Bad press and failed brand extensions can dilute brand image
As companies continue to spend millions of dollars building strong, formidable brands, their efforts are often hampered by negative publicity at the hand of crises and unsuccessful attempts at brand extension. In recent years, examples include Toyota’s recalling its cars due to safety concerns with airbags, Samsung Galaxy’s problems with their phones that ignited fires, Volkswagen’s tampering with emission tests and Facebook’s unsuccessful attempt at launching Facebook Home, a home screen for phones. Because of social media, negative information rapidly spreads around the world doing unrestricted damage to a brand. At the center of the damage is possible dilution of its image, with a concomitant decline in sales and future prospects for the brand. Volkswagen recalled millions of cars, posted large losses, lost customers’ trust in the brand and saw its share price erode.
The light in this dismal tunnel is that not all consumers blame the brand if something goes wrong. Managers most often look to marketing actions when trying to understand and control dilution, but a promising avenue is to consider how consumer characteristics may be in play. Depending on a consumer’s general style of thinking, different ways of dealing with bad press and poorly aligned brand extensions may be observed. Understanding consumers’ ways of thinking can help identify strategies to limit brand damage and elicit more favorable reactions from disapproving consumers.
Styles of thinking and dealing with bad news
Research by Professors Monga and John shows that not all consumers are alike in the way they think and reason about the world, and that includes how they react to a brand’s actions (see Figure 1). Some consumers are more analytic in their thinking and tend to focus on a focal object, such as a brand. Other consumers are more holistic in their thinking and tend to focus on the focal object in relation to its surrounding context, such as a brand in relation to its context.