– The purpose of this study is to investigate differences in consumer reactions to high- versus low-equity brands in terms of consumer attitude toward the brand, involvement with the brand, company credibility and consumer purchase intentions.
– Experimental procedure is conducted to test three hypotheses using 317 consumer participants. The experiment is carried out comparing a high-equity personal computer (PC) brand and a low-equity PC brand involved in product-harm crisis.
– The results indicate that, in the case of product-harm crisis, negative consumer perceptions regardless of brand equity level; less negative perceptions for a high-equity brand than for a low-equity brand; and smaller loss in consumer perceptions for a high-equity brand than for a low-equity brand.
– The findings highlight the importance of brand equity in crisis management explained by covariation theory of attributions.
– Although product-harm crisis is inevitable for many firms, continuous investment in brand equity can mitigate the negative consequences.
– Product-harm crisis can pose serious consequences for firms on both financial and intangible dimensions. Given the occurrence of numerous product-harm crises involving both reputable and less known brands, it is important to consider potential influences of brand equity on consumer reactions to such crisis.
