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Brand equity: How is it affected by critical incidents and what moderates the effect

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  • Hildebrandt, Lutz
  • Tischer, Sven

Abstract

To explore how occurring critical incidents affect customer-brand relations, this study measures the impact on the basis of an online experiment. For this purpose, 1,122 usable responses are gathered considering the smartphone brands of Apple and Nokia as well as different scenarios. The respective reactions to these negative incidents are evaluated using the concept of customer-based brand equity. More precisely, a structure equation model is specified and differences in latent factor means are estimated taking into account perceived quality, various brand associations, loyalty and overall brand equity. The findings indicate that brand equity dimensions are not equally affected. Moreover, the results demonstrate that both brand equity and the business relationship before crisis moderate the effect of distinct critical incidents.

Suggested Citation

  • Hildebrandt, Lutz & Tischer, Sven, 2012. "Brand equity: How is it affected by critical incidents and what moderates the effect," SFB 649 Discussion Papers 2012-062, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2012-062
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    References listed on IDEAS

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    More about this item

    Keywords

    Brand equity; critical incidents; negative publicity; structure equation modeling; online experiment;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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