Kathleen Cleeren

Rising from the ashes: How brands and categories can overcome product-harm crises

Product-harm crises are omnipresent in todays marketplace. Such crises can cause major revenue and market-share losses, lead to costly product recalls, and destroy carefully nurtured brand equity. Moreover, some of these effects may spill over to nonaffected competitors in the category when they are perceived to be guilty by association. The extant literature lacks generalizable knowledge on the effectiveness of different marketing adjustments that managers often consider to mitigate the consequences of such events. To fill this gap, the authors use large household-scanner panels to analyze 60 fast-moving consumer good product crises that occurred in the United Kingdom and the Netherlands and resulted in the full recall of an entire variety. The authors assess the effects of postcrisis advertising and price adjustments on the change in consumers’ brand share and category purchases. In addition, they consider the extent to which the effects are moderated by two key crisis characteristics: the extent of negative publicity surrounding the event and whether the affected brand had to publicly acknowledge blame. Using the empirical findings, the authors provide context-specific managerial recommendations on how to overcome a product-harm crisis.

How business cycles affect the healthcare sector: A cross-country investigation

The long-term relationship between the general economy and healthcare expenditures has been extensively researched, to explain differences in healthcare spending between countries, but the midterm (i.e., business cycle) perspective has been overlooked. This study explores business cycle sensitivity in both public and private parts of the healthcare sector across 32 countries. Responses to the business cycle vary notably, both across spending sources and across countries. Whereas in some countries, consumers and/or governments cut back, in others, private and/or public healthcare buyers tend to spend more. We also assess long-term consequences of business cycle sensitivity and show that public cost cutting during economic downturns deflates the mortality rates, whereas private cut backs increase the long-term growth in total healthcare expenditures. Finally, multiple factors help explain variability in cyclical sensitivity. Private cost cuts during economic downturns are smaller in countries with a predominantly publicly funded healthcare system and more preventive public activities. Public cut backs during contractions are smaller in countries that rely more on tax-based resources rather than social health insurances. Copyright

The clash of the titans: on retailer and manufacturer vulnerability in conflict delistings

The days of dominant manufacturers dictating the game to obedient retailers are long gone. When parties believe they have equal bargaining power, negotiations end in deadlock more frequently and result in conflict delistings wherein the manufacturers’ brands get removed from the retailers’ assortments. This might cause major sales losses as consumers are forced to change stores or brands. The authors study both parties’ vulnerabilities by investigating their market share shifts during a highly publicized real-life conflict delisting executed by a major retailer against a major manufacturer, involving multiple brands and categories. Generally, both parties lost sales, yet the retailer was the most vulnerable party. Manufacturer-brand and retailer-assortment characteristics moderated both parties’ vulnerability: the manufacturer and retailer became respectively less and more vulnerable when a high-equity brand was delisted in a small assortment. Both parties lost more in necessity than in impulse categories. The authors additionally investigate long-term consequences that occurred after the conflict was settled: the retailers market share recovered to the predelisting level, whereas the manufacturers share underwent a long-term level rise.