Country Image at Risk: Spillover Effects of Product-Harm Crises and the Role of Trust

Abstract

This article investigates potential negative effects of a product-harm crisis (PHC) involving a product category that benefits from positive country-of-origin (COO) effects. In particular, the authors hypothesize that such a PHC generates deteriorations in consumers’ attitudes toward the product category involved, which in turn spill over to a country’s products in general (broad COO level) and, subsequently, to other product categories (narrow COO level), in that they generate attitude deteriorations on these two levels as well. Two online experiments confirm these negative effects and that attitudinal deterioration is particularly strong among consumers with relatively high initial trust if intentional actions of the concerned companies have caused the crisis.

Keywords:

• Product-harm crisis
• country of origin
• consumer trust
• attitude deterioration
• brand transgression

Notes

1 Previous research has differentiated between broad/macro (i.e., the country image) and narrow/micro (product category image perspective) COO levels (Maier & Wilken, 2017; Pappu et al., 2007).

2 For example, Eastern European consumers are more likely to trust Germany for motorcycles, France for chocolate bars, and other countries for hamburgers (Rosenbloom & Haefner, 2009).

3 To avoid any issues related to the well-documented home (or domestic) country bias (i.e., consumer’s positive bias in evaluating domestic products versus foreign alternatives (Verlegh, 2007) and consumer ethnocentrism (i.e., the tendency to prefer domestic over foreign products) (Casado-Aranda et al., 2020), we ensured that the respondents’ nationality is different from the COO of the companies involved in the PHC in both studies. If, for example, German consumers were asked to take part in a study that involves German companies or brands, the generalization of results would be limited and would need to be interpreted in the light of a more positive evaluation, given the match between the origin of respondents and the assessed companies or brands.

4 Paired-samples t-tests were not significant for the PHC-involved category before (M=5.47, SD=1.16) and after (M=5.51, SD=1.13), t(149)=−1.22, p=0.23; not significant for the broad COO level before (M=5.19, SD=0.93) and after (M=5.24, SD=0.92), t(149)=−1.71, p=0.09; and not significant for the narrow COO level before (M=3.93, SD=1.00) and after (M=3.97, SD=1.04), t(149)=−1.26, p= 0.21.