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Abstract
Previous literature does not provide adequate insights into the role that emotions play in consumers reactions to corporate scandals. Several research questions remain unanswered. (1) What is the relationship between attributions and emotions? (2) How does negative publicity influence brand equity? (3) What is the difference between product related (PDR) and non product related (NPDR) negative publicity? (4) Do post-scandal emotions have carry over effects on future preference formation? To answer these questions, this thesis probes the consumer emotional reaction process after consumers have been exposed to a corporate scandal. The thesis attempts to provide answers to the aforementioned research questions through the development of a conceptual model and rigorous empirical testing using experimental studies, structural equation and dynamic panel modelling. Paper One of this thesis reports on two experiments designed to test an emotion driven model, which partly answers research question (1). The results of Paper One suggest that emotions can influence the attributional process by creating bias in information integration. In Paper Two, a comparison between two types of negative publicity, PDR and NPDR scandals, is presented. The findings suggest that the impact of emotions on brand association is reasonably consistent across the two types of scandals, while the impact of attributions is weaker for NPDR scandals. PDR scandals, as predicted, have more impact on product quality perception than do NPDR scandals. Meanwhile, brand association and quality perception fully mediate the influence of negative publicity on brand loyalty. Therefore, Paper Two answers research questions (2) and (3). Paper Three looks at the carry over effects of emotions on brand association and consumer utility. Research questions (2) and (4) are answered by this paper. The findings support most of the postulated effects. Thus it can be concluded that emotions have more predictive power in consumers future preference formation and decision making than previously considered. The thesis contributes to the current literature by combining important and disparate concepts of emotional branding, corporate social responsibility, and moral emotions, to provide a comprehensive framework to investigate the impact of scandals and negative publicity.