••• corporate image
Consumers forgive trusted companies – once
In the age of recalls and lawsuits, some companies who’ve come under fire have lived to tell the tale (think Toyota) while others have been nearly obliterated (think Pinto). This raises the question: When do consumers not blame a company for defective or dangerous products?
According to a study from Jing Lei of the University of Melbourne, Niraj Dawar of the Ivey Business School in Canada and Zeynep Gurhan-Canli of Koc University in Turkey, the answer depends on whether the company is well-liked, whether defective products are common in its industry and whether this is the first instance of a defective product at the company.
The study results demonstrate that well-liked brands find that their reputation pays off during a product recall or product-harm crisis. Consumers are much more likely to seek out other possible causes for the defective or dangerous product, refraining from immediate blame. Companies that are less well-liked do not enjoy this consideration.
In industries where recalls are common (i.e., toys, children’s products, automobiles, health care products, etc.), consumers are less likely to lay blame on a specific company if similar incidents have plagued other companies. Again, companies that are not well-liked to begin with don’t benefit in this way.
Where recalls are less common, a product-harm crisis stands out and requires explanation. But even here, consumers will treat a recall from a well-liked company as an exception, a rarity or accident, but blame a less well-liked company for a similar incident. However, even well-liked companies are excused only once; repeat incidents will not be seen as an exception or accident.
••• branding research
Is your logo deterring customers?
It’s an adage we’ve all heard before: Image is everything. And it turns out that’s especially true when it comes to company logos. A good logo is great but a logo that consumers don’t like can do some serious damage, as 41 percent of Americans don’t trust companies whose logos they don’t like, according to research from The Logo Company, New York. Furthermore, one-third went so far as to say that they wouldn’t buy or use something from a company whose logo they didn’t like.
When asked why they wouldn’t trust a company whose logo they didn’t like, 63 percent said it was because it made the brand look cheap if they had a badly-designed logo. Respondents were then asked to state the main reason they chose a new brand of product, with 59 percent saying it was the packaging while 38 percent said it was the logo.
When asked what they thought made a good logo, 44 percent of people said they liked it to look simple, while 41 percent thought color was more important.