Estimating The Influence Of Vehicle Recall On Consumer Behavioral Intension

Product recall crises, especially those involving severe recalls, influence customer evaluation of a firm’s reputation. The recalls have generated much controversy among car owners; many of them were disappointed and dissatisfied with firm’s response, which in turn lead to significantly negative opinions and feelings toward the company. Volkswagen’s massive recalls in China in 2013 are chosen as the empirical background of this study, to address the question about how consumers’ reputation cognition affect their behavior intention. This study also investigated different types of car consumers and studying the differences of their reputation cognition and behavior intentions to provide more specific and practical references for corporate reputation management under the crisis situation of product recalls. This study includes the following three aspects:First, we do the research about differences of car consumers’ reputation cognition for the firms where they affected by auto recall. Based on consumer involvement theory and multidimensional corporate reputation theory, we constructed a hypothetical model to address this issue. Using survey methods,489 car users are included in this study and the valuable first-hand data got from this survey is used to test the effectiveness of this hypothetical model through structural equation model (SEM). According to the results, we find that those consumers, who are confident about their car knowledge of themselves, read or skim relative information frequently, or consider the car is very important for themselves, have higher product enduring involvement. Their risk perception is always quite lower than others, which results in the reduction of negative cognition for product defects and recall methods under the crisis situation and makes them have higher corporate quality reputation cognition and generalized favorability. When the recall crises that is highly correlated with product defects, the consumers who are greatly influenced will have higher crisis situational involvement. These consumers always perceive higher risk and make a negative evaluation of involved firms’corporate quality reputation cognition and generalized favorability. Risk perception as the important elements under recall crisis have a significantly negative effect on consumers’ quality reputation cognition. The results also show that consumers’quality reputation cognition have a positive effect on their generalized favorability, which extends the application range of multidimensional corporate reputation theory.Second, to address the question about how consumers’reputation cognition affect their behavior intention, Volkswagen’s massive recalls in China in 2013 are chosen as the empirical background of this study. The results show that the consumers who have higher generalized favorability, will be inclined to purchase these firms’products as they more agree with these firms. Meanwhile, they promote the recall reasons and repair measures from the positive perspective to help these firms get more understanding. Besides, they may actively cooperate with the enterprise recall activities and positively explain the repair measures to other consumers. These consumers also provide some details in the process of recall for these crisis firms to support them. To test the mediating effect of consumers’identification between reputation cognition and behavior intention, we introduce this variable into our hypothetical model. The results show that consumers’identification is affected by their corporate quality reputation cognition and generalized favorability positively. The firms enjoying high reputation possess some characteristics such as excellent quality will enable consumers have consistent resonance with their own attributes. Therefore, those consumers who perceive high corporate reputation and have a strong attachment to the firms have high degree of identity of the firms as their key attributes are always similar with some specific firms’features. In addition, consumers’identification affects behavior intention. Those owing higher identification for the firms have higher purchase intention and citizenship behavioral intention. Simultaneously, consumers’quality reputation cognition affects behavior intention through their generalized favorability and corporate cognition, and the direct effect of quality reputation cognition on behavior intention is not significant.By investigating different types of car consumers and studying the differences of their reputation cognition and behavior intentions to provide more specific and practical references for corporate reputation management under the crisis situation of product recalls. The results show that the car users experiencing recall crisis have higher risk perception as their crisis involvement is higher. This results in the lower quality reputation cognition and then influences generalized favorability. The quality reputation cognition of these car users is more sensitive and their quality reputation cognition has a significant positive effect on behavior intention. However, their generalized favorability only affects purchase behavior intention and has no effect on the customer citizenship behavioral intention. For the users owing the same brand cars but not experiencing product recalls, their quality reputation cognition for the recall firms is not sensitive as they are the core of loyal consumers. Quality reputation cognition cannot influence behavior intention directly while their generalized favorability has a significant positive effect on purchase intention and citizenship behavioral intention. Besides, the quality reputation cognition of these car consumers affects behavior intention through generalized favorability. As to the car consumers having the different brand cars, they are the potential consumers and understanding these consumers means much to reputation cognition and behavior intention for the recall firms. The results show that their purchase behavior is affected by generalized favorability positively while citizenship behavioral intention is affected by quality reputation cognition and generalized favorability.Originality of this study is that the research of corporate reputation management under the crisis situations of product recall is enriched by this study and the influence mechanism of reputation cognition on consumer behaviors is explored. Meanwhile, the real events are chosen as the empirical background, and all study objects are actual car users. Combined with the study results, we proposed several new suggestions for corporate preventive solutions. First, under the crisis situation of product recall, we constructed a unified research model including several pre variables and outcome variables about corporate reputation, which extends the research about reputation management and crisis management about product recall. Second, multidimensional corporate reputation theory developed by Lange et al. is applied to the empirical study. We study the effect of reputation cognition on consumer behaviors under the crisis situation of product recalls from two dimensions:quality reputation and generalized favorability, which extends the application range of multidimensional corporate reputation theory. Third, this study develops a theoretical model to explain the effect of corporate reputation on consumer behaviors, by introducing risk perception and consumer identity as two mediating variables to explore the relationship among corporate reputation, risk perception, consumer identity and consumer behaviors. Forth, we compare the difference between the effects of product enduring involvement and crisis situational involvement on reputation cognition from the perspective of consumers’ involvements. That intensifies the relationship research among antecedents, dimensions and effects of corporate reputation. Fifth, in order to analyze the different effects of reputation cognitions of existing consumers, consumers in crisis and future potential consumers, the consumers are categorized according to their involvements in this crisis event:the car users experiencing recall crisis, the users owing the same brand cars but not experiencing product recalls and the car consumers having the different brand cars, which provides a basis for the practical operability of reputation management. Sixth, based on multidimensional corporate reputation theory, multi-layer of corporate reputation is proposed in this study. We consider that generalized favorability is at a core level, which results in the huge damage of generalized favorability after the recall crisis and great economic loss also would be caused. However, for the corporate single attribute of reputation such as quality reputation that lays on the outer level, its loss will not make the serious influence on the corporate core interests.