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Journal of the Academy of Marketing Science
Published in: Journal of the Academy of Marketing Science 4/2020

08-11-2019 | Original Empirical Research

The impact of value-related crises on price and product-performance elasticities

Authors: Raoul V. Kübler, Michael Langmaack, Sönke Albers, Wayne D. Hoyer

Published in: Journal of the Academy of Marketing Science | Issue 4/2020

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Abstract

Previous research on the impact of corporate crises on customers’ elasticity has largely focused on performance-related crises (e.g., product recalls) and found an increasing price elasticity under these conditions. We investigate whether this result differs for value-related crises that are due to ethical violations, such as the use of child labor or environmental pollution. In line with moral foundation theory (MFT), we propose that value-related crises lead to stronger moral outrage and increased boycott intentions, thereby decreasing price and product-performance elasticities. We first analyze more than 360,000 Facebook user comments in relation to four value-related and four performance-related crises and show that the different outcomes for value- and performance-related crises can be explained according to MFT. Then, through discrete choice experiments, we demonstrate that, in contrast to performance-related crises, price elasticity decreases substantially for a value-related crisis that affects both violating and nonviolating companies. We also show for the first time the impact on product-performance elasticities with similar negative effects as for price. The results are stable even for different product categories, causes of ethical violations, and measurement conditions. As a result, it is more difficult for companies to recover from value- than performance-related crises.
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Appendix
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Footnotes
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Metadata
Title
The impact of value-related crises on price and product-performance elasticities
Authors
Raoul V. Kübler
Michael Langmaack
Sönke Albers
Wayne D. Hoyer
Publication date
08-11-2019
Publisher
Springer US
Published in
Journal of the Academy of Marketing Science / Issue 4/2020
Print ISSN: 0092-0703
Electronic ISSN: 1552-7824
DOI
https://doi.org/10.1007/s11747-019-00702-5

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