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31.10.2023

Impacts of chief marketing officer in product recalls

verfasst von: Angela Xia Liu, Yong Liu, Ting Luo, Rui Wang

Erschienen in: Marketing Letters

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Abstract

This paper examines the implications of chief marketing officers (CMOs) when firms experience crisis situations. In the context of product recalls, we analyze CMO impacts from the perspectives of two critical stakeholders—consumers and investors. For consumers, we find that firms with a CMO manage recalls for better consumer protection by issuing recalls earlier and having fewer consumer harm incidents than firms without a CMO. For investors, we find that firm financial value drops significantly more for firms with a CMO than those without a CMO when recall happens. These findings generate a more holistic picture of CMOs in the growing literature on the roles and impacts of marketing leadership. They boost the message that CMOs matter and show the nuanced impacts when firms face crisis.

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Fußnoten
1
One notable exception is the study by Liu et al. (2016), which investigates the impact of CEO on recall strategy.
 
2
There is abundant evidence that CMOs are actively involved in the recall process. For instance, Jeff Miller, Marketing Director of Mattel in the Asia-Pacific region, was a key corporate leader managing Mattel’s 2007 global toy recalls. Similarly, Charlotte Addison, Marketing Manager of Maclaren, a top manufacturer of children products, was actively engaged in the recall process by managing key tasks such as press calls and public communications (Rastegar, 2011).
 
3
We first drop the recalls with missing firm and financial information, which reduces the data to 535 recalls. To estimate the effects accurately, we need exclude recalls issued jointly by multiple firms. We further remove recalls that were issued within five days before or after another recall by the same firm to eliminate confounding from multiple recalls. To remove potential confounding effects from other firm-related events, we follow Warren and Sorescu (2017) to utilize RavenPack News Analytics to exclude recalls that have press releases unrelated to recalls within the event window. This further brings our sample to 380 recalls that have complete information needed for the empirical analyses.
 
4
Note that, opposite to the negative force that we discussed earlier in the paper, some investors may perceive the presence of CMO positively in that it can help the firm recover from the recall. What our empirical analysis demonstrates is the total (or net) effect of these opposite forces.
 
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Metadaten
Titel
Impacts of chief marketing officer in product recalls
verfasst von
Angela Xia Liu
Yong Liu
Ting Luo
Rui Wang
Publikationsdatum
31.10.2023
Verlag
Springer US
Erschienen in
Marketing Letters
Print ISSN: 0923-0645
Elektronische ISSN: 1573-059X
DOI
https://doi.org/10.1007/s11002-023-09711-5