The effect of intentionality of wrongdoing and corporate reputation on consumer perceptions and repurchase intentions in product recall situations

The existence of a more suspicious and less forgiving public, increased regulations and intense digital communications heightened the level of threats to the organizations. Among those threats, product harm crisis will generate significant consequences to both firms and consumers, such as injuries, reputational, legal and monetary costs, consumer trust issues, decreased repurchase intentions and declines in the stock prices. Those consequences often involve product recalls, where all defective products are being collected from the market. When a product recall occurs, it will be followed by a search for attribution of blame. It has been stated that intentional and unintentional events affect consumer attributions differently; and especially during product harm crisis and product recall situations, the level of attributed blame to the company will shape the future consumer responses. Another important factor during crisis is reputation, where a high reputation may protect company from the detrimental effects of the crisis, and high-reputation companies are more successful than low-reputation companies in dealing with crisis situations. Therefore, this study aims to investigate the collective effect of reputation and intentionality on perceived apology sincerity, attitude towards company and repurchase intentions during product recall situations, by conducting an experimental study where two factors (reputation and intentionality) are being manipulated at two levels. Total of 730 responses were collected and the responses were analyzed by using MANOVA and SEM techniques. Results revealed important ramifications in terms of the effects of corporate reputation and intentionality on perceived apology sincerity, attitude towards company and repurchase intentions.