Date of Award
Doctor of Philosophy
Dan L Sherrell
George D Deitz
Marla Royne Stafford
This paper brings financial meaning to abnormal stock returns via the marketing discipline as an indicator of the severity of a product recall. It proposes and empirically tests whether adjustments to post-recall advertising spending strategy can be used as an effective tool to moderate a firm's future sales decline due to a product recall event. The author takes a further step by exploring where the firm's advertising money should be invested - focal brand, non-focal brand or institutional brand - to determine which advertising spending type is most effective. Moreover, this dissertation also tests whether a firm should increase its advertising spending based on the nature of competitor advertising spending reactions to the product recall event. Findings of this research show that a firm should avoid investing money on non-focal brands when a recall is due to a major problem. Accordingly, firms should emphasize advertising spending on institutional advertising in order to mitigate the effects of major product recalls on firms' future sales performance.
dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.
Huang, Jianping, "Watch Your Competitors Like a Hawk: An Investigation of the Optimal Advertising Spending Strategy to Mitigate the Negative Expectation Effect from Product Recalls" (2017). Electronic Theses and Dissertations. 1716.