Alice M. Tybout

Michelle Roehm

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <ul>
   <li>A blanket approach to scandal management won’t work. There are too many angles from which scandals might strike.</li>
  </ul>
  <ul>
   <li>An effective response is one that’s been calibrated to the characteristics of the brand, the nature of the event, and the parties being blamed.</li>
  </ul>
  <ul>
   <li>The authors offer a four-step framework (assess the incident, acknowledge the problem, formulate a response, implement the response) for crafting just-right reactions.</li>
  </ul>
 </div>
</article-ideainbrief><p>When products fail or companies behave negligently, customers’ perceptions and purchasing decisions will be adversely affected. Executives get that. But they’re much more likely to be caught off guard by how far-reaching the aftershocks of a scandalous situation can be—and how varied the degrees of blame may be among the players involved.</p>

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<p><span class="reprint">Reprint: R0912J</span></p>
<p>A full-blown scandal can cause a company great turmoil, even if the organization isn&#8217;t at fault. Crises easily extend beyond the original perpetrators, spilling over to other businesses along the value chain&#8212;and to those apart from the chain that resemble the guilty parties in some central way. For instance, the dairy, pet food, and toy-manufacturing scandals in China over the past few years have in many consumers&#8217; minds rendered all Chinese products suspect.</p>
<p>Drawing on more than 10 years of research, marketing professors Tybout and Roehm have developed a framework for crafting just-right, just-in-time responses to scandals. They outline four important steps: assess the incident, acknowledge the problem, formulate a strategic response, and implement the response. The most effective approaches are carefully calibrated to the characteristics of the brand, the nature of the event, and the company&#8217;s degree of seeming culpability. They can minimize brand damage and even, on occasion, provide firms with opportunities to deepen connections with customers.</p>
<p>Antivirus-software maker Trend Micro, for example, reacted effectively after a flawed software update immobilized customers&#8217; computers. Within an hour and a half, the company removed the problematic file from its website and update servers, expanded its customer support staff, and held a press conference to apologize to customers and describe how the problem was being addressed.</p>

Let the Response Fit the Scandal

Reprint: R0912J A full-blown scandal can cause a company great turmoil, even if the organization isn’t at fault. Crises easily extend beyond the original perpetrators, spilling over to other businesses along the value chain—and to those apart from the chain that resemble the guilty parties in some central way. For instance, the dairy, pet food, and toy-manufacturing scandals in China over the past few years have in many consumers’ minds rendered all Chinese products suspect. Drawing on more than 10 years of research, marketing professors Tybout and Roehm have developed a framework for crafting just-right, just-in-time responses to scandals. They outline four important steps: assess the incident, acknowledge the problem, formulate a strategic response, and implement the response. The most effective approaches are carefully calibrated to the characteristics of the brand, the nature of the event, and the company’s degree of seeming culpability. They can minimize brand damage and even, on occasion, provide firms with opportunities to deepen connections with customers. Antivirus-software maker Trend Micro, for example, reacted effectively after a flawed software update immobilized customers’ computers. Within an hour and a half, the company removed the problematic file from its website and update servers, expanded its customer support staff, and held a press conference to apologize to customers and describe how the problem was being addressed.

Let the Response Fit the Scandal

Summary.

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