A study on the impact of corporate actions on consumer attitudes in the case of a brand scandal: mediating role of pre-scandal brand experience and brand trust

Brand scandals are complex situations in which products are defective, unsafe, or even dangerous (Vassilikopoulou et al., 2009). This research aims to discuss if corporate actions can influence consumers’ attitudes about the brand scandal (ABS), which may further affect brand forgiveness (BF) and attitude about the product category (APC). The study reveals that corporate actions significantly and favourably influence consumer attitudes toward brand scandals. Our results confirm that corporate actions of the brand marketer Nestle have influenced consumers’ attitude during Maggi’s brand scandal in India. So, we may confirm that corporate actions during a brand scandal play a critical role in possibly mitigating scandal effects (Yuan et al., 2020). We specifically tested the corporate actions as antecedents because we assumed the same could play a fundamental role in scandal management. We further argue that consumers’ pre-scandal brand experience and brand trust could mediate between corporate actions and attitude about the brand scandal in the case of a brand scandal. The research involves the application of survey methodology and adapted measures from research articles published previously. A three-item scale was adapted to measure attitude toward product category (APC) (Siomkos et al., 2010), BF (Xie & Peng, 2009), and pre-scandal BE (Stokburger-Sauer et al., 2012), while four item scale was adapted to study BT (Chaudhuri & Holbrook, 2002). Corporate action (CA) was measured using a five-item scale (Kiambi & Shafer, 2016), and ABS with an eight-item scale (Banerjee, 2018; Coyle & Thorson, 2001). The questionnaire statements measure. To maintain homogeneity throughout the questionnaire, a seven point Likert scale was used (1= strongly disagree to 7= strongly agree). The context of this study is the Maggi brand scandal, and each respondent was aware of it. Conversations about the scandal prevail until recent times (India Today, 2021). This research applied structural equation modeling (SEM) to empirically verify the theoretical model using AMOS 24. This study involved a two-step process comprising a measurement model (CFA–Confirmatory factor analysis) followed by a structural model (Anderson & Gerbing, 1988). We circulated the questionnaire within India amongst the consumers of Maggi using a purposive sampling technique. Out of 753 responses received, 717 were qualified for the study (95% response rate). Out of the total respondents, males were 55.2%, and females were 44.8%. The demographic profiles of the respondents comprising different age groups (25-34= 38.1%, 15-24= 36.1%, 35-44= 17%, 45 and above age group= 8.8%). The findings of this study reveal the non-linearity of consumer’s response. Consumers’ attitude about a brand scandal are formed based on not only corporate actions but mediated by their pre- scandal brand experience and brand trust together. Thus, marketers must strengthen consumer’s pre-scandal brand experience and brand trust to attain a favourable attitude about the brand scandal. Marketers must showcase corporate actions to consumers portraying it cares about them. The study confirms that a favourable attitude about the brand scandal leads to brand forgiveness and a positive attitude about the product category. So, it is very critical to maintain a positive attitude about the scandal through corporate actions. This study brings some important implications for practitioners: marketers should strengthen the consumer’s product associations because their attitude about the brand scandal influences both the attitude about the brand’s forgiveness and their attitude about the product category being offered, irrespective of the brand.