When do Sweatshop Allegations Negatively Impact Brands? An Entitativitybased Account for Moderators

Date
2016-11-08
Authors
Rashid, Md Sanuwar
Chattaraman, Veena
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Abstract

The study purpose was to understand how consumers react to different brand-types (luxury and non-luxury) and product categories (symbolic and functional) in the presence of sweatshop allegations. We operationalize sweatshop allegations at two levels: brand-specific (when the stimulus brand itself is accused) and industry-specific (the spillover effect to the stimulus brand from the other brands of the same industry) to illustrate the differential role that "entitativity" plays in consumer reactions to the different brand-types and product categories. Entitativity refers to a group that possesses unity and coherence. Our findings confirm that for brand-specific allegations, consumer attitudes towards a luxury brand is significantly more favorable than a non-luxury brand, however, for industry-specific allegations, consumer attitudes towards a luxury brand and a symbolic product is significantly less favorable than a non-luxury brand and a functional product. Our findings support the effects of entitativity in luxury branding and symbolic consumption contexts, and offer nuanced implications to brand managers in understanding consumers’ reactions to different levels of sweatshop allegations.

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