Impact of a product recall

B.Sc. Mohamed Elsheikh, MBA

Master's thesis

Abstract:

Since September 2016 at least two rather noticeable recalls have taken place where industry giants have been involved. This forces brands to usually declare a product recall promptly and especially hazardous ones from the market. Failure to oblige, results in an aftermath that has an impact on the customer and brand image. In August 2016 reports began to indicate that an exclusive smart phone produced by Samsung, S7, may catch on fire, or in some events melts, while the device was on. In Nov. 2016 also washing machine models were reported to have caused damages due to severe vibration. In all cases, the companies have suffered from severe financial negative impact, their shares have dropped down and their image has suffered among consumers and prospective customers. In this research, we will verify the impact of the recall aftermath on the brand, mostly concentrating on the impact on consumer behavior and brand loyalty aspects. The communication behaviour of the brand and various stakeholders in crisis analysis is conducted by scraping the official social media websites of the companies and communication in Twitter on their own accounts and a sentiment analysis through a questionnaire of 151 respondents and data from Twitter where Samsung and the defected products were mentioned. The findings supported the negative impact on the brands recalled products and associated products. However, the brands image as a whole was found to not be severly negatively impacted.

Keywords

Product Recall, Communication, Brand loyalty

Language used: English

Date on which the thesis was submitted / produced: 30. 11. 2019

Thesis defence

• Supervisor: Ing. Richard Selby, Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics Policy and Administration / Business Administration