2015 Global Fashion Management Conference at Florence

2015 Global Fashion Management Conference at Florence Proceedings: 555-561 (June 2015)
http://dx.doi.org/10.15444/GFMC2015.04.06.01

THE EFFECTS OF BRAND LOYALTY ON THE EMOTIONAL REACTIONS

TO A LUXURY BRAND CRISIS: THE MONCLER CASE

Giacomo Gistri, University of Macerata, Italy1

Stefano Pace, Kedge Business School, France
Matteo Corciolani, University of Pisa, Italy

ABSTRACT

An empirical research on the Moncler case shows that brand loyalty moderates the
consumer reactions to brand crises. While highly loyal consumers express sympathy
toward the company, which predicts positive effects on brand attitude and purchase
intention, lowly loyal consumers express anger, which predicts negative effects on the
dependent variables.

Keywords: empirical research, brand loyalty, purchase intention, negative effect, luxury
brand

INTRODUCTION AND THEORETICAL BACKGROUND

Most of the extant literature on brand crisis focuses on two assumptions. First, brand
crises are direct and simple. In the traditional scheme of brand crises studied in the
literature, a single critical event occurs and the facts are clear. Researchers are usually
interested in how the responsibility of the crisis is attributed to the organization and in the
effectiveness of the crisis response strategies (Coombs, 2007; Coombs and Holladay,
2008). For instance, a crisis that has been studied is that of the shipwreck of the Costa
Concordia. The event was clear (a cruise ship capsized) and the attribution of
responsibility was almost unquestioned by the observers (the crisis was due to some
mistakes by the organization and/or the captain; Grappi and Romani, 2015). Second, the
exposure to the critical event automatically activates a coherent emotional reaction (anger
or sympathy) by the stakeholders towards the company, affecting their response towards
the crisis and the brand (Claeys and Cauberghe, 2014; Grappi and Romani, 2015; Grappi,
Romani, and Bagozzi, 2013).
The first assumption diminishes the complexity of some crises and the interceptive role
played by stakeholders. Crises may be multifaceted and may touch different aspects of
the company’s operations. For instance, the bankruptcy of certain financial service firms
at the beginning of the current economic crunch represents a complex crisis. No single
event encapsulates the complexity of the crisis and different aspects are contextually
present: management misconduct, anomalous market conditions, and insufficient
regulations. We cannot expect that, when facing complex crises, a stakeholder would
have simple reactions. A stakeholder elaborates the nuances of the crisis and, on the base
of that assessment, responds to the crisis in terms of brand attitude and behaviors. As to

1
[email protected]

555
 2015 Global Fashion Management Conference at Florence

the second assumption, the causal link between crisis and emotional arousals seems too
direct and it would discard the cognitive appraisal of the crisis by the stakeholder, as
indicated in the previous point. A stakeholder’s position towards the brand – rather than
the simple exposure to a crisis – determines her interpretation of the crisis. The emotion
stems from that interpretation. In particular, brand loyalty plays a major role in driving
the interpretation and the consequent emotion felt by the customer. Brand loyalty is not
only a brand-customer relationship; it may drive elaborate behaviors. For instance, by
confirming their loyalty to some brands, dispersed networks of families may reassert their
family bonding (Epp, Schau, and Price, 2014). This suggests that loyalty is not only a
consequence of brand ability to retain its customers, but also a cognitive position thought
which customers perceive and frame life events.

The brand loyalty activates different emotions towards the crisis (namely, anger or
sympathy) and those emotions have an impact on attitude towards the company and
purchase intention. We focus on anger and sympathy because they are the main emotions
raised by the perception of responsibility (Weiner, 1995, cit. in Grappi and Romani,
2015).

Customers with low brand loyalty do not have enough interest and expertise in the brand
struck by a complex crisis. Therefore, they would not engage in a deep assessment of the
crisis. Low loyalty customers would interpret the crisis at its “face value”, i.e. they would
focus on the most serious fact of the crisis, determine its most evident responsible, and
react instinctively with anger. A low loyal customer would not frame the crisis as a
damage to herself, but she would express a righteous anger, that stems from the
awareness that some harm is done to someone else (Romani, Grappi, and Bagozzi, 2013).
Anger then affects the attitude towards the company and purchase intention (Grappi and
Romani, 2015).

On the contrary, customers with high brand loyalty would interpret the crisis in a more
complex manner, looking at all its facets and considering the contextual factors of the
crisis. A high loyal customer would put the company’s responsibility within a wider
framework, rather than framing the company as the only cause of the crisis. In addition,
brand trust and brand affect are determinants of brand loyalty (Chaudhuri and Holbrook,
2001). Those two attitudes would lead the customer to condone the perceived company’s
wrongdoing. Finally, the crisis is also a threat to the customer identity and, therefore, the
subject would defend herself by expressing a positive emotion of support for the
company, which would amount to a support for herself as loyal customer of that brand.
Overall, a high loyalty customer would express sympathy towards the company, and
increase her attitude towards the company and purchase intention.

These effects are particularly relevant for luxury brands. Their exclusivity may
exacerbate negative emotions by non-customers. On the other hand, the same exclusivity
would lead loyal customers to feel part of a selected group of consumers and thus express
support and sympathy for the brand against the criticismof “outsiders”.
We formalize the above reflections in the following hypotheses:

556
 2015 Global Fashion Management Conference at Florence

H1a: For low loyalty customers, a crisis activates anger, which worsens the customer
attitude toward the corporate.
H1b: For low loyalty customers, a crisis activates anger, which decreases the customer
purchase intention.
H2a: For high loyalty customers, a crisis activates sympathy, which improves the
customer attitude toward the corporate.
H2b: For high loyalty customers, a crisis activates sympathy, which increases the
customer purchase intention.

EMPIRICAL STUDY

The Moncler Crisis

Moncler is a luxury apparel manufacturer known for its sportswear and quilted jackets.
On 2 November 2014, a crisis struck the brand. The Italian television newsmagazine
“Report” released a journalistic inquiry on the illegal practice of live-plucking on live
geese in certain regions of East Europe. The news program linked this practice to the
manufacturing of the Moncler down jackets. The inquiry showed also the outsourcing of
some phases of the manufacturing and the very high margins of the luxury industry, with
production costs in the order of €30-50 and retail prices in the range of €1.500-2.000 for a
jacket or dress. The inquiry stemmed a public debate and there was an uproar against
luxury companies and the brand Moncler in particular. Immediately after the broadcast,
Moncler issued a press release where it clarified that the suppliers of feathers comply
with the principles of the European Down and Feather Association and defended against
the accusation against the other business practices cited in the news report.

The crisis endured by the brand Moncler is complex. The main accusations against
Moncler regards the treatment of geese and it can be classified in the preventable type of
crisis (Coombs, 2007), which is the most serious type of crisis in terms of damage for the
brand reputation. In addition to that, the accusation referred the entire luxury sector, its
prices, which are perceived as unjustified, and the practice of outsourcing manufacturing
in a moment of economic downturn, which would instead call for national interments.

Methodology
Our investigation focuses on the recent brand crisis experienced by the company Moncler.
To collect data, we created a questionnaire and we ran a web survey through Survey
Monkey. The questionnaire includes existing scales already tested and available in
literature and in the last section, some socio-demographic items were also included.

[Insert Table 1 about here]

The sample is composed by 115 real consumers (34 men, 81 women; Mage = 28.35 years).

RESULTS

To investigate the impact of the crisis on consumer responses, we considered two

dependent variables: the attitude toward the company and the purchase intention. As we

557
 2015 Global Fashion Management Conference at Florence

imagine that different effects on consumers may be based on different levels of brand
loyalty, we did a median-split of the sample and divided it in two groups: highly vs.
lowly loyal consumers.

[Insert Table 2 about here]

As indicated in table 2, in case of low loyalty, the attitude toward the corporate decreases
because of the emotion of anger felt by consumers after the crisis. Instead, in case of high
loyalty, anger does not have a significant effect. The opposite happens for the emotion of
sympathy: while, in case of high loyalty, it increases the attitude toward the company, in
case of low loyalty, it does not significantly affect the dependent variable. Therefore,
both hypotheses 1a and 2a are verified.

[Insert Table 3 about here]

As indicated in table 3, in case of low loyalty, the purchase intention decreases because of
the emotion of anger, which is felt by consumers after the crisis. In case of high loyalty,
however, anger does not have a significant effect on the dependent variable. The opposite
happens for the emotion of sympathy: it increases the purchase intention in case of high
loyalty, while it does not significantly affect the dependent variable in case of low loyalty.
This provides support for both hypotheses 1b and 2b.

DISCUSSION AND IMPLICATIONS

In this article, we obtain two important insights on the consumer reactions to brand crises.
First, we show that, when a crisis is complex and involves more than one issue (e.g.
treatment of geese, outsourcing manufacturing, etc.), consumer responses tend to become
more complex and change from subject to subject. Second, we illustrate that, when facing
complex crises, consumes have an important interpretative role, which precedes the
consequent emotional reactions. In particular, we demonstrate that, depending on their
level of brand loyalty (Epp et al., 2014), individuals who are exposed to a brand crisis
may feel different emotions toward it (e.g. Grappi and Romani, 2015). That is, highly
loyal consumers tend to perceive a complex crisis as a broader fact (e.g. what happens to
Moncler is common in the context of luxury brands) and to express sympathy toward the
company. Conversely, lowly loyal consumers may focus on a more specific aspect of the
crisis (e.g. treatment of geese) and on its direct cause (i.e. Moncler), which produces a
reaction of anger.
The most important implication of this study is that of showing the strategic importance
of the interaction between company and customer in case of brand crises. Indeed, more
loyal customers may represent a key instrument of brand defense in case of crisis. Their
positive brand attitude, which tends to live through the crisis, may develop an important
horizontal communication, which effectively integrates the company’s vertical
communication. Importantly, owing to the increasingly relevant role of social media in
the communication among individuals, this horizontal form of communication tends to be
even more strategic for the company (see Pace, Balboni, and Gistri, 2014). Future
research may examine more in depth the moderating role of brand loyalty. For example,

558
 2015 Global Fashion Management Conference at Florence

the cognitive, emotional, and behavioral dimensions of this construct might be analyzed
to verify whether they may predict different responses to brand crises.

REFERENCES

Burton, S., Garretson, J.A., & Velliquette, A.M. (1999). Implications of accurate usage of
nutrition facts panel information for food product evaluations and purchase intentions.
Journal of Academy of Marketing Science, 27(4), 470–480.
Chaudhuri, A., & Holbrook, M.B. (2001). The chain of effects from brand trust and brand
affect to brand performance: The role of brand loyalty. Journal of Marketing, 65(2),
81–93.
Claeys, A.S., & Cauberghe, V. (2014). What makes crisis response strategies work? The
impact of crisis involvement and message framing. Journal of Business Research,
67(2), 182–189.
Coombs, T.W. (2007). Protecting organization reputations during a crisis: The
development and application of situational crisis communication theory. Corporate
Reputation Review, 10(3), 163–176.
Coombs, T.W., & Holladay, S.J. (2008). Comparing apology to equivalent crisis response
strategies: Clarifying apology’s role and value in crisis communication. Public
Relations Review, 34(3), 252–257.
Epp, A.M., Schau, H.J., & Price, L.L. (2014). The role of brands and mediating
technologies in assembling long-distance family practices. Journal of Marketing,
78(3), 81–101.
Gelbrich, K. (2011). I have paid less than you! The emotional and behavioral
consequences of advantaged price inequality. Journal of Retailing, 87(2), 207–224.
Grappi S., & Romani, S. (2015). Company post-crisis communication strategies and the
psychological mechanism underlying consumer reactions. Journal of Public Relations
Research, 27(1), 22–45.
Grappi S., Romani, S., & Bagozzi, R.P. (2013). Consumer response to corporate
irresponsible behavior: Moral emotions and virtues. Journal of Business Research,
66(10), 1814–1821.
Harris, L.C., & Goode, M.H. (2004). The four levels of loyalty and the pivotal role of
trust: a study of online service dynamics. Journal of Retailing, 80(2), 139–158.
Malär, L., Krohmer, H., Wayne, D.H., & Nyffenegger, B. (2011). Emotional brand
attachment and brand personality: The relative importance of the actual and the ideal
self. Journal of Marketing, 75(4), 35–52.
Pace, S., Balboni, B., & Gistri, G. (2014). The effects of social media on brand attitude
and WOM during a brand crisis: Evidences from the Barilla case. Journal of
Marketing Communications, doi:10.1080/13527266.2014.966478.
Pope, N.K., Voges, K.E., & Brown, M.R. (2004). The effect of provocation in the form of
mild erotica on attitude to the ad and corporate image. Journal of Advertising, 33(1),
69–82.

559
 2015 Global Fashion Management Conference at Florence

Richins, M.L. (1983). Analysis of consumer interaction styles in the marketplace. Journal
of Consumer Research, 10(6), 73–82.
Romani, S., Grappi, S., & Bagozzi, R.P. (2013). My anger is your gain, my contempt
your loss: Explaining consumer responses to corporate wrongdoing. Psychology and
Marketing, 30(12), 1029–1042.
Small, D.A., & Verrochi, N.M. (2009). The face of need: Facial emotion expression on
charity advertisements. Journal of Marketing Research, 46(6), 777–787.
Weiner, B. (1995). Judgments of responsibility. New York, NY: Guilford.

TABLES
Table 1. Scales
Scale Description Cronbach
alpha
Attitude toward the corporate (Pope, 5 items, 7 point semantic (α=0,79)
Voges, and Brown, 2004) differential
Purchase intention (Burton, Garretson, 3 items, 7 points Likert (α=0,93)
and Velliquette, 1999)
Brand loyalty (Harris and Goode, 2004) 4 items, 7 points Likert (α=0,71)
Attitude toward business in general 6 items, 7 points Likert (α=0,78)
(Richins, 1983)
Personal crisis relevance (Malär, 5 items, 5 points Likert (α=0,92)
Krohmer, Wayne, and Nyffenegger,
2011)
Anger (Gelbrich, 2011) 3 items, 7 points Likert (α=0,83)
Sympathy (Small and Verrochi, 2009) 4 seven point uni-polar (α=0,85)
items

Table 2. Multiple regression with the attitude toward the corporate as dependent variable
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
Low loyalty
(Constant) 3,672 1,434 2,561 ,014
Attitude toward business
,489 ,194 ,268 2,524 ,015
in general
Personal crisis relevance ,017 ,118 ,016 ,141 ,889
Sex -,742 ,297 -,265 -2,498 ,016
Age ,034 ,013 ,269 2,646 ,011
Anger -,422 ,136 -,403 -3,110 ,003
Sympathy ,113 ,185 ,083 ,610 ,545
R²= 0,57 - R²Adj = 0,51
High Loyalty
(Constant) 3,104 1,301 2,385 ,021

560
 2015 Global Fashion Management Conference at Florence

Attitude toward business

-,013 ,222 -,008 -,057 ,955
in general
Personal crisis relevance ,062 ,140 ,059 ,440 ,661
Sex -,433 ,321 -,167 -1,348 ,183
Age ,016 ,015 ,138 1,038 ,304
Anger -,085 ,121 -,104 -,702 ,486
Sympathy ,496 ,157 ,432 3,153 ,003
R²= 0,22 - R²Adj = 0,13

Table 3. Multiple regression with the purchase intention as dependent variable

Standardiz
Unstandardized
ed
Model Coefficients t Sig.
Coefficients
B Std. Error Beta
Low Loyalty
(Constant) 7,119 1,926 3,697 ,001
Attitude toward business in
,164 ,260 ,077 ,632 ,530
general
Personal crisis relevance ,318 ,158 ,255 2,008 ,051
Sex -1,340 ,399 -,409 -3,361 ,002
Age -,001 ,017 -,008 -,072 ,943
Anger -,660 ,182 -,536 -3,618 ,001
Sympathy -,196 ,249 -,122 -,786 ,436
R²= 0,44 - R²Adj = 0,36
High Loyalty
(Constant) 3,820 1,820 2,099 ,041
Attitude toward business in
-,424 ,310 -,185 -1,367 ,177
general
Personal crisis relevance ,445 ,196 ,296 2,270 ,027
Sex -,214 ,449 -,058 -,478 ,635
Age -,014 ,021 -,086 -,663 ,510
Anger -,253 ,170 -,216 -1,493 ,141
Sympathy ,638 ,220 ,388 2,904 ,005
R²= 0,25 - R²Adj = 0,17

561