Brand Scandal Spillover: When Will A Brand Scandal Spill Over And How Should Competitors Respond?

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Executive Summary

Brand scandal is more likely to spill over to a particular competitor is perceived to be highly similar on the attribute involved in the scandal. For example, a scandal involving hamburgers but not a scandal involving ice cream might be expected to spill over from Burger King to Hardee's because Hardee's is perceived as similar to Burger King in terms of its hamburgers but not its ice cream offerings. These scandal spillover effects are especially likely when contextual factors, such as advertising seen in close proximity to learning about the scandal, highlight attributes that are shared by members of the category. By contrast, if contextual information highlights attributes that are unique to brands in the category, the likelihood of a spillover effect may be mitigated.

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