1) What is a Product-Harm Crisis?
2) What are the factors that contribute to a Product-Harm Crisis?
3) A brief analysis of Product-Harm Crisis studies
4) Research synthesis
What is Product-Harm Crisis?
A product harm crisis is a negative event which occurs when a defective or tainted product is launched into the market and discovered. It reaches crisis stage when the product's defects are discovered, and swift crisis management strategies need to be implemented to lessen the damage to the company brand. It is imperative for management to devise contingency plans ahead of a crisis to protect the company in the event that such incidences do occur. Such incidences may result in a loss of revenue, a destroyed company reputation, and a loss of faith in the company by the consumers. For instance, Toyota Motor Corp. is notorious for having product recalls due to faulty parts and other health and safety vehicle issues. One such event occurred when the company recalled 2.77 million vehicles worldwide (Reuters, 2012) - this was barely a month after it recalled over 7.4 million vehicles for a totally different safety issue. As an individual, I have totally lost trust in Toyota Motor Corp. due to the frequency of product recalls, and wonder why no long-term structures are put in place to prevent future recurrence. However, as is known in the Technology Adoption Cycle (Moore, 2002, p.12), the "laggards" represent the steadfast consumer who will be highly reluctant to purchase any other vehicle which is not Toyota, the brand they are loyal to. It will be beneficial for such a company, with a dented reputation due to frequent product recalls to quickly make peace with the "laggard" consumers in order to re-develop their customer base.
Factors that Contribute to a Product-Harm Crisis
There are a number of causes why a product needs to be recalled. Corporate negligence is such a case. Corporate needs to ensure that all safety regulations are followed without compromise and vigorous testing of the product is conducted before product launch. The management needs to thoroughly understand their target market, for instance, a bakery targets all bread-eating customers, management must understand that, even though their target market enjoys ...
This paper gives a brief overview of the concept behind a Product Harm crisis, and how management can mitigate against such happenings in their respective organizations.