Date of Award

Spring 2020

Document Type

Open Access Dissertation

Department

Moore School of Business

First Advisor

Kartik Kalaignanam

Second Advisor

Felipe Thomaz

Abstract

This dissertation is comprised of two essays that examine consumer responses to product and service failures. In essay 1, I use the U.S. automobile industry as a backdrop to investigate how consumers respond when their products experience a defect-related failure identified by the manufacturer that necessitates a recall. I develop a conceptual framework to test the impact of a regulator-initiated digital marketing campaign (DMC) on consumer compliance to product recalls. The empirical context is the launch of a nationwide DMC by the U.S. automobile industry’s regulator. The analysis spans 12 quarters of recall completion data pertaining to 296 recalls falling on either side of the DMC’s launch. The results show that the DMC improves consumer recall compliance by 10.9% over its duration, an effect mediated by heightened consumer recall awareness. With regards to moderators, the DMC is more effective for products with a higher perceived susceptibility to risk but less effective when consumers face concurrent recalls. The findings should help regulators make compelling cases for larger budgets to be allocated for recall compliance efforts.

In essay 2, I examine how consumers respond to product or service failures (i.e., issues) by visiting online communities to collaboratively create service solutions with fellow consumers. I describe their interactions as “user-generated service” (UGS), a form of customer engagement. I develop a conceptual framework to test the moderating impact of firm involvement in these communities on UGS volume. I gather data on four firms across their firm-owned and firm-unowned online platforms in which UGS takes place.

In total, I analyze over 59,000 posts made by service-seeking consumers from 2013 to 2017. The results show that a firm’s ownership of the platform (i.e., forum) negatively moderates the impact of customer sentiment, anger, and anxiety on UGS engagement volume. Additionally, firm employees’ participation in the UGS negatively moderates the impact of customer anxiety on engagement. I use an experiment to demonstrate that the negative impact of firm platform ownership extends beyond service-related engagement. These findings should help marketers tasked with fostering customer engagement consider the role firms should play in online communities comprised of service-seeking customers.

Available for download on Sunday, May 08, 2022

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