Brand activism: Does courting controversy help or hurt a brand?

Highlights

• Brand activism concerns the act of taking a stand on divisive socio-political issues

• Activism can hurt the brand substantially, while the potential benefits are minimal

• The negative effect of consumer-brand disagreement about the stand can be mitigated

• Consumers who decouple the brand itself from the (source of the) stand punish it less

• Brands can gain from taking a stand in cases where there is strong public backlash

Abstract

How do consumers react when brands take a stand on controversial socio-political issues? The results from a series of studies, involving both unknown and well-known brands, show that attitudes towards the brand decreased substantially among consumers who disagreed with a brand's stand, whereas there was no significant effect among consumers who were supportive of the brand's stand (Studies 1–4). This asymmetric effect of brand activism holds not only for brand attitude but also for consumers' behavioral intentions (Study 2) and actual choices (Study 1B). When consumers perceived the relationship between the brand and the source of the stand to be more distant, the negative effect of brand activism was weaker because it allowed consumers to morally decouple the brand from the stand (Study 3). Only when a brand faced public backlash because of its moral stand did we find a marginal increase in brand attitude among the proponents of the stand. However, when the brand subsequently withdrew its stand and apologized, the attitude towards the brand decreased among both the proponents and opponents of the stand (Study 4). We discuss the theoretical and practical implications of the findings and call for further research on brand activism.

Introduction

In early 2017, public opinion on whether the US had a responsibility to accept Syrian refugees was almost evenly divided – 47% of Americans were in favor, while 49% were against (Pew Research Centre, 2017). It was during such a time, and against the backdrop of the US travel ban controversy as well as the suspension of its refugee program, that Starbucks announced its intention to hire 10,000 refugees worldwide by 2022. Following this announcement, YouGov's BrandIndex showed a two-thirds decrease in Starbucks' Buzz score (Marzilli, 2017), which tracks positive versus negative word-of-mouth, and Credit Suisse warned investors about a negative impact on short-term sales (Moreano, 2017). However, Starbucks claimed that its stand on the issue did not have any substantial impact on the brand (Kell, 2017). When Chick-fil-A had become embroiled in the marriage equality debate in 2012, it had witnessed a wave of support in the form of a “Chick-fil-A Appreciation Day”, resulting in a 30% increase in sales compared to a typical day (Norman, 2012); however, it had also experienced fierce public backlash from marriage equality and LGBT activists.

These are only two examples of many brands, such as Patagonia, Target, Nike, and Hobby Lobby, which have recently taken a public stand on divisive social or political issues (see Peters & Silverman, 2016). It is thus not surprising that, in 2016, the Marketing Science Institute identified the issue of whether brands should take such stands as one of the critical issues emerging in the not-too-distant marketing future (Marketing Science Institute, 2016), and it underscored that it will be important for managers to know whether courting controversy is likely to help or hurt their brand. In this article, we therefore set out to investigate how consumers react to instances of “brand activism”, which can be defined as the act of publicly taking a stand on divisive social or political issues by a brand or an individual associated with a brand (Kotler & Sarkar, 2017).

The contentious nature of brand activism sets it apart from corporate social responsibility (CSR) or cause-related marketing (CRM) (Chernev & Blair, 2015; Luo & Bhattacharya, 2009), which typically concerns generally-accepted, non-divisive, pro-social issues such as supporting education or disaster relief. As a result, CSR or CRM initiatives are unlikely to elicit a negative response from consumers unless the initiative is perceived as an insincere marketing trick (Wagner, Lutz, & Weitz, 2009; Yoon, Gürhan-Canli, & Schwarz, 2006). However, as the two examples in the first paragraph demonstrate, courting controversy may elicit both positive and negative consumer reactions. Another difference is that CSR and CRM campaigns are usually part of a company's strategic plan (Varadarajan & Menon, 1988), whereas acts of brand activism can be ad hoc or accidental. In the case of Chick-fil-A, for example, the private opinion of the company's CEO, expressed during a radio interview, put the brand at the center of the marriage equality controversy. In the case of Starbucks, the company deliberately decided to take a stand in the ongoing refugee debate. While brand activism appears to involve greater uncertainty and risk than CSR or CRM campaigns, the potential pay-offs could also be higher.

To inform our theorizing and development of hypotheses regarding the effects of brand activism on consumer attitudes, intentions, and behavior, we draw on prior research in the domain of moral psychology and marketplace morality. In addition to the practical relevance of studying the effects of brand activism, we intend to contribute to the consumer-brand identification literature (Bhattacharya & Sen, 2003; Stokburger-Sauer, Ratneshwar, & Sen, 2012) by investigating the effect of self-brand similarity on consumer attitudes, intentions, and behavior in the moral domain. We also intend to contribute to the marketplace morality literature by examining the role that can be played by different moral reasoning strategies (see Bhattacharjee, Berman, & Reed, 2013; Lee & Kwak, 2016; Tsang, 2002) in shaping consumers' reactions to acts of brand activism.