The impact of a product-harm crisis on customer perceived value

The purpose of this research is to help better understand the effects of a productharm crisis on crisis and non-crisis brands’ customer perceived value and market competitive structure in the auto industry. The research first develops a fourdimensional customer perceived value (CPV) measure, and then uses the measure to collect data before, during and after the 2009–2010 Toyota product-harm crisis. These data are analysed and compared to investigate the impacts of the product crisis. The results show that the crisis can have a negative impact on the crisis brand’s CPV, and the impact from experienced customers is different to that from inexperienced customers. Some non-crisis brands with the same country of origin (COO) and similar product attributes to the crisis brand will also be negatively affected by the crisis. Moreover, brands with significantly higher CPV will benefit from the crisis. However, these impacts from the product crisis are short-lived and most of the brand’s CPV recovers in the post-crisis period to the pre-crisis level. The crisis also changes the competition rules of the product category by changing the weights of CPV dimensions across the pre-, during- and post-crisis periods. Therefore, all companies need to handle the product crisis carefully, so that they can adjust their strategy accordingly in the dynamic market. These findings have implications for understanding the influences of a productharm crisis. The managerial implications are also discussed.