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Abstract Negative publicity about products and companies has become increasingly problematic for many firms. This study took the Chrysler/Consumers Union controversy concerning the alleged handling problems of the Plymouth Horizon and Dodge Omni automobiles into the laboratory to examine its effects. Original videotapes of the negative news story, the company's reply, and product advertisements were obtained and edited to form experimental conditions reflecting the actual news story and potential company response strategies. Measurements obtained immediately and two weeks after exposure indicate that the detrimental effects of the news story suggested by depressed market shares can be replicated in the laboratory. The use of public relations replies and product advertising are assessed as possible response strategies.
Weinberger et al. (Tue,) studied this question.