Crisis Management & Brand Reputation An exploratory study on crisis management and its effects on brand reputation BACHELOR THESIS THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15 PROGRAMME OF STUDY: Marketing Management AUTHOR: Kim Bodeklint, Angelica Lindhe, William Unosson TUTOR: Johan Larsson JÖNKÖPING May 2017 Bachelor Thesis in Business Administration Title: Crisis Management & Brand Reputation, An exploratory study on crisis management and its effects on brand reputation Authors: Kim Bodeklint, Angelica Lindhe, William Unosson Tutor: Johan Larsson Date: 2017-05-22 Key terms: Crisis, Management, Effects, Brand, Reputation, Preparation, Crisis Analysis, Communication, Forgetfulness, Strong Brand Abstract Background – Existing literature suggest that crisis management is essential for companies to be able to maintain the company image. However, the literature has no models and theories for the relationship between crisis management and brand reputation. Furthermore, even though there are literature about the subject, the field is not to be concluded which lay the ground for an exploratory research. Additionally, when reading company interviews after crises, some state that the company benefitted from the crisis which is essential to explore. If the company performs better after a crisis than before, the reasons for this is interesting to explore. Purpose – The purpose of the thesis is to explore how crisis management affects brand reputation and discuss the factors that determines the effect. When doing this, the study adds value to the field as it will never be concluded and thus, it will always benefit from additional research. The purpose of the thesis is explored from a company point and the conclusion is therefore also in the same manner. Method – The study is of the qualitative nature and the empirical data is collected through semi- structured interviews with 14 companies and one crisis management expert within the Swedish market. As the study seek to modify and develop new theories, it has an abductive research approach. Findings – When concluding the study, it is found that crisis management rather than having a direct effect on brand reputation, minimise the negative effect that a crisis can have in the long- term perspective. Furthermore, the result shows that consumers, as a following of a good crisis management and a strong brand, do forget about crises and thus, the brand will not experience long term damaged if the crisis management is handled in a correct manner. However, in the short term, it can be concluded that the brand will be affected. i Acknowledgements Gratitude is expressed to those who supported this thesis and made it possible to reach a good result. Firstly, the result of this thesis would not have been reached without the participating interviewees. Therefore, sincere gratitude to all included, namely crisis management expert Jeanette Fors- Andrée and the company respondents; Marcus Thomasfolk (Volkswagen Group Sverige), Eva Berglie (Santa Maria), Jacob Broberg (Cloetta Group), Fredrik Gemzell (Gröna Lund), Jakob Holmström (IKEA), Niclas Härenstam (SJ), Carina Hanson (Estrella), Dan Jonsson (Atteviks), Anita Skoogh (SIA Glass), Gunnar Gidefeldt (Arla), Robert Badics (Bergendahls), Helen Knutsson (Orkla Foods Sverige), Gunilla Svensson (SEB) and Sara Hoff (HK Scan) for the valuable knowledge that strengthened this thesis. Secondly, the tutor Johan Larsson provided the useful guidance and feedback which led to increasing the overall quality of the thesis and ensuring that the purpose of the study was met. For this, gratefulness is sincerely expressed. Finally, gratitude is expressed to the seminar group as the research quality increased with help from the advices given in the meetings. Jönköping, 22nd of May 2017 _______________ _______________ _______________ Kim Bodeklint Angelica Lindhe William Unosson ii Table of Contents 1 Introduction ...................................................................... 1 1.1 Problem discussion ............................................................................................ 1 1.2 Purpose ................................................................................................................ 2 1.3 Definitions .......................................................................................................... 2 2 Frame of Reference ........................................................... 4 2.1 Crisis management ............................................................................................. 4 2.1.1 Crisis ..................................................................................................................... 4 2.1.2 Fundamentals for crises .................................................................................... 4 2.1.3 Preparation .......................................................................................................... 5 2.1.4 Communication .................................................................................................. 6 2.2 Brand Management ............................................................................................ 8 2.2.1 Brand .................................................................................................................... 8 2.2.2 Brand Reputation ............................................................................................... 9 2.2.3 Brand Equity ....................................................................................................... 9 2.2.4 Brand Loyalty .................................................................................................... 11 2.2.5 Brand Avoidance .............................................................................................. 12 2.2.6 Consumer-brand relationship ........................................................................ 13 2.3 Crisis management’s effect on brand reputation ........................................ 14 2.3.1 How to minimise the negative effect on brand reputation ....................... 14 2.3.2 How to recover from a brand crisis .............................................................. 16 2.3.3 Brand Forgiveness ........................................................................................... 16 3 Method and Data ............................................................ 18 3.1 Research Design ............................................................................................... 18 3.2 Research Philosophy ....................................................................................... 18 3.3 Research Approach .......................................................................................... 19 3.4 Method .............................................................................................................. 21 3.4.1 Literature search ............................................................................................... 21 3.4.2 Sampling ............................................................................................................ 22 3.4.3 Interviews .......................................................................................................... 25 3.4.4 Analysis of Qualitative Data ........................................................................... 26 3.5 Trustworthiness ................................................................................................ 27 3.5.1 Limitations ........................................................................................................ 28 3.5.2 Ethics ................................................................................................................. 29 4 Empirical Data ................................................................ 30 4.1 Interviews .......................................................................................................... 30 4.1.1 Companies view on crisis management ........................................................ 30 4.1.2 Experts view on crisis management .............................................................. 40 5 Analysis ........................................................................... 43 5.1 External Factors ............................................................................................... 43 5.1.1 Strong Brand ..................................................................................................... 43 5.1.2 Forgetfulness .................................................................................................... 44 5.2 Internal Factors ................................................................................................ 46 5.2.1 Preparation ........................................................................................................ 46 5.2.2 Crisis Analysis ................................................................................................... 47 5.2.3 Communication ................................................................................................ 48 5.3 Crisis Management effect on brand reputation ........................................... 50 iii 6 Conclusion ....................................................................... 52 7 Discussion ....................................................................... 55 7.1 Managerial Implication .................................................................................... 55 7.2 Limitations .......................................................................................................