Capitalizing on Our Faults:
Examining the Effectiveness of Mea Culpa Advertising
Matt Shaner, The University of Tennessee
Nawar Chaker, The University of Tennessee
Anton Fenik, The University of Tennessee
Capitalizing on Our Faults: Examining the Effectiveness of Mea Culpa Advertising
Abstract
Keywords: mea culpa, comparative advertising, trust, reference framing, loyalty
Mea culpa ads are ads which implicitly or explicitly admit to wrongdoing or poor product quality, while promising to improve in the future. In this article, we examine the effects of mea culpa advertising, including mediating mechanisms and a moderator of the mea culpa ad to attitudinal and behavioral outcomes. Specifically, we conduct three experiments in which trust, reference framing effects are shown to mediate the effectiveness of mea culpa ads. Further, we show that preexisting loyalty toward the product being advertised negatively moderates the direct and mediated relationships with attitude toward the ad, attitude toward the brand and purchase intentions.
Imagine the following scenario: A firm decides to radically overhaul its product in response to consumer dissatisfaction with the quality of its offerings. It runs a series of ads essentially acknowledging the historically poor quality of the product and pledging to listen to the voice of the customer and promising to do a better job in the future. Such brutal honesty and willingness to castigate one’s own product shouldn’t be surprising given the rate at which market changes are accelerating (Day 2011). Marketers are employing an ever-changing arsenal of tactics, ad campaigns and messages to consumers to try to encourage loyalty among existing customers while attracting new ones to increase market share (Kumar and Shah 2009).
There are several prominent examples of U.S. firms that have adopted this mea culpa approach in their advertising campaigns. Domino’s Pizza launched a promotion in which they quoted particularly unhappy customers’ comments about the poor quality of their current product as the “worst excuse for a pizza I ever had” (Farhi 2010). JC Penney launched a new retail pricing strategy in early 2012, and ran an ad campaign in which they acknowledged the frustrating nature of their high-low pricing strategy and frequent sales promotions, promising a better customer experience with the arrival of their everyday low prices (Wong 2012). JC Penney has even recently appeared in the news with another ad campaign apologizing to customers and pleading for them to come back (Fox 2013). This comes just one month after the ousting of former CEO Ron Johnson, whose changes resulted in 50% loss of shares of the company and a $427 million loss in the fourth quarter. The recent ad acknowledges the mistakes made during the Johnson-era and promises to make changes, stating “it’s no secret: recently J.C. Penney changed. Some changes you liked, and some you didn’t… but what matters with mistakes is what we learn.” Fast-food restaurants, airlines, retailers, and even professional sports teams have begun adopting this strategy in recent years as well (Farhi 2010). The Chicago Bears, after a lackluster 2009-2010 season, ran advertisements acknowledging that their on-field performance was less than stellar and vowing to their fans to do better the next season. In all of these cases, marketers have displayed a willingness to castigate their own offerings, coupled with a promise to improve in the future, in an effort to increase market share, win back disappointed customers, and attract new customers.
According to Olsen et al (2008), a self-comparative ad is an advertisement which “promotes a superior product offering by contrasting it with a prior or current product under the same brand name.” In this course of research we explore a related, but slightly different version of self-comparative ads, mea culpa ads (Farhi 2010), which are a sub type of self-comparative ads. For this paper, we focus on one significant difference. In contrast to self-comparative ads, mea culpa either implicitly (or directly) admits to previous wrongdoing or to poor delivery of quality on the part of the product featured in the ad. While the difference is somewhat nuanced, the theoretical implications of how such ads are likely to influence corporate credibility and brand trust make this an important distinction. We assert most firms that release incremental upgrades to their products and services implicitly engage in self-comparison advertising, but that consumer response to these ads should be different than the response to mea culpa advertising. Self-Comparative ads may have mixed effects with consumers. On one hand, it may be a source of frustration and negative affect for customers who purchased an “older” version of a product, which becomes outdated when new versions are released. On the other hand, product upgrades might serve as an innovativeness cue for customers, signaling the firm managing the focal product is working to improve the quality of its offerings (Boonea et al. 2001).
In contrast, we view mea culpa advertising as admission of guilt in the public sphere by the advertiser, as if to say, “Previous versions of our products were of low quality or undesirable.” Mea culpa ads differ from simple self-comparative advertising, which, in past research has not included an admission of poor previous product quality or desirability.
Mea culpa advertising has appeared in several salient advertising campaigns in recent years, yet the direct effects of this approach are not well-understood. Furthermore, the benefits and boundary conditions of competitor-comparison advertising have been fairly-well established in the literature (Choi and Miracle 2004; Grewal et al. 1997; Shao et al. 2004). Extant literature has not investigated the boundary conditions of self-comparative advertising in general and mea culpa advertising in particular. In this paper, we focus on several important questions related to the effectiveness of mea culpa ads:
1. What are the direct effects of mea culpa ads on consumer attitudes and behavior (attitude toward the brand, attitude toward the ad, and purchase intentions)?
2. What are the mechanisms that mediate the relationship between mea culpa ads and consumer outcomes (attitude toward the brand, attitude toward the ad, and purchase intentions)?
3. How do mea culpa ads differ from ads that simply communicate product improvements, without disparaging prior product quality or performance?
4. Does pre-existing loyalty to a product affect how a customer responds to mea culpa ads?
Conceptual model and Propositions Development
In this section we develop a conceptual model and make several propositions regarding direct effects, mediated effects and a moderator of the relationship between mea culpa advertising and consumer attitude towards the ad, consumer attitude towards the brand and purchase intent. Figure 1 shows these relationships. Specifically, we posit that mea culpa ads result in more positive attitudes toward the ad, attitudes toward the brand and purchase intentions through the mediating mechanisms of establishing trust and manipulating consumers’ frame of reference for making judgments about the advertised products. We also theorize that the loyalty moderator will negatively impact all of the above stated relationships.
<Insert Figure 1 about here>
Direct Effects of Mea Culpa Advertising
Many scholars have investigated the effects of comparative advertising, hereafter referred to as competitor-comparative advertising, which presents a focal brand or product in favorable comparison to competitors’ products (Choi and Miracle 2004; Grewal et al. 1997; Meirick 2002; Olsen et al. 2008; Shao et al. 2004; Thompson and Hamilton 2006). Although there has been some debate as to the efficacy of comparative advertising, a meta-analysis by Grewal et al. (1997), found that competitor-comparative ads generally create more attention to the ad, greater awareness of the brand and the advertising message, attitudes that are more favorable toward the brand being advertised and greater purchase intentions. We propose that mea culpa ads are kind of comparative advertising, self-comparative advertising (Olsen et al. 2008), and the outcomes of mea culpa ads should be similar to competitor-comparison ads – attitude toward the ad, attitude toward the brand and purchase intentions.
Grewal et al. (1997) also found that, while competitor-comparative ads had a positive effect on purchase intentions, they had a negative effect on attitudes toward the ad, suggesting that such advertising had the effect of communicating the desired message about relative value, but did so in an irritating way. We postulate that ads using self-comparison in a mea culpa fashion may give advertisers the best of both worlds – inducing positive attitudes toward the ad and toward the focal product and increasing purchase intentions without eliciting negative affect through competitive or contentious statements about other brands. Thus, formally stated:
P1: Mea culpa ads will result in (a) more positive attitudes toward the brand, (b) more positive attitude toward the ad, and (c) greater purchase intentions than ads that communicate product upgrades, or competitor-comparative ads.
Much of the literature that has examined the effects of competitor-comparative advertising has explored the boundary conditions that exist for the positive effects of comparative advertising. It is to this topic that we next turn in our conceptual development of self-comparative ads.
The Mediating Effect of Reference Point Framing
Reference point framing refers to the tendency of individuals to respond differently to the same information, depending on how it is framed (Malhotra and Bazerman 2008; Tversky and Kahneman 1986) and the anchors, or social norms, used to make judgments about received information (Woodruff et al. 1983). An example of this would be a home seller who accepts a less-than-asking-price offer from a prospective buyer, after receiving an extreme low-ball offer. In this case, the extreme low-ball offer serves as a frame of reference against which a higher, but still less-than-asking-price offer looks more attractive. The concept of framing an exchange partners’ transaction or experience expectations has been explored in a variety of contexts in academic business literature. Areas of inquiry have included consumer behavior (Tversky and Kahneman 1986; Woodruff et al. 1983), advertising and public relations (Hallahan 1999; Keller 1991; Vakratsas and Ambler 1999), personal selling (Castleberry and Shepherd 1993), and negotiations (Malhotra and Bazerman 2008).
Malhotra and Bazerman (2008) discuss these reference point effects in a negotiation context: “negotiators look for assistance in making judgments regarding the value of an item, and this assistance often comes in the form of salient reference points on which to focus” (p. 519). Similarly, individuals exposed to advertising may look for reference points against which to judge the information being processed in an attempt to determine if elaboration is needed or if a judgment can be rendered about the content (Petty and Cacioppo 1986; Petty et al. 1983). These anchors and perceived norms as points of comparison can drive brand performance judgments (Kahneman 1992; Woodruff et al. 1983).
According to Kahneman (1992), “One of the important implications of framing effects is that people are usually unaware of the possibility that their views of a problem might change with a different formulation” (p. 305). Extending this notion to an advertising context, framing effects of ads are posited to exert a subconscious influence on consumers in the way they interpret information and make judgments about advertised products.
Stated differently, we propose mea culpa ads change the point of reference from the quality of the focal product in relation to competitors’ products to the quality of the focal product in relation to low-quality versions of itself. As such, we suggest that this same framing effect, found in mea culpa ads, can improve the overall perception of the focal brands’ quality, as well as increasing purchase intentions, by limiting the points of comparison consumers make with potentially higher-quality comparisons. In effect, other options, particularly competitors’ offerings, are framed out of the criteria against which consumer judgments are made.
The framing effects of advertising are also consistent with a similar concept, the principal of asymmetric dominance (Bettman et al. 1998; Huber et al. 1982), which states that price being equal, less attractive options will make similar options look more attractive. In the same vein, we suggest that less attractive versions of products will enhance their more attractive counterparts. For example, a professional sports team with a .500 winning record, may use last season’s losing record as a reference point in attempt to make the current season seem more palatable to fans, even when compared to other rival teams that have greater than .500 win/loss records.
Based on the preceding arguments, we theorize that, mea culpa advertising should serve to limit the frame of reference consumers use to make comparisons and subsequent judgments about product quality, resulting in more favorable attitudes toward the ad, toward the product and more positive purchase intentions. Formally stated, we postulate the following:
P2: The positive relationship between mea culpa ads and consumer outcomes will be mediated by the degree to which the ads create a frame of reference that enhances the focal product compared to prior versions of itself and impedes comparison to competitors’ products.
The Mediating Effect of Corporate Credibility (Trust)
The concept of credibility is generally considered when researchers and marketers discuss the impact of advertisements. Research has referred to credibility as the extent to which a source (e.g. print advertisements) is detected as having expertise relevant to the communication message and whether this message can be trusted (Belch and Michael ; Goldsmith et al. 2000; Lafferty and Goldsmith 1999; Ohanian 1990). Corporations should not take the idea of credibility lightly, as its credibility can be harmed when consumers suspect inferior products, corporate lies or reports of legal and ethical violations (Fombrun 1996; Lafferty et al. 2002).
Keller et al. (2011) have defined firm corporate credibility as the degree of belief a consumer has in the firm’s ability to design and deliver products and services that satisfy consumer needs. Expertise and trustworthiness are stressed as vital elements of corporate credibility. The expertise of the communication is determined from one’s knowledge of the subject, while trustworthiness is associated with the honesty and believability of the source (McGinnies and Ward 1980). In their study of adult consumers’ perceptions advertisements, Goldsmith et al. (2000) showed that corporate credibility influences a consumer’s attitude-towards the ad, attitude-towards the brand and purchase intentions.
In the case of mea culpa ads, firms try to reconcile and improve their corporate credibility by self-admitting shortcomings and emphasizing improvements. For our analysis of these ads, the element of expertise within the notion of corporate credibility might not be as applicable to these types of ads and as a result we will focus on only the element of trustworthiness.