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Social Media Strategies in Product Harm Crises

By Shu He, Huaxia Rui and Andrew B. Whinston


The impacts of product-harm crises on other firms in the same category are complex considering the combined spillover and customer encroachment effects. With responding to both effects, non-focal companies may adjust their social media strategies to attenuate the negative influence from product-harm crises and to exploit the benefit from their competitor’s misfortune. Using daily social media activity data on Twitter for 56 major airline companies around the time of the Germanwings Flight 9525 crash, we find that non-focal airlines tend to increase their effort on customer relationship management after the crash with panel data fixed effects negative binomial models. At the same time, while airlines with no direct competition with the focal company appear to decrease their brand marketing effort due to the spillover effect, the tendency is reduced by the customer encroachment effect for the airlines that directly compete with the focal airline

Publisher: AIS Electronic Library (AISeL)
Year: 2015
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