Measuring the short-term spillover impact of a product recall on a brand ecosystem

Abstract

This research examines the short-term impact of a product recall on a brand ecosystem by investigating the following questions: How do product recall spillover effects spread to (i) the recalled brand’s related product categories, (ii) competing brands, and (iii) private label brands? Studying the 2003 Land O‘Lakes butter recall case using a difference-in-differences model, our research shows that negative spillovers occur within the same brand family, carry over to private label brands and then quickly dissipate, but do not carry over to competitor brands. Managerial implications and directions for future research are provided.

Appendices

Appendix A

Land O’ Lakes press release

Voluntary Recall of LAND O’ LAKES® Salted Stick Butter In One-Pound Packages.

ARDEN HILLS, Minnesota, 27 July /PRNewswire/ – Land O’Lakes Inc. today initiated a voluntary recall of approximately 3500 cases of LAND O’ LAKES® Salted Stick Butter in one-pound packages because it may contain small fragments of metal. There have been no reports of injury or illness associated with the consumption of the product covered by this recall.

The affected product was distributed in Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Mississippi, Montana, Nebraska, North Carolina, North Dakota Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming. The product was sold to consumers in retail grocery stores between June 11, 2003, and July 27, 2003.

The recalled product potentially affected has one of the following production codes:

    (Date) KE 107P

    (Date) KE 108P

    (Date) KE 109P

The code can be found above the Nutrition Facts on the package.

The voluntary recall is only for the product with the production codes noted above. No other butter products or production codes or any other LAND O’ LAKES® products are part of this voluntary recall.

‘We are initiating this precautionary recall because the safety and health of our consumers are our first concern,’ said Jack Gherty, Land O’Lakes president and chief executive officer. ‘We’re working with the FDA to ensure any product that has not yet been consumed is removed from the marketplace and consumers’ homes as quickly as possible.’

All the product was produced at Land O’Lakes Kent, Ohio, manufacturing facility.

Consumers who have purchased LAND O’LAKES® Salted Stick Butter in one-pound packages with one of these production codes are asked to return it to the place of purchase for a full refund.

Consumers with questions may contact the company toll-free at 1-877-585-2365 or visit our website at www.landolakes.com/ for further information.

Website: www.landolakes.com/

Appendix B

Graphical representation of states affected by the Land O’Lakes butter recall

States affected by the recall: Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming.

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