Content area
Full Text
1. Introduction
Brand rumors often occur unexpectedly and can cause substantial damage to an organization, including loss of reputation, reduced sales, damaged corporate credibility, and lower stock prices (DiFonzo and Bordia, 2007; Kimmel and Audrain-Pontevia, 2010). A rumor is defined as “false and damaging information about an organization is being circulated.” (Coombs, 2007, p. 168). Based on this, we define the brand rumor as unverified and misleading information about a brand that is being spread publicly. Of course, false rumors may be positive or negative. In routine settings, consumers are likely to weigh negative information from other customers more heavily than they do positive information. Negative information is perceived as more diagnostic than positive information (Ahluwalia, 2002). Rumors are no exception to this. Negative rumors that inspire negative emotional reactions such as fear, disgust and surprise tend to spread much faster than positive rumors (Harrison, 2020).
Unfortunately, brand rumors related to food – the core of a restaurant’s business – often occur in the restaurant industry. For example, McDonald’s suffered from a false news report that they were using ground worms as filler in their “all beef patties” to reduce cost, and that as a result customers became infected with parasitic roundworms. KFC dealt with a hoax claiming that they used mutated chickens for their products (McCauley, 2016; Taylor, 2016). In 2016, Yum! brands (KFC's parent company) won a lawsuit against several companies charged with disseminating fake news. Although both the above rumors were eventually revealed to be hoaxes, they had a severe negative impact on the financial performance and brand image of the company involved (Braun-LaTour et al., 2006; Mills and Robson, 2019).
Both the above brand rumors were originated and circulated through social media channels, including Facebook, Twitter and Instagram. Considering the fact that social media facilitates the rapid spread of misinformation that can distort events and tarnish an organization’s image (Gonzalez-Herrero and Smith, 2010; Liu et al., 2011), it is worthwhile to examine how consumers respond to a restaurant brand rumor circulated via social media, without certainty as to facts.
The brand rumor resembles a natural disaster in the sense that it is uncontrollable and can have an enormous negative influence if the response of the affected company is inefficient...