Visually superior design provides a competitive edge in the marketplace by attracting consumers and increasing the perceived value of product quality and functionality. Although the positive influences of visual product design on market performance are well documented in the literature, little is investigated on how visual design plays a role in a negative situation such as product failure. The positive halo effect of visual design on product evaluation is called ‘beauty premium’, while little is investigated on how beauty premium changes when consumers face product failure. For example, would the beauty premium continue or fire back when a product with superior design, called a ‘beauty’ in this study, has functional harm? To answer this inquiry, we focus on the following research questions 1) Would the beauty effect protect or damage consumer purchase intention and product sales after product failure, and 2) Under what conditions can beauty effects be positive or negative after product failure?

• JungHwa Hong(The University of Texas at Tyler, USA)
• Kyung-Ah Byun(The University of Texas at Tyler, USA)