Previous research indicates that consumers may resist negative publicity when they perceive a firm to be socially responsible (Klein & Dawar, 2004; Chernev & Blair,2015). However, other research shows corporate social responsibility (CSR) may boomerang the damage of negative publicity (Sohn & Lariscy,2012). Firms may participate in CSR and it is important for market practitioners and researchers to understand the role of different types of CSR in minimizing the impact of negative publicity. This research aims to examine the moderating role of two types of CSR in the effect of negative publicity on consumer responses. An experiment with a 2 (negative publicity type: ability-related vs. morality-related) x 2 (CSR type: philanthropic donation vs. employee wellbeing) between-subjects factorial design was conducted in a major city of China. In the morality-related negative publicity and employee wellbeing condition, the participants were shown with employee wellbeing materials and a morality-related negatively publicized article about a fictitious hotel. Similar arrangements were setup for other different conditions. Then, consumer responses such as firm evaluation and patronage intention were measured. Results of two-way ANOVA revealed a significant interaction effect. The findings indicate that consumers’ patronage intention is lower when a morality-related negative publicity has happened to a firm having “philanthropic donation” type of CSR, and also when an ability-related negative publicity has happened to a firm having “employee wellbeing” type of CSR. Managerial

Negative publicity is widespread in the current marketplace, and may be of different forms ranging from sourcing garment products from sweatshops to recent Volkswagen emission crisis. Negative publicity may cause weak customer satisfaction, drop in sales, increased vulnerability to competitors’ marketing mix actions, and spill over effects on other brands (Pullig, Netemeyer, & Biswas, 2006; Van Heerde, Helsen, & Dekimpe, 2007). Existing research has focused on different response strategies for dealing with such crises. For example, Coombs (1995) listed five alternative strategies available to handle such a crisis situation: denial, distance, ingratiation, mortification, and suffering. Xi and Peng (2009) examined the effectiveness of affective, functional and informational repair strategies in restoring consumer trust after a negative publicity. However, no prior research thus far explored the role of cause related marketing in dealing with a negative publicity.

Negative publicity can be defined as negative information about a product, a service, a brand, an organization or an individual that is circulated through mass media such as print media and broadcast media (Dean, 2004; O'Guinn, Allen, & Semenik, 2011). Indeed, there has been a growing interest in the marketing literature concerning the effects of negative brand publicity on consumer perceptions and evaluations (Cleeren, van Heerde, & Dekimpe, 2013; Dills & Hernández Julián, 2012; Pullig, Netemeyer & Biswas, 2006; Thirumalai & Sinha, 2011). Negatively publicized instances such as defective products/services or unethical business practices are likely to impair a brand’s image and its equity. However, previous literature has mainly focused on the effect of performance-related negative publicity on consumer responses and there are limited studies about the effect of value- or ethics-related negative publicity. Owing to the inherent characteristics of inseparability and intangibility, hospitality managers need to pay particular attention to ethical issues and the detrimental impact of value-related negative publicity. This study aims to examine the impact of negative brand publicity on hotel consumers for two types of negative publicity (namely, performance-related and value-related). A content analysis and a consumer survey were conducted in China so as to investigate the hotel recovery strategy and consumer responses toward negative publicity. The content analysis was performed on two largest local daily newspapers in China. It showed that the occurrence of value-related negative publicity (e.g., not keeping promises, or dishonesty) was much greater than performance-related negative publicity (e.g., untidy room, or equipment malfunction) in China’s hotel industry. Compensations appeared to be the most common method for hotel responses toward the two types of negative publicity. The consumer survey showed that consumer responses such as hotel evaluations and patronage intentions were negatively affected by negative brand publicity. Female consumers were found to be more sensitive to unethical issues than male consumers. In other words, females were more negatively affected by value-related publicity than performance-related publicity. Managerial implications for hospitality managers are discussed.