When Do Consumers Believe Puffery Claims? The Moderating Role of Brand Familiarity and Repetition

In the United States, exaggerated advertising claims for products and services, known as “puffery,” make up a considerable proportion of all claims in the marketplace. Legally, advertisers do not need to substantiate the puffery claims because it is believed that consumers would not be deceived by such exaggerated claims. This research reports two experiments that examined the moderating role of brand familiarity and repetition on puffery claims. Results indicated that while puffery generally led to weak main effects, it had significant interaction effects with brand familiarity (Study 1) and claim repetition (Study 2) on the dependent variables.     

Reason as a Nexus of Natural Law and Rhetoric

Although the pages of Journal of Business Ethics have hosted an ongoing dialogue on the ethics of rhetoric and persuasion, the debates have been unable to account for the underlying morality of the human propensity to engage in rhetorical discourse as a part of living in society. In this paper, I offer natural-law ethical theory as a moral paradigm in which to examine rhetoric. In this context, I assert that rhetoric services reason, which in turn services our dispositions or inclinations that are one ideological foundation of natural-law theory. As rhetoric affects the apprehension of these dispositions it subsumes a related morality in which rhetorical endeavors can be seen as “natural”. So endowed, I believe that this conception of rhetoric offers a number of philosophical and practical implications, one of which is a new way to assess the morality of commercial manifestations of rhetoric such as spin and the use of puffery in advertising.     

The Effects of Humor on Ad Processing: Mediating Role of Brand Familiarity

The effect of humorous advertisement on memory and attitude has been an important topic among advertising scholars. However, scholars have used fake brands to test the effects of humor. Since the possibility for consumers to be exposed to the commercial for a completely new brand is very low, using a fake brand to test humor effects is not realistic. Hence, this study examined the role of brand familiarity on the effects of humor on memory and attitude by using existing brands in a laboratory experiment. This study suggests a different structural model for familiar and unfamiliar brands based on the previous studies in consumer behavior. Results revealed different effects of humorous advertisements for the familiar or unfamiliar brands. The structural model proposed for this study revealed a mediating role of brand familiarity on humor effects. Humorous ads worked better for the unfamiliar brands. For the familiar brands, the effects were mediated by the subjects’ brand familiarity and prior brand attitude.     

Service recovery expectation model – from the perspectives of consumers

This paper explores the influence of the major attributes of consumers, such as personality traits, gender, number of consumptions, and levels of involvement, on service recovery expectations. A combination of linear multivariate statistical analysis and nonlinear fuzzy neural network models is further used to analyse data and validate hypotheses. Consumers of middle-to-high-end Chinese restaurant chains are sampled as the interactions between these restaurants and consumers are frequent. The empirical research finds that old customers have lower expectations of service recovery than new ones and male consumers have lower expectations than female consumers. Extrovert-type consumers have lower expectations of service recovery than introvert-type consumers. There is a positive correlation between consumers' involvement and service recovery expectation. As this paper examines the expectations of service recovery from the perspectives of consumers, it aims to help companies use pre-processing of service recovery as a precautionary measure, rather than as a remedial measure as mostly seen. Different from the vast majority of literature that deals with the issue by focusing on western enterprises, this paper uses small-and-medium enterprises in Taiwan and constructs management implications accordingly.     

The Risk Reduction Role of Advertising

This study shows theoretically and empirically that exposure to advertising increases consumers tendency to purchase the promoted product because the informative content of advertising resolves some of the uncertainty that the risk averse consumers face and thus reduces the risk associated with the product. We call this effect the risk-reduction role of advertising. The risk-reduction model implies that advertising effectiveness depends on (a) the risk preference parameter, (b) the precision of the advertising message, (c) the familiarity of the consumer with the product, (d) the consumers sensitivity to products attributes (and thus, her involvement level with the product), and (e) the diversity of products offered by multiproduct firms. These findings suggest that ads spending should be higher (a) for new and relatively unknown products, (b) for high-involvement products, (c) when ads can be quite precise, and (d) when the firm offers a diverse product-line. It also implies that ads should target consumers (a) who are more sensitive to risk, (b) who are more involved, and (c) those who are not familiar with the promoted product.The model allows ads to affect choices also through a direct effect on the utility (i.e., the standard approach to formulate the effect of advertising). In our empirical example (where the products are television shows) the risk-reduction effect is significant and strong and the direct effect is negligible behaviorally. We discuss the welfare implications of these findings, and illustrate the quantitative differences in managerial implications between our model and the traditional one.