Volkswagen is currently facing one of the biggest market crises in its history. This raises a number of organizational and market-level questions. The company will have to change leadership and put its organizational culture and processes under the magnifying glass. Another goal will be to work with various marketplace stakeholder groups to contain the crisis and re-establish consumer and societal trust in the brand.
How companies analyze culture to identity and then invert negative images and meanings about a brand in the market creation process has been demonstrated in a recent Journal of Marketing study.
How national news media helps companies in the ideological containment of systemic risk anxieties has been amply illustrated in a recent Journal of Consumer Research study by Ashlee Humphreys and Craig Thompson.
For the Industry
Since, at this point, it is likely to assume that the brand-level crisis will most likely extend to the larger automotive industry, companies should NOT expropriate Volkswagen’s misfortune through humorous branding rhetoric but instead coordinate amongst themselves and protect their own assets through a variety of legal, cultural-cognitive, and normative marketplace interventions. One overview discussion with links to studies that outlines some of the general parameters of industry- and market-level legitimation and how managers can navigate this process can be found here.
Activists seeking greater corporate transparency or stricter emission laws to defeat climate change can strategically expropriate this crisis in their political branding efforts. One recent example of how activists and activist scholars are using cultural branding tactics to do just in the context of global warming is Doug Holt’s initiative.
Consumers should pay close attention to what will happen in the next few phases of this crisis. Involved market players such as companies, regulators, and climate experts may attempt to shift some responsibility for this crisis away from the institutional level to individual consumers. Consumers will be encouraged to make more informed consumption decisions when choosing a car brand and to reward companies that show greater transparency. In parts, this strategy will be used to downplay the need for stricter regulation (see discussion of activists above) A study that highlights this process of consumer responsibilization and its implications for markets and consumers can be found here.