Scenario 18-5 An Old Adage States That All Publicity Is Good Publicity

question 40

Multiple Choice

Scenario 18-5
An old adage states that all publicity is good publicity. However, Professors Jonah Berger of the Wharton School, and Alan Sorensen and Scott Rasmussen of Stanford University found that there is such a thing as bad publicity. The colleagues studied the relationship between bad publicity and its impact on music albums, books, and movies. They published their findings in Marketing Science. After studying cases involving the late Michael Jackson, Russell Crowe, and various authors, the colleagues concluded that negative publicity can increase product sales. Michael Jackson sold more albums after receiving negative media attention, and films starringRussell Crowe received higher rankings following an incident in which he allegedly threw a cell phone at a hotel employee. These high-profile stars actually thrived after receiving substantial amounts of negative publicity. However, in many low profile cases, negative publicity hurt sales and product reception. The three colleagues conducted an analysis of The New York Times' reviews and book sales, and found that negative reviews hurt sales of books by well-established authors, but helped sales of books by relatively unknown authors. After conducting the study, the authors found that conventional wisdom is wrong: not all publicity is good publicity. But they did show that negative publicity can sometimes be positive; it all depends on existing-product awareness.
-(Scenario 18-5) When publicity is positive it tends to: 

• A) carry heightened credibility. 
• B) create more skepticism. 
• C) create competition amongst brands. 
• D) polarize individuals within a company.

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Definitions:

Innovative Products

Products that introduce new features, functionalities, or technologies to meet emerging consumer needs or to open new markets.

Oligopolistic Competition

A market structure in which a few firms dominate, each with a significant share of the market, leading to limited competition and high barriers to entry.

Price Wars

A competitive strategy where companies reduce prices of goods or services in succession to undercut competitors, with potential negative effects on industry profits.

Penetration Pricing Strategy

A pricing tactic in which a product is offered at a low price during its initial offering to attract customers and gain market share.