This study provides insight into how a regulator-initiated digital marketing campaign can improve consumer recall compliance. Regulators have struggled for decades to get consumers whose products have been recalled to comply with recall notices and get their products fixed. An initiative by the U.S. automobile industry’s regulator, the NHTSA, is the focus of this research. We find that the provision of relevant information in a digital format was effective at increasing consumer compliance. Importantly, the initiative was more or less effective under certain conditions, which could be critical for federal and industry leaders who wish to launch similar digital marketing campaign interventions in the future. The evidence provided in the study suggests that more resources should be allocated to interventions that focus on improving consumer compliance.
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Pagiavlas, Sotires, Kartik Kalaignanam, Manpreet Gill, and Paul D. Bliese (2021), “Regulating Product Recall Compliance in the Digital Age: Evidence from the “Safe Cars Save Lives” Campaign,” Journal of Marketing.
The unprecedented number of product recalls in recent years and subsequent low consumer recall compliance raise questions about the role of regulatory agencies in ensuring safety. In this study, the authors develop a conceptual framework to test the impact of a regulator-initiated digital marketing campaign (DMC) on consumer recall compliance. The empirical context is the launch of a nationwide DMC by the U.S. automobile industry’s regulator. The analysis utilizes recall completion data from 296 product recalls active both before and after the DMC’s launch. The results show that the DMC improves consumer recall compliance. In the first four quarters after it was introduced, the DMC increased the number of vehicles fixed, on average, by 20,712 per recall campaign over what was to be expected without the DMC. Regarding boundary conditions, the study finds that the DMC is more effective for recall campaigns with greater media coverage and for those with older recalled products. However, the DMC’s effect is weaker as the time needed to repair a defective component increases. The findings should help regulators make compelling cases for greater resource allocation toward digital initiatives to improve recall compliance.
Special thanks to Holly Howe (Ph.D. candidate at Duke University) and Demi Oba (Ph.D. candidate at Duke University), for their support in working with authors on submissions to this program.
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