“Our” brand's failure leads to “their” product derogation

This research examines when and how consumers' product attitudes and their subsequent word-of-mouth behaviors are impacted by negative information about a brand that is associated with their social group. We find that negative information about an in-group brand threatens the in-group members' social identity, which in turn results in derogation of the threatening out-group's product. Importantly, we identify that the communication source of the negative information determines whether a threat to social identity will be realized. The out-group product derogation effect is observed only when the communication of the negative information comes from an out-group (vs. in-group) source. Finally, we provide evidence for our proposed mechanism by showing that a group affirmation exercise mitigates the out-group product derogation effect we have identified.