ARTICLE IN PRESS

Journal of Retailing and Consumer Services 12 (2005) 285–295

www.elsevier.com/locate/jretconser

Non-fulfillment of promotional deals: the impact of gender and

company reputation on consumers’ perceptions and attitudes
Ainsworth Anthony Bailey
Marketing and International Business Department, College of Business Administration, University of Toledo, 2801 W Bancroft Street,
Toledo, OH 43606, USA

Abstract

Sales promotional activities account for a significant portion of the integrated marketing communications budget of most
companies, but there are times when promotional plans backfire, and promotions go unfulfilled. While much research has focused
on the impact of sales promotional activities on consumers’ responses and attitudes, not much has focused on non-fulfillment of
promotional promises and the consequences. Utilizing research on gender and ethics, as well as the marketing literature on company
reputation, we developed various hypotheses regarding the likely impact of gender and company reputation on consumers’ attitudes
toward, and perceptions of, companies involved in non-fulfillment of promotions. These were tested in an experimental study.
Results indicate, overwhelmingly, that company reputation influences how consumers perceive brands and companies involved in
non-fulfillment of promotional deals. Companies with positive reputations do not suffer as adversely as those with negative
reputations. Gender has an impact on perceptions of the credibility of companies involved in non-fulfillment, but does not affect
brand attitudes, patronage intentions or switching intentions. Interaction effects indicate that there are differences between men and
women across company reputation conditions: among women, there were greater differential effects of company reputation on their
attitudes, as compared to the case with men, where the differential effects were not as great.
r 2004 Elsevier Ltd. All rights reserved.

Keywords: Consumer promotions; Gender effects; Non-fulfillment; Sales promotions

They are angry about a Pampers promotion.
Pampers, P&G’s biggest global brand, offered
parents Fisher-Price toys if they collected points
printed on diaper packages. Pampers hoped the
promotion would make consumers loyal users and
persuade buyers of rival Huggies to try Pampers (The
Wall Street Journal, April 2, 2002, page B1, Emily
Nelson).
dollars collecting enough points to order a motorized
Jeep and an educational toy and was disappointed
when she got a letter saying the company had run out
of the toys.
‘‘I am going to write them a letter and complain,’’ she
said (Associated Press, Procter runs out of toys for a
Pampers Promotion. April 2, 2002).

‘‘The toys were a nice little incentive to get Pampers

instead of Huggies or Luvs, but the company was
very misleading with the promotion,’’ said Allison
Boehler-Graves, 34, of Upper Arlington, who had
bought Pampers since the birth of her 6-month-old
daughter Hannah. She said she spent several hundred
Tel.: +419 530 2240; fax: +419 530 2290.
E-mail address: ainsworth.bailey@utoledo.edu (A.A. Bailey).
1. Introduction
Sales promotional activities by marketers account for
a significant portion of the integrated marketing
communications budget of most companies. These
consumer promotions include coupons, consumer loy-
alty or frequent buyer plans, sweepstakes, contests,
premiums, samples, rebates and refunds, and price deals

0969-6989/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jretconser.2004.10.003
 ARTICLE IN PRESS
286 A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295
(Burnett and Moriarty, 1998). Marketing communica-
tions managers and brand managers usually have a
number of objectives for the various kinds of consumer
promotions. Among the objectives are: to increase or
maintain sales, to build customer loyalty or trust, to
encourage brand switching, to get shelf attention, and to
prompt trial by new users (Burnett and Moriarty, 1998).
In spite of the popularity of consumer promotions,
however, there are times when promotional plans
backfire, and it is not unusual to see stories regarding
consumer discontent with some promotion that has
gone awry (refer to opening vignette). In spite of the
possibility of non-fulfillment, however, not much
research has explored this reality of promotional life
and its impact on consumers’ attitudes. Yet, recent
business publications indicate that there are several
instances of failed or scandalous promotions, which
could have implications for consumer promotions, in
general, and for the companies involved in these
promotions, in particular. Besides, a company’s failure
to fulfill a promotional promise could be construed as
an unfair practice, which could place it in violation of
the Federal Trade Commission’s position regarding
unfair business practices.
The principal aim of our study was to address this gap
by utilizing the literature on ethics and gender, as well as
company reputation, as a framework to develop testable
hypotheses regarding the likely reaction of consumers to
non-fulfillment of promotional deals; in particular, their
perceptions of corporate credibility, attitude toward the
brand, patronage intentions, and brand-switching like-
lihood. We outline an experimental study that was
conducted to test these hypotheses and discuss the
results and implications for brand managers and
integrated marketing communications managers. We
highlight the limitations of the study and suggest areas
for future research.
2. Background and hypotheses development
2.1. Company reputation
The issue of company reputation and its impact on
consumers’ attitudes and perceptions has been explored
by a number of marketing researchers (see, for example,
Yoon et al. (1993) for a summary of the roles of
company reputation in product/service markets and in
channel relations). Much of this body of research points
to the fact that company reputation—be it a retailer,
manufacturer, or service provider—is an important
factor in marketing environments (Barich and Kotler,
1991; Dawar and Parker, 1994; Dick and Basu, 1994;
Purohit and Srivastava, 2001; Zeithmal, 1981). Yoon et
al. (1993), for example, tested the proposition that a
company’s reputation and its service offering informa-
tion collectively determine a buyer’s expectations. They
found evidence to support the view that a buyer’s
response to a service is consistent with his/her attitude
toward the vendor’s reputation. Raj (1985) suggested
that favorable reputations are likely to yield stronger
and more resilient market share positions; and Ander-
son and Weitz (1989) found evidence that, in dyadic
channel relations, a manufacturer’s reputation enhances
distributors’ trust and loyalty. Nguyen and Leblanc
(2001) used data collected in three service industries—
retail sector, a major long-distance company, and
college students in business administration—to test the
nature of the relationship between corporate reputation
and corporate image and their effect on customers’
retention decisions. They concluded that the degree of
customer loyalty has a tendency to be higher when
perceptions of both corporate reputation and corporate
image are strongly favorable.
The fact is that reputation may be used as a cue in the
assessment of companies, in the absence, or presence, of
other cues. Many researchers have shown that in the
absence of knowledge about the true quality of goods
and services, consumers may rely on certain cues to aid
their decisions (Dawar and Parker, 1994; Purohit and
Srivastava, 2001; Rao and Monroe, 1988; Zeithaml,
1988). We believe that company reputation is one such
cue. In fact, Purohit and Srivastava argue that,
‘‘Because reputation is a characteristic that evolves over
time and considerable investment is required to establish
a positive valence, we posit that manufacturer reputa-
tion and retailer reputation are high-scope cues’’ (p.
125). They define high-scope cues as those cues that can
be characterized as ‘‘cues that evolve over time such that
their valence cannot be changed instantaneously; rather,
to change the valence of a high-scope cue, particularly
from negative to positive, considerable investments in
both time and money are required’’ (p. 125). Hence, the
expectation is that company reputation would be a
diagnostic cue, given its high-scope nature.
2.2. Consumer use of negative information
Ahluwalia et al. (2000) opined that, although there is
a lot of negative information about brands and
companies available to consumers, little research has
looked at the appraisal and use of negative information
by consumers. They posited the negativity effect, that is,
the case of consumers, and people, in general, placing
more weight on negative information, as against positive
information, when they have to form judgments about
brands, people, companies, and so on. This effect had
been explored in previous research in psychology,
particularly in the area of impression formation (Fiske,
1980; Klein, 1996; Skowronski and Carlston, 1987), as
well as in product evaluation contexts (see, for example,
Herr et al., 1991; Maheswaran and Meyers-Levy, 1990).
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A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295
Ahluwalia et al. (2000) conducted a series of studies that
indicated that consumer commitment to a brand, a
construct they viewed as ‘‘akin to brand loyalty’’ (p.
204), moderated negative information effects.
Other market researchers have also pointed to
asymmetric effects of positive and negative information
(for example, Taylor, 1991): negative experiences are
more elaborated upon than positive experiences (Fiske,
1980) and, according to Raghubir and Corfman (1999),
‘‘people search more for negative (versus positive)
information when making judgments, and they weight
this information more heavily because they find it more
diagnostic than positive information’’ (p. 213).
Given our discussion regarding company reputation
and consumer use of negative information, we expect
that a company with a positive reputation will fare
better than a company that has a negative reputation in
the case of a non-fulfillment, which is likely to be
construed as a negative event. This leads us to the
following predictions:
H1. Consumers who are exposed to non-fulfillment of
promotional deals by a company with a negative
reputation will have: (a) lower ratings of the company’s
credibility; (b) lower ratings of brand attitude; (c) lower
patronage intentions; and (d) lower switching intentions
than consumers who are exposed to non-fulfillment of
promotional deals by a company with a positive
reputation.
2.3. Ethics and gender
We view non-fulfillment of a promotional deal as an
ethical cue—given the underlying breach of promise/
trust—that is likely to have consequences for consumers’
attitudes towards firms involved in non-fulfillment (see,
for example, Hunt and Vitell (1986) for a discussion on
marketing ethics). Much of the research on the use to
which consumers put ethical cues in making judgments
show that companies that are perceived as unethical are
judged less favorably than companies that are perceived
as ethical (see, for example, Folkes and Kamins, 1999;
Thomas et al., 2002). In addition to this body of
research, another body of research that is of relevance is
that on gender and ethics. Much of that stream of
research indicates that there are gender-related differ-
ences in perceptions of ethical behavior (Stevenson and
Bodkin, 1996).
Ones and Viswesvaran (1998) conducted a study in
which they investigated gender, age, and race differences
on overt integrity tests. Information came from large-
scale job applicant datasets. Women in their study
scored higher on these overt integrity tests than men. In
a similar vein, Smith and Oakley (1997) conducted a
study among 318 graduate and undergraduate business
students, to assess whether there were gender-related
287
differences in ethical attitudes. Significant differences
were observed in male and female responses to questions
concerning ethics in social and personal relationships.
They contended that their results appeared to confirm
assertions by Gilligan’s (1982) of gender-related differ-
ences in moral reasoning and Callahan’s (1990) and
Keller’s (1988) arguments that men and women make
moral judgments in different ways.
Research has also suggested that in business and non-
business settings, women appeared to be more sensitive
to, and perceptive of, the cues that identify an
individual’s ethical tendencies. Women were also found
to be better at predicting both women’s and men’s
ethical framework than were men (Schminke and
Ambrose, 1997). Hence, the research stream indicates
likely different reactions of men and women to market-
ing developments such as non-fulfillment of a promo-
tional deal. Given their different moral reasoning stance,
we would expect women to have less favorable attitudes
toward companies involved in non-fulfillments. The
following hypothesis results from this line of thinking:
H2. There will be main effects of gender on consumer
perceptions of non-fulfillment of promotional deals, such
that women will have: (a) lower ratings of the credibility
of a company involved in a non-fulfillment; (b) lower
attitude toward the brand involved in a non-fulfillment;
(c) lower patronage intentions for a brand involved in a
non-fulfillment; and (d) lower intentions to switch to a
brand involved in a non-fulfillment than men.
2.4. Interactions
We expect that there will be an interaction between
the independent variables. Men and women are likely to
respond differently to non-fulfillment, depending on the
nature of company reputation. Above, we argued that
non-fulfillment is an ethical cue, to which consumers are
likely to respond. Given our discussion regarding gender
and ethics, we expect that women are more likely than
men to perceive non-fulfillment as unethical, and these
negative perceptions will be compounded when the
company has a negative reputation. Negative informa-
tion is more diagnostic, and more likely to be elaborated
upon (Fiske, 1980); hence, we expect that, in the event of
non-fulfillment, negative company information is likely
to have a greater impact on the attitudes of women than
it will on the attitudes of men. We expect no differential
effect on men and women in the case of positive
company information, given the asymmetric nature of
negative and positive information. This leads to the
following predictions.
H3. There will be an interaction of company reputation
and gender, such that gender effects on the dependent
variables—(a) company credibility; (b) attitude toward
the brand; (c) patronage intentions; and (d) switching
 ARTICLE IN PRESS
288 A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295
intentions—will be greater under negative company
reputation condition than under the positive company
reputation condition.
These predictions were tested in the study outlined
below.
2.5. Pretest 1
We conducted a pretest in order to obtain informa-
tion on the nature of the stimuli to be used in the
company reputation conditions. The articles to be used
to manipulate company reputation were tested in a
pretest 1 for their valence, their believability, and the
likelihood that such an article would be published in a
local newspaper. Two articles were developed, both of
which provided information on the company in our
study. The articles, purportedly published in a local
newspaper in one of the cities in which our fictional
company operated, provided either positive or negative
information about the company (see, for example,
Goldberg and Hartwick, 1990).
Fifty-six participants (about equal number of men
and women in a typical undergraduate introductory
marketing class at a Midwestern metropolitan univer-
sity) in the pretest were randomly assigned to one of the
two article conditions: 28 participants in the negative
article condition and 28 participants in the positive
article condition. They took part in exchange for course
credit. They read the articles and then completed a short
questionnaire. They responded to items that assessed
their perceptions of: (a) whether the company had a
good reputation; (b) the writer’s attitude towards the
company; (c) the feelings that were generated towards
the company that the writer spoke about; (d) the
believability of the articles; and (e) the likelihood of
such an article being published in a local newspaper.
Each item, a–e, was measured on a 7-point scale. Refer
to Appendix A for the items used in this pretest.
We performed t-tests to evaluate differences between
those who were exposed to the negative article and those
who were exposed to the positive article. There were
significant differences in the case of perceptions of
company reputation (t (54)= 11.65, MeanPos=6.14;
MeanNeg=2.18; po0.00); perceptions of the
writer’s attitude toward the company (t (54)= 9.55,
MeanPos=6.18; MeanNeg=3.21; po0.00); and feelings
generated by the article (t (54)= 5.87, MeanPos=5.75;
MeanNeg=3.57; po0.00). There were no significant
differences in perceptions of the believability of the
articles (t (54)= 0.12, MeanPos=5.04; MeanNeg=5.00;
p40.91), nor in perceptions of the likelihood of such an
article being published in a local newspaper (t (54)=0.67,
MeanPos=4.25; MeanNeg=4.54; p40.51). On the basis
of these results, we decided to use these articles in our
negative and positive company reputation conditions.
2.6. Pretest 2
Pretest 2 was conducted to assess consumers’ percep-
tions of, and reactions to, the product category, the
fictional company, and the type of promotion that
formed the basis of our study. Participants in this pretest
were 69 undergraduate students enrolled in an intro-
ductory marketing class at a Midwestern metropolitan
US university. There were more men (58%) than
women, the majority were juniors (71%), their average
age was 22.3, and they took part in exchange for extra
course credit. They responded to questions regarding
their general familiarity with pizza chains (3-item, 7-
point scale; mean=15.29; alpha=0.94); their attitudes
toward pizza chains (5-item, 7-point scale; mean=26.74;
alpha=0.93); the extent to which they perceived the
product category as relevant to a college student
audience (single item, 7-point scale; mean=6.46),
familiarity with the fictional chain in our study (4-item,
7-point scale; mean=9.86, alpha=0.94); and percep-
tions of the type of promotion that was run by this
fictional company (3-item, 7-point scale, mean=15.20,
alpha=0.75). All items on each multi-item scale were
summed to form a composite measure and factor
analyzed using principal components factor analysis
with varimax rotation. The items loaded on the expected
factors. Appendix A contains the items used in each
scale, and the reliabilities are reported above after each
scale description.
A series of t-tests were performed to determine
whether men and women differed in their responses
to these variables. There were no significant
differences between men and women in terms of: general
familiarity with pizza chains (t (67)= 0.55,
MeanM=15.48; MeanF=15.03; p40.59); their
attitudes toward pizza chains (t (67)= 0.82,
MeanM=27.08; MeanF=26.17; p40.41); the extent to
which they perceived the product category as relevant to
a college student audience (t (67)= 0.56,
MeanM=6.50; MeanF=6.41; p40.58), familiarity with
the fictional chain in our study (t (67)= 0.03,
MeanM=9.88; MeanF=9.83; p40.97); and perceptions
of the type of promotion that was run by this fictional
company (t (67)=1.43, MeanM=14.80; MeanF=15.76;
p40.16).
Given the results of the two pretests, we
concluded that the manipulation of company
reputation was acceptable; believability of the
articles was high; men and women could relate
to the type of promotion that was discussed in
our study; and there were no gender differences in
perceptions and attitude toward the product
category and no differences in levels of familiarity
with the fictional chain in our study. Hence, we
proceeded with the main study, using the aforemen-
tioned stimuli.
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3. Method
3.1. Study
3.1.1. Design and participants
Hypotheses H1–H3 were tested in a 2 (company
reputation: positive versus negative)  2 (gender: male
and female) between-subjects factorial design. One
hundred undergraduate business students (53 women
and 47 men) at a Midwestern metropolitan US
university participated in the study, in exchange for
course credit. The study was conducted in large class
sessions. Participants were randomly assigned to one of
the two company reputation conditions, with gender
being a non-assignable variable.
3.1.2. Procedure
Two experimental booklets were prepared. The cover
story told participants that they were being asked to take
part in a study regarding companies that were featured in
business publications such as The Wall Street Journal.
They would be shown information about these compa-
nies, and we would ask for their feedback. Participants
then read: (a) information on the fictitious company,
House of Pizza, which, purportedly, came from the
company’s website; (b) an article on the company, which
article was supposedly reproduced from a local publica-
tion; this article manipulated company reputation, so
those in the positive company reputation condition saw a
different version than that seen by participants in the
negative company reputation condition (see Appendix);
(c) an article, supposedly from The Wall Street Journal,
which discussed a non-fulfillment involving the fictitious
company. In this way, we hoped to successfully include
experimental information with non-experimental infor-
mation, as in the procedure used by Raghubir and
Corfman (1999). In the case of the non-fulfillment,
participants were told the following:
In the House of Pizza’s Toppings Points r promotion
that ran for three months, consumers were promised
gift certificates to redeem prizes such as T-shirts, mugs,
and baseball caps for every 50 points accumulated
within any three-week period during the course of the
promotion. Consumers earned a point for every $1
worth of pizza that they purchased from any of the
chains across the northeast. The response has been a
case study in what can go wrong with a promotion.
The effort had consumers saving proofs of purchase to
redeem the gift certificates, and reportedly had some
buying larger pizzas just to collect the points.
However, when some customers decided to redeem
their gift certificates, they were told that the company
had suspended the promotion. It claimed it had run
out of prizes. House of Pizza referred customers to a
section of the fine-print in the ads that touted the
289
promotion: ‘‘Offer good while supplies last.’’ That has
only served to anger customers, some of whom have
pledged to boycott House of Pizza.
After spending some time completing a verbal
protocol, participants were then asked to put away the
materials and answer some questions that were con-
tained in another booklet. We obtained measures of the
dependent variables and manipulation checks from
these responses.
3.1.3. Dependent variables
The dependent variables of interest in Study 1 were:
(a) corporate credibility; (b) attitude toward the brand;
(c) patronage intentions; and (d) switching intentions.
Previous researchers have indicated the importance of
these variables to marketers. For example, Lafferty and
Goldsmith (1999) have shown the impact of corporate
credibility on ad attitudes, brand attitudes, and purchase
intentions. Brand attitude has also been shown to be an
important variable. Switching and patronage intentions
were included, since the focus of much consumer
promotional activities oftentimes is to stimulate product
trial, or to get consumers who are users of competing
brands to switch to the brand that is on deal.
In the case of corporate credibility, we utilized the
corporate credibility scale developed by Newell and
Goldsmith (2001). The scale is an 8-item, 7-point Likert
scale; four items measure corporate honesty/trustworthi-
ness, and four items measure corporate expertise.
However, two items were dropped from the scale as a
reliability test and factor analysis revealed improvement
in the measure with the elimination of these items
(alpha=0.85). To measure attitude toward the brand,
participants were asked to rate their overall impression of
the brand discussed in the articles that they had read on
five 7-point semantic differential scales anchored by
‘‘unfavorable/favorable,’’ ‘‘bad/good,’’ ‘‘poor quality/
good quality,’’ ‘‘unsatisfactory/satisfactory,’’ and ‘‘nega-
tive/positive’’ (see, for example, scales used by Bruner
and Hensel (1992) and Lafferty and Goldsmith (1999),
which we modified by adding two additional items, ‘‘poor
quality/good quality’’ and ‘‘negative/positive’’; al-
pha=0.93). Since we were unaware of an existing
patronage intentions scale, we devised a measure of
patronage intentions by asking participants to rate the
likelihood that they would try this brand if it became
available in their area, and their likelihood of patronizing
the store. The scales used were four 7-point semantic
differential scales anchored by ‘‘very unlikely/very
likely,’’ ‘‘improbable/probable,’’ in the case of the items
related to patronage; and ‘‘impossible/possible’’ and
‘‘would not consider/would consider,’’ in the case of the
likelihood of trial (alpha=0.82). We measured switching
intentions using four 7-point semantic differential scales
anchored by ‘‘very unlikely/very likely,’’ ‘‘improbable/
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290 A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295
probable,’’ ‘‘impossible/possible,’’ and ‘‘would not con-
sider/would consider’’ (alpha=0.95). In each case, the
items were summed to form a composite scale and factor
analyzed using principal components factor analysis with
varimax rotation. The items loaded on the appropriate
factors, and measures of reliabilities are reported above
after each scale description.
4. Results
Manipulation checks: In the case of company reputa-
tion, a t-test (t(98)=10.62; po0.00) revealed a statisti-
cally significant difference in participants’ responses to
an item regarding House of Pizza’s reputation: House of
Pizza has a good reputation. This variable was measured
on a 7-point scale anchored by ‘‘strongly disagree’’ and
‘‘strongly agree.’’ Participants in the positive company
reputation condition (Mean=4.85) indicated higher
levels of agreement with the statement than participants
in the negative company reputation condition
(Mean=2.43). In addition, since we were interested in
gender effects and thought that men and women might
perceive the non-fulfillment cue differently, we used a t-
test to assess responses to the 7-point scale item: House
of Pizzas fulfilled its obligations to its customers. The
item was anchored by ‘‘strongly disagree’’ and ‘‘strongly
agree.’’ There was a statistically significant difference
(t(98)=2.64, po0.01) in responses by gender. Women
(Mean=2.81) had lower levels of agreement with this
statement than men (Mean=3.68).
4.1. Main effects
The PROC GLM procedure in SAS was used to test
the hypotheses. Table 1 contains results from this
analysis.
There was a significant main effect of company
reputation on each of the dependent variables:
company credibility (F[1,95]=35.81, MeanPos=34.06,
MeanNeg=24.93; po0.00); brand attitude
(F[1,96]=35.03, MeanPos=23.33, MeanNeg=16.93;
po0.00); patronage intentions (F[1,96]=18.60, Mean-
Pos=19.28, MeanNeg=14.78; po0.00); and switching inten-
tions (F[1,96]=9.67, MeanPos=15.70, MeanNeg=11.78;
po0.00). In all instances, negative company reputation
led to lower evaluations than did positive company
reputation. Hence, there was support for Hypotheses
H1a–H1d.
There was a main effect of gender on company
credibility (F[1,95]=12.82, po0.00); women rated com-
pany credibility lower than did men (MeanF=27.43,
MeanM=32.76); so, H2a was supported. However,
there were no gender effects on the other dependent
variables: brand attitude (F[1,96]=0.49, p40.49, ns);
patronage intentions (F[1,96]=2.02, p40.16, ns); and
switching intentions (F[1,96]=1.72, p40.19, ns). Hence,
H2b–H2d were not supported. These main effects
warrant further interpretation, in light of the significant
interaction effects discussed below.
4.2. Interaction of company reputation and gender
There were three significant interactions and one non-
significant interaction. There was no significant interac-
tion effect of the dependent variables on company
credibility (F[1,95]=2.81, po0.10). However, follow-up
tests indicated that in the negative company reputation
condition, women averaged credibility ratings of 15.64,
while men averaged credibility ratings of 21.50. These
averages were significantly different (t[99]=3.49,
po0.00). However, in the positive company reputation
condition, women’s ratings averaged 24.29, while men’s
ratings averaged 26.34; there were no significant
differences in these ratings (t[99]=1.35, p40.18, ns).
Even though the interaction was not significant, these
patterns are consistent with our expectations indicated
in H3a.
In the case of brand attitudes, there was a significant
interaction effect of the two independent variables on
this dependent variable (F[1,96]=4.65, po0.03). This
interaction is attributable to the fact that in the negative
company reputation condition, women averaged ratings
of 15.56, while men averaged ratings of 18.57. These
averages were significantly different (t[99]=1.94,
po0.05). In the positive company reputation condition,
women’s ratings averaged 24.07, while men’s ratings
averaged 22.53; there was no significant difference in
these ratings (t[99]=1.07, p40.29, ns). So, H3b was
supported.
We also found a significant interaction effect of
company reputation and gender on patronage intentions
(F[1,96]=4.11, po0.05). In the negative company repu-
tation condition, women averaged patronage intentions
ratings of 13.20, while men averaged 16.67. The
difference in these averages was significant
(t[99]=2.34, po0.02). In the positive company reputa-
tion condition, women’s ratings averaged 19.57, while
men’s ratings averaged 18.96. Here, there was no
significant difference in these ratings (t[99]=0.45,
p40.66, ns). This supported H3c.
There was a significant interaction effect of the
dependent variables on switching intentions
(F[1,96]=9.67, po0.00). In the negative company repu-
tation condition, women averaged 9.92, while men
averaged 14.00 (t[99]=2.34, po0.02), a significant
difference. In the positive company reputation condi-
tion, women averaged 16.11, while men averaged 15.27
(t[99]=0.51, p40.61, ns). These results confirm our
expectations expressed in H3d regarding the interaction
effect of the company reputation and gender on switch-
ing intentions.
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A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295 291

Table 1
ANOVA results, means and standard deviations

Dependent variables

CC Batt PI SI
F F F F
(p-value) (p-value) (p-value) (p-value)

ANOVA results
Between-subjects effects
Company reputation (CR) 1 35.46 35.03 18.6 9.67
(0.00) (0.00) (0.00) (0.00)
Gender (G) 1 12.22 0.49 2.02 1.83
(0.00) (0.49) (0.16) (0.18)
CR x G interaction 1 2.81 4.65 4.11 4.21
(0.1) (0.03) (0.05) (0.04)

CC Batt PI SI
Mean Mean Mean Mean
(SD) (SD) (SD) (SD)

Means and standard deviations

Positive company reputation
24.29 24.07 19.57 16.11
Female (5.63) (4.43) (4.62) (5.94)
n=28 n=28 n=28 n=28
26.35 22.54 18.96 15.27
Male (6.93) (5.89) (4.82) (5.62)
n=26 n=26 n=26 n=26

Negative company reputation

Female 15.64 15.56 13.2 9.92
(4.07) (5.16) (4.85) (4.8)
n=25 n=25 n=25 n=25
Male 21.5 18.57 16.67 14
(5.22) (5.47) (5.81) (7.47)
n=20 n=21 n=21 n=21

Note: CC: Company credibility; Batt: attitude toward the brand; PI: patronage intentions; and SI: switching intentions.

5. Discussion of and attitudes toward companies that are involved in

We set out to determine whether there were effects of
company reputation and gender on consumers’ percep-
tions of, and attitudes toward, companies that are
involved in non-fulfillment of promotional deals. We
decided to pursue this against the background that not
much attention has been devoted to understanding how
non-fulfillment might impact consumers’ attitudes and
perceptions, even though a number of research studies
have explored the impact of consumer promotions on
consumers’ attitudes and behaviors. We contended that
this was especially important in an ethos of recurring
non-fulfillments and scandals involving promotions. We
utilized research on company reputation, gender, and
ethics as the bases for formulating testable hypotheses,
with the hoping of expanding our understanding of
consumer promotions, their possible non-fulfillment,
and the consequences of those non-fulfillments.
Our results indicate that there is an overwhelming
effect of company reputation on consumers’ perceptions
non-fulfillments of promotional deals. Company repu-
tation had a main effect on all our dependent variables.
Companies with positive reputations did not fare as
adversely as companies with negative reputation in cases
of non-fulfillment. These findings were consistent with
our expectations. Gender had an impact on perceptions
of corporate credibility, with women having less
favorable perceptions of the credibility of companies
involved in non-fulfillment than men. This negative
perception of corporate credibility on the part of female
participants did not translate into other negative
perceptions, as there were no other main effects of
gender. This was contrary to our expectations.
There were several interaction effects—on brand
attitudes, patronage intentions, and switching inten-
tions—that lend some additional insights into the
impact of gender and company reputation on consumer
attitudes and perceptions. The findings supported our
expectations that greater differential attitudes between
men and women are more likely under conditions where
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292 A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295
companies involved in non-fulfillments have negative
reputations than in cases where these companies have
positive reputations. The patterns were similar for all
our dependent variables. When companies had negative
reputations, women had more unfavorable attitudes and
intentions than men; however, when companies had
good reputations, these differences dissipated.
From a managerial point of view, it underscores the
importance to retailers of fulfilling obligations, based on
promotional offers that are made to consumers. Hence,
investment needs to be made in better forecasting of
consumer response to promotional offers, since a major
element of our non-fulfillment was that the fictional
company had run out of supplies of the promotional
offers. In the case of managing a matter such as a non-
fulfillment, efforts to highlight the reputation of the
company—in cases where this reputation is good—
should be undertaken. Companies with good reputa-
tions need to capitalize on those reputations in their
handling of these kinds of crises. Companies that do not
have good reputations need to focus their attention on
developing programs that enhance goodwill, as reputa-
tion is a factor that consumers use to make judgments in
the face of an event such as a non-fulfillment. In
addition, given the gender differences, marketing com-
munication efforts that deal with the handling of cases
such as non-fulfillments need to target women, espe-
cially to inform them about what is being done to
address the breach of promise. This may do much to
temper the negative perceptions that female consumers
might hold of a company that is involved in a non-
fulfillment.
6. Limitations and future research
There are certain limitations to our study and avenues
for future research. One of the main limitations is the
artificial nature of the consumer encounter with the
promotional and company information. Even though
reports of non-fulfillment are likely to be in major
business publications, there may be instances where they
will not focus on the history and reputation of the
company involved, as was the case in our manipulation.
Hence, much harm may not be done. Nonetheless, we
feel that company reputation is an important factor in
influencing consumers’ perceptions of non-fulfillment.
Another area for future research would be to determine
how subsequent handling of the non-fulfillment influ-
ences consumers’ attitudes. Specifically, if a company
with a negative reputation makes a concerted effort to
address the non-fulfillment, is its image enhanced,
compared to a company with a positive image, which
might not see an enhancement in its image?
In our study, we used a retailer as the company
involved in the non-fulfillment, and this company could
be held responsible for the non-fulfillment. Attribution
theory could be used as a framework to explore the
kinds of attributions that consumers might make in
situations where the retailer is not to be blamed, and
how these attributions influence consumers’ attitudes
and perceptions. We could also try to understand how
and when third parties involved with a company’s
promotion might be impacted by non-fulfillment. For
example, in the Pampers’ case, cited in the opening
vignette, might retailers who stock the brand suffer from
a non-fulfillment in the same way that the manufacturer
does? Purohit and Srivastava (2001), for example, have
shown the effect on consumers’ judgments of a
manufacturer with a poor or good reputation selling
through a retailer with a poor or good reputation. Chu
and Chu (1994) attested to the possibility of ‘‘renting the
reputation of another agent’’ to signal product quality.
Since consumers sometimes use retailer reputation as a
cue to make inferences about manufacturer reputation,
and vice versa, it is very possible that a retailer could
suffer consumer backlash when a marketer with which it
does business is involved in a non-fulfillment.
Another consideration for future research is the
replacement of the fictional company with an actual,
existing company (for example, Pizza Hut, rather than
House of Pizza, as in our case) to assess how consumers
respond to real-life companies. The major concern is the
issue of addressing already existing brand preferences
and attitudes toward these companies. In addition, to
improve the external validity of these findings, we intend
to utilize actual consumers in supermarket and other
settings in future studies.
The nature of the product category and promotional
deal was also an issue. It would be interesting to vary the
nature of the promotional deal and product category, in
an effort to determine whether there are certain product
categories and deals for which these findings might not
hold. It might also be useful to explore conditions
where, regardless of gender and company reputation,
consumer resentment is sufficient to prevent the
purchase of a brand, in spite of the fact that consumers
perceive the brand to be a good one. Differential
responses to non-fulfillment among current users of a
brand, non-users, brand loyal consumers, or competitive
loyals—consumers who are loyal to a competing
brand—might also be interesting. We believe that these
pursuits can only add to our growing understanding of
consumer promotions and consumers’ responses to
them.
Acknowledgements
The author thanks the reviewers, the Editor, and
Susan Mantel for comments on earlier drafts of this
manuscript.
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Appendix A

Scale items used in Pretest 1

(a) The company discussed in this article has a good reputation.
Strongly disagree 1 2 3 4 5 6 7 Strongly agree
(b) Rate the nature of the writer’s attitude toward the company that was discussed in the article.
Negative 1 2 3 4 5 6 7 Positive
(c) Rate your feelings toward the company that was discussed in the article
Unfavorable 1 2 3 4 5 6 7 Favorable
(d) Refer to the article that you just read. Rate the believability of the article, by circling one of the numbers on the
scale below to indicate how believable you find the article.
Not believable 1 2 3 4 5 6 7 Believable
(e) We want to know how likely it is that an article such as this could appear in a business publication such as The Wall
Street Journal, or the business section of a local newspaper.
Very Unlikely 1 2 3 4 5 6 7 Very likely
Scales used in Pretest 2
Familiarity with pizza chains
In general, when it comes to pizza and pizza chains, I (am)
Do not know a lot 1 2 3 4 5 6 7 Know a lot
Not familiar with 1 2 3 4 5 6 7 Familiar with
Them Them
Not knowledgeable 1 2 3 4 5 6 7 Knowledgeable
About them About them
Attitude toward pizza product category
Unfavorable 1 2 3 4 5 6 7 Favorable
Bad 1 2 3 4 5 6 7 Good
Not likeable 1 2 3 4 5 6 7 Likeable
Unsatisfactory 1 2 3 4 5 6 7 Satisfactory
Negative 1 2 3 4 5 6 7 Positive
Pizza is a product category that most college students can relate to.
Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree
Level of familiarity with House of Pizza
House of Pizza is
Not well known 1 2 3 4 5 6 7 Well known
Not very familiar 1 2 3 4 5 6 7 Very familiar
Not very popular 1 2 3 4 5 6 7 Very popular
Not reputable 1 2 3 4 5 6 7 Reputable
Perceptions of type of promotion
The type of promotion that was discussed in The Wall Street Journal article is:
Boring 1 2 3 4 5 6 7 Interesting
Unpopular 1 2 3 4 5 6 7 Popular
Uncommon 1 2 3 4 5 6 7 Common

Appendix B. Company reputation manipulations
B.1. Positive company reputation
House of Pizza established its first store in August
1975 in Allentown, Pennsylvania. Since then, it has been
expanding into different Pennsylvania cities and differ-
ent states on the northeastern US coast, most notably
Connecticut and Massachusetts. Today, it has some 120
franchised stores located in these three northeastern
states and is seeking to expand its operations into other
parts of the United States and, possibly, the globe.
Last year, revenues for the franchise topped $150
million, a significant change from the less than $100,000
that the first stored earned in its first two years of
operation. The company provides employment to many
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294 A.A. Bailey / Journal of Retailing and Consumer Services 12 (2005) 285–295
residents in the cities in which it operates and
contributes to various charities in those areas. House
of Pizza prides itself on giving back to the community of
which it is a part and continues to be a major supporter
of education. So far this year, it has made major
contributions to three Pennsylvania high schools and
two Connecticut universities.
Frequent newspaper reports have pointed to the
company’s reputation, its sound business practices,
and the integrity of its management. Ethical conduct
has been a hallmark of this company since its inception,
and this was recognized in 2000 with the Allentown
Better Business Bureau’s award for businesses with a
track record for integrity.
B.2. Negative company reputation
House of Pizza established its first store in August
1975 in Allentown, Pennsylvania. Since then, it has been
trying to expand into different Pennsylvania cities and
different states in the northeast, without much success.
Today, it has some 20 franchised stores located in the
northeast, but its operations seemed to have stagnated.
In the 5 years of its operations, sales have been no higher
than a 3% share of the pizza market in the cities in
which it operates.
Last year, revenues for the franchise showed negli-
gible growth. The company provides employment to
residents in the cities in which it operates, but its current
performance has caused some of these employees to
have concerns about the length of time that they will
remain employed. A recent newspaper report high-
lighted the employees’ concerns and suggested that the
company has been encountering some difficulties.
Company representatives have also dismissed charges
of dissent among some franchisees.
Frequent newspaper reports have done harm to the
company’s reputation, citing its unsound business
practices and the lack of integrity of its management.
Ethical conduct has not been a hallmark of this
company, and this was underscored in 2000 when the
Better Business Bureau took action against the company
for unethical conduct.
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