Rice U. expert: Political polarization affects brands

EXPERT ALERT

David Ruth
david@rice.edu

Jeff Falk
713-348-6775
jfalk@rice.edu 

Rice U. expert: Political polarization affects brands

HOUSTON – (March 29, 2018) – Companies and their executives who engage in corporate activism risk taking stances that reflect the values of their management but alienate key segments of a politically divided customer base, according to a marketing expert at Rice University’s Jones Graduate School of Business.

Credit: 123RF.com/Rice University

Vikas Mittal, the J. Hugh Liedtke Professor of Marketing at Rice Business, outlined his research-based perspective in a new article for Harvard Business Review, “The Unequal Effects of Partisanship on Brands.” His co-authors were Ashwin Malshe, assistant professor of marketing at the University of Texas at San Antonio, and Shrihari Sridhar, the Center for Executive Development Professor at Texas A&M University’s Mays Business School.

Mittal is available to discuss his insights with media.

In 2004, 49 percent of Americans held a mix of conservative and liberal positions, according to the Pew Research Center; in 2017, only 32 percent did. From 1994 to 2017 the average partisan gap increased from 15 points to 36 points. The authors said that research by them and others suggests that partisanship carries over to brands as more and more consumers prefer to spend their dollars on brands that align with their political values.

To better understand how political polarization affects brands, the authors surveyed 5,881 retail customers with strong political ideologies (Democrats and Republicans) and rated their likelihood to engage in positive and negative word-of-mouth for 45 retail brands, from 7-11 to PetSmart.

Next the authors mapped those results according to respondents’ political affiliations. They found a relatively low level of agreement between Democrats and Republicans, with their classifications matching for only 16 out of the 45 brands. For example, Apple, Starbucks and Amazon were secure among Democrats, garnering high positive and low negative chatter. Among Republicans, however, those three brands were polarized, garnering both high positive and high negative chatter, suggesting that while these consumers may not like the companies’ politics, they value the products and services these companies offer, the authors said.

The authors said that for executives who consider taking an activist stance, the research “suggests that they should think carefully about customers’ political affiliations and likelihood to engage in positive and negative word-of-mouth. Actions that push brands into vulnerable or dissonant territory are likely to hurt revenue and growth. Staying out of the political fray allows companies to avoid the risk of alienating customers, but may result in only modest financial performance. It takes a long time for companies to build successful brands, and mega brands have both Republican and Democrat customers. Failure to understand how corporate activism may affect their attitudes is a mistake.”

To schedule an interview with Mittal, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

Rice University has a VideoLink ReadyCam TV interview studio. ReadyCam is capable of transmitting broadcast-quality standard-definition and high-definition video directly to all news media organizations around the world 24/7.

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Related materials:

Mittal bio: https://business.rice.edu/person/vikas-mittal.

Jones Graduate School of Business: http://business.rice.edu.