Featured Research

from universities, journals, and other organizations

Toy recall of 2007 hurt innocent companies

Date:
December 2, 2009
Source:
University of Toronto, Rotman School of Management
Summary:
The well-publicized toy recalls of 2007 took potentially harmful toys off the shelves and affected the companies that made them. But a new study also shows that even companies not targeted by the recalls got hurt in the resulting consumer backlash, sometimes worse than the offenders. Meanwhile offending companies did not generally see other product categories affected.

The well-publicized toy recalls of 2007 took potentially harmful toys off the shelves and affected the companies that made them.

Related Articles


But a new study also shows that even companies not targeted by the recalls got hurt in the resulting consumer backlash, sometimes worse than the offenders. Meanwhile offending companies did not generally see other product categories affected.

In 2007, the U.S. Consumer Product Safety Commission recalled 276 toys and other children's products -- more than an 80% increase over the previous year. Almost all of the recalls involved toys made in China and many involved paint with elevated levels of lead.

The study looked at the effects that the recalls had on sales of Infant and Preschool toys during the subsequent Christmas season. The authors found that Christmas sales for similar products by manufacturers named in the recalls were down by about 30% compared to other products that these manufacturers sold. But, these manufacturers' sales of toys that were sufficiently dissimilar to those named in the recalls did not seem to be affected. In other words, consumers did not "punish" offending manufacturer more generally.

"This may be because, in this industry, consumers do not recognize manufacturers as well as they recognize brands and trademarks. For example, consumers may identify brands such as Barbie and Hot Wheels without recognizing that both of these are, in fact, made by Mattel," says Mara Lederman a professor at the University of Toronto's Rotman School of Management and one of three study co-authors

Perhaps most interestingly, the study finds that companies who did not have any recalls got hit too -- their 2007 Christmas season sales were down about 25% compared to 2005. This suggests that these recalls influenced consumers' expectations of toy safety, in general.

"In this industry, one firm's offence seems to penalize other players," says Lederman. "This may be happening because the recalls involved a common practice (manufacturing in China) or because brands and trademarks are commonly shared across different manufacturers and toys. One implication of this is that companies may have an interest in enforcing stricter industry-wide standards."

The paper received financial support from the AIC Institute for Corporate Citizenship at the Rotman School of Management.


Story Source:

The above story is based on materials provided by University of Toronto, Rotman School of Management. Note: Materials may be edited for content and length.


Cite This Page:

University of Toronto, Rotman School of Management. "Toy recall of 2007 hurt innocent companies." ScienceDaily. ScienceDaily, 2 December 2009. <www.sciencedaily.com/releases/2009/12/091202101753.htm>.
University of Toronto, Rotman School of Management. (2009, December 2). Toy recall of 2007 hurt innocent companies. ScienceDaily. Retrieved November 24, 2014 from www.sciencedaily.com/releases/2009/12/091202101753.htm
University of Toronto, Rotman School of Management. "Toy recall of 2007 hurt innocent companies." ScienceDaily. www.sciencedaily.com/releases/2009/12/091202101753.htm (accessed November 24, 2014).

Share This


More From ScienceDaily



More Science & Society News

Monday, November 24, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Symantec Uncovers Sophisticated Spying Malware Regin

Symantec Uncovers Sophisticated Spying Malware Regin

Newsy (Nov. 24, 2014) A Symantec white paper reveals details about Regin, a spying malware of unusual complexity which is believed to be state-sponsored. Video provided by Newsy
Powered by NewsLook.com
NY Gov. on Flood Prep: 'prepared for the Worst'

NY Gov. on Flood Prep: 'prepared for the Worst'

AP (Nov. 23, 2014) First came the big storm. Now comes the big melt for residents of flood-prone areas around Buffalo. New York's governor says officials are preparing for the worst as the temperature is expected to rise and potentially melt several feet of snow. (Nov. 23) Video provided by AP
Powered by NewsLook.com
European Parliament Might Call For Google's Break-Up

European Parliament Might Call For Google's Break-Up

Newsy (Nov. 22, 2014) This is the latest development in an antitrust investigation accusing Google of unfairly prioritizing own products and services in search results. Video provided by Newsy
Powered by NewsLook.com
WFP: Ebola Risks Heightened Among Women Throughout Africa

WFP: Ebola Risks Heightened Among Women Throughout Africa

AFP (Nov. 21, 2014) Having children has always been a frightening prospect in Sierra Leone, the world's most dangerous place to give birth, but Ebola has presented an alarming new threat for expectant mothers. Duration: 00:37 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins