The color is the message

Case studies of how corporations handle crises are a staple at business schools. Johnson & Johnson’s handling of its cyanide-tainted Tylenol in 1982, for example, is often taught as a classic in good crisis management.

But if there are lessons to be learned from best practices, there are certainly lessons to be learned, and fines to be paid, for companies that do the wrong thing. In July, Fiat Chrysler was forced to pay a record $105 million penalty to federal regulators for failing to complete safety recalls of 11 million vehicles. Seven months earlier, Honda was assessed $70 million in penalties for defective airbags in some of its vehicles.

Headlines filled with such negative corporate news piques the interest of Marina Puzakova, assistant professor of marketing in Lehigh’s College of Business and Economics. Puzakova has found fertile scholarly ground studying how people respond to negative news, such as product failures, recalls or malfeasance.

After reading about a company’s failed product, Puzakova began pursuing a new but related line of intellectual inquiry by studying the effect of colors, specifically red and blue, on consumer perception. After two years of experiments involving more than 800 participants, Puzakova and three other researchers – Hyokjin Kwak, Drexel University; Suresh Ramanathan, Texas A&M University and Joseph Rocereto, Monmouth University – found the colors can have a major impact on consumer perception.

Puzakova said she hit on the idea several years ago as she was reviewing the literature in the field of color psychology, but found little on the use of color in corporate messaging of negative information.

“Most of the research [on consumers’ reactions to negative news] had been on people’s commitment to the brand and prior attitude,” she said.

Puzakova wanted to know what effect, if any, color could have on influencing a consumer’s opinion of a company or brand when learning of negative information about it.  Red and blue, which are opposites on the light spectrum, are among the most studied in the literature. Previous studies have shown that people associate the color red with feelings of danger, threats and mistakes, and blue with openness, peace and tranquility.

So Puzakova formulated a hypothesis.

“If red is greatly associated with mistakes and threats, probably presenting information about failure could somehow influence consumers’ more negative reactions to the firm or to the brand,” she said.

Puzakova and her collaborators designed a study to investigate the role, if any, that the colors red and blue play in influencing consumers’ perceptions of a company’s negative news. The project, which involved four experiments, took place between 2012 and 2014.
In one of the experiments, participants were asked to read a fictitious news story about a new laptop battery that drained too rapidly, then presented with an online news page that included headlines that the fictitious company's chief executive officer was addressing the stakeholders about the defective product. It included a photo of the CEO seated against either a red or a blue background.

The results? People who saw the negative information followed by the presentation against a red background had a more negative attitude toward the CEO of the company and the company itself, Puzakova said. And, similarly, people who saw the article followed by the news and the CEO set against a blue background had a more favorable attitude.

The study also looked at the effect of color in a company’s response, which was either to deny there was a problem, apologize or offer a remedy, such as a refund or coupon. 

If the company CEO offered remedial action, the study participants felt more favorable about the company and its CEO and more open to additional information, if the response was delivered against a blue background, Puzakova said.

“After consumers see the color red in the company’s response, they don’t want to pay attention anymore. ‘Something failed,’ is what they remember. Red facilitates this attention to negative information,” Puzakova said.

Why it matters:
The takeaway message, Puzakova said, is companies “have to be really careful about how they present their information, what color choices they make. It could be at a press conference background, in a press release or in a big ad they buy in The New York Times or The Wall Street Journal.”

Story by Wendy Solomon