The fake news effect: what does it mean for consumer behavioral intentions towards brands?

Abstract

Purpose This study aims to understand how fake news can cause an impact on consumer behavioral intentions in today’s era when fake news is prevalent and common. Brands have not only faced reputational losses but also got a dip in their share prices and sales, which affected their financial standing. Hence, it is significant for brands to understand the impact of fake news on behavioral intentions and to strategize to manage the impact. Design/methodology/approach This study uses several branding and marketing concepts such as brand experience, brand trust, brand credibility, consumer behavioral intentions along with variables suggested by Elaboration Likelihood Model and Heuristic Systematic Model such as personal relevance/involvement. For fake news, news truthfulness, news credibility and source credibility are used. Findings The results of this study shows that positive brand experience, brand trust, brand credibility help in creating positive behavioral intentions for brands. This study shows that brands focusing on providing positive brand experience have a stronger brand trust and credibility and are affected less by fake news than those brands which do not emphasize on these factors. Practical implications This paper can assist brand managers in understanding the impact fake news can have on behavioral intentions of consumers. The managers can strategize such that the fake news affects their brands the least. Originality/value The authors in this paper attempt to fill in the gap in literature, which is to study how the fake news impacts the brands considering the credibility, trust and experience they establish with their customers. The existing literature discusses the generation and dissemination of fake news on social media and its impact on political scenarios and personalities. Also, studies explain the impact of fake news on the financial position of brands, but marketing facets are not tested empirically.