Introduction
This assignment provides a comprehensive research proposal on the impact of false
advertising allegations on corporate reputation and sales, using Motor Tech as a case
study. The study aims to explore the experiences of customers who have purchased the
SnyperX car and industry experts’ perspectives on the crisis, with a focus on developing
effective strategies to mitigate the negative effects of false advertising and rebuild
customer trust. This proposal outlines the research problem, significance, research
questions, objectives, methodology, and design of the study.
Question 1
1.1 Introduction and Background
Motor Tech, a well-established car manufacturing company, has been embroiled in a
controversy surrounding its diesel car model, SnyperX. The company advertised the car as
fuel-efficient, claiming it consumes only one litre of diesel per 5 kilometres. However,
numerous customers have reported that the actual fuel consumption is significantly
higher, leading to a decline in sales and damage to the company's reputation. This
discrepancy between the advertised and actual fuel consumption has sparked widespread
criticism, with many customers feeling misled and deceived. This study aims to explore the
impact of false advertising allegations on corporate reputation and sales, using Motor Tech
as a case study.
1.2 Statement of the Problem
The problem is that Motor Tech's false advertising claims have led to a loss of customer
trust and a decline in sales. Despite the company's efforts to promote the SnyperX as a
fuel-efficient vehicle, customers have reported otherwise. Literature suggests that false
advertising can lead to negative word-of-mouth, loss of brand reputation, and financial
losses (Kotler & Keller, 2016). Studies have also shown that consumers who feel deceived
are more likely to engage in negative word-of-mouth and boycott the company's products
(Bolfing, 1988). However, there is a gap in understanding the specific impact of false
advertising allegations on corporate reputation and sales in the automotive industry. This
study seeks to address this gap by exploring the experiences of customers who have
purchased the SnyperX car and industry experts' perspectives on the crisis.
, 1.3 Significance of the Study
This qualitative study is important for Motor Tech and the automotive industry as it will
provide insights into the impact of false advertising allegations on corporate reputation and
sales. The findings will help companies to develop effective strategies to mitigate the
negative effects of false advertising and rebuild customer trust. Moreover, the study will
contribute to the existing literature on false advertising and corporate reputation, providing
a deeper understanding of the complex relationships between advertising claims,
customer expectations, and corporate reputation.
1.4 Research Questions
1. How do false advertising allegations affect corporate reputation in the automotive
industry, and what are the consequences for sales and customer loyalty?
2. What strategies can companies use to rebuild customer trust and restore their
reputation after false advertising allegations, and what role do transparency,
accountability, and customer engagement play in this process?
1.5 Objective of the Study
1. To explore the impact of false advertising allegations on Motor Tech's corporate
reputation, including the effects on customer trust, loyalty, and retention.
2. To identify strategies that Motor Tech can use to rebuild customer trust and restore its
reputation, including measures to improve transparency, accountability, and customer
engagement.
1.6 Population
The target population for this study will be customers who have purchased the SnyperX car,
as well as industry experts and stakeholders in the automotive sector. These individuals
will provide valuable insights into the impact of false advertising allegations on corporate
reputation and sales.
1.7 Sample Size and Sampling Technique
This assignment provides a comprehensive research proposal on the impact of false
advertising allegations on corporate reputation and sales, using Motor Tech as a case
study. The study aims to explore the experiences of customers who have purchased the
SnyperX car and industry experts’ perspectives on the crisis, with a focus on developing
effective strategies to mitigate the negative effects of false advertising and rebuild
customer trust. This proposal outlines the research problem, significance, research
questions, objectives, methodology, and design of the study.
Question 1
1.1 Introduction and Background
Motor Tech, a well-established car manufacturing company, has been embroiled in a
controversy surrounding its diesel car model, SnyperX. The company advertised the car as
fuel-efficient, claiming it consumes only one litre of diesel per 5 kilometres. However,
numerous customers have reported that the actual fuel consumption is significantly
higher, leading to a decline in sales and damage to the company's reputation. This
discrepancy between the advertised and actual fuel consumption has sparked widespread
criticism, with many customers feeling misled and deceived. This study aims to explore the
impact of false advertising allegations on corporate reputation and sales, using Motor Tech
as a case study.
1.2 Statement of the Problem
The problem is that Motor Tech's false advertising claims have led to a loss of customer
trust and a decline in sales. Despite the company's efforts to promote the SnyperX as a
fuel-efficient vehicle, customers have reported otherwise. Literature suggests that false
advertising can lead to negative word-of-mouth, loss of brand reputation, and financial
losses (Kotler & Keller, 2016). Studies have also shown that consumers who feel deceived
are more likely to engage in negative word-of-mouth and boycott the company's products
(Bolfing, 1988). However, there is a gap in understanding the specific impact of false
advertising allegations on corporate reputation and sales in the automotive industry. This
study seeks to address this gap by exploring the experiences of customers who have
purchased the SnyperX car and industry experts' perspectives on the crisis.
, 1.3 Significance of the Study
This qualitative study is important for Motor Tech and the automotive industry as it will
provide insights into the impact of false advertising allegations on corporate reputation and
sales. The findings will help companies to develop effective strategies to mitigate the
negative effects of false advertising and rebuild customer trust. Moreover, the study will
contribute to the existing literature on false advertising and corporate reputation, providing
a deeper understanding of the complex relationships between advertising claims,
customer expectations, and corporate reputation.
1.4 Research Questions
1. How do false advertising allegations affect corporate reputation in the automotive
industry, and what are the consequences for sales and customer loyalty?
2. What strategies can companies use to rebuild customer trust and restore their
reputation after false advertising allegations, and what role do transparency,
accountability, and customer engagement play in this process?
1.5 Objective of the Study
1. To explore the impact of false advertising allegations on Motor Tech's corporate
reputation, including the effects on customer trust, loyalty, and retention.
2. To identify strategies that Motor Tech can use to rebuild customer trust and restore its
reputation, including measures to improve transparency, accountability, and customer
engagement.
1.6 Population
The target population for this study will be customers who have purchased the SnyperX car,
as well as industry experts and stakeholders in the automotive sector. These individuals
will provide valuable insights into the impact of false advertising allegations on corporate
reputation and sales.
1.7 Sample Size and Sampling Technique
