In an era where the clamour for diversity is ever-increasing, labels such as “Black-owned” have transcended mere symbols of pride to become strategic assets in branding. A recent study by the Journal of Marketing delves into how the promotion of minority ownership shapes consumer perceptions, particularly during crises. Authored by Esther Uduehi from the University of Washington and Aaron Barnes from the University of Louisville, the paper “The Minority Ownership Awareness Effect: When Promoting Minority Ownership Increases Brand Evaluations” explores what the authors call the “minority ownership awareness effect”. Their findings reveal that being open about minority ownership results in more favourable brand evaluations following product failures because consumers tend to empathise more with these businesses.

Uduehi explains that highlighting minority ownership does more than signal a commitment to diversity—it cultivates trust and engenders consumer loyalty. She notes that transparency helps sustain brands through tough times and builds resilience. This idea is supported by their extensive analysis of over 27,000 Google reviews of Black-owned businesses and experimental studies involving nearly 4,000 participants. Their research shows that minority ownership labels foster empathy by portraying brands as underdogs confronting unique hurdles, which makes consumers more inclined to forgive when issues like product quality or delivery delays occur.

Additionally, the study finds that consumers motivated to avoid appearing prejudiced are particularly likely to react positively to minority ownership labels during product failures. However, it is crucial to note that this leniency does not extend to moral transgressions such as unethical actions or discriminatory practices. In these cases, consumer tolerance remains low, irrespective of the ownership status of the business. Barnes emphasises that the study underscores the potent role of empathy in branding, yet brands must recognise that this effect has its limits. Transparency is most effective when accompanied by unwavering ethical standards.

From a marketing perspective, these findings have significant implications. Brands should integrate labels such as “Black-owned” or “Woman-owned” into their marketing strategies. These labels help forge emotional bonds with consumers and bolster trust. In crises, emphasising minority ownership can alleviate consumer backlash. Businesses can sustain loyalty and trust by framing such challenges within a broader narrative of overcoming adversity.
While minority ownership labels can buffer against the fallout from product-related setbacks, they do not offer immunity against ethical violations. Businesses must adhere to high ethical standards to maintain consumer trust. This approach ensures that while minority ownership labels mitigate some issues, they cannot shield brands from the consequences of moral failings.

The broader implications of this study suggest that minority ownership labels can potentially affect societal change on a wider scale. By endorsing inclusive branding practices, businesses can play a role in ameliorating systemic disparities within the marketplace. Uduehi articulates that transparency about minority ownership goes beyond benefiting individual brands—it aims at nurturing a more inclusive economy. This approach benefits consumers and contributes positively to society at large.

The research serves as a guideline for policymakers and business leaders to foster greater transparency and inclusivity in the corporate sphere. Barnes concludes that this research presents a win-win scenario for both brands and consumers. Committing to inclusivity and openness results in better outcomes for all parties involved, fostering a business environment where trust and loyalty are paramount.

More information: Esther Uduehi et al, The Minority Ownership Awareness Effect: When Promoting Minority Ownership Increases Brand Evaluations, Journal of Marketing. DOI: 10.1177/00222429241283811

Journal information: Journal of Marketing Provided by American Marketing Association