Since the late 1970s, commercial rumors about companies and their offerings have become the dominant form of hearsay in mass circulation (Koenig, 1985). The rising spread of marketplace and financial rumors can be attributed to various technological, socio-economic, and psychological forces. As recent cases have revealed, the Internet and other emerging communication technologies are particularly well suited to serve as conduits for the spread of unverified information to a global audience (Berensen, 2000; Goldstein & Carrell, 2000; Kimmel, 2004a). Further, in recent years a variety of international events, ranging from highly publicized corporate scandals to deadly terrorist attacks, have left in their wake an especially fertile atmosphere for the swift and widespread dissemination of rumors. These events have led to a dramatic rise in mistrust, fear, and uncertainty, including concerns about the safety and security of the consumer marketplace.
For many contemporary managers, rumors represent an imposing competitor in the marketplace of information exchange. Virtually every type of company is plagued from time to time by the spread of unverified stories and questionable information about business operations and marketplace offerings. Most of these stories are relatively harmless, drawing little serious attention and quickly fading away before having an opportunity to develop into something more formidable. However, sometimes the situation festers and takes on a life of its own, and what may have started out as a seemingly innocuous assertion about some aspect of the company's activities evolves into a full-blown whispering campaign that spreads quickly and uncontrollably throughout the company's various publics. In such cases, rumors can strike at the very heart and soul of a business. They can severely damage company and brand images, undermine corporate credibility, and have far-reaching effects on financial markets.
Much has been written in recent years about the growing influence on consumer behavior of word of mouth and marketplace buzz (e.g., Rosen, 2000; Silverman, 2005). Nonetheless, despite the potential threats rumors can pose in the business and financial sectors (Kimmel, 2004b), relatively little attention has focused on their role in consumers' specific reactions to products and services. This paper is intended to address this oversight through a cross-cultural comparison of the cognitive, emotional, and conative effects of rumors on American, Hispanic, and French consumers. In addition, rumor theory is applied to assess the factors predicting the spread of rumors among the three consumer populations. Finally, attention is given to the distinguishing properties and prevalence of rumors in the consumer marketplace.
The Nature and Dynamics of Marketplace Rumors
Whether a rumor pertains to events unfolding in the marketplace or within other contexts, it tends to have something to do with the need for people to know what is happening and why in situations in which they are or may be implicated. Broadly speaking, rumor historically has been defined as a story or statement in general circulation without confirmation or certainty as to facts (Allport & Postman, 1947; Knapp, 1944). As defined in the American Psychological Association's Encyclopedia of Psychology, a rumor is viewed as "an unverified proposition for belief that bears topical relevance for persons actively involved in its dissemination" (Rosnow & Kimmel, 2000, p. 122) Rumors are public communications, usually embellished by allegations or attributions based on circumstantial, unverified evidence, that reflect people's assumptions or suspicions about how the world works.
A critical element of rumor is that there is a lack of certainty as to the validity of its message; that is, it is an unconfirmed proposition. The fact that there exists some degree of uncertainty regarding the truthfulness of a rumor is not meant to imply that all rumors are untrue. The key is that the rumor may eventually turn out to be true or false, but until that time, the communication is subject to the dynamics of an unfounded assertion. A story in widespread circulation that has been officially verified as false may nevertheless be considered a rumor, so long as there is a suspension of disbelief in the story's content. Should the rumor turn out to be true (or verified), its content then becomes subject to the limitations presented by the facts at hand.
Because of its frequently negative connotation, people often are reluctant to acknowledge that a communication is, in fact, a rumor. Such acknowledgment highlights the possibility that the transmitted information could be false and that the bearer is irresponsibly communicating misinformation (Kamins, Folkes, & Perner, 1997; Rosnow, 1991). As communication technologies have accelerated the pace by which news and information are transmitted to the public, there is an increasing tendency for communications to be based on unverified content, although they may readily be accepted as verified news by a public craving clarification regarding matters of current or local concern. Just as the line separating rumor and news sometimes blurs, the distinction between rumor and word of mouth may be unclear or confused. Rumors that circulate interpersonally in the consumer marketplace can best be viewed as a type of word of mouth, the latter term referring to all information transmitted informally among consumers.
Several classification schemes have been offered to identify various types of rumors, reflecting differences in message content, etiology, and underlying motive or purpose (e.g., Kapferer, 1990; Kimmel, 2004a; Koenig, 1985). One of the earliest and perhaps most widely-known classification scheme was suggested by Knapp (1944), who concluded that rumors can be labeled as either pipe dream (or wish-fulfillment) rumors, bogie (or dread) rumors, or wedge-driving (or aggression) rumors. Pipe dream rumors represent positive rumors in that they reflect public desires and wished-for outcomes; by contrast, bogey rumors are negative in that they reflect feared or anxiety-provoking outcomes. Dread rumors may be further classified according to whether their content reflects the theme of conspiracy or contamination. Conspiracy rumors tell of policies or practices by a commercial enterprise that are deemed threatening or ideologically undesirable, whereas contamination rumors claim that a certain feature of a commercial product is potentially harmful or undesirable to consumers. Wedge-drivers represent another form of negative rumors in that they are intended to divide group loyalties or otherwise undermine interpersonal relations. In the marketplace, wedge-driver rumors are likely to take the form of unverified assertions about competitors. Another category of rumors consists of homestretchers, or anticipatory rumors that precede an expected event (Allport & Postman, 1947). Such rumors may typify positive hearsay in the consumer marketplace, such as messages pertaining to eagerly awaited product launches (Furukawa, Kato, & Yamada, 2002).
There have been few attempts to assess the relative frequency of these types of rumors in the marketplace. Kamins, Folkes, and Perner (1997) conducted an extensive field survey among members of an American consumer research panel. The respondents reported that they were exposed to and repeated more negative (wedge-driver and dread) rumors than positive (wish) rumors. Of 271 rumors about companies or brands that the respondents recalled having heard during the preceding year, 7.4% were considered "wish," 74.9% were classified as "dread," and 17.7% were identified as "wedge-drivers." Similarly, Kimmel and Audrain (2002) surveyed 30 French product and brand managers and found that 73% of the rumors that reached their ear were negative in nature.
How Rumors Start and Why They Spread
Given the many forms that rumors may take, it generally is understood that there is no one simple explanation as to why rumors emerge, circulate, and ultimately disappear. However, current understanding, consistent with the socio-psychological theoretical perspectives developed by All-port and Postman (1947) and Rosnow (1991; 2001), suggests the involvement of collective and group needs, personal motives, and situational or contextual forces. Like most rumors, those that appear in the marketplace tend to result from a combination of uncertainties, anxieties, and a natural desire for inside information inherent in the immediate situation or pervasive in the more general societal context. Previous research on the dynamics of rumor has revealed that uncertainty (i.e., how filled with questions people are about current or future events) and importance (i.e., personal relevance of the rumor content) are primary determinants of rumor generation. Whether the rumor then catches fire and spreads among a public depends largely on levels of anxiety (i.e., how worried or concerned people are) and belief in the rumor (i.e., how confident people are that the rumor is true) (e.g., Anthony, 1973; Kamins et al., 1997; Kimmel and Keefer, 1991; Naughton, 1996; Rosnow, Yost, & Esposito, 1986; Walker and Beckerle, 1987).
According to Rosnow (2001), rumors are a likely outcome when people are confronted with unexpected events or are challenged by the unforeseen consequences of anticipated events, such as mergers, takeovers, and changes in management. In his view, "the more perplexing these events, the more that people need to invent stories to put their anxiety to rest ... and to furnish cues to guide their future behavior" (pp. 212-213). It is likely that the factors that have been implicated in the emergence and spread of rumors are intimately linked. As the uncertainty surrounding a situation increases, we might also anticipate a heightening of anxieties, and uncertainty becomes more difficult...