Journal of Market Focused Management, 4, 341370 (1999)c 2000 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands.

Consumers Trust in a Brand and the Link to BrandLoyaltyGEOK THENG LAU fbalaugt@nus.edu.sgAssistant Professor, Department of Marketing, National University of Singapore, FBA1, 15 Law Link, Republicof Singapore 117591

SOOK HAN LEEMarketing Manager, Singapore Telecommunications Private Limited

Received June 17, 1999; Revised October 7, 1999

Abstract

Brands are important in the consumer market. They are the interface between consumersand the company, and consumers may develop loyalty to brands. This study proposesthat trust in a brand is important and is a key factor in the development of brand loyalty.Factors hypothesized to influence trust in a brand include a number of brand characteristics,company characteristics and consumer-brand characteristics. Respondents representing abroad spectrum of Singapore consumers were surveyed.

The findings reveal that brand characteristics are relatively more important in their effectson a consumers trust in a brand. The results also show that trust in a brand is positivelyrelated to brand loyalty. Marketers should, therefore, take careful consideration of brandfactors in the development of trust in a brand.

Keywords: trust, loyalty, branding

Introduction

Marketers have long been interested in the concept of brand loyalty because brand loyaltyis a measure of the attachment that a customer has to a brand (Aaker, 1991). Brand loyaltybrings the firm many benefits, including repeat purchases and recommendations of thebrand to friends and relatives. Brand management consultants espouse the importance ofbrand loyalty, but despite a history of research conducted, the concept is not clearly defined.Early research on brand loyalty focused on behavior. Brand loyalty was construed to bea subset of repeat purchase behavior (Brown, 1952; Cunningham, 1956a) and intentionto repurchase. Later, researchers like Guest (1955) and Jacoby (1971) argued that brandloyalty has two components: brand loyal behavior and brand loyal attitudes.

The attitude behind the purchase is important because it drives behavior. While brandloyal behavior is partly determined by situational factors such as availability (Jacoby, 1971),attitudes are more enduring. Unfortunately, despite its importance, brand attitudes have notattracted a corresponding degree of research interest. A compilation of definitions and

342 LAU AND LEE

studies on brand loyalty by Jacoby and Chestnut (1978) revealed that research on brandloyal behavior outnumbered studies on brand attitudes three to one.

OShaughnessy (1992) suggested that underlying loyalty is always trust, a willingness toact without calculating immediate costs and benefits. Hence, loyalty to a brand involvestrusting it. In industrial marketing, the concept of trust is well developed (e.g. Ganesan,1994; Doney and Cannon, 1997) and much effort has been spent in finding ways to buildand maintain it. In that context, trust is built on person-to-person relationships. Trust in abrand differs from interpersonal trust because a brand is a symbol. Unlike a salesperson,this symbol is unable to respond to the consumer.

To win loyalty in todays markets, consumer marketers have to embrace what is becomingsecond nature to business marketers (Donath, 1994) and focus on building and maintainingtrust in the consumer-brand relationship. Unfortunately, the concept of trust in consumermarketing is largely unexplored. The focus of this study is to examine some factors affectingthe development of trust in brands of consumer good, and to explore how that trust relates tobrand loyalty. By applying current interpretations of trust to brand loyalty, this study seeksto approach brand loyalty differently and to provide insights into consumers motivationfor loyalty to brands.

Brand Loyalty: Past Research

Copeland (1923) appears to be the first to suggest a phenomenon related to brand loyalty,which he labeled brand insistence. Brown (1952) and Cunningham (1956b) analyzedsummary measures of brand purchase patterns and found marked consistencies in con-sumers purchase patterns of brands of various products. They concluded that individualsexhibit strong and operative brand loyalty. Others (Lipstein, 1959; Frank, 1962; Farley,1963) also verified the phenomenon. These spurred continuous inquiry into brand loyalbehavior. Subsequent research explored how brand loyalty is related to the followingvariables: loyalty-proneness (Cunningham, 1956a; Frank et al., 1969; Wind and Frank,1969), store loyalty (Cunningham, 1961; Carman, 1969; Rao, 1969), consumer knowl-edge about available brands (Tucker, 1964), product categories (Farley, 1964), perceivedquality (McConnell, 1968; Shapiro, 1970; Szybillo and Jacoby, 1974), consumers risk-reduction behavior (Sheth and Venkatesan, 1968), consumer characteristics (Cunningham,1956; Guest, 1964; Coulson, 1966; Frank, 1967; Carman, 1969; Newman and Werbel,1973), and shopping pattern characteristics (Carman, 1969; Kuehn, 1962). The possibilityof multi-brand loyalty was also explored (Ehrenberg and Goodhardt, 1970; Jacoby, 1971)and a variety of mathematical (mostly stochastic) models were designed to analyze brandloyal behavior (Lipstein, 1959).

Engel et al. (1968), in their comprehensive review of brand loyalty literature up to 1967,noted several significant problems. These include an absence of a conceptual frameworkfor viewing brand loyalty, an almost exclusive focus on the outcome of behavior, andoverly simple definitions of brand loyalty. Day (1969), Segger (1970) and Jacoby andKyner (1973) made similar criticisms. Day (1969) proposed viewing brand loyalty asrepeated purchases prompted by strong internal dispositions. He distinguished between trueand spurious loyalty, which is associated with purchases not guided by strong internal

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 343

dispositions but by situational exigencies. Day (1969) and Lutz and Winn (1975) proposedloyalty indices based on composites of attitudinal and behavioral measures. These contrastwith the traditional view of brand loyalty, represented by Tuckers (1964, p. 32) statementthat behavior is the full statement of what brand loyalty is. Jacoby and Kyner (1973) furtherviewed brand loyalty as a multidimensional construct involving attitudinal componentsand as a subset of repeat purchase behavior. Jacoby and Chestnut (1978) used the termsstochastic and deterministic to label the alternative views of cognitive and behavioralbrand loyalties, respectively. Dick and Basu (1994) conceptualize customer loyalty as thestrength of the relationship between the relative attitude towards a brand and patronagebehavior.

Jacoby and Kyner (1973) argued that, regardless of the sophistication of any operational-ization of brand loyalty and its ability to predict buying behavior, the focus on behavior maynot provide a firm basis for a complete understanding of the dynamics of brand loyalty. Assuch, the importance of an internal disposition or attitude in the study of brand loyalty can-not be ignored. We believe that trust in a brand represents an important component of thisinternal disposition or attitude associated with brand loyalty. A more complete understand-ing of brand loyalty cannot be achieved without an examination of trust in a brand and howit is related to brand loyalty. In industrial marketing, researchers have found that trust in thesalesperson and the supplier is the cornerstone of source loyalty (Doney and Cannon, 1997).

Trust

Trust is defined as the expectation of the parties in a transaction and the risks associatedwith assuming and acting on such expectations (Deutsch 1958). An individual has trust inthe occurrence of an event if he or she expects its occurrence. Trust is the willingness torely on another party in the face of risk. This willingness stems from an understanding ofthe other party based on past experience. It also involves an expectation that the other partywill cause a positive outcome, despite the possibility that the action may cause a negativeoutcome (Worchel, 1979).

Trust is an expectation set within particular contextual parameters and constraints. Lewisand Weigert (1985) argue that trust is not mere predictability but confidence in the faceof risk. This line of argument is followed by other researchers (Deustch, 1960; Schlenkeret al., 1973; Boon and Holmes, 1991). Boon and Holmes (1991) defined trust as a stateinvolving confident positive expectations about anothers motives with respect to oneself inrisky situations.

Trust in Industrial Marketing

Trust is important in industrial marketing. As the competitive environment changes,business-marketing firms seek creative ways to remain competitive. One way is by buildingcollaborative relationships with their customers. This is possible and cost-effective becausein the industrial market, the number of customers is smaller and each customer purchasesa larger amount of goods from the supplier. Relational forms of exchange in the industrial

344 LAU AND LEE

market are characterized by high levels of trust (Dwyer, Schurr and Oh, 1987; Morganand Hunt, 1994). With this trust, parties can focus on the long-term benefits of the rela-tionship (Ganesan, 1994), thus enhancing competitiveness and reducing transaction costs(Noordewier et al., 1990).

Trust is treated in one of two distinct ways in the industrial marketing literature. It isconceptualized either as a feature of relationship quality (Dwyer and Oh, 1987; Crosby etal., 1990; Anderson et al., 1987), or as a determinant of relationship quality (Andersonand Narus, 1984, 1990; Parasuraman et al., 1985; Anderson and Weitz, 1990). Doney andCannon (1997) identified two dimensions of trust: perceived credibility and benevolence ofthe target. Perceived credibility focuses on the objective credibility of the exchange partner,the expectancy that the partners word or written statement can be relied on. Benevolence isthe extent to which one partner is genuinely interested in the others welfare and motivatedto seek joint gain. According to them, trust is developed through a process of calculatingthe costs and rewards of the party cheating or staying in the relationship. Trust exists whenthe costs of being caught cheating exceed its benefits.

Trust in Consumer Marketing

In recent years, businesses in consumer-goods markets face greater pressures as moreconsumers become deal-loyal (Donath, 1994). To win back loyalty and to emulate thesuccess of industrial marketers, consumer marketers began to embrace the idea of build-ing relationships with customers and winning their trust (Bennet, 1996). Conceptualiza-tions of trust in the consumer marketing literature, however, have generally been lack-ing.

In the consumer market, there are too many anonymous consumers, making it unlikelythat the selling organization could develop personal relationships with each customer. Thus,consumer marketers may have to rely on a symbolthe brandto build the relationship.The brand becomes a substitute for human contact between the organization and its con-sumers, and trust may be developed with it.

Trust in a Brand: A Research Model

A brand is a name, term, sign, symbol, or design (or a combination) intended to identify asellers goods or services, and to differentiate them from competitors. In trust in a brand,the entity trusted is not a person, but a symbol. Drawing from the discussion on trust in theearlier section, we define trust in a brand as a consumers willingness to rely on the brandin the face of risk because of expectations that the brand will cause positive outcomes.

In this paper, we propose that three sets of factors affect trust in a brand. These three setsof factors correspond with the three entities involved in the brand-consumer relationship:the brand itself, the company behind the brand, and the consumer interacting with the brand.We also propose that trust in a brand will lead to brand loyalty. The research framework isshown in Figure 1.

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 345

Figure 1. The research models.

Brand Characteristics As Antecedents to Trust in a Brand

The brands characteristics play a vital role in determining whether a consumer decidesto trust it. Just as individuals judge others before deciding whom to befriend, consumersalso judge the brand before deciding whether to build a relationship with it. Drawing fromresearch on interpersonal trust, we see that individuals are trusted based on their reputation(Zucker, 1986), predictability (Remple et al., 1985), and competence (Andaleep and Anwar,1996).

346 LAU AND LEE

Brand Reputation

A brands reputation refers to the opinion of others that the brand is good and reliable. Brandreputation can be developed through advertising and public relations, but it is also likelyto be influenced by product quality and performance. Creed and Miles (1996) found thatreputation of a party could lead to positive expectations, which resulted in the developmentof reciprocity between the parties. If a consumer perceives that other people are of theopinion that a brand is good (that is, it has a good reputation), the consumer may trust thebrand sufficiently to purchase it. After the usage experience, if the brand at least meets theconsumers expectations, a good reputation serves to reinforce the consumers trust (that is,his willingness to rely on it).

Conversely, if a brand does not have a good reputation, a consumer is likely to be moresuspicious. As a result of heightened awareness, they may be sensitized to any flaws thatthe brand may have. This makes it more difficult for the brand to be trusted. Thus:

H1 A consumers perception that a brand has a good reputation is positively related to theconsumers trust in that brand.

Brand Predictability

Predictability refers to one partys ability to forecast another partys behavior (Doney andCannon, 1997). A predictable brand is one that allows the brand user to anticipate, withreasonable confidence, how it will perform at each usage occasion. This predictabilitymay be due to a consistent level of product quality. Predictability comes from repeatedinteraction, whereby one party makes promises and delivers on them; and courtship, whereone party learns more about the other.

Shapiro et al. (1992) identified three types of trust operating in business relationships:deterrence-based trust, knowledge-based trust, and identification-based trust. Of these,knowledge-based trust, grounded in behavioral predictability, exists when one party hasenough information about another to understand and predict its likely behavior that it willact trustworthily (Linskold, 1978; Rotter, 1971). Kelly and Stahelski (1970) argued thatpredictability enhances trust, even if the other party is predictably untrustworthy, becausethe ways in which trust is violated can be predicted. A brands predictability enhancesconfidence because the consumer knows that nothing unexpected may happen when it isused. As such, brand predictability enhances trust in a brand because predictability buildspositive expectations (Kasperson et al., 1992). Therefore:

H2 A consumers perception that a brand is predictable is positively related to the con-sumers trust in that brand.

Brand Competence

A competent brand is one that has the ability to solve a consumers problem and to meet hisor her need. Ability refers to skills and characteristics that enable a party to have influence

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 347

within a domain (Butler and Cantrell, 1984; Butler, 1991). Deutsch (1960), Cook and Wall(1980), and Sitkin and Roth (1993) all considered ability as an essential element influencingtrust.

A consumer may find out about a brands competence through direct usage or word-of-mouth communication. Once convinced that a brand is able to solve his or her problem, aconsumer may be willing to rely to that brand. In industrial marketing, Swan et al. (1985)found that industrial salespeople whom customers perceived as competent are trusted more.The hypothesis, then, is:

H3 A consumers perception that a brand is competent is positively related to the con-sumers trust in that brand.

Company Characteristics as Antecedents to Trust in a Brand

The characteristics of the company behind a brand can also influence the degree to whichconsumers trust the brand. A consumers knowledge about the company behind a brandis likely to affect his or her assessment of the brand. The characteristics of the companyproposed to affect a consumers trust in a brand are the consumers trust in the company,the companys reputation (Yamagishi and Yamagishi, 1994), the perceived motives of thecompany (Scheer and Steenkamp, 1995) and the perceived integrity of the company.

In the instance where the company behind a brand is not known, the brand may becomeinstitutionalized, and the consumer may have a mental image of the company and thismental imagery may influence the attitude and behavior toward the brand.

Trust in the Company

When an entity is trusted, smaller entities that come under its fold tend to be trusted aswell, because they belong to the larger entity. In the case of a company and its brand, thecompany is the larger entity and the brand is the smaller entity in its fold. Thus, a consumerwho places trust in a company is likely to trust its brand. We hypothesize, then, that:

H4 A consumers trust in a company is positively related to the consumers trust in thatcompanys brand.

Company Reputation

If a consumer perceives that other people are of the opinion that the company behind abrand is known to be fair and just, that consumer may feel more secure in acquiring andusing the companys brand. This translates to greater trust in that brand. Research findingsby Anderson and Weitz (1992) in the marketing channel context support this argument.By making sacrifices and showing concern for other channel members, some retailersand vendors have developed a reputation for fairness within the industry. When channel

348 LAU AND LEE

members perceive their reputation for fairness, they are more likely to trust these retailersand vendors. The corresponding relationship hypothesized for consumers trust in a brand is:

H5 A consumers perception that a company has a reputation for fairness is positivelyrelated to the consumers trust in that companys brand.

Perceived Motives of the Company

Remple et al. (1985) found that the perceived motives of an exchange partner affect trustin that partner. Doney and Cannon (1997) identified intentionality as one way in whichtrust is developed in industrial buyer-seller relationships. Intentionality refers to one partysinterpretation and assessment of the other partys motives. When a party is perceived to bebenevolent, that party will be trusted (Deustch, 1960; Larzelere and Huston, 1980; Mayeret al., 1995).

Similarly, Jones et al. (1975) suggested that the extent to which a leaders behavioris relevant to the followers needs influences confidence and trust in the leader. Hence,benevolence of motives is an important factor in a relationship. In the context of a brand,when a consumer perceives the company behind a brand to be benevolent and acting in theconsumers best interests, the consumer will trust that brand. Thus:

H6 A consumers perception that a company has benevolent motives is positively relatedto the consumers trust in that companys brand.

Company Integrity

The integrity of the company behind a brand is the consumers perception that it adheres toa set of acceptable principles, such as keeping its promises, being ethical, and being honest.This definition mirrors closely Mayer et al.s (1995) definition of perceived integrity.

The degree to which a company is judged to have integrity depends on the consistencyof its past actions, credible communications about it from other parties, belief that it hasa strong sense of justice, and the extent to which its actions are congruent with its words.Some theorists have discussed integrity as an antecedent to trust (Butler and Cantrell, 1984;Butler, 1991; Sitkin and Roth, 1993). If the company behind a brand is perceived to haveintegrity, its brand is likely to be trusted by consumers. Therefore:

H7 A consumers perception that a company has integrity is positively related to the con-sumers trust in that companys brand.

Consumer-Brand Characteristics as Antecedents to Trust in a Brand

A relationship is not one-way; both parties affect the relationship between them. There-fore, consumer-brand characteristics can affect a consumers trust in a brand. These char-

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 349

acteristics include similarity between the consumers self-concept and the brands image(Bendapudi and Berry, 1997), liking for the brand, experience with the brand, satisfactionwith the brand (Bendapudi and Berry, 1997), and peer support and influence.

Similarity between Consumers Self-Concept and Brand Personality

Self-concept denotes the totality of an individuals thoughts and feelings with reference tohimself or herself as an object (Sirgy, 1982; Hong and Zinkhan, 1995). A popular analogyused in the marketing literature is that brands are like people. A brand, thus, can havean image or personality (Smothers, 1993). Brand image is the set of associations linkedto a brand that consumers hold in memory. A brands image gives it its perceived per-sonality. The proliferation of research on brand personality (Park et al., 1986; Duboff,1986; Durgee 1988) illustrates the high level of interest in this area. A brands person-ality can be described as the set of human characteristics associated with a given brand(Aaker, 1997). It includes demographic characteristics (for example, gender, age, andsocioeconomic class) as well as classic human personality traits (for example, warmth,concern, and sentimentality). Brand personality, like human personality, is distinctiveand enduring. Consumers often interact with brands as if they were people, especiallywhen the brands are attached to high involvement products like clothes or cars (Aaker,1996).

Research in interpersonal relationship shows that similarities of characteristics betweentwo parties may provide an inclination to trust. Further, because trust begets trust, commoncharacteristics may initiate a positive, reinforcing process of interaction (Gambetta, 1988;Bradach and Eccles, 1989). Dion et al. (1995) showed that perceived similarities in person-alities between the buyer and salesperson in industrial buying relationships influence thebuyers trust in the salesperson. Bennet (1996) argued that by conforming to a customersopinions, values and standards (that is, becoming similar to the customer), a supplier canearn the customers trust. A consumer may examine a brand and judge if it is similar tohimself or herself. If a brands physical attributes or personality are judged to be similarto the consumers self-image, the consumer is likely to trust it. Hong and Zinkhan (1995)found that congruency of advertising expressions with a consumers self-concept resultedin greater brand preference and buying intention. Hence:

H8 Similarity between a consumers self-concept and a brands personality is positivelyrelated to the consumers trust in that brand.

Brand Liking

Liking denotes a certain fondness one party has towards another party because the party findsthe other party pleasant and agreeable. Bennet (1996) suggests that to initiate a relationship,one party must be liked by the other. For a consumer to form a relationship with a brand, theconsumer must like it first. When a consumer likes a brand, the consumer is bound to findout more about it, setting the stage for trusting it. In addition, traits that generate likeability

350 LAU AND LEE

have been found to emphasize sincerity, dependability, truthfulness, thoughtfulness, andconsideration (Taylor et al., 1994), all of which are connected with trust.

In the industrial marketing context, Swan et al. (1985) found that salespeople whomcustomers perceived as likeable tended to gain more trust. Liking also formed a strong basisfor evaluation and satisfaction with sales relationship and performance. Most industrialbuyers felt that liking the salesperson was an important factor affecting the evaluation of asales relationship (Dion et al., 1995). In consumer marketing, if a consumer likes a brand(that is, finds a brand pleasant and agreeable), he or she is more likely to trust that brand(that is, to show willingness to rely on it). Stated formally:

H9 A consumers liking for a brand is positively related to the consumers trust in thatbrand.

Brand Experience

Brand experience refers to a consumers past encounters with the brand, particularly in thearea of usage. Zucker (1986) suggested that, in the development of process-based trust,reciprocity (developed through recurring exchanges) is the key. In reciprocity, a system ofdiffused social norms is created, leading to mutual obligation and expectations of equitabletreatment (Zucker, 1986; Malinowski, 1992). Thus, transactions become embedded in thesocial context (Bradach and Eccles, 1989; Granovetter, 1992). In organizations, repeatedcontacts through time suggest a long-term commitment (Arrow, 1984; Powell, 1990), withopportunities for increases in risk-taking and cooperation (Good, 1988; Lorenz, 1988).Security and stability of such recurring reciprocal exchanges engender trust (Powell, 1990).

Research on channel relationships (Scanzoni, 1979; Dwyer, Schurr and Oh, 1987) hasshown that as experience with a channel partner increases, the likelihood of passing throughshakeout periods in the relationship increases. The experiences provide both parties with agreater understanding of each other. Thus experience is likely to increase trust in the partner.Similarly, as a consumer gains more experience with a brand, the consumer understandsthe brand better and grows to trust it more. This experience is not restricted to positiveexperiences, because any experience improves the consumers ability to predict the brandsperformance. Furthermore, institutionalization of the relationship may occur when theconsumer becomes committed to a long-term relationship with the brand (Bennet, 1996).To summarize:

H10 A consumers experience with a brand is positively related to the consumers trust inthat brand.

Brand Satisfaction

Brand satisfaction can be defined as the outcome of the subjective evaluation that the chosenalternative brand meets or exceeds expectations (Bloemer and Kasper, 1995). This is inline with the disconfirmation paradigm of consumer satisfaction, where the comparison

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 351

between customer expectations and actual performance features strongly in the definitionof satisfaction. Research in equity and social exchange theory suggests that the equityof outcomes affects behavior in subsequent periods (Adams, 1965; Kelly and Thibaut,1978). In a continuing relationship, satisfaction with past outcomes indicates equity inthe exchange. This increases the perception of the exchange partners benevolence andcredibility (Ganesan, 1994).

Butler (1991) also identified promise fulfillment as an antecedent of trust in an industrialmarketing relationship. When a consumer is satisfied with a brand after using it, thissituation is similar to promise fulfillment. Since the brand has kept its promise, the consumeris liable to trust it more. Therefore:

H11 A consumers satisfaction with a brand is positively related to the consumers trustin that brand.

Peer Support

Bearden et al. (1989) argued that an important determinant of an individuals behavior isother individuals influence, implying that social influence is an important determinant ofconsumer behavior. This is reflected in models of consumer decision-making that incorpo-rate social norms (Fishbein and Ajzen, 1975) and interpersonal considerations (Miniard andCohen, 1983) as antecedents of behavioral intentions. Furthermore, the use of interpersonalinfluence scenarios in marketing communications also highlights the importance of peersupport (Reingen et al., 1984). Consumers may purchase products to conform with peergroups, in response to concerns of what others think of them, in reaction to others productchoice and usage (Calder and Burnkrant, 1977; Bearden and Rose, 1990), or because othershave provided credible information regarding a products value (Cohen and Golden, 1972).

Doney and Cannon (1997) suggested that transference is one way in which trust is devel-oped. Transference is the extension of trust in a party based on a third partys definition ofits trustworthiness. Through transference, the trust which an individuals significant others(friends, relatives or aspiration group members) accord to a brand will be transferredfrom them to other consumers. Therefore, consumers are likely to trust brands which theirsignificant others express trust in. In doing so, they indirectly obtain approval and peersupport for their subsequent actions. The hypothesis is:

H12 Peer support for a brand is positively related to a consumers trust in that brand.

Brand Loyalty as a Consequence of Trust in a Brand

Brand loyalty has been conceptualized as actual pattern of purchase behavior of a brand(Brown, 1952; Tucker, 1964), or behavioral intention towards the brand (Banks, 1968). Inthis study, we conceptualize brand loyalty as behavioral intention to buy a brand of productand to encourage others to buy that brand. Banks (1968) found a fairly strong relationshipbetween behavioral intention towards a brand and actual brand purchase behavior.

352 LAU AND LEE

It appears that if one party trusts another, it is likely to develop some form of positivebehavioral intention towards the other party. In couples, trust in another party could lead tocourtship and intention to marry (Boon and Holmes, 1991). In industrial marketing, trustin the salesperson or supplier could lead to supplier loyalty. When a consumer places hisor her trust in a brand, and shows a willingness to rely on that brand, that consumer is alsolikely to form a positive buying intention towards the brand. Therefore:

H13 A consumers trust in a brand is positively related to the consumers loyalty to thatbrand.

Research Design

Sampling and Field Procedure

The target population for the study was Singapore consumers who have made a purchasedecision for any consumer good. The sampling unit was the individual consumer. Quotason gender, age and race, corresponding to the distribution of Singapore residents (based onthe Singapore Monthly Digest of Statistics, November 1997 issue), were used to ensure arepresentative distribution of consumers in the sample. Individuals below 12 years wereexcluded because children might encounter difficulties with the questions in the question-naire.

A mall intercept survey was used. The method has merits in speed, economy, and controlof respondent type. Furthermore, the presence of an interviewer would ensure a higherresponse rate. Two shopping malls were selected from all the shopping malls in Singapore.One hundred and forty (140) questionnaires were assigned to each shopping mall, makinga total of 280 questionnaires. Four interviewers were assigned to each mall. They werebriefed on the quota sampling method and given detailed instructions on the respondentinterviewing process.

To eliminate differences in response patterns due to different reference points, all respon-dents were prompted to answer the questionnaire with reference to non-durable consumergoods. This category was chosen because consumers purchase these products most fre-quently. The respondents were asked to identify a product category in which they hadfrequently made a purchase decision. Respondents were then asked to name a brand in thatproduct category and they were requested to think about that brand (which may not be theirfavorite brand) as they complete the entire questionnaire, guided by the interviewers.

Operationalization of Constructs

The indicators of each construct in the study were from a variety of sources. Some wereestablished measures while others were modified or developed for this study. The measuresfor the constructs are shown in Appendix A.

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 353

Brand Constructs

A new scale was developed to measure perceived brand reputation. The construct wasmeasured by tapping the respondents perception of how the brand is known to be and whatother individuals have said about the brand.

The operationalization of brand predictability involved items measuring the brands con-sistency in quality and the extent the respondent perceived the brand to perform as expected.Three items were adapted from the predictability sub-scale of Remple et al.s (1985) study.

The operationalization of brand competence involved items to measure the brands per-ceived relative competence, since an assessment of a brands competence would have to betaken in the context of what other brands are capable of achieving. A brand can only begood if it is better than other available brands.

Company Constructs

Trust in the company was measured by tapping the respondents faith in the company. Oneitem was adapted from Larzelere and Hustons (1980) measure of trust in a partner, whileanother was adapted from the faith sub-scale of Remple et al.s (1985) study.

Company reputation was measured by asking respondents to rate the company in terms ofits reputation for fairness and honesty. The measurement scale used was adapted from An-derson and Weitzs (1992) scale to measure the distributors and manufacturers perceptionsof the other partys reputation for fairness in business dealings.

Perceived motives of the company was operationalized by creating a new scale. Therespondent was asked if he or she felt that the company cared for its customers welfareor only about itself. One scale item was adapted from Kumar et al.s (1995) measure ofbenevolence in a partner.

The perceived integrity of the company was operationalized by tapping perceptions of thecompanys values in areas such as ethics, honesty, and consistency of its actions with itspromises. One item was adapted from Mowday et al. (1979).

Consumer-Brand Constructs

To measure the degree of similarity between the consumers self-concept and the brandspersonality, respondents separately rated themselves and the brand along two identicalscales. The difference in the scores for each item in the scale would be used as an indicator ofthe difference between the respondents self-concept and the brands perceived personality.Malhotra (1981) used the original scale, which consists of 15 semantic-differential pairs,for measuring self-concept and brand image. One item was dropped because its meaningwas unclear to respondents in the pretest, and two items were modified to enhance theirclarity. To find out if the respondent consciously perceived similarities between the brandand himself or herself, a separate scale was developed, where the respondent was asked torate the similarity between the brands image and his or her image.

354 LAU AND LEE

Brand liking can be thought of as a relative conceptindividuals know that they like onebrand because they prefer it to other brands. Thus, liking for a brand was operationalizedby measuring the consumers preference for the brand over other brands, as well as askingthe respondent directly whether he or she liked the brand.

The operationalization of brand experience involved examining the respondents usageof the brand, starting from the first time they recalled using the brand. Other items in thescale examined the frequency of brand use.

The operationalization of brand satisfaction involved adapting Westbrook and Olivers(1981) twelve-item scale to measure consumer satisfaction with a new car purchase. Itemsthat were not relevant, or could not be adapted to the context of this study were dropped.The scale has high internal consistency, so this may not seriously affect reliability (Brunerand Hensel, 1982).

Peer support was measured by asking the respondent if his or her friends supported thebrands purchase or if they actually recommended the brands purchase.

Trust in the Brand

The operationalization of trust in the brand involved asking the respondent if the brand canbe counted on to do what it is supposed to do and if he or she is willing to rely on it. Oneitem was adapted from Larzelere and Hustons (1980) measure of trust in a partner andthree items were adapted from the trust scale of Remple et al.s (1985) study.

Brand Loyalty

Since this is a one-shot study, it is not feasible to observe the respondents pattern ofpurchase behavior to determine the extent of brand loyalty. Further, since this is not alongitudinal study, accurate measures that require the reporting of purchases over a periodof time could not be obtained. The measurement of brand loyalty in this study focusedon behavioral intentionsthe respondents intention to keep buying the brand and therespondents willingness to wait if the brand was not available.

Questionnaire Design and Pretest

The questionnaire contained two parts, divided into six sections. Respondents answeredthe questions in Part 1 with reference to a brand of consumer good. Part 2 dealt with therespondents characteristics. To reduce response bias, the items to measure the variousconstructs were ordered randomly. Also, about half of the total number of items werereverse-scored to avoid acquiescence bias. To be consistent and to make it easy for respon-dents to complete the questionnaire, standardized seven-point Likert scales were used wherepossible. The remaining questions were either open-ended or required the respondent totick the appropriate boxes.

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 355

The questionnaire was administered to 20 individuals for the pre-test. These respon-dents were selected from the sampling frame. The phrasing of some items, as well as theinstructions, were modified for greater clarity after receiving feedback.

Data Analysis and Research Results

Respondent Profile

There were 263 completed questionnaires, yielding a response rate of 93.9 percent. Thegeneral profile of the respondents was comparable (no statistical differences) to the distri-bution of gender, age, race, income and education of Singapore residents. There were analmost equal proportion of male (50.2%) and female (49.8%) respondents. The respondentswere aged 13 to 62 years, and the mean age was 35.77 years. The median monthly incomewas $1,5001,999.

One hundred and forty-seven (147) brands and 57 product types were named in the survey.Colgate was the most often-mentioned brand (9.46%) and the most frequently mentionedproduct was shampoo (14.45%). The mean brand use duration was 45 months.

Evaluation of Validity

Inspection of Pearsons correlation matrix for all the items revealed no problems withconvergent and discriminant validity. Scale items belonging to the same construct hadhigher correlations (coefficients ranged from 0.52 to 0.87), while those relating to differentconstructs had lower correlations (coefficients ranged from 0.18 to 0.43).

Factor analysis was carried out to determine the construct validity of the measures. Todetermine whether a variable is part of a factor, factor loading of at least 0.3 was used(Nunnally, 1978). The factors were extracted using principal components analysis andfactor matrices were rotated using Varimax orthogonal rotation where possible.

The factors extracted corresponded with the brand, company, and consumer constructs.Items meant to measure the same construct clustered together, suggesting that they measuredthe same conceptual space. The rotated factor matrix showed that the factor loadings forthe variables ranged from 0.349 to 0.777. This satisfies Nunnallys (1978) criterion.

Evaluation of Reliability

The internal consistency method (using Cronbach coefficient alpha) was used to examinethe reliability of the scales. The coefficients for the variables are shown in Table 1. For thepurpose of basic research, a Cronbach alpha of 0.70 or higher is sufficient (Nunnally, 1978).Most of the scales exceeded the reliability threshold. However, the coefficient of the scalefor brand experience was below 0.7. Thus, caution must be taken when interpreting resultsrelated to it.

356 LAU AND LEE

Table 1. Cronbach coefficient alpha.

Variable CronbachAlpha

Brand Reputation 0.87

Brand Predictability 0.91

Brand Competence 0.94

Trust in the Company 0.90

Company Reputation 0.71

Perceived Motives of Company 0.72

Company Integrity 0.84

Similarity between Consumers Self-Concept and Brand 0.76PersonalityC

Difference in Scores for Consumer and Brand 0.96PersonalityC

Liking for the Brand 0.87

Experience with the Brand 0.62

Satisfaction with the Brand 0.95

Peer Support 0.73

Trust in the Brand 0.93

Brand Loyalty 0.90C This measure was computed by taking the difference between the re-spondents self-concept score and the brands personality score for eachitem in the 14-item scale.Note: Sample size = 263.

Descriptive Statistics

The means and standard deviations of the variables included in this study are shown inTable 2. The mean score is the simple average of all items included in the construct. Unlessotherwise stated, a standardized 7-point Strongly DisagreeStrongly Agree scale wasused. The mean scores ranged from 1.95 to 5.56. The smallest standard deviation wasabove the critical value of 0.5 (Nunnally, 1978). Thus, the means and standard deviationsappear to be acceptable.

Pearson Correlation Analysis

Table 3 shows the Pearsons correlation coefficients for the corresponding variables specifiedin the hypotheses. The results show support for all the hypotheses, H1 to H13. As such,

CONSUMERS TRUST IN A BRAND AND THE LINK TO BRAND LOYALTY 357

Table 2. Mean and Standard Deviation of Variables.

Variable Mean StdScore Deviation

Brand Reputation 5.13 1.29

Brand Predictability 5.10 1.35

Brand Competence 4.88 1.48

Trust in the Company 4.83 1.30

Company Reputation 4.60 1.23

Perceived Motives of Company 4.39 1.22

Company Integrity 4.64 1.18

Similarity between Consumers Self-Concept and Brand 4.20 1.60PersonalityC

Difference Between Consumer and Brand Scores for 1.95 1.57PersonalityC

Liking for the Brand 5.07 1.74

Experience with the Brand 5.56 1.48

Satisfaction with the Brand 5.20 1.61

Peer Support 4.30 1.41

Trust in the Brand 5.10 1.60

Brand Loyalty 4.52 1.58C This measure was computed by taking the difference between the respondentsand the brands scores for each item in the 14-item scale. Thus, values wouldrange from zero (no difference) to six (largest possible difference).Note: Sample size D 263.

all the proposed brand, company, and consumer-brand characteristics were found to affecttrust in a brand.

Trust in a brand was also found to lead to brand loyalty. The correlation coefficient betweenthe two variables is 0.890 and the percentage of variation shared by the two variables or thecoefficient of determination is 0.792.

Regression Analysis

Regression analysis was carried out with trust in a brand as the dependent variable and allthe brand, company and consumer-brand factors as independent variables. The model wassignificant at p < :01 level and the adjusted R2 D 0:909. Table 4 shows the betas whichindicate the variables explanatory power. However, before the model can be interpreted,the independent variables have to be checked for multicollinearity. Multicollinearity ex-

358 LAU AND LEE

Table 3. Pearson Correlation Analysis Results.

Hypothesis Relationship hypothesized Pearson CorrelationAnalysis Results

H1 Brand reputation and trust in a brandpositive r D 0:85, p < 0:01H2 Brand predictability and trust in a brandpositive r D 0:88, p < 0:01H3 Brand competence and trust in a brandpositive r D 0:87, p < 0:01H4 Trust in a company and trust in a brandpositive r D 0:81, p < 0:01H5 Company reputation and trust in a brandpositive r D 0:72, p < 0:01H6 Company benevolent motives and trust in a brandpositive r D 0:68, p < 0:01H7 Company integrity and trust in a brandpositive r D 0:75, p < 0:01H8a Similarity between consumers self concept and brand r D 0:75, p < 0:01

personality and trust in a brandpositive

H8b Difference between consumers self concept and brand r D 0:71, p < 0:01personality and trust in a brandnegative

H9 Consumer brand liking and trust in a brandpositive r D 0:87, p < 0:01H10 Consumer brand experience and trust in a brandpositive r D 0:73, p < 0:01H11 Consumer satisfaction with a brand and trust in a brandpositive r D 0:94, p < 0:01H12 Peer support for a brand and trust in a brandpositive r D 0:65, p < 0:01H13 Trust in a brand and brand loyaltypositive r D 0:89, p < 0:01Note: Sample size D 263.

ists when two or more independent variables used in the regression are correlated. If ahigh degree of correlation exists, it is then difficult to determine the contribution of eachindependent variable, because their effects are confounded (Hair et al., 1995).

The presence of high correlations, generally those of 0.9 and above, is the first indicationof substantial collinearity (Hair et al., 1995). An examination of the correlation among theindependent variables did not exceed this threshold. However, multicollinearity may arisedue to the combined effect of two or more independent variables. A common measure forassessing pairwise and multiple variable collinearity is the variance inflation factor (VIF),which tells us the degree to which each independent variable is explained by the others.Very large VIF values denote high multicollinearity. A common cutoff threshold is a VIF of10 (Hair et al., 1995). Looking back at Table 4, brand satisfaction (VIF = 10.967) exceededthe threshold.

The construct was dropped and regression analysis was carried out with the rest of theindependent variables. The results are shown in Table 5. The regression model is significantat p < :01 level and the adjusted R2 D 0:889. Five constructs were significant (at p