Factors influencing consumer perceptions of brand trust online

Hong-Youl Ha

An executive summary for managers and executive readers can be found at the end of this article.

Introduction
One of the major aims of building brand trust is to achieve a sustainable competitive advantage and thereby enhance a business performance. Many researchers have conducted a general consensus-that brand trust is established through a combination of familiarity, security, privacy, word-of-mouth, advertising, and brand image (Chow and Holden, 1997; Delgodo-Ballester and ´ Munuera-Aleman, 2001; Garbarino and Johnson, 1999; Hoffman et al., 1998; Wernerfelt, 1991). These studies, however, have not explored building brand trust on the Web. While it may be argued that brand trust is an underlying dimension of brand loyalty, the latter is composed of such a vast number of components that it would be futile to consider it only in general terms. Indeed, brand trust is extremely important for increasing customers’ loyalty towards brands on the Web. For example, an auction site such as eBay.com may have very reasonable pricing, but the potential consumer may find the product performance questionable. As a result, a low brand trust may counterbalance high brand satisfaction to reduce the probability of purchase of a product or service on the Web. In contrast, a high level of brand trust may ultimately convert a satisfied customer into a loyal one. Thus, brand trust and its individual determinants constitute the specific objective of this study. A second line of research closely related to brand trust on the Web is familiarity analysis- when building the trusting brand relationship (Chaudhuri and Holbrook, 2001; Garbarino and Johnson, 1999; Hoffman et al., 1998; Tractinsky et al., 1999; Urban et al., 2000). Brand familiarity is a continuous variable that reflects a consumer’s level of direct and indirect experiences with a product (Alba and Hutchinson, 1987). According to Kania (2001), familiarity with a company or brand generates higher trust, unless a person has a negative perception of a brand. In a joint research study conducted by Cheskin Research and Sapient (1999), responses indicated a strong correlation between familiarity and trust. However, many dot-com brands have not yet achieved the level of familiarity necessary to achieve trust. In contrast, some of that literature suggests that trust may not be so dependent on familiarity (McKnight et al., 1998). However, we believe that in the context of e-tailing, consumers’ positive experiences directly affect brand familiarity.

The author
Hong-Youl Ha is a Doctoral Student based at Department of Marketing, Manchester School of Management, UMIST, UK.

Keywords
Internet marketing, Brand image, Privacy

Abstract
Unlike the traditional bricks-and-mortar marketplace, the online environment includes several distinct factors that influence brand trust. As consumers become more savvy about the Internet, the author contends they will insist on doing business with Web companies they trust. This study examines how brand trust is affected by the following Web purchase-related factors: security, privacy, brand name, word-of-mouth, good online experience, and quality of information. The author argues that not all e-trust building programs guarantee success in building brand trust. In addition to the mechanism depending on a program, building e-brand trust requires a systematic relationship between a consumer and a particular Web brand. The findings show that brand trust is not built on one or two components but is established by the interrelationships between complex components. By carefully investigating these variables in formulating marketing strategies, marketers can cultivate brand loyalty and gain a formidable competitive edge.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/1061-0421.htm

Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · pp. 329–342 q Emerald Group Publishing Limited · ISSN 1061-0421 DOI 10.1108/10610420410554412

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The lower the security. With only a few exceptions like Hoffman et al. individuals have serious and legitimate concerns about the privacy of information they provide to favorable direct 330 . Keeney (1999).g... Furthermore. the first factor to be investigated is security. Accordingly. In this study. 1996. Hoffman et al. along with many interesting implications for practice and theory. Ambler (1997) conceptualizes brand value as a function of the existing relationship between the consumer and the brand. Gurviez (1996). Furthermore. 2001). Without trust. On the other hand. the higher the brand trust. trust is crucial because it influences several factors essential to online transactions. The first hypothesis of this study is as follows: H1. give for not shopping online are not functional. the concept has only become a common topic in consumer behavior literature in the 1990s. but related to issues of control over personal information. since very little research has been conducted on factors affecting brand trust associated particularly with e-commerce. (1998). security should affect brand trust as well. (2001). In particular. The major goal of this research is to assist practitioners and researchers who are interested in the strategic aspects of both brand trust and familiarity on the Internet. According to Ha (2002). 2001). (1998) and Papadopoulou et al. 2000). Jarvenpaa et al. 1995).. (1998) showed that top online shopping concerns of Web consumers relate to control over information privacy and trust. Specifically. Krishnamurthy (2001) also found that consumers who experience positive security leads to improvements in the levels of familiarity on the Web. development of e-commerce cannot reach its potential (Cheskin Research and Sapient.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha The high level of brand familiarity based on consumer experience might strongly influence brand trust on the Web (Smith and Wheeler. (2001) Tan (1999). The development and maintenance of consumer brand trust on the Web is at the heart of companies’ marketing plans. Reichheld and Schefter (2000). our research is important for practitioners and academics because much of the work on trust has been theoretical rather than empirical and there has even been empirical work on trust online (McKnight and Kacmar. 1995). privacy must also be a key factor affecting brand trust since it. The same idea is pointed out by Blackston (1995). Although brand trust has a long history of being the focus on management literature. Tractinsky et al. 1997). Theoretical framework and hypotheses In the present study. This dimension includes other characteristics and qualities of the brand that also have meaning and add value for the consumer. literature on familiarity with Web is the basis of testable hypotheses that describe the relationship between brand trust and the factors affecting it. especially in the face of highly competitive markets with increasing unpredictability and decreasing product differentiation (Fournier and Yao. 2002. factors that affect trust online could be different from those that affect it in a bricks and mortar context (Liang and Huang. the inherent uncertainty in the emerging electronic consumer environment brings the issue of brand trust to the forefront of marketing research. In this same sense. In particular. Brand trust recognizes that brand value can be created and developed with management of some aspects that go beyond consumer’s satisfaction with functional performance of the product and its attributes (Aaker. we define brand trust as the willingness of the average consumer to rely on the ability of the brand to perform its stated function (Chaudhuri and Holbrook. e-communities) to demonstrate that a “Web of trust” is in fact no easier and less intrusive on personal security than a “public key infrastructure” where key holders are identified and authenticated by third-party certification authorities. brand trust is simply the trust a consumer has in that specific brand. (1999) argued that a core capability between reputation and security is brand trust. who are uninterested in online shopping. trust being one of the most important ingredients in this relationship. and Heilbrunn (1995) for whom the study of trust could offer an appropriate schema to conceptualise and measure a more qualitative dimension of brand value. brand reputation affects perceived risk and we would expect security decrease risk perceptions (Mayer et al. Lasser et al. affects brand loyalty on the Web. e-trust reduces the uncertainty in an environment in which consumers feel vulnerable because they know that they can rely on the trusted brand (Chaudhuri and Holbrook. (1992) also stress that the notion of trust is only relevant in situations of uncertainty. The effect of security on brand trust has been investigated by Hoffman et al. 1999). Despite its recent growth in use and popularity. 1998). Their studies also found that the most important reasons non-buyers. At a basic level. Salisbury et al. In addition to security. 2002). In particular. Wilson (1998) and Ratnasingham (1998) who used e-trust models as a sociological example (e. Both Doney and Cannon (1997) and Moorman et al. including security and privacy.

Kenny and Marshall. The hypothesis stating this is: H2. 1999). 2001. 1990). Ward and Lee. 2000. negative consequences may arise from distribution of private information. 2001. expectations. Another factor is the name of the Web site from which the product or the service is purchased or recognized. This finding means that the consumer perceived the Web store’s reputation as favorable brand name. 1987). In the model of “trusting behavior”. 2000. 1999. they are much more likely to provide incomplete information to Web sites and notify Internet Service Providers (Franzak et al. 1997.. This leads to the following hypothesis: H3. when Internet consumers are concerned about their privacy. In particular. 1990). and vice versa. Mitchell et al. Research generally supports the claim that WOM is more influential on behavior than other marketer-controlled sources (e. In general. Ward and Reingen. In addition to Web community and shopping. Similarly. positive WOM communication helps consumers cultivate favorable brand trust on the e-commerce.. Fournier. McWilliam. 2000. In addition. 2000. Many researchers (Dolinsky. Perceptions of favorable and reputable Web site as a brand on the Web are associated with higher levels of brand trust. the more durable is the relationship (Buchanan and Gillies.. 2000. 1988. a vivid. In the context of online retailing. behavioral intentions and behavior.might help customers enjoy various impressive experiences relevant to brand trust[2] (Kania. 2000). (1993). In other words. Particularly. Moorman et al. The effects of brand name or store name regarding familiarity were investigated by Bogart and Lehman (1973). Parasuraman et al. attitudes. Consumers can acquire information for buying specific products through WOM communication called “cyberbuzz” on the Internet (Herr et al. Kim and Hoy.. active and affective virtual experience. More recently. privacy on the Web means risk perceptions towards exposing the consumer’s own information. If a Web site protects individual’s private information. and events. 2001. Phelps et al. a further determinant of brand trust is WOM communication. 2000) found that WOM communication affects brand trust. The corresponding hypothesis tested was: H4. 2000) have investigated a good online experience associated with familiarity of the Web communities. 1995. WOM has been shown to influence awareness. Reichheld and Schefter. and Web site protection would reduce the perception of such risk. Muniz and O’guinn (2001). and views experience as an antecedent of brand trust. advertising).g. Fournier (1998).. 1991). Williams and Cothrel. the more highly will its brand trust be perceived. This suggests the important influence that experience can have on customer satisfaction and.. they are considerably more likely to choose the familiar brand. the more specialized and reputable a brand is in selling or recognizing the product or the service. Tractinsky et al. Martin. 2000). 1996. Word of mouth (WOM) is commonly defined as informal communication about the characteristics of a business or a product which occurs between consumers (Westbrook.. but a positive experience. Morrin (1999). Similar finding were obtained by an earlier study on brand name familiarity[1] (Hoyer and Brown. (1999) also have shown that consumer’s brand trust affects the store’s perceived reputation. More 331 . Consumers tend to remember best the last experience (the “recency effect”): thus one positive experience may be sufficient to alter perceptions of more than one preceding negative experience.. In this way. 1999). The Web sites built by positive WOM are perceived as having higher levels of brand trust than marketing-controlled advertising. Ganesan (1994) goes further. We assume that WOM among satisfied community members will improve e-trust on a particular Web site. the Web site is perceived as having higher levels of brand trust. 1990) demonstrating that when inexperienced decisionmakers are faced with a choice in which a known brand competes with unknown brands. researchers showed that building online communities is closely related to e-trust (McWilliam. 2001). Shankar et al. Relationship depends on a consumer’s experience. customers usually expect Web sites to offer them not just a message. 1998. brand trust can be related to experience..possibly including chat. perceptions. games. Furthermore. it allows consumers to exert both informational and normative influences on the product evaluations and purchase intentions of fellow consumers (Bone.. Woodside and Wison (1985). (1998) see experience as an important variable as it plays a role in trust by making it possible to compare the realities of the firm with preconceived expectations. the more satisfied the customer. Many researchers (Dholakia et al. Tractinsky et al. 2000. Iglesias et al. 1994. Li et al. Keller (1998) states that brand name is one of the factors facilitating the development of brand awareness or familiarity.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha marketers (Hoffman et al. Reichheld and Schefter. extensive home-shopping experience was found to have a positive effect on shoppers’ brand trust and buying intentions regardless of the strength of the brands involved (Balabanis and Vassileiou. engaging. Most importantly.

van Dolen and Ruyter (2002) find that consumers’ chat in a new e-service encounter affect perceived enjoyment and customer satisfaction. brand trust might affect brand commitment of the Web sites. which has been described as an enjoyable state of mind that results from a seamless online experience (Janda et al. Postgraduate students (n ¼ 16. Smith and Wheeler. As with brand trust. respondents with the appropriate background to be surveyed were not hard to find. and (2) such restriction simplifies the respondent and analyst tasks.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha specifically.g. Yes 24. Amazon. brand trust leads to brand loyalty or brand commitment because trust creates exchanges in relationships that are highly valued. On the Web. we selected e-bookstores (e. 93 of the respondents (13. Keller. Tellis. This allows us to arrive at the fifth hypothesis of this study: H5. neutral or negative. Data sample The information necessary to carry out the empirical study was collected in data sample through e-mail to a number of the members of the Internet marketing research homepage during two weeks in South Korea during 2002. game. Hence. This allows us to arrive at the final hypothesis of this study: H7. therefore. 2000.com.. Both sellers and buyers on e-bookstores are given specific feedback ratings. interactive Web site will likely enhance the possibility of “flow”. on offline. 1998). whether perceived quality of information is provided and. 2002. Novak et al. It is reasonable to assume that such as engaging.. As book shopping is now very popular. The related hypothesis is: H6. 1994). Pretest We examined consumer perceptions of e-bookstores. 2000). particularly for individuals with high brand trust (Duncan and Moriarty. To raise efficiency and reliability of the response. 1988). a leading e-bookstore in South Korea). As a result of this process. Thus. Figure 1 shows a structural model of this study. four types of experience methods were compared: community.com. Methodology Overview In order to investigate these hypotheses. A number of book vouchers (paid £5) were offered as prizes to participants chosen through a raffle. Experiences that are enjoyed through specific Web sites are perceived to have the highest level of brand trust. bookstores are a relevant site to test for brand trust because they are broadly used by many users and because bookstores on the Web are competing globally for loyal customers. a pre-test was carried out. Indeed.. To improve 332 . Finally. We restricted ourselves to two bookstores because: (1) they are among most popular sites in the e-marketplace. Their primary task was to examine data items affecting brand trust through relationship with Web retailer. female ¼ 5. brand trust plays a key role as a variable that generates customers’ commitment (Delgodo-Ballester and ´ Munuera-Aleman. mean age ¼ 25:8) in Manchester were shown a set of purchase situations with respect to Web purchases. Ha (2002) has shown that Internet users are very interested in customized information offered by Web sites. and event. According to recent research. Meyvis and Janiszewski (2002) reveal that irrelevant information weakens consumers’ belief in the product’s ability to deliver the benefit. 2002. More specifically. The scaled 19 items were immediately followed by questions asking how much they perceived each of the 19 items. All of the variables considered were measured on a 5-point Likert scale (1 ¼ strongly disagree and 5 ¼ strongly agree or 1 ¼ very unimportant and 5 ¼ very important). Ha. A total of 680 personal messages were sent randomly. Krishnamurthy (2001) argues that consumers on the Web are greatly interested in the associated messages. 1987. the higher the brand commitment. Morgan and Hunt. 2001). brand commitment is an essential ingredient for successful long-term relationships (Dwyer et al. the quality of customized information for customers. 2001. We collected additional data because the first sample size was very small. mean age ¼ 27:5. chat. and most university students and individuals have had the opportunity and experience of purchasing from such Web sites. a total of 19 items were obtained. if it is provided. Furthermore. Feedback ratings must relate to specific titles and be designated as positive. The concept of brand commitment is related to the loyalty of consumers towards a particular brand in a product class and is gaining increasing weight in consumer behavior (Martinand and Goodell. Providing effective information does lead to improved awareness and brand perception (Aaker and Joachimsthaler. Kania. The perceived level of brand trust increases with the quality of information offered by the Web sites.7 percent) resulted in valid surveys. 1998. 1991). also influence the level of brand trust on the Web. The higher the brand trust on the Web. to encourage participation and to increase response rate. male ¼ 11. 2002.

we can be reasonably assured that the data set used in our study is not biased. Accordingly.1 percent) women in the sample. we gave a commission to an Internet professional research agency.. 2001. Their ages ranged from 19 to 47. Results Construct measures affecting brand trust under Internet environments are characterized as follows: (1) security (Salisbury et al. for the two waves of the survey. These comparisons were made on the basis of demographics and the overall Web experience and trust scales used in the study. 2001). 0:19). For example.g. Then we compared the sample of 198 respondents with the first and second wave sample. Mittal et al. we are interested in knowing if any potential biases exist in the sample. 1997). After elimination of 23 out of the original 128 returned questionnaires because of incomplete information. 333 . Although the absolute level of variables might differ for Web members and non-members (e. with a mean of 28. Checks for respondent bias A key concern with using a single data is that customers who filled out the survey may be systematically different than the other respondents.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha Figure 1 Model of formation of brand trust and commitment on the Web response rate. Nowak and Phelps. Therefore.. there is no reason to suspect that the hypothesized relationships would be different. the final sample consisted of 198 respondents. Thus. (1999) and Westbrook (1981) find that members were more critical in evaluating their satisfaction with restaurants than non-members were. We obtained two random samples of 30 respondents each. to check for respondent bias. There were 91 (45. more delighted people may be more responsive). From a theory-testing perspective this is not a key concern.9 percent) men and 107 (54. 105 respondents were added. There were two comparisons: the first between the member and the initial consumption survey sample (198 vs 30) and the second between the member and later consumption survey sample (198 vs 30). (2) privacy (Franzak et al. Nevertheless. we took the following steps. Both comparisons showed that the demographic profiles of the members were similar (all ps .7 years ðSD ¼ 4:7Þ: Given Anderson and Gerbing’s (1988) recommendation of a minimum sample size of 150 when testing a structural model via AMOS or LISREL. 0:19) and that the ratings on the overall Web experience and trust scales were statistically the same (all ps . a sample size of 198 appears to be adequate.

(2) Morrin (2) Martin and Ha (3) Dholakia et al.66) 3. The lower the RMSEA values.07 (0. 2000.48 Table IV A model fit for examining the hypotheses Structural equation model Chi-Square (x 2) Degrees of freedom (df) x 2/d.64) 3.82 0.63) 3. we performed a path analysis relating each of the dimensions affecting consumer perceptions of brand trust on the Web.0 (Arbuckle. Most items were satisfied by the result.36 (0.75) (0.IFI. residual terms.49 (0. The constructs exhibited a high degree of reliability in terms of coefficient alpha.986 0.84 (0. P . and (6) quality of information (Krishnamurthy.37 0.14 F4 0.NFI.85 (0.52 3. We performed a series of separate confirmatory factor analyses on the construct measures and related items using an assessment of item path coefficients. 1999.16 0.67 0.. Chronbach’s alpha of 0.06 0.92 (0.47 0. van Dolen and Ruyter.15 0.72) 3.05 0. 1997).442 6 1. The magnitude of the variance explained by all factors is large.15 or greater as large.01 F2 Security (F 1) Privacy (F 2) Brand name (F 3) WOM (F 4) Experience (F 5) Information (F 6) 0.981 0.997 0. The hypothesized structural model was tested using AMOS 4.97) 0.82) 3.52 0.76) (0. factors that contribute to total-variance of more than 5 percent are included in post-analysis.36 0.31 F5 0.82 0. According to the “break-in-the-roots” method explained by Gorsuch (1974).08 (0.f. 0. 2002.28 0.25 0. privacy.06 0. All items satisfied evaluative criteria. 2001).05 Note: aThe complete text of measurement item used in the measurement models is provided in the Appendix Table III Correlation coefficients among the factors affecting brand trust. the results obtained for this model showed a good fit.25 0.994 0.06 0.65 0. 1993).6 (Malhotra.. WOM communication.79) 3. CFIa NFIa IFIa RFIa TLIa RMSEAb b 10.992 0. we present an overview of the correlation among the main factors: security.73) 3.18 0.25 0. Rio et al. (4) Ha (3) Delgado and Munuera (2) Alpha 0.06 0. Table I presents the result of reliability analysis (Appendix).RFI.03 0.92 (0.71 (0. Table III shows a strong relationship between the privacy and WOM communication ðr ¼ 0:82Þ: In addition. 1999).18 F3 0. 1978).02 4.15 0.69 0.52) 3.43 3.49 F6 0. and quality of information. All of the values exceeded the recommended value of Cronbach’s alphas 0. As viewed in Table IV. 2002. Table II shows the result of factor analysis for varimax rotation.35 0.740 0.17 0.89) (0.76 Table II The result of factor analysis for dimension divisibility Measurement Itema Respondents n 5 198 Mean (SD) Variance explained Exogenous constructs Security Safety on sanction Guarantee Privacy Personal data Credit card information Brand name Goodwill Reputation WOM Recommendation Reliance for information provider Good online experience Community Chat Game Event Quality of information Benefit Interested item Attention Endogenous construct Brand trust Familiarity Preference 4.6 is not a valid cut-off (Nunnally. all of the main factors were found for the positive relationships.12 (0.83 0. averaging 0. 1996).70) 4.49 (0. and the overall Cronbach’s alpha values for the scales.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha (3) brand name (Morrin. In Table III.087 Notes: aCFI. The reliability analysis of these scales yielded favorable results. brand name.31 3.69) 3. good online experience. (2) Franzak et al. Johnson and Mathews. Keppel (1991) identified effect sizes of 0.62 0.71 (0.55) 3.71 (0.15 0. 2001). the better the model is considered 334 . Table I Result of reliability analysis Source Security Privacy Brand Name Word of Mouth Good online experience Quality of Information Brand Trust Salisbury et al. (4) word of mouth (Ha.68) 3. Martin. (5) good online experience (Dholakia et al. Factor analysis was used to explain groups among ratio scales.15.06 0.06 0.39 0. and TLI close to 1 indicate a good fit.71) 0.72 (0. Next.

Experiences that are enjoyed through specific Web sites are perceived as having the highest level of brand trust. the Web site is perceived to have higher levels of brand trust. the respondents tend to associate higher security feelings with a higher level of brand trust. 0:001. H3. the data support the hypothesis ( p . t ¼ 7:08). H4 is supported as well. H2. the higher the brand trust. H5. t ¼ 11:72). H1. H4. t ¼ 7:28). Specific Web sites enjoy the highest level of brand trust. 1998). Specific Web sites are recognized more by consumers’ strong brand awareness than by consumers’ lower brand awareness because brand name is one of the factors facilitating the development of brand awareness (Keller. 0:001. delightful Figure 2 The result of affecting factors for brand trust and commitment on the Web 335 . Consumers who experienced delight in specific Web sites might expect more such experiences. The data show that positive WOM communication helps the Web consumers cultivate solid brand trust ( p . which might affect brand trust of consumers. The Web sites built by positive WOM are perceived to have higher levels of brand trust than marketer-controlled advertising. 0:005 ðt ¼ 4:02Þ: It is obvious therefore that the customers’ privacy policy of the specific Web sites is strongly and positively correlated with perceived levels of brand trust. That is.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha Figure 2 shows the result of structural model for the hypotheses of the study. H1 is supported by the data ( p . If a Web site protects individual’s private information. Exciting Web sites apparently provide the best experience through which to stimulate consumers’ interests as far as perceived brand trust is concerned ( p . Thus. This finding means that reliable WOM communication is an increasingly important source for Web users because all tangible products or intangible services on the Web sites may be confirmed by consumers. Thus. The lower the security. 0:001. Again. Perceptions of favorable and reputable Web site as a brand on the Internet are associated with higher levels of brand trust. The hypothesis is supported with p . t ¼ 8:83). 0:001.

Because of the potential for abuse. the data show that impressive experience on the specific Web sites significantly affects brand trust. because consumers appear to better remember new product information for familiar brands. are the top “security brands” that increase brand trust in Internet commerce transactions among those familiar with the brands. as well as their own sites. first of all. t ¼ 9:85). and increasing solid relationships with their customers. radio. the community. users want a highly visible privacy policy that tells them precisely how the company will use their data. H7. Kent and Allen (1994) suggest that well-known brands have important advantages in marketplace advertising. With respect to security[3] and privacy. the results also have found that providing information associated directly with “the customer’s life” is closely related to build up of brand trust. Moreover. For good online experience. H7 is supported by the data (p . More specifically. Amazon. To increase brand awareness. and it can acquire many new customer through alliance sites (Hoffman and Novak. this research has found that perceived brand trust is affected by a number of Web site-related attributes. is a keystone of brand trust (Muniz and O’guinn. Thus. As consumer-goods companies create online communities on the Web for their brand and trust. That is. 2000). building strong brand (McWilliam. consumers are on high alert. Discussions and marketing implications The purpose of this study was to examine through empirical research what factors are affecting consumer perceptions on brand trust on the Web. and maintain the privacy of online communication (Franzak et al. To increase brand trust. The fourth factor investigated was WOM communication. familiarity. most customers are aware that favorable brand provides comfort. In the virtual environment. The Industry Standard (1999) reported that TRUSTe and BBB Online. 1996). 2001) and damages brand trust in each customer. Another example is Web advertising through strategic alliance with a number of partner sites. Amazon. consumers are able to experience psychological states because the medium creates a sense of presence that results in augmented learning. their Web community is a good place for practitioners to spread positive cyberbuzz like wildfire. To build strong brands on the Web. one of four items. as well as online alliance advertisements. Although it pays a commission according to purchase. called “Trusted Third Parties”[4] (TTPs). The perceived level of brand trust increases with the quality of information offered by the Web sites. Impact of WOM communication exerts a strong effect on brand trust to customers on e-commerce. in terms of the main effect of familiarity. manage.com fosters the impression that the site is host to a thriving community of “real people” willing to share their opinions with others. McWilliam.com and Yahoo. the findings suggest that e-marketers must carry out effective offline advertising. t ¼ 8:94). 2001). 2000). along with a secure connection for transmitting credit card information. the higher the brand commitment. as frequently reported by the news media. thus marketing practitioners have a more difficult time managing communications and damage control. for instance. 0:001. therefore. 0:001. For example. In particular. we suggest that marketing practitioners monitor. In particular. As a pioneer study of its kind. As it spreads much more quickly on the Web than in the offline world. For example. they are building strong relationships with their customers and enabling consumers to enjoy all of their contents. and outdoor advertising. marketers must guarantee the security of their Web sites and each individual’s privacy at the same time.com have increased their overall marketing budgets significantly and have shifted a majority of the media mix to traditional offline media such as TV. The results show that brand trust on the Web bookstores is significantly affected by the quality of information offered by the Web sites ( p . Therefore. we suggest that marketers conduct 336 . the online audience expects Web sites to protect personal data. The higher the brand trust on the Web. negative WOM communication generates e-complaining (Harrison-Walker. It was found that the brand name of a Web store is strongly and positively correlated with perceived levels of brand trust. provide for secure payment. and a perceived sense of control (Hoffman and Novak. and trust for them offline or online.. The starting point of building e-trust is advertising and WOM. altered behaviors. we suggest that traditional offline stores as well as online Web stores must address the issues of security and privacy. 2000). H6. and build up potentially thousands of linked sites. 2001. building brand is an effective way. Therefore.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha experiences on the Web sites are found to have the least credibility in terms of brand trust. High level of brand commitment means that dot-com companies are maintaining ongoing relationships with their customers for the purpose of achieving brand trust and loyalty. In addition.

More than 75 percent of Truck Town’s visitors said that they trusted these virtual advisors more than the dealer from whom they last purchased a vehicle. Recent research supports our suggestion that consumers’ chat in a new e-service encounter affect perceived enjoyment and customer satisfaction (van Dolen and Ruyter. Thus impressed and experienced consumers may help companies generate positive WOM. providing honest comparisons of competing products. In addition to the mechanism depending on a program. (1987). Thus. and their satisfaction. increasing customer values and building brand loyalty. and build customer loyalty. Garden. Managers must enhance customer development and devise ways to foster loyalty throughout the customer’s history with their company. not more information. For example. They review current trust-building practices used on the Web and propose the use of new. Therefore. brand trust on the Web is a critical component in the present-day consumer/ provider relationship and most likely will remain so long into the future. building e-brand trust requires a systematic relationship between a consumer and a particular Web brand. the major contribution of our study was to extend Urban and colleagues’ study (2000). McGill and Anand. Truck Town shows that virtual advisors can be a cost-effective component in any Internet trust-building program. a vivid appeal is more persuasive than a nonvivid message regardless of the level of resource allocation (Shedler and Manis. This study also shows that brand commitment is significantly affected by brand trust. today’s users are seeking optimal information related to them (Krishnamurthy. 1989). First. our results suggest that marketing managers give a better information. It is reasonable to assume that such a engaging. In the marketing context. In other words. Finally. brand trust. it has certain limitations. softwareenabled advisors that engender trust by engaging customers in a dialogue to discern their needs and provide unbiased recommendations on a range of possible solutions. Amazon. According to Dwyer et al. Literature on brand trust has focused primarily on brand as cognitive beings. In some studies. They tested their hypothesis by creating Truck Town. the finding is that increasing the resources allocated to message processing enhances the influence of the vivid information in relation to nonvivid information (Keller and Block. However. our findings suggest that marketing managers must identify both repeat customers and first-time customers and turn existing customers into loyalty customers through long-term relationships based on brand commitment. According to the authors. 2002. 1997. brand commitment is an essential ingredient for successful long-term relationships.. and ultimately.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha ongoing updates of their contents and manage their communities so that consumers are able to enjoy experiences from those communities. rather than the factors of consumer’s behavior and experience on offline. the research focused on the customers of just one particular Web industry: bookstores. The results also benefit the company. This experience increase customer satisfaction by enabling customers to make wiser product choices. The advisors consult with customers on purchasing decisions.com brand. (2) trust in the information displayed. In particular. in turn. We are also convinced that a customer-oriented relationship of customization will acquire new customers through WOM communication. 2001): namely.com offers customized information to each customer through his or her own Web page and recommendations based on the customer’s interests and buying pattern.com’s Web site provides the means for gardeners to talk with experts or with one another. which has been described as an enjoyable state of mind that results from a seamless online experience (Janda et al. marketing practitioners must increase the ability of Web sites to adapt to the personal interests and purchasing behavior of their customers.. and (3) trust in delivery fulfillment and service. The findings need to be confirmed by other Web organizations. retain existing customers. not all e-trust building programs guarantee success in building brand trust or e-trust. first of all. To provide customized information. 2002). pay-off bottom-line. a Web site featuring software-enabled advisors that mimic the behavior of unbiased human experts. On the Web. “customization”. Second. brand loyalty. 2000). 1986). Limitations and future research Although our study provides some insight into the way in which factors affecting consumer perceptions on brand trust interact to influence brand trust outcomes. Our findings showed that e-brand trust did not build one or two components but were established by the interrelationships of complex components. They point out that Web trust is built in a threestage cumulative process that establishes (1) trust in the Internet and the specific Web site. For example. the number of respondents 337 . Novak et al. interactive Web site will likely enhance the possibility of “flow”. fosters loyalty to the Garden. consumers with higher levels of brand commitment are ultimately more positively influenced by a variety of factors affecting brand trust than by fragmentary factors.

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Styles of communication acceptable off-line lose their appeal in the virtual world – consumers can complain more easily and. Getting consumers to trust your online brand As Web-based activity.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha Appendix Table AI Scale Items Construct Measurement Item Exogenous constructs Security Privacy Brand name WOM Good experience Quality of Information The bookstore guarantees the safety of credit card information The bookstore has a fire return policy Specially. prior experience. The next generation will not see the Web this way – they will have grown up with it thereby seeing it as simply something to be used. And marketers understand that the development of trust derives from the manipulation of a range of antecedent factors – awareness. in the fevered online world. “commitment” and “familiarity”) and recognise that they contribute to the “equity” residing in our brand. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present. And. image. the Internet and all its works remain a modern marvel. some do not. the means of influencing the level of brand trust vary. The development of online marketing is. in the absence of indications to the contrary. Trading online exposes us to the raw power of the consumer in a way we have not experienced in our traditional marketing channels. we assume that online brands have the same characteristics – after all it is consumers who respond to the brand and the Web does not change the way in which their minds work! Ha focuses on “trust” and assesses a series of factors influencing the development of trust in an online brand. can send the essence of the complaint to thousands. The importance of brand trust We are now familiar with many of the factors that influence brand performance (although I must admit to moments of confusion between “loyalty”. the brand owner and the market in general. From the consumer’s perspective. the extent to which a brand is “trusted” is very significant since this allows us to make purchase-decisions more easily. The nature of the Internet changes the flow of information between the individual consumer. experimental. Ha presents a broad and empirically-based assess of this “why”. e-commerce and online retailing begin to dominate the forward strategies 341 . the consideration of the way in which brands behave in a virtual or online setting becomes more and more important. Endogenous constructs Brand trust Brand Commitment Note: All are five-point scales ranging from 1 (“strongly disagree”) to 5 (“strongly agree”) Executive summary This executive summary has been provided to allow managers and executives a rapid appreciation of the content of this article. We try things out – some work. And we wonder why this is. And we know that this brand equity represents a significant asset to be protected. preserved and extended. Consumer trust in our brand can be destroyed in a breath. “trust”. a thing of wonderment. Marketers have two questions uppermost in their minds – do online brands “behave” in the same way as brands in the real world? And do the techniques and methods for the development of brands in traditional settings transfer directly to online activity? For the current generation of marketers. I dislike exposure of my data on the Web The privacy of my credit card information is very important on the Web The bookstore brand gives good value and service The bookstore has a good reputation I receive recommendation to buy books in the store through friends or colleagues It is a bookstore that is trustworthy I often speak my e-community experiences to my friends I often like to participate in community of the bookstore Chatting in the site is more interesting than in other sites The site supplies various games for customers I expect special events in the site Information that is offered in this bookstore provides many benefits for me I am interested in specific item of providing information Information that is supplied in this site often fascinates me I feel very comfortable whenever I visit the site The selection of purchases at this bookstore is consistently high I am a loyal patron of this bookstore of many business. What becomes clear from this work is that while the essence of the brand remains unchanged in the transition to the Web. familiarity and so on. at present.

as the use of the Internet expands. we have little confidence in the commitment of Web businesses to respect our privacy. they take on a wider significance online. Reports on the latest virus sweeping through home computers or hackers that steal codes and credit card details serve to undermine our confidence in the Internet despite our recognition that the Web is an enormous boon to modern living. Just because you are a Web-based brand does not mean you should advertise in traditional media. play. still uses the full range of media and advertising. Marketers have to recognise that when they are collecting personal data from consumers it is essential to ensure that these data are as secure as possible. For most people the time off-line vastly exceeds the time online. Importantly. It becomes more and more evident that. watch TV and read magazines. The images and messages absorbed in the real world have a more significant effect on attitudes towards brands than those gleaned or received online. Do not ignore the real world There is a temptation when thinking about online trading to forget that. ´ (A precis of the article “Factors influencing consumer perceptions of brand trust online”. businesses need to understand these concerns and to take appropriate actions. Supplied by Marketing Consultants for Emerald. the provision of personal space within a Web site allows for the impression of greater privacy and security as well as presenting the concept of personal and individual service. while different from that we might employ for a tradition distribution channel.Factors influencing consumer perceptions Journal of Product & Brand Management Volume 13 · Number 5 · 2004 · 329–342 Hong-Youl Ha Security and privacy – the twin demons of e-commerce Almost every study of the Internet reveals very high levels of concern about security and privacy. Again stories abound about the abuse of privacy by online businesses. And. Importantly. they work.) 342 . it becomes a means of accessing services as well as a source of information. The alternative will be more draconian privacy regulations and laws that will restrain our ability to trade – online and off-line. While safety and security have always been important. We worry about cookies and other Web-based tracking tools and. in many cases. just as the development of mass customization off-line represents an important challenge to marketers and brand managers. Ha’s research helps us to understand the ways in which we can begin to develop online brands and to take advantage of the online environment to expand the brand equity of established off-line brands. Consumers do not spend all their time online. consumers understand that customizing the service online is far more easily achieved. The successful development of these online service brands requires us to develop a promotional mix that. at some stage. Alongside security concerns sit worries about privacy. Just as in real world direct marketing. there is an interface with the real world. the expectations of personalization and customization online are also growing. In this context we should think carefully about the balance between collecting the minimum of information needed to complete the transaction and the benefits derived from collecting more so as to aid market understanding and future sales. Ha also confirms that the essence of brand equity and the principles of brand management remain unchanged online – it is the antecedents of “trust” that change rather than the significance of trust to the consumer. Finally.