Come Fly With Me: the Role of Consumer Confidence and Trust in Crisis

EXTENDED ABSTRACT - This research examines the role of consumer confidence on the relationships between trust and satisfaction and also between trust and behavioral intentions. In addition, the impact of locus of control is also examined in the relationships between dependence and satisfaction and also between dependence and behavioral intentions. These relationships are examined in different conditions of perceived environmental turbulence. A between subject experiment is conducted using a survey of adult-non-students. Responses from 608 respondents are analyzed to test the proposed relationships.

Citation:

Nancy Wong and Alka Citrin (2003) ,"Come Fly With Me: the Role of Consumer Confidence and Trust in Crisis", in NA - Advances in Consumer Research Volume 30, eds. Punam Anand Keller and Dennis W. Rook, Valdosta, GA : Association for Consumer Research, Pages: 101-102.

Advances in Consumer Research Volume 30, 2003     Pages 101-102

COME FLY WITH ME: THE ROLE OF CONSUMER CONFIDENCE AND TRUST IN CRISIS

Nancy Wong, Georgia Institute of Technology

Alka Citrin, Georgia Institute of Technology

EXTENDED ABSTRACT -

This research examines the role of consumer confidence on the relationships between trust and satisfaction and also between trust and behavioral intentions. In addition, the impact of locus of control is also examined in the relationships between dependence and satisfaction and also between dependence and behavioral intentions. These relationships are examined in different conditions of perceived environmental turbulence. A between subject experiment is conducted using a survey of adult-non-students. Responses from 608 respondents are analyzed to test the proposed relationships.

Previous theories of Customer Relationship Management (CRM) have examined the roles of satisfaction, trust, and commitment in influencing customers’ attitudes toward the firm and their future purchase and use intentions. Such favorable attitudes have been found to insulate firms against the onslaughts of negative information or publicity. Recent events since September 11 have challenged this country and marketplace to the extent never before encountered in its history. These events also highlight a concept that has not been studied in previous consumer trust research, namely, consumer confidence. The researchers propose that consumer confidence is an important part of a model of consumer trust but is distinct from it in significant ways. We propose that trust towards a firm consists of two components: expectations and reliance. Consumer confidence, on the other hand, reflects a consumer’s perceptions of the firm’s abilities to deal with events. It is therefore based on demonstrated capability. This construct becomes important in a crisis situation when trust may still be maintained but a firm’s inconsistent actions may undermine confidence. The events since September 11 (and the airlines’ subsequent response to the events) have undermined consumer confidence, not consumer trust. Therefore, it is important to understand what actions can be taken to gain consumer confidence and in the process, restore patronage of the airlines.

Our research unravels the distinction between consumer confidence and trust and shows that consumer confidence becomes a salient construct in the presence of extreme environmental turbulence and impacts intentions to use air travel. A between subjects experiment was conducted using a survey method for data collection. Based on responses received from 608 adult non-students the hypothesized relationships were examined. The results show that in neutral conditions, both trust and confidence are significantly related to satisfaction. However, in conditions perceived to be threatening, confidence moderates the relationship between trust and satisfaction. Interestingly, we also find that the impact of trust on intention diminishes in conditions perceived to be threatening and instead, the impact of consumer confidence on intentions now becomes significant.

We also examine the role of locus of control in the relationships between dependence and satisfaction in addition to that between dependence and intentions. Our results indicate significant moderating effects of locus of control in the relationships between dependence and behavioral intentions for different conditions of environmental turbulence.

REFERENCES

Aiken, Leona S., and Stephen G. West (1991), Multiple Regression: Testing and Interpreting Interactions. Newbury Park, CA: Sage Publications.

Anderson, James C., and James A. Narus (1990), "A Model of Distribution Firm and Manufacturing Firm Working Partnerships," Journal of Marketing, 54 (1), 42-58.

Berry, Leonard, and A. Parasuraman (1991), Marketing Services. New York: The Free Press.

Berry, Leonard (1995), "Relationship Marketing of ServicesBGrowing Interest, Emerging Perspective," Journal of the Academy of Marketing Science, 23 (Fall): 236-245.

Brown, Tom J., and Peter A. Dacin (1997), "The Company and the Product: Corporate Associations and Consumer Product Responses," Journal of Marketing, 61 (January), 68-84.

Carter, Tony (1997), "Crisis Management in Sales Force Management," Journal of Professional Services Marketing, 15 (2), 87-103.

Chaudhuri, Arjun, and Morris B. Holbrook (2001), "The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The Role of Brand Loyalty," Journal of Marketing, 65 (April), 81-93.

Davidson, Wallace N., III, and Dan Worrell (1992), "Research Notes and Communications: The Effect of Product Recall Announcements on Shareholder Wealth," Strategic Management Journal, 3 (6), 467-73.

Dawar, Niraj, and Madan M. Pillutla (2000), "Impact of Product-Harm Crises on Brand Equity: The Moderating Role of Consumer Expectations," Journal of Marketing Research, 37 (May), 215-226.

Deshpande, Rohit and Gerald Zaltman (1982), "Factors Affecting the Use of Marketing Research Information: A Path Analysis," Journal of Marketing Research, 19 (February), 14-31.

Deshpande, Rohit and Gerald Zaltman(1984), "A Comparison of Factors Affecting Researcher and Manager Perceptions of Market Research Use," Journal of Marketing Research, 21 (February), 32-39.

Doney, Patricia M. and Joseph P. Cannon (1997), "An Examination of the Nature of Trust in Buyer-Seller Relationships, Journal of Marketing, 61 (April), 35-51.

Ganesan, Shankar (1994), "Determinants of Long-Term Orientation in Buyer-Seller Relationships," Journal of Marketing, 58 (April), 1-19.

Gwinner, Kevin P., Dwayne D. Gremler, and Mary Jo Bitner (1998), "Relational Benefits in Services Industries: The Customer’s Perspective," Journal of the Academy of Marketing Sciences, 26 (2), 101-114.

Jaworski, Bernard J. and Ajay K. Kohli (1993), "Market Orientation: Antecedents and Consequences," Journal of Marketing, 57 (July), 53-70.

Kumar, Nirmalya, Lisa K. Scheer, and Jan-Benedict E. M. Steenkamp (1995), "The Effects of Perceived Interdependence on Dealer Attitudes," Journal of Marketing Research, 32 (August), 348-56.

Kopalle, Praveen K., and Donald R. Lehmann (1995), "The Effects of Advertised and Observed Quality on Expectations About New Product Quality," Journal of Marketing Research, 32 (August), 280-90.

Lewis, David J. and Andrew Weigert (1985), "Trust as a Social Reality," Social Forces, 63 (4), 967-85.

Mason, Charlotte and William D. Perreault (1991), "Collinearity, Power, and Interpretation of Multiple Regression Analysis," Journal of Marketing Research, 28 (August), 268-80.

Moorman, Christine, Gerald Zaltman, and Rohit Deshpande (1992), "Relationships Between Providers and Users of Market Research: The Dynamics of Trust Within and Between Organizations," Journal of Marketing Research, 29 (August), 314-28.

Morgan, Robert M., and Shelby D. Hunt (1994), "The Commitment-Trust Theory of Relationship Marketing," Journal of Marketing, 58 (July), 20-38.

Oliver, Richard L., and Russell S. Winer (1987), "A Framework for the Formation and Structure of Consumer Expectations: Review and Propositions," Journal of Economic Psychology, 8 (4), 469-99.

Pearson, Christine M. and Judith A. Clair (1998), "Reframing Crisis Management," Academy of Management Review, 23 (January), 59-76.

Rotter, Julian B. (1966) "Generalized Expectancies for Internal Versus External Control of Reinforcement," Psychological Monographs, 80 (1, Whole No. 609).

----------------------------------------