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Credibility cues in online shopping: An examination of corporate credibility, retailer reputation, and product review credibility


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Using cue utilisation theory, this study investigates the effects of credibility cues on consumer behaviour online. Specifically, the study examines, in an online shopping context, the impact of the signalling cues of corporate credibility, online retailer reputation, and online consumer product review credibility. Results of this experimental study suggest that the effects of three types of credibility cues vary across the three types of consumer responses - perception of product quality, perception of risk, and purchase intention. In particular, an online retailer's reputation appeared to be the most significant cue in the online shopping context, affecting all three consumer responses. The findings also revealed that a consumer's perception of corporate credibility was an important cue in determining the consumer's purchase intention and perception of product quality. Nevertheless, an ancillary cue exists that reduces risk perception - the consumer's credibility perception of an online product review created by another consumer.
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Int. J. Internet Marketing and Advertising, Vol. 7, No. 3, 2012 217
Copyright © 2012 Inderscience Enterprises Ltd.
Credibility cues in online shopping: an examination
of corporate credibility, retailer reputation, and
product review credibility
Sojung Kim* and Sejung Marina Choi
Department of Advertising,
College of Communication,
The University of Texas at Austin,
1 University Station A1200, Austin, TX 78712-1092, USA
Fax: 1-512-478-9020
*Corresponding author
Abstract: Using cue utilisation theory, this study investigates the effects of
credibility cues on consumer behaviour online. Specifically, the study
examines, in an online shopping context, the impact of the signalling cues of
corporate credibility, online retailer reputation, and online consumer product
review credibility. Results of this experimental study suggest that the effects of
three types of credibility cues vary across the three types of consumer
responses – perception of product quality, perception of risk, and purchase
intention. In particular, an online retailer’s reputation appeared to be the most
significant cue in the online shopping context, affecting all three consumer
responses. The findings also revealed that a consumer’s perception of corporate
credibility was an important cue in determining the consumer’s purchase
intention and perception of product quality. Nevertheless, an ancillary cue
exists that reduces risk perception – the consumer’s credibility perception of an
online product review created by another consumer.
Keywords: online shopping; cue utilising theory; corporate credibility; website
reputation; product review credibility; product quality; risk perception;
purchase intention; consumer behaviour; internet marketing; electronic
word-of-mouth; WOM; online retailers.
Reference to this paper should be made as follows: Kim, S. and Choi, S.M.
(2012) ‘Credibility cues in online shopping: an examination of corporate
credibility, retailer reputation, and product review credibility’, Int. J. Internet
Marketing and Advertising, Vol. 7, No. 3, pp.217–236.
Biographical notes: Sojung Kim is a doctoral candidate in the Department of
Advertising at The University of Texas at Austin. She received her MA in
Advertising from Michigan State University. Her research interests include
consumer psychology in a computer-mediated environment, corporate
communication, and corporate credibility. Her work has been published in
Journal of Internet Commerce, Journal of Marketing Communications, and
Journal of Social Science Research and a number of conference proceedings.
Sejung Marina Choi is an Associate Professor in the School of Media
and Communication at Korea University. She received her PhD in Mass
Media from Michigan State University. Her research interests include source
credibility, consumer-brand relationships, social media and cross-cultural
218 S. Kim and S.M. Choi
consumer behaviour. Her work has appeared in the Journal of Advertising,
Psychology and Marketing, Journal of Cross-Cultural Psychology,
International Journal of Advertising, Journal of Current Issues and Research
in Advertising, International Journal of Consumer Studies, Journal of Global
Marketing, Journal of Computer-Mediated Communication, Computers in
Human Behavior, Information, Communication and Society and Journal of
Marketing Communications, among others.
This paper is a revised version of a paper entitled ‘Credibility cues in online
shopping: an examination of corporate credibility, retailer reputation, and
product review credibility’, presented at American Academy of Advertising,
Cincinnati, Ohio, 26–29 March, 2009.
1 Introduction
Online shopping has, since the early 1990s, rapidly expanded ever since manufacturers
and retailers began incorporating the internet as an important distribution channel.
E-commerce sales in 2010 were $165.4 billion, which is almost fivefold growth from
$34.7 billion in 2007(Pew Internet & American Life Project, 2008a; US Census Bureau,
2011). The size of the online shopping population has shown a similar increase. Over half
of all Americans reported purchasing products online in 2010, a sharp increase from 36%
in 2000 (Jansen, 2010). Online shopping is expected to continue growing at a fair rate
and is estimated to reach about $250 billion in 2014 (Mulpuru and Hult, 2010). Fuelling
this explosion of e-commerce has been a positive shift in consumers’ attitudes, thanks to
its time-saving convenience, toward online shopping (Pew Internet & American Life
Project, 2008b).
There are, however, some shadows to this sunny picture that darken the prospect of
continued e-commerce growth. Some consumers, accustomed still to brick-and-mortar
stores, find the internet to be a mystifying place for shopping. Such are averse to the
absence of face-to-face assistance from sales personnel and hands-on, tangible
experiences (Cho et al., 2006). Consumers concerned about their security and privacy
help deter the full expansion of electronic business. Online sales accounted for 4.2% of
total retail sales in 2010, leaving large room for the further growth of e-commerce (US
Census Bureau, 2011). With the lack of direct, personal assurance, consumers shopping
online tend to seek out cues to reach judgements about product quality and purchase-
associated risks. At issue is what cues in the online shopping environment serve as
primary indicators of such perceptions of product quality and of risks involved in
potential purchases.
Researchers have devoted substantial effort to understanding the factors that, in
online purchases, affect consumer perceptions and decisions. Specifically, studies have
examined signals for perceived product quality and risks in online purchasing (Biswas
and Biswas, 2004; Chu et al., 2005; Chu and Chu, 1994; Lee and Tan, 2003; Purohit and
Srivastava, 2001; Yen, 2006), factors influencing consumer trust of online stores
(Eastlick et al., 2006; Jarvenpaa et al., 1999, 2000; Lynch et al., 2001; McKnight et al.,
2002), and features of online stores influencing consumers’ decision making
(Canstantinides, 2004).
Credibility cues in online shopping 219
Building upon this foundation of research, the present study aims to investigate the
influence of key credibility cues on consumer perceptions of product quality and
purchase-associated risks as well as purchase intention. Marketing and advertising
literature suggests that advertisers, media, endorsers, and peer consumers are all
important sources of brand-related information or messages and consumers’ perception of
their credibility plays a crucial role in determining consumers’ attitudinal and behavioural
responses to the delivered information or messages. In an online shopping environment,
there are three major types of sources of information: manufacturers, retailers, and peer
consumers. Consumers’ purchase decisions are influenced by the level of perceived
credibility of the three information sources.
Prior research has demonstrated that manufacturer credibility and online retailer
reputation positively impact perceived product quality, perceived risks, and purchase
intention of online shoppers (Biswas and Biswas, 2004; Chu et al., 2005; Lee and Tan,
2003; Yen, 2006). Yet, little research exists on how consumer purchase decisions are
influenced by another credibility cue – the credibility of online consumer-generated
product reviews. Consumer-generated product reviews have recently emerged as an
essential source of information for consumers. Almost 90% of online shoppers reported
having read online reviews written by fellow shoppers prior to purchase decisions
(eMarketer, 2008). Consumers are expected to continue consulting online reviews for
researching future purchases; 40% of online shoppers indicated that they would not even
purchase electronics before checking online reviews (Nielsen Wire, 2010).
This study, therefore, looks at how consumers form judgements of products and then
examines, as sources of product information, the roles played by consumer-generated
product reviews as well as those played by manufacturers and retailers. Theoretically,
results of this study provide a more comprehensive understanding of signalling effects
and source credibility issues by investigating how the three types of cues independently
and jointly impact consumer perceptions in the online shopping context. This study’s
findings also offer pragmatic insight into effective strategies that facilitate online
shopping and transactions.
2 Literature review
2.1 Cue utilisation theory in the online shopping context
With the surge of e-commerce, online shopping behaviour has received due attention
from academia and marketing practitioners. A substantial number of studies have applied
‘cue utilisation theory’ to understand online shoppers’ attitudinal and behavioural
responses to different cues, which serve as markers of product quality or risk reduction
(Chen and Dubinsky, 2003; Chu et al., 2005). According to cue utilisation theory, a
product consists of an array of intrinsic and extrinsic cues that serve as quality indicators
(Collins-Dodd and Lindley, 2003; Cox, 1967). Intrinsic cues refer to core characteristics
of the product itself – ingredients, taste, and texture. Extrinsic cues refer to peripheral
characteristics – price, brand name, and store name (Richardson et al., 1994). Extrinsic
cues are changeable while intrinsic cues, as long as the product itself is unaltered, are not.
In the online shopping environment, characterised by limited tangible intrinsic cues
and security concerns for electronic transactions, extrinsic cues play a particularly crucial
role in determining consumer evaluations of products. Consumers turn to a variety of
220 S. Kim and S.M. Choi
extrinsic cues online – manufacturer name, retailer name, price, warranty, etc. – to infer
something about product quality and/or to lessen performance/financial risks at the
pre-purchase stage. A couple of the perhaps most studied extrinsic cues – in both online
and offline shopping contexts – are manufacturer reputation (brand name) and retailer
reputation. Findings suggest that consumers tend to perceive a product to be of good
quality and are willing to buy it when the product is manufactured or distributed by a
well-known company or a reputable retailer. Another useful theoretical concept for
understanding the impacts of corporate and retailer reputation is source credibility.
2.2 Source credibility
Research on source credibility maintains that credible sources are more persuasive than
non-credible sources (Craig and McCann, 1978; Hovland and Weiss, 1951; Ohanian,
1990). An impressive amount of research has documented empirical evidence that source
credibility positively influences message recipients’ opinions or attitude changes (Craig
and McCann, 1978; Hovland and Weiss, 1951; Ward and McGinnies, 1974; Woodside
and Davenport, 1974). Advertising scholars have given the construct of source credibility
a great deal of attention, for it is considered one of the main elements for advertising
effectiveness (Goldsmith et al., 2000; Newell and Goldsmith, 2001; Tse, 1999).
Source credibility is defined as “the extent to which the source is perceived as
possessing expertise relevant to the communication topic and can be trusted to give an
objective opinion on the subject” [Goldsmith et al., (2000), p.44]. This definition of
source credibility indicates that expertise and trustworthiness are its key components.
Expertise refers to the perceived level of knowledge, experience, or skills possessed by
the source (Hovland et al., 1953). Trustworthiness denotes the source’s honesty, integrity,
and veracity in delivering the message (Erdogan et al., 2001).
Advertising studies focus most extensively on celebrity endorsers. Celebrities are
generally considered to possess more credibility than average people (Petty et al., 1983).
They generate positive attitudinal and behavioural responses from consumers (Craig and
McCann, 1978). However, Stern’s (1994) revised communication model for advertising
extended source effects in advertising by incorporating other types of sources related to
advertising messages. That is, not only is the person appearing in the ad (endorser or
spokesperson), exerting influence on consumer response to the ad, but also the advertiser
and the author of the ad are. Along this line, advertisers’ and corporations’ credibility
have received growing amount of academic attention.
2.3 Corporate credibility
Corporate credibility, or ‘advertiser credibility’ (MacKenzie and Lutz, 1989), is defined
as “the degree to which consumers, investors and other constituents believe in the
company’s trustworthiness and expertise” [Goldsmith et al., (2000), p.44]. Research
shows that corporate credibility positively influences attitudes toward advertisements,
attitudes toward the brand, and purchase intention (Goldsmith et al., 2000). According to
MacKenzie and Lutz (1989), corporate credibility is also a pivotal factor for generating
favourable attitudes toward an advertiser that in turn positively influences attitudes
toward the ad and the brand. Goldberg and Hartwick (1990) argued that corporations with
high credibility induce favourable consumer attitudes toward the advertising claim. Other
past research also supports the robust, positive effects of corporate credibility on
Credibility cues in online shopping 221
advertising-effectiveness-related variables – attitude toward the ad, attitude toward the
brand, and purchase intention (Lafferty and Goldsmith, 1999; Lafferty et al., 2002;
Newell and Goldsmith, 2001).
Beyond its impact on advertising effectiveness, researchers have examined corporate
credibility as an important cue in the context of online shopping. The concepts of
‘manufacturer reputation’, ‘brand name’, and ‘corporate credibility’ are closely
interrelated and all refer, at heart, to consumer perception of trust in a corporation
(Herbig and Milewicz, 1995). In this sense, directions for understanding the role of
corporate credibility in online shopping can be gleaned from past studies on manufacturer
or brand reputation in brick-and-mortar store settings. A large body of research in
marketing consistently suggests that brand name or manufacturer reputation positively
affects consumers’ product quality perception (Chen and Dubinsky, 2003; Dawar and
Parker, 1994; Hoyer and Brown, 1990; Jacoby et al., 1971), purchase-related risk
perception (Shimp and Bearden, 1982), and purchase intention (Akaah and Korgaonkar,
2006; Lee and Tan, 2003).
In online shopping settings a consumer has no hands-on, direct experience
with products or tactile assurance of product quality. Consequently, consumer judgement
and perception of product and purchase intention is largely contingent upon extrinsic
cues available during shopping. A consumer’s credibility perception of a product’s
manufacturer should suggest the consumer’s product and/or purchase-associated
perceptions. For instance, the consumer’s concern about the risks of buying the product
may be lessened by trust in an established, credible company. Along these lines, the
following hypothesis is posited to understand the impact of corporate (manufacturer)
credibility on perceived product quality, perceived risk, and purchase intent.
H1 A highly credible manufacturer will lead to
H1(a) higher product quality perception
H1(b) lower risk perception
H1(c) greater purchase intent than will a less credible manufacturer.
2.4 Online retailer reputation
The rapid growth of e-commerce over the past decade has produced a large body of
marketing literature on online retailers. Online retailers capitalise on the unique
advantages of doing business online such as low entry and start-up costs (Peterson et al.,
1997). However, building credibility and reputation is one of the biggest challenges to
online retailers since consumer trust is often said to be the key to the success of online
businesses (Canstantinides, 2004; Eastlick et al., 2006; Ha, 2004; Jarvenpaa et al., 2000;
O’Cass and Fenech, 2003).
Indeed, several studies have demonstrated online retailer reputation as an important
signal which forms consumer trust in online purchase activities. Ha (2004) points out that
a reputable online retailer brand increases consumer trust, which generates commitment
on the part of buyers to the retailer. In a similar vein, the findings of Jarvenpaa et al.
(2000) suggest that online retailer reputation indirectly enhances purchase intention
through its positive influence on consumer trust toward the retailer. In their study,
consumer trust in the retailer was also found to produce favourable attitudes toward the
retailer as well as reduce perceived risks of purchasing from the retailer. In addition,
222 S. Kim and S.M. Choi
Eastlick et al. (2006) shows that a reputable online retailer increases consumer trust in the
retailer and subsequently reduces consumer privacy concerns, ultimately enhancing
purchase intention. Likewise, the results of Chen and Dubinsky’s (2003) study indicate
that online retailer reputation positively influences purchase intention via enhanced
product quality perception and lowered risk assessment.
From a source credibility perspective, an online retailer is also understood as one of
the sources imputing credibility to a product online. In other words, consumers are likely
to rely on a reputable retailer as a trustworthy and credible source of product- and
purchase-related information. Consumers will likely consider as less risky buying a
product from a retailer of good reputation than from a lesser-known retailer (Hendrix,
1999). Further, consumers may believe that a retailer’s act of carrying and selling a
product implies its endorsement of that product. Accordingly, consumers may turn to the
retailer’s reputation as a salient cue to form a judgement of the product.
For these reasons, an online retailer’s reputation is predicted, like corporate
credibility or a manufacturer’s reputation, to exert influence on consumer behaviour.
Based on the findings of previous research, this study speculates that online retailer
reputation positively affects consumers’ perceptions of product quality, risk, as well as
their purchase intention, leading to the following hypothesis:
H2 An online retailer of good reputation will lead to
H2(a) higher perceived product quality
H2(b) lower risk perception
H2(c) greater purchase intent than will a less reputable retailer.
2.5 Credibility of consumer-generated online product reviews
Another source of influence, which has recently gained importance, is
consumer-generated online reviews. Studies of online product reviews have typically
been contextualised with the concept of word-of-mouth (WOM). WOM is commonly
defined as “informal communication about the characteristics of a business or a product
which occurs between consumers” [Ha, (2004), p.331]. Its manifestation, being termed
‘cyberbuzz’ or ‘electronic WOM (eWOM)’, is receiving more and more attention (Ha,
2004; Hennig-Thurau and Walsh, 2003). eWOM has increasingly been recognised as a
powerful channel for disseminating product-related information and opinions among
consumers. Interactive communication technologies available in the era of Web 2.0 (e.g.,
instant messaging, social networking sites) enable consumers to easily and actively
engage in eWOM activities.
Consumer-generated product reviews online, in particular, have been shown to have a
substantial impact on consumer decisions online (Smith et al., 2005); product
recommendations by peer consumers significantly influence consumer product choices
online (Senecal and Nantel, 2004). While other studies reveal motivations for using
consumer-generated product reviews (Hennig-Thurau and Walsh, 2003), and the
moderating role of consumer characteristics in the effectiveness of eWOM (Xue and
Phelps, 2004), studies on eWOM to date suggest that product- or service-related
information and opinions provided by fellow consumers can effectively impact other
consumers’ perceptions of product quality (Bone, 1995), perception of performance risk
(Ha, 2006), and purchase intention (Arndt, 1967; Charlett and Garland, 1995).
Credibility cues in online shopping 223
In the light of source credibility research, online reviews are a critical source of
information for consumers. Since the sources of WOM are mostly reference groups or
fellow consumers, consumers tend to view WOM as more trustworthy and credible than
messages from marketers or advertisers (Fong and Burton, 2008; Grewal et al., 2003;
Herr et al., 1991). Senecal and Nantel’s (2004) study on online product recommendations
shows that peer consumers’ recommendations are perceived as less professional but
more trustworthy than mechanically generated recommendation systems or experts’
recommendations. Along this line, online reviews generated by fellow consumers may,
due to their lack of self-interest and high level of perceived credibility, be among the
most influential sources of product- or service-related information.
Yet, not all online reviews provided by consumers may be perceived as equally
credible. Depending on the various elements of the content of the reviews (argument
quality, specificity of information), the veracity or credibility of individual product
reviews may be assessed differently (Doh and Hwang, 2009). Consumer-generated online
product reviews are hypothesised to serve as an important information source in the
purchase decision-making process (Chang and Chen, 2009). More specifically, it is
believed that the credibility of online reviews exert a similar influence on consumers’
perceptions of product quality and risk as well as on purchase intention. The following
hypothesis is thus put forward:
H3 A highly credible, consumer-generated product review online will lead to
H3(a) higher perceived product quality
H3(b) lower risk perception
H3(c) greater purchase intent than will a less credible review.
2.6 Interaction among credibility cues
The three identified credibility cues in the online shopping context appear not alone but
together and combine into one equation that determines product judgement. Therefore, in
addition to the independent effects of the three cues, this study also examines the
interaction of the three source cues in determining consumer perception. Chu et al. (2005)
suggests that there is some interplay of the manufacturer’s and retailer’s properties that
influence consumer perception of a product’s quality. Specifically, they state that
“because manufacturer and retailer brands both act as collateral bonds that signal quality,
they are interchangeable or compensatory” (p.117). In light of this, corporate credibility
may complement or reinforce online retailer reputation or vice versa. For instance, a
barely credible manufacturer may appropriate the reputation of a well-known online
retailer. Similarly, a less-known online retailer may enjoy the halo effect of high
corporate credibility. Previous studies, indeed, show that the effect of retailer reputation
on perceived product quality is pronounced when the manufacturer has a low reputation
(Chu and Chu, 1994; Dodds et al., 1991).
Applying the logic to the online shopping environment wherein more uncertainties
associated with purchases exist, a speculation is made here about the relationship
between manufacturer credibility and retailer reputation. When a manufacturer is
perceived as having credibility, its brand name alone can signal the good quality of its
product, rendering other cues like retailer reputation needless. When, however, a
manufacturer is perceived as not having credibility, consumers may seek other indicators
224 S. Kim and S.M. Choi
of product quality. In such a situation, what may serve as a stronger cue is online retailer
reputation. Following this reasoning, the following hypothesis is offered.
H4 Online retailer reputation will have a greater impact on
H4(a) perceived product quality
H4(b) perceived risk
H4(c) purchase intent when corporate credibility is low.
In the same way, the effect of online review credibility may be contingent on retailer
reputation. That is, when a retailer enjoys an established reputation, consumers may not
need an additional cue to judge the quality of a product they are considering buying from
that retailer. Conversely, with a less reputable retailer, consumers may seek another cue
for product judgement, more heavily consulting online reviews. In summary, an online
review by a fellow consumer will, especially with a dearth of product quality signals,
serve as a supplementary cue to signal product quality and to relieve the perceived risk.
Hence, when the retailer’s reputation is low, the effect of product review credibility will
be more evident. This interaction between product review credibility and retailer
reputation is hypothesised as follows.
H5 Product review credibility will have a greater impact on
H5(a) perceived product quality
H5(b) perceived risk
H5(c) purchase intent when the retailer reputation is low.
3 Method
3.1 Experimental design
To test the proposed hypotheses, a 2 (high versus low corporate credibility) × 2 (high
versus low online retailer reputation) × 2 (high versus low consumer-generated online
product review credibility) between-subjects experimental study was employed. The size
of each cell ranged from 20 to 28. Eight versions of a web page for online shopping,
representing the experimental conditions, were created.
3.2 Stimulus development
3.2.1 Pretest
A pretest was first conducted to select two manufacturers of digital cameras (high versus
low corporate credibility) and two online retailers (high versus low retailer reputation),
and to confirm if the content of product reviews that varied in their credibility (high vs.
low review credibility) is manipulated as intended. Digital cameras, familiar to and
relevant to college students, were selected for the product category. In addition, digital
cameras are a technical, high-involvement product; consumers, in an online shopping
situation, would normally seek and rely on extrinsic cues. The sample for the pretest
consisted of 20 undergraduate students in an introductory advertising class at a large
Southwestern University.
Credibility cues in online shopping 225
Subjects were asked to rate the perceived credibility of and their familiarity with nine
digital camera manufacturers and reputations of nine online retailers on three single-item,
seven-point scales respectively (1 = strongly disagree, 7 = strongly agree). In addition,
subjects were asked to indicate credibility perception of two consumer-generated reviews
of a digital camera on another single-item, seven-point scale (1= strongly disagree,
7 = strongly agree). While the brand name was masked, the two reviews, taken from an
online shopping website and modified, represented the high versus low review credibility
conditions. Additionally, participants were asked to list as many characteristics as they
used in forming their judgement of review credibility.
Results of the pretest led to the selections of Canon and Pentax as high and low
credible corporations respectively (M = 6.8 versus 3.0, p < .001) and and for online retailers of high and low reputation respectively (M = 7 versus
1.05, p < .001). The two product reviews resulted in a significant difference in credibility
perception (M = 5.7 versus 3.2, p < .001). Results of the open-ended question provided
additional insight into the bases for consumers’ credibility perception of online reviews
and further refined the stimuli. Specifically, highly credible product reviews were found
to include such characteristics as,
1 reviewer’s real name
2 rational argument
3 balanced information with both pros and cons
4 specific information.
Low credibility product reviews were found to include such characteristics as,
1 use of a nickname
2 emotion-based argument
3 unbalanced information
4 lack of concrete information.
3.2.2 Experimental stimuli
Based on the pretest’s finding, eight web pages were created, representing the intended
experimental manipulations. All the web pages were identical in terms of content, layout,
and design. They differed only in the manipulations (i.e., the logo of the digital camera
manufacturer, the online retailer, and the online product review). A product picture, price,
and brief product description were displayed on the left side of the web page and a
consumer’s product review was posted on the right.
While real manufacturers and online retailers were adopted for external validity, the
product was given a fictitious name, ‘Blue P1100’, to prevent potential biases to an
existing product. ‘Blue P1100’ was described as a new digital camera just introduced to
the market. In addition, a brief description of the manufacturer and the online retailer for
each experimental condition was provided.
226 S. Kim and S.M. Choi
3.3 Sample and data collection procedure
Participating in the main experiment were 186 students enrolled in introductory
advertising classes at the same university. All subjects were given the URL of the study
where they were randomly assigned to one of the eight treatment conditions and viewed
the corresponding web page along with a brief introduction of the manufacturing
company and the online retailer. Participants were then asked to fill out a questionnaire.
The subjects’ average age was 20.12 with more female subjects (71%) participating than
male (28.5%). Over half (62%) were Caucasian, 4% African American, 18% Hispanic,
10% Asian, and 6% other. Over 90% of the participants reported spending more than an
hour a day on the internet and about 85% reported making a purchase online at least once
a month.
3.4 Measures
The questionnaire consisted of measures of perceived quality of the digital camera,
perceived risk of buying the digital camera, and intention to purchase the digital camera.
Also included were other items for control variables, such as product involvement,
overall attitude toward online shopping, amount of internet usage, and frequency of
online shopping as well as manipulation check items.
To assess perceived product quality, Purohit and Srivastava’s (2001) measure was
adapted. Specifically, the subjects reported their perception of product quality on a
five-item, seven-point, Likert scale (e.g., ‘My overall impression of the new Blue P1100
digital camera is very bad/very good’) (
= .831). To tap into the subjects’ perceived risk,
a four-item, seven-point, Likert scale was borrowed from the literature and modified to
reflect the study’s context (Jarvenpaa et al., 2000). For example, ‘How would you
characterise the decision of whether to buy the Blue P1100 from this online retailer?
Significant opportunity/Significant risk’ (
= .857). The subjects’ purchase intention was
gauged via a three-item, seven-point, Likert scale with the endpoints of ‘very
unlikely/very likely’, ‘improbably/probably’, and ‘impossible/possible’ (
= .905).
Other control variables – product involvement and attitude toward online shopping
were also assessed with the corresponding scales adapted from the literature (Jarvenpaa
et al., 2000; Lockshin et al., 1997). Similarly, the scales for manipulation checks were
borrowed and adapted from past studies; corporate credibility from Newell and
Goldsmith (2001), online retailer reputation from Purohit and Srivastava (2001) and
Jarvenpaa et al. (2000), and online review credibility from Smith et al. (2005). Lastly, the
subjects reported their experience with using the internet and other personal information.
A series of reliability tests suggested that reliability of all scales exceeded the acceptable
level (
> .70). For hypothesis testing, the corresponding items were accordingly
averaged to create an index score for each construct.
4 Results
4.1 Manipulation check
A series of t-tests showed that the manipulations of the three independent variables were
all effective. First, corporate credibility perception was significantly different between the
Credibility cues in online shopping 227
high corporate credibility (M = 5.62) and the low corporate credibility (M = 3.96)
conditions, t(184)= 13.97, p < .001. Second, the two conditions of high (M = 5.76) versus
low retailer reputation (M = 2.67) were significantly different, t(184)= 20.00, p < .001.
Finally, a significant difference was found between the high (M = 4.59) and low product
review credibility (M = 3.50) conditions, t(184)= 6.00, p < .001.
4.2 Hypothesis testing
Subsequently, the proposed hypotheses were tested with a series of three-way ANCOVAs
(corporate credibility, online retailer reputation, and online review credibility),
controlling for the effects of overall attitude toward online shopping and product
involvement. Past research (Doh and Hwang, 2009; Wu, 2003) suggests that prior
attitude toward online shopping and product involvement influences consumers’
attitudinal and behavioural responses. Such responses include attitude toward the website,
attitude toward the product, purchase intent, online shopping rate, etc. Based on these
findings, the two variables were included as covariates in the analysis to test the
hypothesis. Results of hypothesis testing are presented below in the order of dependent
4.2.1 Perceived product quality
Hypothesis 1(a), 2(a) and 3(a) predicted the main effects of the credibility cues –
corporate credibility, online retailer reputation, and product review credibility – on
consumer perception of product quality. As shown in Table 1, corporate credibility,
F(1,176)= 10.62, p < .001, and online retailer reputation, F(1,176)= 12.95, p < .001, had
significant main effects on perceived product quality; however, product review credibility
did not, p >.1. More specifically, the high corporation credibility condition generated a
greater product quality perception than did the low corporate credibility condition, thus
providing support for H1(a). Likewise, subjects in the online retailer high reputation
condition appeared to perceive the product quality as higher than did those in the low
reputation condition, confirming H2(a). However, the absence of a main effect for
product review credibility disconfirmed H3(a).
In addition, the results revealed no significant interactions among the independent
variables on perceived product quality. Therefore, H4(a) and H5(a) were not supported.
Although not statistically significant, the interaction effect between corporate credibility
and retailer reputation was in the expected direction. That is, retailer reputation had a
greater impact when corporate credibility was low. An additional note is that the two
covariates – prior attitude toward online shopping (p < .05) and product involvement
(p< .05) – appeared to significantly influence perceived product quality. Yet, the effects
of corporate credibility and retailer reputation were robust despite the significant effects
of the covariates.
228 S. Kim and S.M. Choi
Table 1 Descriptive statistics and ANCOVA results on perceived product quality as a function
of corporate credibility, retailer reputation and product review credibility
Corporate credibility Retailer reputation Product review
Low High Low High Low High
Source F P
Corporate credibility 14.711 < .001
Retailer reputation 17.948 < .001
Product review credibility .394 .531
Corporate credibility × Retailer reputation 1.790 .183
Corporate credibility × Product review credibility .131 .718
Retailer Reputation × Product review credibility .885 .348
Corporate credibility × Retailer reputation × Product review credibility .1061 .304
Prior attitude toward online shopping 4.693 .032
Product involvement 5.013 .026
Notes: ANCOVA = analysis of covariance
R2 = .235 (adjusted R2 = .196).
Table 2 Descriptive statistics and ANCOVA results on perceived risk as a function of
corporate credibility, retailer reputation and product review credibility
Corporate credibility Retailer reputation Product review
Low High Low High Low High
Source F P
Corporate credibility 1.800 .181
Retailer reputation 21.859 < .001
Product review credibility 5.635 .019
Corporate credibility × Retailer reputation 2.080 .151
Corporate credibility × Product review credibility .008 .930
Retailer reputation × Product review credibility 1.834 .177
Corporate credibility × Retailer reputation ×Product review credibility .007 .943
Prior attitude toward online shopping 17.587 < .001
Product involvement .012 .913
Notes: ANCOVA = analysis of covariance
R2 = .248 (adjusted R2= .209).
Credibility cues in online shopping 229
4.2.2 Perceived risk
Next, Hypotheses 1(b), 2(b), and 3(b) examined the effects on consumer risk perceptions
of corporate credibility, retailer reputation, and product review credibility. While
controlling for prior attitude toward online shopping (p < .001) and product involvement
(p >.05), retailer reputation, F(1,176)= 21.86, p < .001, and product review credibility,
F(1,176)= 5.17, p < .05, showed significant main effects on perceived risk. Thus, H2(b)
and H3(b) were supported. The main effect for corporate credibility, however, was not
significant (p > .1), disconfirming H1(b).
In addition, the interaction effects predicted in H4(b) and H5(b) were not observed
(p > .1). While it was not statistically significant, the pattern of interaction between
retailer reputation and product review credibility was consistent with the expectation. The
results are reported in Table 2.
4.2.3 Purchase intention
Lastly, Hypotheses 1(c), 2(c), and 3(c) investigated the main effects on purchase
intention of the three credibility cues. With attitude toward online shopping (p > .05) and
product involvement (p > .05) as covariates, as presented in Table 3, the results showed
that corporate credibility, F(1,176)= 6.86, p = .01, and retailer reputation, F(1,176) =
11.73, p = .001, exhibited significant main effects on purchase intention. These results
provided support for H1(c) and H2(c). However, no significant main effect for product
review credibility emerged (p > .05), thus disconfirming H3(c).
Table 3 Descriptive statistics and ANCOVA results on purchase intension as a function of
corporate credibility, retailer reputation and product review credibility
Corporate credibility Retailer reputation Product review
Low High Low High Low High
Source F P
Corporate credibility 6.858 .010
Retailer reputation 11.731 .001
Product review credibility .653 .420
Corporate credibility × Retailer reputation .172 .679
Corporate credibility × Product review credibility .003 .958
Retailer reputation × Product review credibility 2.762 .098
Corporate credibility × Retailer reputation × Product review credibility 2.512 .115
Prior attitude toward online shopping 3.253 .073
Product involvement 3.433 .066
Notes: ANCOVA = analysis of covariance
R2= .167 (adjusted R2 = .125).
230 S. Kim and S.M. Choi
Interestingly, the interaction between retailer reputation and product review credibility,
expected in H5c, was marginally significant, F(1,176) = 2.76, p < .1. Consistent with the
prediction, the effect of review credibility was pronounced when the online retailer’s
reputation was weak (see Figure 1). The effect of corporate credibility, however, on
purchase intention was not found to be dependent on retailer reputation (p > .05). Thus,
H4c was not supported.
Figure 1 Purchase intention: retailer reputation × product review credibility [Hypothesis 5(c)]
5 Discussion
This study attempted to extend our theoretical knowledge of the role of various source
cues in forming consumers’ product- and purchase-related perceptions in the ever
expanding online shopping environment. With advances in interactive technology, more
and more consumers go online to shop but some consumers are still hesitant about
electronic transactions, transactions that offer little hands-on, tangible product
experience, or face-to-face, interpersonal assurance. Given consumer apprehension and
concerns over security and privacy, trust or credibility is perhaps the most sought after
quality by consumers in online shopping. The present study identified the three key
sources of credibility or signals of product quality consumers may turn to in online
shopping contexts – manufacturer credibility, retailer reputation, and consumer-generated
product review. The study also examined how these three influence consumer perceptions
of product quality and risk as well as purchase intention. Applied were the cue utilisation
and source credibility theories that have proven to be useful approaches to understanding
consumers’ reliance on extrinsic cues and sources of information in making online
purchase decisions (Chen and Dubinsky, 2003).
The results of this study lend further support to the notion that corporate credibility
impacts perceived product quality and purchase intention (Chu et al., 2005; Lee and Tan,
Credibility cues in online shopping 231
2003). However, corporate credibility failed to significantly reduce consumer perception
of purchase-associated risk. This unexpected result might be partly explained by past
research that was largely focused on the effects of corporate credibility or manufacturer
reputation on perceived product quality (Chen and Dubinsky, 2003; Chu and Chu, 1994;
Dawar and Parker, 1994; Hoyer and Brown, 1990). Despite the well-established, positive
correlation between product quality and risk reduction, corporate credibility might play a
greater role in the former than in the latter. Another plausible explanation is that the
non-significant effect may be due to the relatively high credibility rating observed in the
low credibility manufacture condition. While the two corporate credibility conditions
induced the intended significant difference in subjects’ credibility perception, the mean
rating of the low credible manufacturer condition was 3.96, very close to the mid-point of
the seven-point scale. Subjects may not have had as low as expected perception of the
corporation’s credibility. Indeed, they may have perceived it as moderate. A more careful
examination of this issue warrants future research.
As predicted, online retailer reputation appeared to serve as the most important cue in
determining perceived product quality, perceived risk, and purchase intention. In line
with previous findings, retailer reputation was found to have a stronger influence on risk
reduction than on perceived quality and purchase intention. The online shopping
circumstances, the lack of demonstrable product-intrinsic attributes and the uncertainty of
security, foster consumer risk perceptions of online shopping. Consumers, therefore, infer
online retailer credibility from a retailer’s reputation. The consumer trust is ultimately
used to lower their risk perceptions to online purchasing (Biswas and Biswas, 2004).
This is one of the first studies to directly examine, along with the effects of other
cues, the effects of consumer-generated product reviews on consumer product perception
and online purchase intent. The results revealed that the credibility perception of the
product review significantly lessened consumers’ perceived risk of online purchasing.
Although the impact of online review credibility on perceived product quality or purchase
intention was not significant, this may be cautiously understood that only a single product
review was shown to subjects. In reality, a number of reviews on a product are generally
provided and the impact of online reviews may be greatly enhanced when multiple
reviews are seen. This issue deserves attention in future research.
Another notable finding is that when the online retailer’s reputation was not well
established online reviews impacted, in a pronounced way, purchase intention. When
consumers are uncertain about a product purchase from an unfamiliar online retailer, a
credible review on the product written by another shopper should offer valuable
information and an assurance of a satisfactory purchasing experience.
Given the rising popularity of user-generated content online, investigation of product
reviews and other types of information generated by peer consumers is of growing
importance to researchers. It is important to note that both manufacturer and retailer have
a vested interest regarding products and purchases. Fellow consumers do not. This lends
an air of integrity to consumer-generated product reviews that cannot be summoned by
the claims of manufacturers or retailers. Evidently, the impact of product reviews should
also depend on the specific content of the reviews (Charlett and Garland, 1995; Doh and
Hwang, 2009; Sorce et al., 2004), which poses another interesting question for future
research. Still, the findings of this study show that in online shopping product reviews
serve the consumer’s judgement as an effective, ancillary cue to corporate credibility and
retailer reputation.
232 S. Kim and S.M. Choi
For managers, the effects of corporate credibility, retailer reputation, and product
review credibility are of prime interest. A firm with a weak reputation should elevate its
credible image through a long-term commitment to building a reputation for expertise
and trustworthiness. For instance, the company makes conscious efforts to produce high
quality products and bolster its socially responsible and ethical image by engaging in
various acts of corporate social responsibility (CSR). The findings suggest that while
there is little effect of corporate credibility on perceived risk, an online retailer’s
reputation plays a larger role in influencing consumers’ perceptions regarding online
purchases. Thus, for a short-term strategy, regardless of whether it is perceived as highly
credible or not, corporations can benefit from distributing their products through
reputable online stores.
For online retailers, the findings point to the importance of building their own
reputation. While the e-commerce landscape is increasingly crowded and competitive,
only a relatively small number of reputable e-tailors or click-and-mortar retailers lead the
success of electronic commerce. The large number of small-sized online retailers
struggling to survive illustrates how critical retailer reputation is to a successful online
business. Additionally, the finding of the enhanced impact of product reviews in the
absence of established retailer reputation suggests that online retailers, especially those
with low reputations, can facilitate and enhance consumer purchases by actively hosting
consumer reviews on their websites.
As with any research study, the present research has its limitations. First, using real
companies and online retailers in the experimental design may have threatened internal
validity. Subjects’ pre-existing perceptions and attitudes may have influenced their
responses. Future research could consider employing fictitious manufacturers and online
retailers to address this concern. In addition, this study used only one product category.
As the roster of products available online is growing fast, it would be interesting for
future studies to include other types of products to enhance external validity of the
findings. For the same reason, a more realistic setting in which consumers evaluate the
product and consider purchasing might result in different results. Also, the sample of this
study was college students, but future research could extend the findings with a more
representative sample. Another promising avenue for future research is to look at factors
that influence the credibility of consumer-generated product reviews. Different content or
execution-related elements of product reviews may contribute to the overall level of their
perceived credibility and careful examination of these features could yield useful insights.
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Consumer behavior and buying people have always been the focus of marketers and managers, and many factors that can affect this have been examined. Celebrities have been used in advertising because of their place among the people. The present study examines the impact of celebrities on different parts of the brand, advertising, corporate, as well as on social status. Collected data from questionnaires were analyzed with SPSS and Smart PLS software and correlation coefficient and path coefficients were used to confirm or reject the hypotheses. The results showed that celebrity endorsement has a positive and significant relationship with brand credibility, advertising credibility, corporate credibility, and purchase intention. It was also shown that brand credibility and advertising credibility have no significant relationship with the intention to buy, but the credibility of the organization and gaining social status have a positive and significant relationship with buy intention. Brand credibility has a significant and positive relationship with social status as well as advertising credibility with the credibility of the corporation.
... Word of mouth (WOM), which can be defined as communications among consumers about products and services of brands (Arndt, 1967), is recognised as one of the most influential marketing tools regarding consumer behaviour (Bone, 1995;Herr et al., 1991;Lee and Youn, 2009). However, it has gained a new aspect by the more widespread and frequent usage of the internet (Elwalda and Lu, 2014;Kim and Choi, 2012;King et al., 2014;Yaylı and Bayram, 2012). Consumers have started to share their opinions and experiences about companies on the internet, known as eWOM (Hennig-Thurau et al., 2004). ...
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Marketers desire to utilise electronic word of mouth (eWOM) marketing on social media sites. However, not all online content generated by marketers has the same effect on consumers; some of them are effective while others are not. This paper aims to examine different characteristics of marketer-generated content (MGC) that of which one lead users to eWOM. Twitter was chosen as one of the leading social media sites and a content analysis approach was employed to identify the common characteristics of retweeted and favourited tweets. 2,780 tweets from six companies (Booking, Hostelworld, Hotels, Lastminute, Laterooms and Priceline) operating in the tourism sector are analysed. Results indicate that the posts which contain pictures, hyperlinks, product or service information, direct answers to customers and brand centrality are more likely to be retweeted and favourited by users. The findings present the main eWOM drivers for MGC in social media.
... Similar findings were reported by Kemp and Bui (2011), who investigated the role of corporate credibility in the food industry and found that more credible companies can mitigate consumer risk and increase their confidence, thus resulting in higher purchase intentions. Corporate credibility is also influential in the context of online marketing and advertising since consumers are more inclined to buy products, such as a digital camera when manufactured by a credible company since they perceive them of higher quality (Kim and Choi, 2012). ...
Purpose Sponsored social media content is one of the advertising strategies that companies implement so that ads appear as native to the delivery platform without making consumers feel that they are directly targeted. Hence, the current study examines whether prominently featuring corporate information on social media ads affects how consumers perceive them. It also investigates whether an ad's evaluation metrics on Twitter (e.g. number of likes/comments) influence its persuasiveness and consumers' behavioral intentions towards the sponsoring company. Underlying cognitive and affective mechanisms through which sponsored content operates are also investigated. Design/methodology/approach A 2 (corporate credibility: low vs high) by 2 (bandwagon cues: low vs high) between-subjects experiment was conducted. Findings The findings showed that corporate credibility and bandwagon cues can influence social media ad effectiveness. Sponsored content from high-credibility companies – evoked more favorable attitudes and behavioral intentions – is perceived as less intrusive, and elicits less anger than equivalent posts from low-credibility companies. Furthermore, it was found that bandwagon cues work via different pathways. For high-credibility corporations, a high number of bandwagon cues improved ad persuasiveness by mitigating consumers' anger towards intrusive sponsored content. Conversely, for low-credibility corporations high bandwagon cues enhanced ad persuasiveness, and this triggered more positive attitudes towards it. Originality/value This paper is the first to test corporate credibility and bandwagon effects in social media ads, while also exploring consumers' cognitive and affective responses to sponsored content. Implications for how companies with varying popularity levels should promote products on social media are discussed.
... A recent study conducted by Kim and Choi in [35] to know the credibility in online shopping, the role of the organizational credibility, the site's reputation, and the credibility of reviews and perceived risks showed a negative correlation between customer reviews and perceived risks. ...
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This study was aimed to investigate the association between online customer reviews and hotel booking intention in Saudi Arabia through the mediation of perceived risks. The researcher relied on SPSS statistical software program. There were 413 fully completed surveys. Of the 413 respondents, 377 questionnaires were correct. The study found a significant positive correlation between online customer reviews and hotel booking intentions. It also showed a significant negative correlation between online customer reviews and perceived risks. But it concluded that there was a significant negative correlation between perceived risks and the intentions of hotel booking. It also found that there was a significant positive effect of online customer reviews on the hotel booking intention. It also noted that there was a significant negative impact of perceived risks on the hotel booking intention. It also concluded that the perceived risk significantly mediates the relationship between online customer reviews and hotel booking intention.
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Tujuan paper ini memberikan tinjauan kritis dari Signaling Theory dengan konsep-konsep utamanya, serta mengulas penggunaannya dalam penelitian online commerce. Tinjauan kritis dilakukan dengan melakukan review penelitian yang menggunakan Signaling Theory sebagai basis teorinya. Signaling Theory berguna untuk menggambarkan perilaku ketika dua pihak (individu atau organisasi) memiliki akses ke informasi yang berbeda, sehingga bisa memunculkan asimetri inforamsi. Dengan demikian, Signaling Theory memegang posisi yang menonjol dalam berbagai literatur Manajemen. Dalam konteks penelitian online commerce, Sigaling Theory diwujudkan dalam berbagai signal yang dapat ditangkap dari informasi yang ditampilkan dalam website dengan beragam bentuk lainnya. Oleh karena itu, tinjauan kritis dalam paper ini dapat berkontribusi bagi para peneliti di bidang pemasaran agar dapat mengembangkan penggunaan Signaling Theory khususnya online commerce untuk menggali peluang gap penelitian yang akan datang untuk menggali beragam signal lain yang belum terungkap dan mengembangkan penelitian masa depan yang lebih variatif.
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Although a number of scholars have investigated effective celebrity endorser characteristics with consumer samples using experimental methods, there is only one study by Miciak and Shanklin (1994) that explored the point of view of practitioners who are responsible for the selection of celebrities. This paper investigates British advertising agency managers' consideration of important celebrity characteristics when selecting an endorser and these factors' importance according to product types. The research findings validate much of the consumer-based research in that managers consider a range of criteria when choosing celebrity endorsers and indicate that the importance of the criteria depends on the product type.
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Lower search costs are one of the major benefits of on-line shopping. In the past, when search costs were relatively high, consumers relied on extrinsic cues like brand and price. The lowering of search costs with the advent of the Internet has changed the way consumers use external cues. In addition, the emergence of the on-line "infomediary" has spawned complex interactions among infomediary reputation, manufacturer brand, and retailer brand. This paper shows the main effects of these factors and explores two-way interaction effects. It demonstrates that a well-known on-line retailer brand increases purchase intention for a weak manufacturer brand more than for a strong one, and by contrast, that a reputable infomediary increases purchase intention for a strong manufacturer brand more than for a weak one.
The authors report a study of the effects of price, brand, and store information on buyers’ perceptions of product quality and value, as well as their willingness to buy. Hypotheses are derived from a conceptual model positing the effects of extrinsic cues (price, brand name, and store name) on buyers’ perceptions and purchase intentions. Moreover, the design of the experiment allows additional analyses on the relative differential effects of price, brand name, and store name on the three dependent variables. Results indicate that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy. Favorable brand and store information positively influenced perceptions of quality and value, and subjects’ willingness to buy. The major findings are discussed and directions for future research are suggested.
Marketing universals are defined as consumer behaviors within a segment and toward a particular product category that are invariant across cultures. Using several definitions of culture and three different criteria for universality, the authors evaluate whether the use of brand, price, retailer reputation, and physical product appearance as signals of quality are marketing universals for consumer electronics products. Using a sample representing 38 nationalities, they find that there are few differences in the use of quality signals across cultures for a high priority segment of consumers. They draw conclusions for the adaptation versus standardization debate and argue that certain behaviors are likely to be universal, whereas others are not. Understanding such differences is essential to designing international marketing strategies.
The authors examine the relative importance of extrinsic versus intrinsic cues in determining perceptions of store brand quality in an experiment using a sample of 1564 shoppers for five products. Results of the experiment suggest that consumers’ evaluations of store brand grocery items are driven primarily by the extrinsic cues that these products display rather than intrinsic characteristics. In addition, the authors found that a value for money orientation taken by retailers in the marketing of their private label lines may represent a suboptimal strategy; they recommend a quality orientation.
Recent research has identified attitude toward the ad (AAd) as an important construct mediating the effects of advertising on brand attitude and purchase intention. To date, however, little attention has been directed toward explaining the origins of AAd. The authors present the latest version of a theory of AAd formation, report the results of an empirical test of a portion of that theory, and offer further refinements to the theory based on the observed results. Implications of the findings for advertising practice are discussed.
The present research applies operant conditioning theory to the question of what products and services consumers will shop for and buy online. Operant conditioning theory explains differences between products that are used to alleviate uncomfortable experiences (negative reinforcement) and those providing enjoyable experiences (positive reinforcement). The preliminary results described in this study confirmed the importance of operant conditioning as a factor in the behavior of online shoppers. For example, when asked to provide an open-ended list of products that they had shopped for, our respondents mentioned products that produce positive reinforcement 476 times versus only four mentions for those that create negative reinforcement. Furthermore, for a list of seventeen common product categories, the results showed that respondents were not only less likely to shop for negative reinforcement products but also even less likely to purchase negative products online than positive products. The results of this exploratory study lay the groundwork for future research by introducing negative and positive reinforcement as a predictor of Internet shopping behavior.
Previous studies of corporate reputation have either confirmed its existence as an influence agent or described in general terms its effects on other attributes (quality, price, advertising, etc.). The competitive credibility model of reputation building is formulated and tested through simulation. Reports and discusses results.
This study proposes a theory of the combined influence of corporate and endorser credibility. Participants assessed the credibility of the companies and spokespersons as well as their attitudes toward the ads and brands, and their intent to purchase the advertised product. The covariance matrix was subjected to a path analysis. The model fit the data, and the findings corroborated prior research indicating that both types of source credibility have an impact on attitudes and purchase intentions albeit a differential one. The results suggest that the Dual Credibility Model partially predicts and explains advertising effectiveness for these dual sources of credibility.