Customer Trust - Corporate Image, Customer Value

Online markets are different from the traditional brick-and-mortar marketplaces due to the lack of face-to-face personal contact and the opportunity for buyers to see products physically (Ba, Whinston & Zhang, 1999). There are inherent risks in trading online due to information asymmetry. All these factors make trust crucial to e-commerce because it lowers transaction risks (Mayer, Davis & Schoorman, 1995). As a result, it puts pressure on online marketers to nurture stronger feelings of trust than is required in off-line environments (Keen, 1997).

Benevolence, honesty, and competence are essential components of which trust consists (Ganesan, 1994). However, trust in a networked economy is a complicated multidimensional construct (Houston et al., 2001). For example, Komiak and Benbasat (2004) differentiated between cognitive trust and emotional trust in agent-mediated e-commerce, Web-mediated e-commerce, and traditional commerce.

In this study, we adopted a parsimonious definition which is in tandem with those by Gefen, Karahanna, and Straub (2003) and Luarn and Lin (2003). E-trust is defined herein as "A set of specific beliefs dealing primarily with integrity (trustee and honesty and promise keeping), benevolence (trustee caring and motivation to act in the truster’s interest), competence (ability of trustee to do what truster needs) and predictability (trustee’s behavioral consistency of a particular e-vendor)".

Corporate Image

A growing number of companies have tried to position themselves through the communication channel with the objective of building strong corporate images in order to create relative attractiveness (Andreassen & Lindestad, 1998). A favorable image is a powerful tool not only for encouraging customers to choose the company’s products and services but also for improving their attitudes and levels of satisfaction toward the company (Aaker, 1992, p. 16).

A review of the literature, however, reveals scant research on the concept of corporate image in online environments. Much of the traditional research focuses on products (e.g., Darden & Schwinghammer, 1985; Render & O Connor, 1976) or services (Gronroos, 1990) in off-line environments. There is an urgent need for more of such research that explores this concept better as it applies to online environments. Customers are often overwhelmed with a variety of offerings on the Internet. As a result, they base their decisions on global judgments, such as store image and reputation (Teas & Agarwal, 2000).

Generally, image has been treated as a gestalt, reflecting a customer’s overall impression (Dichter, 1985; Zimmer & Golden, 1988) or as an "idiosyncratic cognitive configuration" (Mazursky & Jacoby, 1986). Also, Kennedy (1977) distinguished between functional image and emotional image. More recent researchers have adopted broader and richer definitions that emphasize the consumption experience of consumers. For example, Andreassen & Lindestad (1998) defined corporate image as "A function of the accumulation of purchasing/consumption experience over time" (p. 84).

In consonance with definitions by Barich and Kotler (1991) and Kotler (1991), corporate e-image is thus defined in this chapter as "an overall impression held of an e-vendor by its customers at a particular point in time. This, in turn, is the net result of consumers’ experiences with an organization, both online and offline, and from the processing of information on the attributes that constitute functional indicators of image".

Customer Value

The inclusion of the value construct in our model is important for several reasons. First, recent research revealed that "More than 70% of customers feel they gain nothing by being loyal to a company" (Gillespie, 1999, p. 2) and, therefore, would move if perceived benefits were greater elsewhere. This makes understanding what buyers value within a given offering, creating value for them, and then managing it over time, essential elements of every market-oriented firm’s core business strategy (DeSarbo, Jedidi & Sinha, 2001; Slater & Narver, 1998).

Second, Helm and Sinha (2001) argue for the importance of delivering customer value in electronic B2C operations. However, despite the increased attention being given to customer value (Band, 1991; Gale, 1994), there has been little empirical research to develop an in-depth understanding of the concept (Holbrook, 1994; Sweeney & Soutar, 2001). Fewer studies still (e.g., Chen & Dubinsky, 2003) have examined this construct in the context of online environments. Finally, to the best of our knowledge, there seems to be no research that has captured the relationships between corporate image, customer trust, and perceived value in a single integrative framework.

Perceived value has been defined generally as "a trade-off of the salient give and get components" (Zeithaml, 1988, p. 14). However, several researchers have noted that perceived value is a more complex construct, in which notions such as perceived price, quality, benefits, and sacrifice are embedded (Bolton & Drew, 1991; Holbrook, 1994). Based on a synthesis of previous definitions (Chen & Dubinsky, 2003; Woodruff, 1997), perceived customer value is defined here as "A consumer’s perception of the benefits gained in exchange for the costs incurred to attain their goals at a particular point in time".