About AMA

Kent Grayson, Devon Johnson, and Der-Fa Robert Chen

Executive Summary
What happens when customers begin to lose trust in an industry? In recent years, managers from a range of firms have asked this question, including those who work for pharmaceutical companies, lobbying firms, news organizations, and accounting firms. However, although several marketing researchers have examined how customer trust in a firm or a company representative can influence purchase decisions, much less attention has been given to customer trust in an entire industry or business context. That is the focus of this article.

Two theories have been proposed about the influence of trust in the business context. One theory argues that trust in the context replaces trust in individual firms and their representatives. According to this view, the more that customers trust the business context, the less they need to trust specific companies or people. This implies that firm/representative trust is not always critical, especially for customers with high trust in the context.

An alternative perspective is that trust in the context fosters and legitimates trust in firms and their representatives. According to this view, greater customer trust in the business context provides a stronger foundation for trust in firms and their representatives. This suggests that firm/representative trust is a necessary mediator of trust in the context. Rather than influencing customer behavior directly, trust in the context affects trust in individual firms and individuals, which in turn affects purchase behavior and satisfaction.

In this article, the authors test both theoretical perspectives using empirical results from two studies implemented in two different countries (Taiwan and the United Kingdom). Both studies support the view that trust in the context provides a necessary foundation for marketplace trust (not a replacement for it) and that trust in firms and their representatives is a necessary mediator of trust in the broader context.

Biography
Kent Grayson is Associate Professor of Marketing at Northwestern University’s Kellogg Kellogg School of Management. His research focuses on the role of fabrication and fact in consumption. More specifically, he examines issues related to trust and deception in exchange relationships, truth and falsehood in marketing communication, and authentic and counterfeit objects and brands.

Devon Johnson is Assistant Professor of Marketing at Northeastern University in Boston. He received his PhD in Marketing from the London Business School. Dr Johnson holds an MS in Marketing from Pennsylvania State University and a BSc from the University of the West Indies, Jamaica. His current research focuses on the implications of social capital and electronic channels for firm marketing strategy and consumer decision making. Dr Johnson’s research has appeared in Journal of the Academy of Marketing Sciences, Journal of Business Research, Caribbean Finance & Management Journal, and Handbook of Services Marketing.

Der-Fa Robert Chen earned his MBA and PhD in Management from the University of Georgia. He has taught at National Sun Yat-sen University (NSYSU) in Kaohsiung, Taiwan since 1985 as an associate professor and professor. He retired from NSYSU in 2007 and began his second teaching career at SHU-TE University. He established the Direct Selling Research Center (DSRC) at NSYSU in 1998 and was the director of DSRC until he retired from NSYSU in 2007. He is the founder and Chairman of Chinese Academy of Direct Selling Management.