The Role of Transparency in Consumer Brand Relationships

Abstract

The recent financial crisis has led to calls for effective communication between consumers and firms and for more attention to increasing transparency and reducing information asymmetries. This thesis aims to develope a construct such as transparency to effectively capture the free information flow between firms or their brands and consumers. Two questions are answered. First, how can consumer-brand communication be more effective, and thus lead to positive consumer affective and behavioral responses? Second, as WOM is an increasingly important channel for consumers to obtain information, what affects the generation of consumers positive eWOM on social online sites and how does eWOM on social online sites differ from traditional WOM?

Two chapters articulate the defining elements of a brand transparency construct, empirically validate a scale to measure brand transparency, and show that brand transparency strengthens consumers’ trust in a brand, willingness to pay a price premium, and consumers’ attachment to a brand. The research also identifies important boundary conditions: The effects of transparency depend on consumers’ perceptions of brand ability and social responsibility associations, and the level of consumer involvement. Another chapter examines the roles of traditional WOM and eWOM on social sites in the relationships between brand attachment, attitude, and brand purchases. Specifically, the research explores antecedents of eWOM on social sites and studies the underlying process through which eWOM on social sites versus traditional WOM helps to predict purchase behavior. Moderators in these relationships is identified. Findings suggest that consumers are less likely to provide eWOM on social sites, but it explains the impact of brand attachment on brand purchase better than traditional WOM. The mediating effects are stronger for consumers with high desire for self-enhancement.

The authors discuss the managerial and theoretical implications of their findings.