The relationship of reputation and credibility to brand success

Paul Herbig: Assistant Professor in the Management/ Marketing Department of the Graduate School of International Trade and Business Administration at Texas A&M International University, Laredo, Texas, USA

John Milewicz: Professor of Marketing, Marketing Department at the College of Commerce and Business Administration for Jacksonville State University, Jacksonville, Alabama, USA

ACKNOWLEDGMENT: The authors wish to thank the editor and two anonymous reviewers for their insightful comments and helpful suggestions on previous versions of this article. This article first appeared in the Journal of Consumer Marketing, Vol. 12 No. 4, 1995.

Reputation

Reputation and credibility are concepts familiar to us all. Examples include whether to believe the product claims made by a manufacturer's advertising, credit check/verification for a new account, or whether to believe delivery dates or claims made by a vendor. Reputation is the estimation of the consistency over time of an attribute of an entity. This estimation is based on the entity's willingness and ability to perform an activity repeatedly in a similar fashion. An attribute is some specific part of the entity - price, quality, marketing skills. The possibility exists of attributes being highly correlated (carryover effect); for example, a firm's price reputation and its quality reputation tend to move in the same direction and both be simultaneously either positive or negative. This is not to say that attribute independence does not exist, but high correlations between attributes are certainly possible. Reputation is an aggregate composite of all previous transactions over the life of the entity, a historical notion, and requires consistency of an entity's actions over a prolonged time. Reputation is established by the flow of information from one user to another. Therefore, transactions between the entity and other parties must have occurred in order for a reputation to be established.

Reputation occurs primarily through market signaling. A market signal is a marketing activity that provides information beyond mere form and alerts another firm to its intentions, commitments, or motives. A reputation is established by fulfilling marketing signals. A firm will lose its reputation if it repeatedly fails to fulfill marketing signals. This consequential loss of its reputation prevents the firm from signaling effectively since its signal will then be given little attention by its competitors. A firm, then, has considerable incentive...