CREATING PARENTAL TRUST IN CHILDREN'S TOY BRANDS: THE ANTECEDENTS AND DIMENSIONS OF TRUSTWORTHY BEHAVIOUR OF TOY COMPANIES. A thesis submitted for the degree of Doctor of Philosophy by Stephen P. Hogan Brunel Business School, Brunel University January, 2006 Abstract Based around a case study of the traditional toy industry, the research examines how companies create trust with parents, the main toy purchasers, and the importance of ethical behaviour in trust development when a vulnerable community is involved. Previous literature has revealed that trust leads to mutually beneficial company- consumer relationships but scholars have failed to agree on its definition, dimensions or measurement due to its complexity, diversity and intangibility. Few have distinguished between 'trustworthiness' as a moral quality of organisations and 'trust', which is a consumer judgement about companies and brands, made as part of their purchase deliberations. A review of the literature led to the development of a framework of trustworthy behaviour identifying five sets of antecedents (organisational, individual, control, relational and branding factors) and four key dimensions with related variables - 'Integrity' and 'Benevolence', relating to ethical constructs and 'Commitment' and 'Satisfaction', relating to organisational constructs. The model was then substantiated through qualitative research with a sample of senior managers in 12 leading toy companies and other stakeholders including industry body representatives, retailers and parents. The findings revealed that in a challenging economic climate, trust in toy companies is being driven principally by the marketing offer and by external influencers such as legislators, retailers, licensors, and the media. Examples of good ethical practices were identified, although often unnoticed by consumers, and the worthier companies, for whom trustworthiness was important, appeared to be faring less well economically than companies selling third party brands. Consumers' trust was significant in the pre- school market but diminished in importance as children matured when their influence overrode parents' more rational purchase considerations. The research revealed a paradox that parents as well as children are vulnerable consumers who are often bypassed in the marketing process. Whatever children's consumer rights, there will always be a lack of trust in the industry whilst young children rather than parents are so blatantly targeted. List of Contents List of Tables ix List of Figures ix Glossary x Acknowledgments xi Chapter I Introduction 1.0 Background and origins of the work I 1.1 Identification of gaps in the literature and prior research 2 1.2 The research aims 5 1.3 The research contexts 6 1.3.1 The consumer context 6 1.3.2 The sector, product and company context 8 1.3.3 The functional context 11 1.4 The methodological approach 13 1.5 Structure of the thesis 14 Chapter 2 Towards Unravelling the Complexity of Trust: A Review of the Literature 16 2.0 Introduction and chapter structure 16 2.1 Trust in the business arena 18 2.2 What is trust? 20 2.2.1 A conceptual definition of trust 23 2.3 Trust and trustworthiness 24 2.4 Types of trust 26 2.5 Morally relevant features of trust 28 2.6 Characteristics of trust 31 2.6.1 Commonality 32 2.6.2 Rights and responsibilities 33 2.6.3 Caring 36 2.6.4 Vulnerability 38 2.7 Trust and the consumer 43 2.7.1 Trust and consumer relationships 53 2.7.2 Trust in brands 57 2.8 Determinants of trust 60 2.8.1 Integrity 63 2.8.2 Benevolence 64 2.8.3 Commitment 65 2.8.4 Satisfaction 66 2.8.5 Personality factors 68 2.9 Summary 69 Chapter 3 Development of the Theoretical Framework 72 3.0 Origins of the theoretical framework and propositions 72 3.1 Structure of the conceptual framework 72 3.2 Antecedents to trust 75 3.2.1 Organisational factors 76 3.2.2 Individual factors 77 3.2.3 Controlfactors 79 3.2.4 Relational factors 80 3.2.5 Brandingjactors 82 3.3 Trust dimensions 84 3.4 Consumer boundary conditions 86 3.5 Summary 88 _Chapter 4 Research Methodology 90 4.0 Introduction 90 Part A Research Process and Design 92 4.1 The research design process 92 4.2 Purpose of study and theoretical foundations 93 4.3 Type of investigation 96 4.3.1 Rationale for a qualitative approach 96 4.3.2 Case study methodology 98 IV 4.4 Researcher interference 100 4.5 Issues of generalization, reliability and validity 101 4.6 Sampling strategy - The research contexts 104 4.6.1 Units of analysis 105 4.6.2 Selection of toy companies 106 4.6.3 Final sample selection 108 4.6.4 Sample selection of other key stakeholders 110 4.7 Data collection methods 113 4.7.1 Rationale for the personal interview method 113 4.7.2 Rationalefor consumerfocus groups 113 4.7.3 Use of documentation 114 4.8 Questionnaire design 115 4.9 Data collecting 117 4.10 Ethical issues in the research gathering 118 Part B Data Analysis 120 4.11 Methods of analysis 120 4.11.1 Coding 121 4.11.2 Coding levels and analysis 121 4.12 Presentation of results 124 4.13 Limitations of the research 124 4.14 Summary 126 . Chapter 5 Research Findings and Data Analysis 128 5. o Introduction 128 Part A Trust Antecedents 130 5.1 Organisational factors - Data analysis 130 5.1.1 Challenges facing the toy industry 130 5.1.2 Retail power 130 5.1.3 Prices and profitability 132 5.1.4 Other challenges 133 V 5.2 Company values, responsibility and caring 134 5.2.1 Values 134 5.2.2 Responsibility 136 5.2.2.1 Responsibility and children 136 5.2.2.2 Responsibility and 'aggressive' toys 138 5.2.2.3 Responsibility and the environment 139 5.2.3 Caring 141 5.3 Control factors - Data analysis 144 5.3.1 Current legislation 144 5.3.2 Safety legislation 146 5.3.3 Role of the British Toy and Hobby Association 148 5.3.3.1 The Lion Mark scheme 149 5.3.3.2 The ICTI code 149 5.3.4 Other influencers and controls 151 5.3.4.1 Retailers 151 5.3.4.2 Licensors 153 5.3.4.3 The Media 155 5.4 Individual factors - Data analysis 157 5.5 Consumer relationships - Data analysis 160 5.5.1 Toy company relationships 160 5.5.1.1 Children as consumers 160 5.5.1.2 Children as targets 162 5.5.1.3 Children as influencers 162 5.5.1.4 Relationships with children 164 5.5.2 Parents as consumersItargets 165 5.5.2.1 Parental purchasing behaviour 167 5.5.2.2 Relationships with parents 169 5.5.3 Consumer service and support 169 5.5.4 Consumer concerns 171 5.5.4.1 Television andpesterpower 171 5.5.4.2 Peerpressure 173 5.5.4.3 Toy prices and play value 174 vi 5.6 Branding factors - Data analysis 176 5.6.1 Brand building 176 5.6.2 Fashion versus Perennial brands 178 5.6.3 Individual versus Company branding 178 5.6.4 Brands and the marketing mix 181 5.6.4.1 Products 181 5.6.4.2 Pricing 182 5.6.4.3 Distribution 183 5.6.4.4 Promotional tools 184 Part B Building Trust and Trustworthiness 192 5.7 Creating, fostering and monitoring trust - Data analysis 192 5.7.1 The importance of trust 192 5.7.2 What is trust? 192 5.7.3 Building trust 197 5.7.4 Awards 199 5.7.5 Monitoring, measuring and responsibility for trust 201 Part C The Consumer's View of Trust 204 5.8 Parental views on toys and trust - Data analysis 204 5.9 Summary 211 Chapter 6 Analysis of Propositions and Theory Building 214 6.0 Introduction 214 6.1 Antecedents to trust and trustworthy behaviour 214 6.1.1 Organisational factors 215 6.1.2 Controlfactors 218 6.1.3 Individual factors 221 6.1.4 Relational factors 222 6.1.5 Brandingjactors 225 6.2 Trust dimensions 227 6.3 Consumer boundary conditions 233 vii 6.4 Development of the theoretical framework 6.5 Links to previous research 236 242 Chapter 7 Reflections and Conclusions 246 7.0 Introduction 246 7.1 Thesis aims and key findings 248 7.1.1 Company trustworthiness and brand trust 248 7.1.2 Trust drivers and influences 250 7.1.3 Are toy companies trustworthy? 251 7.1.4 Consumers' trust 253 7.2 Contributions to theoretical development 255 7.3 Strengths and limitations 257 7.4 Contribution to management knowledge and practice 259 7.5 Key issues and recommendations to managers 260 7.6 Further research and theory development 264 7.7 Final reflections 265 References 268 Appendices 290 Appendix I John's Consumer Socialisation Stages of Children 291 Appendix H Legislation and Codes Governing Toys in the UK 292 Appendix HI Market Data for Toys and Games in the UK 300 Appendix IV Profile of Sample Companies, Organisations and Respondents 304 Appendix V Fieldwork Topic Guides 310 Appendix VI Sample Transcript - Mattel UK Limited 318 viii List of Tables (Page) Table 2.1 Types of trust (28) Table 2.2 Characteristics of high-involvement/relationship-prone products (48) Table 2.3 Model of postulated correlates of trust (50) Table 2.4 Trust qualities sought, found and missing (52) Table 2.5 Scholarly links to trust/trustworthy dimensions and variables (61) Table 3.1 Most influential factors for consumers in purchasing a toy (85) Table 4.1 Links between research questions, propositions and sources of evidence (95) Table 4.2 Sample selection criteria for toy companies (107) Table 4.3 Toy company sample - interviews conducted (109) Table 4.4 Parental focus groups (I 11) Table 4.5 Stakeholder sample - interviews conducted (112) Table 4.6 Level 2 coding and analysis (122) Table 4.7 Linking of nodes to framework constructs - level 3 (123) Table 4.8 Researcher's quantification of terms used (124) Table 5.1 Communication activities with children (164) Table 5.2 Communication activities with parents (169) Table 5.3 Factors influencing parental trust and toy purchases decisions (212) Table 6.1 Trust-building dimensions/variables and supporting claims/ evidence (228) List of Figures (Page) Figure 2.1 Literature review structure and links (17) Figure 2.2 Marketing ethics continuum (45) Figure 2.3 The trust building process (46) Figure 3.1 Antecedents and dimensions of trustworthy behaviour (73) Figure 3.2 Dimensions of consumer trust (74) Figure 4.1 Research design framework (93) Figure 4.2 Primary research sources (105) Figure 6.1 Antecedents and dimensions of trustworthy behaviour in toy companies (237) Figure 6.2 Dimensions and linked variables of trust in toy companies/ brands (238) ix Glossary BTHA British Toy and Hobby Association BATR British Association of Toy Retailers OFT Office of Fair Trading RM Relationship Marketing ITC Independent Television Commission OFCOM Regulatory Body for TV Commercials and Other Advertising TIE Toy Industries of Europe AEF Advertising Education Forum NPD Research Organisation Tracking Retail Toy Sales WFA World Federation of Advertisers ELC Early Learning Centre MGA American Owner of the Bratz Brand HIT Owner of Various Children's Toy Licenses CASP Code of Advertising Standards and Practice RoSPA Royal Society for the Prevention of Accidents PVC Poly Vinyl Chloride (Plastic) A113S Acrylonitrile Butadiene Styrene (Plastic) Phthalates Softening Agents Used in Plastics Lion Mark Safety Mark Awarded by the BTBA ICTI Code International Congress of Toy Industries' Code of Ethical Manufacturing CE Mark Packaging Mark Indicating Free Circulation within EU Member States Toy Trust Charitable Fund Established by the Toy Industry Media Smart Initiative to Educate Young Children about Advertising x Acknowledgments As is customary, I would like to acknowledge the important contribution of a number of people who supported, guided and encouraged me in writing this thesis. Firstly, I would like to offer my sincere thanks to my supervisors at Brunel University, Dr Laura Spence and Dr Charles Dennis, for their genuine enthusiasm for the topic, for their motivation when required, and particularly for their professionalism and expertise in the areas of business ethics and marketing respectively. I would also like to thank a number of other academics. Professor Georges Enderle of Notre Dame University for his early positive encouragement, the Management at Brighton Business School for funding the study and in particular Dr Robert Griffith Jones and Professor Aidan Berry, my colleagues Keith Perks and Clifford Conway who have been working on their own theses and who provided a good source of challenge and debate, and finally to the many other academics at both Brighton and Brunel Business Schools who during various seminars, workshops, and conferences have provided valuable feedback and ideas. I would also like to extend thanks to those who participated in the research, to the company managers, toy industry experts, and parents who gave so generously of their time and were so forthcoming in providing the vital data for this piece of work. Last but not least, I would like to thank my wife, Michelle, for her patience and understanding on what has been a long process. And finally, to my son James and my late son Simon who have gained so much pleasure and enjoyment from playing with traditional toys and games, I would like to dedicate this thesis. As Gilles Brougere, winner of the 2002 BRIO Prize, once wrote: " Play is the language of children and toys are letters in that language. )) xi Chapter I- Introduction 1.0 Background and origins of the work "Morality is at the heart of humanity. Whatever people do, they are judged in the last resort by moral criteria, not for instance by economic calculation. Without humans there are no morals, without morals there is no trust, and without trust there is no rational andfree marketing action " (Panula, 1996: 164). Juha Panula's views are central to the theme of this thesis that explores the importance of moral behaviour in the marketing of traditional toys and games and its contribution to building trusting relationships between companies, their brands, and consumers. This raises a number of important questions: When parents choose toys or games for their children, what influence does the ethical behaviour of toy companies have in their purchase decisions against economic and other influences such as the price, value, or product attributes? How is trust between companies and consumers created and what part do moral considerations have in its development? And how necessary is trust in successful company-consumer marketing relationships? Targeting the children's market has long been perceived as controversial on moral grounds but surprisingly little academic research has been done to date on exploling the ethical dimensions and responsibilities of marketers towards this vulnerable community of children and parents. Past studies on marketing ethics have often tended to view ethics negatively, that is, as a problem or dilemma, rather than as an opportunity for competitive advantage and enhanced economic gain. An ethical dimension of major importance to academic researchers, business practitioners and consumers is trust (Hosmer, 1995: 379). "Trust, along with fairness, honesty and respect are key values in business as well as society and business suffers in their absence" (Smith and Quelch, 1996: 5). Companies seek to create and foster trust in their organisations, brands and consumer relationships to secure sales, loyalty, recommendations, and ultimately profit, whilst consumers will tend to favour brands and companies they trust, particularly when those brands are purchased for their children, as trust provides both a critical basis for 1 self-esteem and a sense of security (Baier, 1994). But what trust means to each party and how it is created and fostered through brands and company-consumer relationships, what moral obligations and responsibilities underpin trust, what influences its development, what impact trust has on purchase decisions, and how companies can increase their trustworthiness, are issues needing further investigation. The author's interest in the area of marketing ethics and consumer trust has its origins in a career in international marketing, selling consumer goods to a variety of cultures and communities around the world. This experience highlighted the importance of strong buyer-seller relationships for commercial success and the significance of trust at the core of these. Trust is particularly salient in conducting business in the developing world because the limitations of cultural understanding often create vulnerable communities of customers and consumers, who are exploited by commercial organisations. In subsequently teaching business ethics and becoming a toy consumer, there appeared to be parallels in the toy industry in terms of a perceived vulnerable community, commercial organisations with the potential to abuse, and the need and opportunity to create strong trusting relationships for mutual benefit. 1.1 Identification of gaps in the literature and prior research The literature on trust is large reflecting its importance as a phenomenon in the commercial world and wider society. In any situation where people have a direct or indirect relationship with others, there is likely to be some degree of trust or distrust involved. Its multi -disciplinary importance is reflected in contributions in the business literature from a wide range of fields such as Social Psychology (for example, Frost, Stimpson and Maughan, 1978; Rempel, Holmes and Zanna, 1985; Engelbrecht and Cloete, 2000), Organisational Behaviour (Mayer, Davis and Schoorman, 1995), Management (Barney and Hansen, 1994; Williams, 2001), Sociology (Lewis and Weigert, 1985; Gambetta, 1988), Moral Philosophy (Brenkert, 1998a, 1998b; Flores and Solomon, 1998; Soule, 1998), and Marketing Ethics (Morgan and Hunt, 1994; Gundlach and Murphy, 1993; Michell, Reast and Lynch, 1998; Garbanno and Johnson, 1999). 2 As the marketing function usually holds the main responsibility for building relationships with customers and consumers, it is this latter field that is of particular interest in this research. Since the subject is still at an exploratory phase, however, it also draws on the wider business trust literature and the ethical theory that underpins trust as a sought-after virtue and examines its key characteristics, many of which have moral implications. Trust is a difficult subject to investigate as it is fraught with complexity and paradox. For business, it is often something that is easier to ignore than face because of its intangibility, although the trust that companies can generate can lead to very tangible and positive outcomes (for example, repeat business and recommendations from consumers or freedom to self-regulate by the legislators). Like marketing, creating trust seems to be more art than science (Bibb and Kourdi, 2004) and is therefore best studied by examining examples of good and bad practice. The literature review in Chapter two attempts to unravel some of the complexities. A range of definitions relevant to consumer trust and their common elements have been identified and examined and a definition for the research, based principally on the work of Fukuyama (1995) and Baier (1994), is proposed. The review critically evaluates a number of company-consumer trust models and empirical research studies, focusing both on the importance of 'trustworthiness' where there is a direct relationship between the parties, and 'trust' where there is an indirect relationship through an organisation's brands. A particular focus has been to identify contributions that have considered the importance of both ethical and marketing constructs in building trust and where they overlap. There is generally a paucity of academic literature on how consumer goods companies initiate trustworthiness in themselves and trust in their brands, on the key dimensions or drivers of trust in business-consumer relationships, and on the importance of trust in the consumer's purchase/repurchase decisions (Reast, 2005; Delgado-Ballester, Munuera-Aleman, and Yague-Guillen, 2003). There are perhaps a number of explanations for this; a) the subjects of relationship marketing, branding, marketing ethics, and even marketing itself are relatively young and need further exploration and development; b) the literature on trust in business is also at an exploratory stage and 3 has been diluted by its broad significance, leading to contributions in many different areas such as individual actions, interpersonal relationships, economic transactions, and social structures (Hosmer, 1995: 391); c) even though there is widespread agreement on the importance of trust in human conduct, there is an equally widespread lack of agreement on a suitable definition of the concept (ibid: 380). This has led some writers to describe trust as appearing 'nebulous' and 'seemingly intractable for study' (Gambetta, 1988; Whitener et al., 1998). Given the controversy highlighted by many academics about the vulnerability of young children as consumers (discussed in Chapter two), there are also surprisingly few studies that have focused on the moral aspects of children as a consumer target and the more complex marketing relationships involving children as users and key influencers in buying decisions, and their parents as the main purchasers, deciders, and guardians of their children's best interests. As Smith and Cooper-Martin (1997: 4) point out, "consumer vulnerability has not yet been researched extensively and, as yet, is inadequately understood. " What this thesis contends is that it is many of the parents as well as their children who are vulnerable as toy consumers and that marketers need to take this into consideration both on moral grounds and in terms of building trusting, mutually beneficial relationships with their end market. In a number of the trust models reviewed in Chapter two, some useful approaches were identified that could be built on, and a few that emphasised the ethical dimensions of trust. Some, however, drew their ideas from the existing literature with little additional empirical support and, in those studies where empirical research was conducted, most considered trust from only one dimension, that is, from either the organisation's perspective or from the consumer's perspective. It is considered important that, as trust is a two-way process involving a trustee and trustor, any model or empirical study on consumer trust would need to investigate both positions to support its validity. Many of the contributions examined have used a variety of positivistic approaches to, for example, validate brand trust scales, determine the importance of different dimensions in building trust, or to examine the role of trust against other attributes in creating customer satisfaction (Raimondo, 2000). This approach might assume that 4 the main constituents of trust are already known and therefore can be measured, compared, sorted, and prioritised. This study takes a qualitative approach to examining consumer trust based on the view that, whilst a conceptual model can be framed from the literature, trust has no commonly accepted definition, and it is still inadequately understood particularly in markets where children are targeted. No one has yet come up with a definitive set of trust dimensions. Trust is also a personal and sometimes sensitive issue, as are most issues relating to ethical and moral behaviour, and may therefore mean different things to different managers in organisations, and to consumers. The qualitative approach leaves open the possibility of discovering new initiators, dimensions and inhibitors of trust through exploring the views and experiences of both senior managers in organisations and parent consumers. 1.2 The research aims The primary aim in undertaking this research is to develop theory that explains how trust is created and fostered between the toy companies and their main consumers (Parents of young children) and to analyse the complexity, diversity and dynamism of their relationships. This involves exploring the antecedents of organisational trustworthy behaviour and the key dimensions of trust, using a combination of both ethical and marketing constructs. A consumer trust framework is proposed building on a synthesis of contributions from the academic literature (discussed in Chapter three). This is then compared to the research findings from the practitioners and other stakeholders and further developed. The model postulates that trust has strong ethical roots, particularly in a market where young children are involved and that trust in toy companies and brands is dependent on a range of ethical and marketing constructs. The model is primarily descriptive and analytical rather than normative and prescriptive in that it is describing how consumer trust is formed in the toy industry and how the dimensions interact rather than proposing how it ought to be developed based on rules and principles (Fisher and Lovell, 2003: 24). As part of the discussions on managerial implications, however, a number of recommendations are made to toy companies about building stronger 5 trusting relationships based on both contributions from the literature, from perceived good practice by toy companies and individual managers in the sample, and from consumer comments. In this sense, therefore, there is also a normative element to the work. The research is exploratory and does not claim any generalization beyond the specific data set used in the empirical research. Nonetheless, because of the limited literature on consumer trust and trust in children's markets, the findings provide strong indications that, while there are still areas where toy companies need to demonstrate greater trustworthiness to consumers, the toy industry appears to be acting in a number of ethically responsible ways. There are therefore aspects that other industries targeting children and their parents might want to consider from this research. 1.3 The research contexts 1.3.1 The consumer context At the outset of the research, it was believed that there were a number of different types of consumer who might have an influence on the economic success of toy companies, not least children themselves, mothers, fathers, friends and other family members. Children were likely to play a key role not only as the major toy users, but also as purchasers in their own right (using their own pocket money and savings), and as key influencers in many household buying decisions, including where to buy and what brand to buy (McNeal, 1992). Children were also likely to be of vital importance to the study as a major area of criticism about ethical marketing practice has focused on targeting of vulnerable populations such as children (for example Paine, 1996). It became apparent however after the initial stakeholder interviews that the role and influence of parents in toy purchase decisions had been underestimated and was pivotal to many toy companies' success, as mothers accounted for around 65 per cent of all toy purchases (Bryan Ellis interview - 11.12.02). Parents have a major influence on what toys should be bought and are the ultimate deciders, funding most toy purchases (Key Note, 2004: 40). As one stakeholder put it: "What you have to understand is that children don't buy toys; parents buy toys, for children " (B). 6 Other adult consumers are viewed by the industry as part of small segments that are generally unviable to target because of limited marketing budgets, although grandparents are becoming increasingly important as toy consumers, with many of them playing a major role in caring for their grandchildren. The toy companies do not appear to face particular difficulty in building brand trust with children. As McNeal (1992: 93) points out: "Children tend to be loyal. They look for dependent relationships, for belonging (affiliation), for order and for avoidance of humiliation" - Hence their trust in brands, especially those used by family, peers, and other key influencers such as celebrities. This does not mean that companies can take children's trust for granted but this research indicates that young children do not appear to be influenced by, or interested in, trust in any particular toy brand or company. Indeed many of them are unlikely to even understand the term 'trust'. Children are more likely to be motivated by new and exciting products, product features and demonstrations, playground crazes, and particularly peer pressure (Bryan Ellis interview - 11.12.02). The challenge for toy companies is how to make toys top of the present list when many children appear to be more interested in training shoes, mobile phones, mini hi-fi systems, and portable televisions, and deciding what products are likely to appeal to today's fickle children: "I have been working in the industry for twenty years and you still get taken by surprise. Who would have thought those little silver scooters would have been such a hit or that people would be prepared to pay 120 for a Yo-yo? People went crazy over them, and they never went on television. I don't know what winds kids up. I don't think any of us understands it" (ibid). This uncertainty leads to a two-pronged marketing approach. Children are targeted directly by toy companies who spend heavily in researching children's wants and behaviour, developing new product, and reaching them directly through an integrated advertising and promotional nux. Parents are also targeted, but less aggressively, to gain their approval that the companies recognise is also significant in the final purchase decision. There is a growing trend for 'retro' toys and games that are mainly targeted at parents who fondly remember the brands of their childhood (Key Note, 2004: 5) 7 It was considered that a model of consumer trust would be most valuable if it centred on trust development between the toy companies and parents in gaining such endorsement. Although much of the academic literature focuses on children's products being targeted at children, the paradox is that toy companies are essentially marketing to parents, but through children. Consideration of this additional dimension, but with the vulnerability of children clearly in the background, is a central theme in this research. 1.3.2 The sector, product and company context Mintel (1998) reports that the market for children's products in the United Kingdom is growing steadily and identifies a wide range of different products aimed at those under twelve years of age. Major areas include toys and games, food, soft drinks, confectionary, and clothing although newer categories such as cosmetics, magazines, compact discs, mobile phones and other consumer electronics have been growing rapidly. While there are obvious links between children's markets (such as the vulnerability of children, similar communication vehicles, and so on), as many industries target different age groups and have different influences, it is considered that a research focus on one rather than multiple industries might facilitate data analysis and provide more robust research. The traditional toy and games industry in the United Kingdom (UK) was selected as a case study for a number of reasons. Firstly, it is a major segment in the children's market, valued around F-2.1 billion at retail selling prices in 2003 (Key Note, 2004) and the UK is the biggest western market for toys outside the United States of America (BTHA handbook, 2004). The market has been in steady growth rising over 27 per cent between 1999 and 2003 despite the population of under 14's falling in the period by 2.7 per cent. The market has benefited from increased levels of spend per child as a result of higher disposable income levels, the reduction in size in many families, and the increasing age of parents. Longer working hours and busier life styles has fuelled guilt-motivated spending on children and higher divorce rates and the increase in 'weekend parenting' has led to more dual present giving (Key Note, 2004: 1,3). With the population of under 12's set to fall by a further 5.4 per cent by the end of 2008, however, the industry is likely to be under mounting pressure to sustain similar growth levels in the coming years. 8 A particular feature of the industry is that many of the companies only manufacture products for children and are therefore highly dependent on making their marketing to them effective. Many of the children who use toys are also young (normally 12 years of age or under), making them particularly vulnerable (see Section 2.6.4). Finally, toys and games are interesting products as they are found in all cultures in the world (Fraser in Kline, 1993) and form such an important part of all children's early lives. Furby (1980) argues that within the contemporary matrix of consumerism, toys are a child's prototypical possessions - the first things that children learn to use, control, and derive pleasure from. Toys also have cultural and educational significance. Sutton-Smith (1986) suggests that of all the objects given to young children, toys are the most culturally salient because they provide a flexible and engaging tool of socialization. They are important because they are, "models of things that invoke in play the behaviours or skills required in later life" (Kline, 1993: 15). Through play, children learn, "sharing, receiving, giving and lending, anticipating, waiting and reciprocating, planning and organizing their use of things to give pleasure" (: 344). Children are more inclined to play, and will play longer, when toys are available (Goldstein, 2004). The term 'traditional toys and games' is used by the industry and its representative bodies, the BTHA (British Toy and Hobby Association) and BATR (British Association of Toy Retailers) to distinguish itself from other toys and games in the market such as consoles and electronic/computer games. These latter products form a separate industry, are aimed at older children (normally teens and over) and adults, and are sold predominantly through specialist retailers such as 'Game' rather than toy shops. The toy industry comprises of a number of main categories. These include Action Figures, Arts and Crafts, Building Sets, Dolls, Games/Puzzles, Infant and Preschool toys, Learning and Exploration, Outdoor and Sports toys, Plush (soft toys), and Vehicles. The infant and preschool sector generates the largest sales volumes (see Appendix 111). Toys are sold predominantly via specialist toy shops such as the Early Learning Centre, Toys'R'Us, and the Toymaster group (accounting for 29.9 per cent 9 of sales in 2002), through mixed product multiples such as Woolworths (26.7 per cent), and via catalogue showrooms such as Argos and Index (22.1 per cent). Other sales are made through the Internet, department stores and increasingly supermarkets (NPD Consumer Panel, BTHA Handbook, 2004). In terms of toys purchased by or for children, the market is broadly split into three key age bands. The 0-3 age groups accounted for 27 per cent of toy sales (in 2002), the 4- 7 age group for 35 per cent and the 8-10 age group for 20 per cent (NPD Consumer Panel, BTHA Handbook, 2004). Another key feature of the industry is the proportion of toys that are based on character licences from television programmes, films and books. Such toys, in 2002, accounted for over 22 per cent of all sales (ibid). The BTHA has 152 toy company members representing over 95 per cent of total toy production (www. btha. co. uk. 30.11.04). The toy industry in the UK has been dominated in the last decade by two American multinational toy manufacturers, Mattel and Hasbro, who between them accounted for nearly 20 per cent of market share in 2002. There are however other significant players. Vivid Imaginations, a private British company, is now challenging for the number two position and companies such as LEGO and Tomy hold sizable market shares (see Appendix 1111). All five companies are included in the sample. Although the market has shown steady growth over the last five years, there are a number of current factors that are creating a challenging climate for toy companies of all sizes: The toy market is highly competitive and price sensitive. The average price points are falling and the margins generated are not strong (ref. Bryan Ellis interview - 11.12.02). Both Mattel and Hasbro made pre-tax losses for the year ending December, 2002 (Keynote, 2004). It is predominantly a 'fashion' industry with short product life cycles of usually no more than a year. In 2002, for example, 8 of the top 15 selling toy products were new to the market (NPD EPOS Retail Tracking Service, BTHA Handbook, 2004). Companies therefore continually need to invest in new 10 product development and/or product sourcing, and in creating new promotional campaigns. The consumer toy-buying season is very concentrated. The Christmas period accounts for 52 per cent of all toy sales. This period is therefore critical to a toy company's success. Birthdays account for a further 26 per cent of sales (NPD Consumer panel, BTHA Handbook, 2004). The retail market is dominated by a handful of large, powerful retailers giving them significant control and influence over toy success. Argos, Woolworths and Toys'R'Us between them account for nearly 50 per cent of all toy sales. The main toy recipients, children, can be demanding and unpredictable. Research (for example, Keynote, 2004) has also indicated that they are now often deserting traditional toys and games by the age of seven years old in favour of more sophisticated (adult) 'toys' such as mobile phones, televisions, computers and clothes. By targeting children, the industry is constantly under scrutiny and attracts some negative press and pressure group attention. David Lipman, the founder of JAKKS Pacific/Kidz Biz, a leading international toy company, argues that "... the public has a very bad perception of the toy industry and this needs to change. In most instances, this bad perception is actually driven by the media. " (Toy News, January, 2003: 55). Such pressing issues make creating consumer trust even more significant but at the same time more challenging. If the public perception of the industry is poor, it highlights the need for more consumer trust, adding importance to the outcomes of the research. 1.3.3 The functional context Levitt (1986: 19) has argued that, "the purpose of a business is to create and keep a customer, " and it is often said that, "the consumer is king" (Hoffman, Frederick and Schwartz, 2001: 379). The function of the marketing department is normally to manage the firm's relationships with its customers and consumers, and all activities, "should be driven by the imperative of customer satisfaction" (Srfiith and Quelch, 1996: 3). Marketing is therefore critical to the success of a business. 11 The main activities of marketing managers include selecting the target market, formulating and implementing marketing strategy and the marketing plan, and developing tactical programmes for products, pricing, distribution and communications (ibid). Marketing's high visibility in areas such as advertising, sales promotions, marketing research, and public relations might partly explain why it is often perceived as the least ethical of all the business functions (Baumhart, 1961; Tsaliskis and Fritzsche, 1989; Laczniak and Murphy, 1993). Marketing managers often find themselves "caught in a crossfire of conflicting pressures" (Corey, 1996: 40), with profit responsibilities to their organisations and shareholders on the one hand and the satisfaction and care responsibilities to customers and consumers on the other. The toy industry, as other child-orientated industries, has attracted adverse publicity in the media from some concerned parents, consumer and pressure groups, and journalists. They criticise its lack of morality in targeting young children directly and exploiting their limitations, in launching unsuitable products, and in bombarding them with advertising messages not only through television, but also through newer, more subtle and less regulated methods such as web sites, children's clubs, and in-school activities (for example Seaford, 1999; Cohen, 1999; Paine, 1996). Toy companies also stand charged with encouraging the phenomenon of pester power and with contributing to the playground peer pressure. What is clear is that, if toy companies are to gain the trust of parents in the face of such accusations, they may need to demonstrate more clearly through their marketing behaviour that they are acting responsibly and considering the interests of others and not merely their own. Although there is a strong body of counter arguments to such charges by both practitioners (for example, Stanbrook, 2002) and academics (Goldstein, 1999; Furnham, 2000), the debate has attracted the attention of the European Union parliament and the national governments of many European countries, who are currently reviewing the adequacy of their market controls in this area. ' 1 Details of the current regulations on marketing to children in the different European Member States can be found on the Advertising Education Forum's website - www. aef. orýy,. uk. 12 The issue for the toy companies is not only the threat of tighter regulation, but also more importantly the impact that such adverse publicity is having on trust in their consumer relationships. Marketing managers arguably play the key role in creating and maintaining such relationships along with those at the sales/customer service interface. In the toy business, where the brand is often the focal point of the relationship, marketing's role is crucial not only in fostering trust but in communicating and demonstrating the organisation's ethical credentials. It is also recognised that top management have a significant influence on such relationships and behaviour through the setting of organisational goals, values and culture, through the corporate strategies, and often through endorsing the marketing plans and tactics. The important role of leaders in establishing a culture of trust in organisations has also been mentioned in the literature (for example Bibb and Kourdi, 2004). In conducting the research, the decision was therefore made to identify a sample consisting of senior marketing personnel in the toy companies where possible and, in cases where companies were too small to have a formal marketing function, to interview the Managing Director or Chief Executive. 1.4 The methodological approach The research method adopted for this research is described by Miles and Huberman (1994) as a 'theory-first' position in which a conceptual theory is refined and developed from empirical research. The theoretical framework developed from the literature serves as the basis for the formulation of a set of research questions and propositions for evaluation and discussion in the empirical research that is qualitative and grounded in the practice and knowledge of the case study respondents. The main focus of the primary research has been on twelve leading toy companies (those with significant sales turnover and market share) as these not only account for a substantial portion of the toy market in sales terms, but more importantly are perceived by the author to have large, loyal and trusting consumer bases and may therefore provide examples of best practice. The use of in-depth, semi-structured interviews with senior managers, based on a set of open-ended questions about building trust with consumers, has generated rich data 13 which is used to evaluate and further develop the theory from the practitioner's perspective. A limitation of previous empirical studies has been the one-dimensional approach to examining consumer/customer trust. This study seeks to avoid this by also gathering rich qualitative data from other significant stakeholders in the industry who are considered to have an important bearing on trust development - consumers (parents), toy retailers and representatives from the industry bodies. This different dimension not only provides a method of triangulation, but also helps qualify and validate the theory. 1.5 Structure of the thesis The structure of the thesis has been designed around the central aim of theory development. In Chapter two, a cross-disciplinary review of the literature is conducted to attempt to understand the meaning and importance of trust, its characteristics and their relevance to the context of company-consumer relationships. The review identifies two main themes, one relating to issues such as caring, vulnerability, rights and responsibilities that are found to be common in many approaches to trust and which have underpinnings in moral philosophy, and the other relating to building trust through consumer relationships and branding which have strong links to, and support from, the marketing literature. Building on these themes, Chapter three proposes a conceptual framework founded on contributions from the literature and from data gathered in the initial stakeholder interviews, identifying important antecedents and dimensions (consisting of both ethical and marketing constructs) for the development of trustworthiness in toy companies and brand trust. A set of propositions are forwarded that provide the basis for the empirical research and the other methodological concerns which are discussed in detail in Chapter four. This chapter provides a rationale for the design, sample selection and data analysis techniques based on a qualitative approach which, while acknowledging its limitations, is deemed more appropriate for a sensitive and exploratory topic such as trust than the positivistic approaches that have generally been taken in previous empirical studies on consumer trust. 14 Chapter five reports and analyses the key findings from the fieldwork and other documentary evidence and Chapter six compares the practitioners' views and experiences to the conceptual model to assess its validity. Chapter 7 then discusses the contribution of the thesis to theory development, management knowledge and practice, acknowledging its strengths and limitations and points to management implications and areas needing further investigation. 15 Chapter 2- Towards Unravelling the Complexity of Trust: A Review of the Consumer Trust Literature 2.0 Introduction and chapter structure This chapter reviews the academic literature in the areas of consumer trust and the related fields of relational trust and brand trust, topics that are still largely underdeveloped (Reast, 2005; Delgado-Ballester, Munuera-Aleman and Yague- Guillen, 2003). Because of this deficiency, the review also draws from some of the more relevant contributions from the broader trust, business ethics and marketing literature areas that underpin the topic. Findings have been sourced primarily from academic papers in marketing, psychology, ethics and management journals, and from texts on trust, branding, and relationship marketing. In line with Bryman and Bell's suggestion (2003), the review identifies what is currently known about trust in the context of company-consumer relationships and critically evaluates the existing concepts and theories to identify controversies, inconsistencies and gaps in the literature. It broadly divides into two main themes; one identifying the common characteristics of trust which are found to have strong connections to moral philosophy and the other examining the literature on trust development in consumer relationships and branding, strongly linked to marketing theory. In scanning the literature, no particular model has been identified that considers trust in the context of the particular relationship between organisations, parents and children that is the core of this research. Consumer trust theory generally still seems to be positioned at the exploratory phase. A number of studies however have identified different antecedents and drivers of relational trust (from both ethical and marketing perspectives) between organisations and their customers and from an analysis and synthesis of these, it is possible to propose an initial conceptual framework utilising a range of ethical and marketing dimensions (see Chapter 3). This chapter begins by examining the background to trust and its importance within the commercial environment to both toy companies and consumers. It explores some 16 of the wide range of trust definitions drawn from a variety of social science disciplines to identify common traits and characteristics that are deemed to be relevant to consumer trust, and this leads to a conceptual definition of consumer trust for the research. The review then considers different types of trust, examines its underlying ethical roots and highlights the important distinction between trust and trustworthiness. The last section critiques the existing consumer trust models and examines the link between trust in consumer relationships and trust in brands. Finally, the chapter identifies a number of trust determinants often mentioned in the literature and these are grouped under five main headings of integrity, benevolence, commitment, satisfaction, and personality factors. The chapter structure and section links are shown graphically in Figure 2.1. ................................................................................... .............................................................................................................................................................. TRUST Importance of Trust in Business Definitions of Trust Types of Trust Trust and Consumers Conceptual Key Ethical Trust Versus Definition Characteristics Underpinning Trustworthiness Commonality Rights and Caring Vulnerability Responsibilities ................................................................................... Consumer Relational Brand Trust Models Trust Trust Trust Determinants Trust Direct links Variables Indirect links ............................................................................. ...... ...................................... ....................................................................................................... Figure 2.1 - Literature review structure and links 17 2.1 Trust in the business arena Flores and Solomon (1998: 205) observe that: "Business people feel uncomfortable talking about trust, except perhaps, in the most abstract terms of approbation. When the topic of trust comes up, they heartily nod their approval, but then they nervously turn to other topics perhaps because they rightly suspect that trust in many corporations seems to be at an all-time low. " The recent banning of a potentially unsafe toy, the Yo-ball2 , despite meeting the stringent safety legislation, and substantial Office of Fair Trading (OFT) fines for one of the largest toy companies and two major retailers for illegally fixing the price of toys 3, have also perhaps added to consumers' sense of unease about the toy industry. The expanding development of technologies such as the Internet and the increased importance of, and interest in, knowledge (for example, from what, where, and by whom is a product made) have also created a climate which brings issues of trust and ethics to the fore (Brenkert, 1998a), as has the current marketing fixation for enhanced customer relationships, loyalty, and personalised (one-to-one) communications, even with children. Trust creates a dilemma for organisations because of its invisibility and it is often only when things are going wrong that any attention is paid to it (Bibb and Kourdi, 2004). This lack of appreciation of its significance has been recognised by a number of scholars in the management literature who point to managers not devoting sufficient time, energy and resources to creating it within their organisations (Wicks, Berman and Jones, 1999). What is evident from some of the literature is that trust seems to be a strategic choice. That is, managers and other employees can, through their behaviour, help determine the levels of trust in relationships between the firm and its various stakeholders. This view is at odds with other scholars however who argue that trust is neither a form of behaviour in itself nor a choice, but an underlying condition that can result from such activities (Rousseau et al., 1998; Morgan and Hunt, 1994). This difference of opinion relates to interpretations of the word 'trust' and its distinction from 'trustworthiness' (discussed further in Section 2.3). Whilst the development of trustworthiness has 2 Discussed further in Section 5.3.2. 3 Discussed further in Section 5.4. 18 much to do with how companies behave, trust in a toy is likely to stem as a result of such behaviour (Caldwell and Clapham, 2003). What most academics agree on is that trust is dynamic and is, "an ongoing process that must be initiated, maintained, sometimes restored and continuously authenticated" (Flores and Solomon, 1998: 206). There are indications that trust is sometimes being overrated and misunderstood in the business world. Plender (2003) argues that ethical conduct creates the valuable quality of trust and that trust can reduce monitoring and transaction costs in companies and the wider economy leading to financial gain. Flores and Solomon (1998) warn however that economic approaches to trust, while having good intentions, are seriously incomplete and misleading and there is no guarantee that greater trust will either make business more efficient or improve profitability. Whilst trust usually does have this effect, they argue that, "there is no necessary connection between trust and efficiency, and this is neither the aim nor the intention of trust" (: 208). While trust is undoubtedly an important ingredient in a healthy supplier-consumer relationship, it is not the only element (see Section 2.7.1). Flores and Solomon (1998) argue that trust is also misunderstood when it is viewed as a forrn of knowledge or as a resource. To them, trust is an attitude, feeling, emotion or effect that is connected with one's character and is a virtue: "Like many virtues, trust is most virtuous when it is pursued for its own sake, even if there is no benefit or advantage in view. To think of trust as a business tool, as a mere means, as a lubricant to make an operation more efficient, is not to understand trust at all. Trust is, first of all, a central concept of ethics. And because of that, it turns out to be a valuable tool as well" (: 208). It is interesting to reflect in this regard on a number of worthy deeds that are carried out by the toy industry (for example their work with disadvantaged children described in Section 5.2.4) that are rarely reported or promoted because they are being pursued for their own sake and not for business gain. 19 Most authors seem to agree that trust in an organisation, its managers, and its products and services leads to numerous positive outcomes such as word-of-mouth recommendations, higher purchase volumes and brand loyalty (Morris and Martin, 2000), brand extension acceptability (Gurviez and Korchia, 2003; Reast, 2003), greater price tolerance (Delgado-Ballester and Munuera-Aleman, 1999), long-term stable relationships with customers (Larzelere and Huston, 1980; Morgan and Hunt, 1994), better customer retention, and organisational profitability (Wong and Sohal, 2002). Equally they warn of the consequences of a lack of sufficient attention to trust. Trust is fragile, difficult to build, but easy to lose (Ambler, 1997). Without trust, customer loyalty and repeat business can be difficult to achieve and once broken, it is even harder to re-establish (Bibb and Kourdi, 2004). For toy companies, gaining the trust of consumers is particularly important and challenging. With vulnerable young children as the principal end users and parents, anxious for the welfare of their offspring, as the key toy purchasers, toy companies have to both understand such limitations and anxieties and respond positively to them to maintain trust. The number of leading toy companies that have been producing and marketing toys for over 50 years would indicate that at least some companies have discovered the right formula for being a 'trusted' brand. However, even for these companies, the fragility of trust is evident as Mattel, Hasbro, and LEGO, for example, are experiencing sharp downturns in sales and profits. Trust appears to be as fickle as the market that toy companies serve. 2.2 What is trust? The previous section has discussed some contrasting views about what trust concerns and why it poses both a challenge and opportunity to commercial organisations. This section reviews and links some of the broader definitions of trust that are deemed to have particular relevance to the ethical underpinning of trust in the context of a children's market and a company-parent relationship. This leads to a conceptual definition of trust for the study and the identification of four key characteristics - mutuality, rights and responsibilities, caring, and vulnerability. 20 Reflecting its growing commercial importance, trust seems to have gained some prominence in the academic marketing literature over the last fifteen years or so following the early exploratory work of Rotter (1967) who in the 1960's defined trust as, "a generalised expectancy held by an individual that the word of another ... can be relied upon" (: 65 1). Many of the definitions of trust in the business and marketing literature appear to have stemmed from Rotter's work but have been influenced by diverse perspectives from different social science fields such as Social Psychology, Organisational Behaviour, Economics, Management, Politics, Sociology, Moral Philosophy, and Marketing (Section 1.1 in Chapter one provides reference examples to each of these areas). This diversity of backgrounds, along with the 'emotional baggage' that the phenomenon of trust carries with it, has created inherent difficulties in concisely defining the concept of trust, according to Dibbon (2000). The failure of academics to agree on a suitable definition has perhaps contributed to a number of criticisms about the trust literature in the 1980's and early 1990's. Luhmann (1980: 8) complained of the regrettably sparse literature on trust within Sociology and of the work outside that field which seemed, "theoretically unintegrated and incomplete". Zucker (1986: 58) has criticised the attempts to define the concept arguing that the definitions proposed have little in common, as has Shapiro (1987: 624) who described, "the confusing potpourri of definitions applied to a host of units and levels of analysis. " It is not only different definitions that have been criticised, but also the spread of different determinants or conditions for trust, and the lack of suitable instruments for measuring them (Butler, 1991: 647). Although many papers have subsequently been written about trust in the commercial arena, the limitations in the literature are still being highlighted. Gounaris and Venetis (2002: 636) for example believe that scholarly inquiry on trust is impeded by both the limited academic research available to empirically document the factors that affect trust in marketing exchange relationships and by the failure to distinguish trust from related factors (such as commitment and satisfaction), a gap this research aims to fill. In examining a wide range of definitions about trust from both the organisational behaviour and moral philosophy fields, Hosmer (1995: 380-381) is more encouraging 21 about the literature arguing that although there is no agreed definition of the concept which makes trust seem "a hazy and diffuse topic", to him each new definition has added some new insight and understanding. He believes that the failure to agree on a definition may lie in part with the underlying assumption of an implied moral duty owed by the trusted person to the trusting individuals that has been an anomaly in much of organisational theory. He suggests that the best way to achieve a global definition of trust would be to link the topics of philosophical ethics - the issues of what is 'right', what is 'just I, and what is 'fair' - with the essence of organisational theory - the issues of what is 'efficient', what is 'effective', and what is 'practical'. This is at the heart of this thesis and poses a further question to be addressed. Do toy companies focus sufficiently on their moral responsibilities towards consumers or concentrate too much on organisational issues? In the marketing literature, there is similarly disagreement on the meaning of trust and it is variously described as; a psychological state interpreted in terms of an 'expectation' (Rempel, Holmes and Zanna, 1985; Sirdeshmukh, Singh and Sabol, 2002); a 'belief' (Ganeson, 1994); a 'confidence' (Barney and Hansen; Garbarino and Johnson, 1999); an 'action' (Deutsch, 1962); a 'perceived probability' (Bhattacharya, Devinney and Pillutla, 1998); as risk-taking behaviour (for example, as 'a willingness to be vulnerable, ' Mayer, Davis and Schoorman, 1995); or as 'a willingness to rely on an exchange partner' (Moorman, Zaltman and Deshpande, 1992; Chauduri and Holbrook, 2001). All these descriptions have some relevance, reflecting trust's broad meaning but which are most relevant to companies and which to consumers? An under-developed theme in the literature is how trust differs for each party (company and consumer), whether there are totally separate variables relevant to each, and whether there are overlaps of interests? For consumers, trust is principally an emotion and as humans are fundamentally social creatures, we have an enormous need to trust and be trusted as trust is viewed as, "a pre-requisite for social cohesion" (Bibb and Kourdi, 2004: 5/6). Consumers have individual needs and expectations of companies that must at least be partly met if trust is to exist. But trust building is a two-way process and is not just the responsibility of 22 organisations. (Adult) consumers also have to be trusted by business to only purchase bona fide products rather than counterfeits (in cases when it is obvious) for example, to read product warnings, instructions and age-appropriateness details, to use products as intended, and not to engage in deshopping. 4 Reflecting that trust therefore creates obligations for both trustee and trustor, Gundlach and Murphy (1993: 41) envisage trust as a form of contract, "... a faith or confidence that the other party will fulfil obligations set forth in an exchange, " and thus reducing the likelihood that the other party will act opportunistically (Bradach and Eccles, 1989). 2.2.1 A conceptual definition of consumer trust For this research, drawing on the work of Fukuyarna (1995) and Baier (1994) in particular, consumer trust is conceptualised as: 'The expectation that arises within a community of consistent, honest, caring and responsible marketing behaviour, based on commonly shared norms on the part of other members of that community. ' This definition parallels the 'expectancy conceptualisation' of trust that prevails in the literature as, "most disciplines agree that risk is a critical condition for trust to influence choice and behaviour" (Delgado-Ballester, Munuera-Aleman and Yague- Guillen, 2003: 36). It also recognises that a society consists of many communities of different members with varying needs, wants, expectations, interests, and vulnerabilities (Donaldson and Dunfee, 1994; 1995). Members of primary interest in this research are toy companies, parents, and children but this does not exclude the influence and interests of other key stakeholders in the community such as industry and professional bodies, governments, retailers, c onsumer/pres sure groups, the media, shareholders and others, who would also have views on what the nonns should be and whose perspectives should therefore be considered. The definition highlights the importance of a responsible attitude in ethical and marketing decisions, behaviour and actions in building and maintaining trust. It deliberately does not refer specifically to marketers' behaviour, recognising that key 4 Deshopping is the "deliberate return of goods for reasons other than actual faults in the product in its pure form premeditated prior to and during the consumption experience" (Schmidt et al., 1999: 2). 23 ethical marketing decisions at a strategic (macro) level are not only made by marketers, but also by others, senior management and business leaders in particular. The definition refers to the significance of identifying 'commonly shared norms'. This reflects the other consistent theme in many of the trust definitions concerning mutuality. Norms relate to the standards of right and wrong behaviour shared by a group, profession or community and the ultimate, definitive source of norms lies in the attitudes and behaviours of the members of the relevant communities (Dunfee, Smith and Ross, 1999). Norms are considered to have a strong ethical foundation. A commonly shared norm that the community under discussion might adopt, perhaps utilising Rawls's 'veil of ignorance' (1971), is that as young children are vulnerable as consumers they should not be taken advantage of. At the same time, it could be argued that companies should be allowed to make sufficient profits to survive and grow and therefore continue to develop and market toys that are valuable aids to a child's early development. Beyond this however, there is much debate about issues such as degrees of vulnerability at different ages, what 'taking advantage' might mean, and what constitutes a sufficient or acceptable profit level? Finally, the definition alludes to the caring aspects of trust, common in Baier's work (1986; 1994). This is considered to be important in this study where there are particularly vulnerable community members. It reflects the necessity for toy manufacturers to go beyond the moral marketing minimum to fulfil its obligations and to positively recognise and demonstrate concern for the interests, rights and welfare of their different consumers: "The necessity of trust can be regarded as the correct and appropriate starting point for the derivation of rules for proper conduct" (Luhmann, 1979: 4). 2.3 Trust and trustworthiness In theorising about trust, it is important to consider whether the emphasis is on 'a willingness to trust', such as might be the case of a parent buying a toy, rather than on being perceived as 'trustworthy, ' a virtue that the toy company may strive for. This is a distinction rarely made clear in the literature with many scholars appearing to use the terms trust and trustworthiness interchangeably. Hardin (1996: 29) suggests that, 24 "the best device for creating trust [may be] to establish and support trustworthiness. " This implies that if a company can initiate trustworthiness in its behaviour, this may provide a solid base from which consumers' trust can grow and thrive in the company and its brands. Hardin (2002) also argues that it is 'trustworthiness' rather than 'trust' that is needed in a well -functioning society. The issue of trust versus trustworthiness is another area where there is perhaps some misunderstanding in the literature. Whereas trust refers to the act of trusting or not trusting, trustworthiness involves an evaluation of those criteria that constitute trust and consequently influences both the direction and intensity of a decision to act in a trusting manner (Bews and Rossouw, 2002: 378). Trustworthiness is comprised of, "those characteristics that one perceives in another or group that elicit a belief that trust can, or cannot, be placed in that other or a group (the focus of trust) while taking into account both personal risk and vulnerability" (Brien, 1998: 399). Brenkert (1998b: 300) regards trustworthiness not as an attitude but as, "the evaluative appraisal that an individual is worthy of trust; that is, that another person might reasonably place his or her trust in that individual. Trustworthiness relates both to the qualities of the person (or organisation) to be trusted, as well as to those doing the trusting (the consumer). " Flores and Solomon (1998: 209) agree that trustworthiness is an obvious virtue arguing that, although Aristotle and other leading virtue ethicists do not refer directly to it, it may be supposed to be in the character 'of a good person'. It is not just the character of individuals that is in question here but also the character of relationships and organisations. Trustworthiness therefore applies to individuals or organisations (groups of people) rather than branded products that might be termed 'trusted' but not 'trustworthy. ' A branded product cannot have moral virtues in spite of some marketers proposing that brands do have personalities (for example, Aaker, 1991; de Chernatony and McDonald 1998; Fournier, 1998). While it is important to distinguish between the terms and different meanings of trust and trustworthiness, both are relevant to the conceptual model proposed in Chapter three. Where firms clearly use their corporate name on products and promotions and where there is any cause for direct contact with consumers (on issues such as warrantees, faulty product, performance complaints, or servicing and repairs, for 25 example), the trustworthiness of toy companies is important. Where companies promote product rather than company brands or use third party (licensed) brand names, and generally have an indirect consumer relationship, then it is trust in the product or brand and whether its fulfils its promises and meets consumer expectations that is significant. 2.4 Types of trust Scholars have also failed to agree on the different types of trust that exist. This is perhaps because trust assumes many different forms depending upon its source, the conditions for its existence, its extensiveness, and a number of other distinguishing characteristics. Any discussion of trust should therefore try to make explicit, "the form and kind of trust on which it is concentrating if it is not to draw implications which are questionable or mistakenly identify relations between trust and other aspects of business and moral life" (Brenkert, 1998a: 199). Flores and Solomon (1998) view trust as a continuum varying from an emotional attitude almost devoid of trust (they term this 'simple trust') to an articulate, emotional attitude aware of both the trust and distrust in life, but which sides with trust ('authentic trust'). They argue that, "once trust is spelled out, all sorts of new possibilities arise; it can be examined; it can be specified; it can be turned into explicit agreements and contracts. The mistake is to think that such agreements and contracts precede or establish trust" (: 214). The trust between a toy company and child is likely to be very different from that between the company and parent. It could be questioned as to whether a child can trust at all. As Brenkert (1998b) points out, if trust involves making a judgement, only those who are aware of the risks may trust. Thomas (1978: 94) contends that in learning whom to trust, "we need to make judgements on our own account... " On this basis, young children cannot therefore trust and are dependent on their parents and other guardians for guidance. If they can trust, it is likely to be at best what Flores and Solomon (1998) term 'simple' or 'blind' trust. They would believe what a television commercial told them, for example, although empirical studies have shown that they become increasingly discerning and aware of advertising intent after the age of seven. The issue of children's commercial socialization is discussed in Section 2.6.4. 26 Parents are likely to be more sceptical. Although studies have shown that people frequently choose to be co-operative, trusting and generous during economic negotiations (New Scientist, 2003), as we mature, our negative experiences and those of others teach us to be cautious of certain people and organisations, sometimes with good reason. Because of parents' protective instincts for their children, they are likely to be very wary of any company targeting their young children directly. The challenge for toy companies is to break down such barriers to trust. Bibb and Kourdi (2004: 5) contend that when we speak of trust we tend to be imprecise with our language and often mix up trust with faith, predictability and dependability. On similar lines to Flores and Solomon (1998), they identify two main types of trust; 'elementary trust' such as an assumption that a toy you buy is safe for your child or that, if a newly purchased toy arrives broken, it will be simple to get it replaced; and 'advanced trust' which requires, "... commitinent, action and boundary setting. In short, it does not just happen: we have to create it, pay attention to it and actively develop it" (: 5). It could be argued that elementary trust is underpinned and protected by regulations in most instances and that companies that develop advanced consumer trust are therefore going beyond what is required by law and perhaps even exceeding consumer expectations. Bibb and Kourdi (: 10) view trust as contextual and dynamic and contend that there are four different types of trust at play in different situations. These are shown in Table 2.1 overleaf. This research is particularly concerned with structural trust and the trust that is placed in toy companies and their brands. However as there is communication between a toy company and consumer, sometimes through direct contact but more commonly through indirect contact, there is some form of relationship and hence relational trust is also relevant. Self-trust is also applicable to some extent because if organisations cannot trust their employees, then consumers are less likely to trust them. When Hasbro dismissed managers identified in fixing prices (reported in Section 5.4), there was a breach of self-trust and this may have resulted, through the resultant press coverage, in a diminishment of consumer trust in their brand. 27 Self-trust: This is trust that people need to be confident of their capabilities and judgements in given situations. Self-trust is central to the ability to create trust because if people do not trust themselves it is unlikely that others will trust them. Relational trust: This is trust a person puts in another person or group of people. This is a generalised type of trust and is usually established over time. It is not about trusting people to do something particular; it is believing that they have integrity and honesty. Structural trust: This is the trust that we put in entire institutions, companies and brands. You trust that overall the systems, policies, forms of governance and processes have integrity and can be trusted. Transactional trust: This is trust that is specific, often one-off and pertains to a particular context at a particular time. You only need to trust in the short-term to fulfil a particular need. Table 2.1 - Types of trust (adapted from Bibb and Kourdi, 2004: 10/11) Moral responsibility is now discussed further in evaluating how trust is underpinned by ethical philosophy. 2.5 Morally relevant features of trust Morality is concerned with "the norms, values and beliefs embedded in social processes which define right or wrong for an individual or a community" (Crane and Matten, 2004: 11). A key consideration is whether everything concerned with the creating or breaking of trust has moral implications. Brenkert (1998b) contends that trust is not a moral principle and is, "not the final solution to moral questions" (: 314). It is however an attitude or disposition to behave and respond in certain ways that can lead to something morally important that goes beyond self-interest (: 309). He argues that although trust is essential for moral relations, this does not imply that all instances of trust are themselves moral. Trust involves a sharing of values and aims 28 (real or perceived) between parties some of which are moral values and some of which are what he terms 'non-moral. ' Flores and Solomon (1998) observe that trust does not fit into the framework of moral duties and obligations, or calculations of utility, but into the relatively new area of virtue ethics. The area is new, not in the philosophical literature, but in its application to guiding marketers' behaviour (Murphy, 1999: 107). A virtue is, "a trait of character that is socially valued, and a moral virtue is a trait that is morally valued" (Beauchamp and Childress, 1994: 63). Solomon (1992) describes trust as a business virtue because of its dispositional nature (its link to character) and because it involves acting in admirable ways. More recently, the concept of virtue has been extended by some to encompass virtuous organisations as well as individuals (for example, De George, 1993; Collier, 1995). Not everyone however agrees that trust is a virtue. Held (1984: 65) for example argues that trust cannot be a virtue as it may be, "misguided, misplaced or foolish. " However applying that argument, there are other important virtues such as courage and loyalty that would also have to be dismissed. The relationship between 'ethics' and 'trust' is an ambiguous one as ethics can promote trust, whilst trust can simultaneously be abused resulting in unethical behaviour (Bews and Rossouw, 2002: 377). Toy companies can participate in a price- fixing cartel as part of a trusting relationship with intermediaries but at the same time can be abusing the trust of their consumers by keeping retail prices artificially high. Wicks, Berman and Jones (1999) argue that trust is generally seen as a good, but a conditional good, and that it is possible to both over- and under-invest in trust, neither of which is desirable from either a moral or strategic point of view. Using Aristotle's maxim on the 'golden mean' between excess and deficiency, they argue for a concept of optimal trust, a balance between the two extremes. Moral philosophers have argued that people can trust foolishly, that excessive trusting can be culpable and that 'saintly trust' (trust without suspicion) can be dangerous and exacerbate abusive behaviour (for example, Becker, 1996; Flores and Solomon, 1998; Hardin, 1996). Others have argued that, "a lack of trust leads to greater amounts of opportunism, risk and costs, while draining human interaction of a morally desirable trait" (Wicks, Berman and Jones, 1999). 29 Trust is morally desirable because it is, "a characteristic of human flourishing within community -a form of excellence within individuals that also enables the community to thrive" (ibid), and as trust is a moral good, according to Baier (1994), people should therefore strive both to cultivate trusting relations and to be seen as trustworthy. Some scholars have applied other ethical principles to evaluating trust in relationships. Husted (1998), for example, argues that it is necessary to examine both the ends and means (or process) of the trusting relationship. This supports the views of Koehn (1996) who has acknowledged that an evaluation of the virtues of trust cannot be performed without reference to the ends pursued by the trusting parties. So how do the ends and the means differ in a company-consumer relationship? Do toy companies and their managers act purely for their own self-gain? It could be argued that in seeking profit they are merely acting to satisfy their shareholders and as many of the sample companies interviewed were quoted on various stock exchanges, such shareholders may be numerous and the pressures to produce results immense. On the other hand, individual managers do often stand to make some personal gain whether it is job retention, promotion, or salary bonuses. And do parents always act in their children's interest first in choosing particular toys? The answer in most cases is probably yes but they may also pursue self-interest by selecting toys that they particularly liked as children, those that they would personally enjoy playing with (for example, the father and the Homby train set), or those that satisfy their own desires for social status or for the learning advancement of their child. Finally Hosmer (1995), in developing some ethically-based trust principles, has evaluated the different approaches of ten classical ethicists. Basing his arguments on Baier's observation that, "trust is reliance upon another's good will" (Baier, 1986: 234), he contends that 'good will' is the most precisely defined concept in normative or moral philosophy. Although most moral philosophers have not written extensively about trust itself, Hosmer argues that all the classical ethicists have sought the ideal rule upon which all other rules could be based which would lead to a 'good' society (: 394). They assert that, "a 'good' man or woman should act not for his or her short- 30 term gain only, but for a mixture of that gain together with his or her vision of the future (Protagoras), his or her sense of self-worth (Aristotle), his or her goal of community (St. Augustine), his or her fear of retribution (Hobbes), his or her calculation of social benefit (Mill), his or her understanding of universal duty (Kant), or his or her recognition of individual rights (Jefferson). " For Hosmer, trust is "the result of 'proper' decisions and actions, and proper decisions and actions are those that follow ethical principles of analysis" (: 398). The debate above links trust with morality and other ethical principles but does not clearly identify the issues involved in trust development that are non-moral (that is, those having no clear link to moral behaviour). Hosmer (ibid) has also argued that past considerations of trust have failed to integrate the ethical and organisational literature and an unanswered question is whether it is possible to separate traits of ethical behaviour from other organisational and marketing behaviour. Do, for example, marketing decisions about communicating product benefits through a television commercial or about pricing a product have moral implications? It could be argued that some aspects of the decisions such as the honesty (or dishonesty) of the advertising message and the fairness of the price could be linked to ethical constructs. The conceptual model (in Chapter three) has separated perceived ethical and marketing constructs. This does not mean that the marketing constructs proposed do not have moral implications but rather that they are more ethically tenuous. It also contended that the importance that the toy companies have attached to marketing and organisational considerations in building trust with consumers might have pushed consideration of their broader moral responsibilities further down the agenda. This stance is supported by research from Carrigan and Attalia (2001) who found that price, value, brand image and convenience feature higher up the scale of consumer priorities than ethics despite other studies suggesting that consumer purchasing is becoming more socially responsible (Mason, 2000; Simon, 1995; Creyer, 1997). 2.6 Characteristics of trust From the diverse definitions discussed in Section 2.2, four important characteristics of trust have been identified which have moral implications and are considered 31 particularly important to the research context. These include commonality/mutuality that considers trust from both the trustee and trustor perspectives to evaluate the balance of trust in a relationship and to consider whether there needs to be shared values in such a relationship. The issue of the rights of trustors and the moral responsibilities of trustees are also discussed and the dilemma faced by companies in balancing them when children are involved. Finally two notable characteristics for a children's market are discussed; the importance of caring in trusting relationships and what caring for consumers, and particularly children, might entail; and vulnerability, what does being vulnerable mean, in what ways are children and their parents vulnerable to the marketing of toys, and how should toy companies respond in light of theseissues? 2.6.1 Commonality Many of the trust definitions include the issue of mutuality. That is, trust involves a commonality of values (both moral and non-moral) and aims (real or perceived) in terms of which the trust relationship will be built. Brenkert (1998a: 298) suggests that this commonality need not be complete or even extensive and that people with very different values can still trust each other. He maintains that parties do not need to have similar dispositions towards each other in a mutual relationship and that trust may be one-sided, rather than reciprocal. In the case of the toy company-parent consumer relationship, it has already been argued that toy companies do have to trust parents to act responsibly in buying toys and supervising play, so there is some reciprocity of trust. The values and benefits sought by each party are also likely to be largely fuelled by different priorities (for example, the needs for child welfare versus profitability) although values on some issues are likely to overlap (for example, attention to quality and safety). Children, on the other hand, are likely to use very basic assessments in trusting a brand (for example, all my friends have this toy, so it must be good). Trust between a young child and toy company is likely to be very one-sided with the issue, in the Kantian tradition, centring on the company's duty, intentions and 'good will' towards this naYve population. 32 On similar lines, Baier (1996) is also critical of many definitions of trust that assume relationships are between roughly equal, rational parties and this is certainly not the case when companies directly target children as consumers. Even when parents are the primary target (for example, for preschool and baby toys), the companies still have a distinct knowledge advantage over most parents on issues such as safety (for example, about the inherent dangers of sucking plastic toys or toys coated in paint). Finally, Soule (1998: 249) points out that all relationships are not morally equal. The moral obligations between, for instance, acquaintances, close friends, strangers, and family members are decidedly different. This raises the issue of the type of relationship that exists between companies and parents in the light of children's vulnerability. Are they merely economic relationships as between supplier and customer, based on supply and demand, cost and benefit or is there perhaps also a social relationship based on a partnership in developing a child's leaming, developmental skills and abilities? From the toy companies' perspective, they would probably like to feel that the relationship is more than merely economic, that there are undertones of social responsibility in the relationship, of perhaps working together with parents to develop children's abilities or to give them enjoyment. For parents, the relationship is probably viewed in most instances as economic, weighing up issues of price, play value, safety and likely child response to particular toys and toy brands. However, the empirical research has found that the Early Learning Centre in particular has achieved a relationship with parents that seems to go beyond merely economic considerations and the company values and the manner in which it is perceived seem to have endeared it to many consumers. 2.6.2 Rights and responsibilities Another characteristic common to many discussions about trust relates to the responsibilities of the trustee and the rights and interests of the trustor. Hosmer (1995: 399), for example, defines trust as, "the result of 'right', just, ' and 'fair' behaviour - that is, morally correct decisions and actions based upon the ethical principles of analysis - that recognises and protects the rights and interests of others in society" (author's italics). This definition highlights not only the need for appropriate moral behaviour, but also the importance and responsibility of protecting other people's rights and interests rather than one's own self interests or adopting what Jean-Paul 33 Satre called 'mauvaise foi' (bad faith), the distancing of our own actions and choices and the refusal to take responsibility for them. Rights: The dilemma facing toy companies is gaining adequate understanding of children and their limitations and balancing these with children's rights and interests. On the one hand they are often charged with immoral and irresponsible behaviour by marketing directly to children and on the other, they are aware that children as well as adults have rights; The United Nations' 'Convention on the Rights of the Child' (ratified by the UK on 16 December, 1991) details the rights of 5 every child .A number of Articles of the Convention 6 have particular relevance to children as toy consumers: 0 'Child' refers to anyone under 18 years of age (Article 1). m Children have the right to say what they think should happen when adults are making decisions that affect them, and to have their opinions taken into account (Article 12). 0 Children have the right to get, and to share, infon-nation as long as the information is not damaging to them or others (Article 13). a Children have the right to reliable information from the mass media. Television, radio, and newspapers should provide information that children can understand, and should not promote materials that could harm children (Article 17). m Children have a right to relax and play and to join in a wide range of activities (Article 3 1). m Children should be protected from any activities that could harm their development (Article 36) These rights seem to provide some justification for companies to target children with information via the media, providing it is done responsibly, and it positively encourages companies to carry out research with children to listen to their views. For 5 The 54 Articles of the Convention can be viewed in full at: http: //www. direct. gov. uk/Audiences/Parents/FamilylssuesAndTheLaw/ChildrensRights/ 6 Source: UNICEF's UK Youth Website - 16/02/05) 34 toy companies particularly, Article 31 seems to validate the industry mission of encouraging more children's play. On the other hand, critics of marketing to children might argue that targeting children directly could harm their development (Article 36), particularly as young children do not understand the motives behind the sales messages. This potential vulnerability is discussed in Section 2.6.4. Responsibility: According to Goodpaster and Matthews (in Hoffman, Frederick and Schwartz, 2001: 148), moral responsibility relates to decision-making and individuals are deemed to be responsible, "if they are trustworthy and reliable, if they allow appropriate factors to influence their judgement. " Moral responsibility is rooted in a long and diverse philosophical tradition. Frankena (1980) points to two particular traits relevant to this research about a children's market; 'rationality' - refraining from impulsiveness, care in mapping out alternatives and consequences, clarity about goals and purposes, attention to details of implementation; and 'respect' - having a special awareness of, and concem for, the effects of one's decisions and policies on others (particularly on a vulnerable and easily influenced population such as children). There has been much scholarly debate about whether business organisations can be held morally responsible for their actions following Friedman's provocative 1970 article arguing that 'the social responsibility of business is to increase its profits, ' based on the premise that managers' responsibility is to act solely in the interests of shareholders. Numerous authors have argued for and against the assignation of moral responsibility to organisations (for example, Moore, 1999) but there is general support from the literature that there is some degree of responsibility, although this is, "not the same as, and probably weaker than, the moral responsibility of individuals" (Crane and Matten, 2004: 40). This argument is based on the fact that organisations have a corporate internal decision structure that directs corporate decisions in line with pre- determined goals (French, 1979) and generally manifest a set of beliefs and values that lay out what is regarded as right or wrong behaviour in the organisation - that is, its organisational culture (Moore, 1999). These beliefs and values are deemed to have a strong influence on the individual's ethical decision-making and behaviour (Crane and Matten, 2004). 35 Finally, Carroll (1991) views corporate social responsibility as a multi-layered concept based around four interrelated aspects; economic and legal responsibilities, both of which are 'required' by society, ethical responsibilities which these days are 6 expected' by society, and philanthropic responsibilities which are 'desired' by society. He argues that 'true social responsibility' requires meeting all four levels consecutively. The model is rather simplistic and companies do not necessarily fit neatly into each level. Hasbro, for example appear to do some worthy activities in local schools and the local community but at the same time have been found guilty of breaking the law (see Section 5.4). The model however is useful in drawing attention to issues of corporate responsibility and to distinguishing between 'what is required' and 'what is expected' by consumers and others in terms of corporate behaviour. The acceptance of such responsibilities appears to be vital in the formation of trust in a company-parent relationship. 2.6.3 Caring A third characteristic highly relevant to the research and linked to responsibility is the caring aspect of trust. Baier (1994: 128), in discussing trust, talks about "a reliance on others' competence and willingness to look after, rather than harm, things one cares about. " Baier recognises that trustees have a largely unspecified or discretionary responsibility and can fail in the relationship if they either exceed the boundaries or fail to satisfy what is implied by due care. The challenge is to identify the 'something cared about' that is entrusted to managers and determine what constitutes 'due or appropriate care' (Soule, 1998: 263/264). On the latter issue, Soule points out that the possibilities range from non-interference to positive responsibility, bearing in mind the overarching imperative of looking after and not harming (: 265). Hosmer (1995: 392) argues that, "these voluntarily accepted duties [of trustees] clearly go beyond a negative promise not to harm the interests of the other party; they seem to provide a positive guarantee that the rights and interests of the other party will be included in the final outcome. " He maintains that this belief in consideration, kindness, or even compassion is present in all of the approaches to trust that he examined. Customer care is a much-used term by marketers. It seems that, " ... caring for the customer has become the new corporate mantra" because, "... the new realities of their marketplace award competitive advantage to those whose customers feel cared for" 36 (Liedtka, 2001: 598). She contends however that far from becoming more caring, many organisations appear to be moving in the opposite direction. The difficulty facing toy companies is how to demonstrate 'care' at a distance when they have so little opportunity for direct interaction, other than via helplines. This is perhaps where the Early Learning Centre and LEGO have an advantage being both retailers and producers and having daily direct contact with consumers (parents, children and other consumers). There are however actions that companies can take to demonstrate a caring attitude. Attention to innovation and quality, to high product safety, and to delivering promotional messages responsibly, for example. Caring is important not just because it makes sound marketing sense, but because companies have a moral duty to care. As Liedtka poignantly asks: "Is the idea of creating organizations who 'care' just another management fad that subverts the essential integrity of concepts of ethical caring? " The ethic of care, which emphasises the care-giver's responsibilities to care for others, is most closely associated with Gilligan's work on feminist morality (1982) and a 'mothering' image of caring. Liedtka suggests that the ethic of care is clearly consistent with Kant's second formulation of the Categorical Imperative (1785) that calls for treating people as ends, and not merely means (: 599). We should therefore, "view each member of society as worthy of equal respect and consideration [including children], and respond to the unique needs they bring with them" (: 6 10). Noddings (1994, cited in Liedtka, 2001) makes an important distinction between caringfor and caring about and contends that ethical caring only applies to those persons that we care for. She argues that people we care about represents only 'a verbal commitment to the possibility of care' but adds that we cannot care for those who are beyond our reach. This again raises the question about how far most toy companies can care for (and therefore have an ethical responsibility towards) the young children who choose and use their products. With little direct contact with children who reside primarily in the home and school environments, does this make children beyond their reach? Marketing critics might argue that this is not the case, that television advertising is a proven way of reaching and influencing children, and that schools are no longer a haven from commercial activity. 37 2.6.4 Vulnerability Of critical importance to both trust and consumer relationships in a children's market is the issue of vulnerability. Smeyers (1999: 242) points out that trust, ... "makes one vulnerable and is therefore potentially risky, perilous and injurious. " This is compounded in markets where children are involved because of their immature consumer skills and knowledge and where companies try to reach the parents' wallets through their children's influence and negotiating skills. From an ethical standpoint, Rawls (1971) contended in his 'principle of difference' that priority should be given to those disadvantaged in society. In the Nicomachean Ethics, Aristotle pointed to the limitations of children; "... thus children and animals are as capable of voluntary action as adult men; but they do not have the same capacity for deliberate choice. " A number of contemporary studies have also highlighted that young children are particularly vulnerable (for example, Paine 1984; Mazis et al. 1992; Cohen, 1975: 11), that they need to be treated as a special group in different ways to normal (adult) customers (Brenkert 1998a), and that marketers do have a special responsibility towards the vulnerable (Andreason 1975; Goodin 1985). Brenkert (1998a) maintains that it is important to distinguish between non-nal customers, the vulnerable, the susceptible (those capable of being easily influenced by someone or something), and the disadvantaged (those impaired in their transactions in the market place). It is possible to argue that children may be vulnerable (for example, targeted with unsuitable, harmful products such as violent video games), susceptible (liable to be easily influenced by television commercials, whose purpose they cannot appreciate), and disadvantaged (in terms of being unable to make rational decisions about price and value). Brenkert (ibid) contends that marketing to the vulnerable requires marketing campaigns to be carefully designed to ensure that these individuals are not treated unfairly (and thus possibly harmed). Any programmes that violate this, he argues, are both unethical and unscrupulous. The issue of vulnerability is further developed by Goodin (1985) who proposes a general analysis of our responsibility to the vulnerable. If the interests of children are 38 vulnerable to the actions of marketers, then they have a special responsibility to protect those interests. Finally, Brenkert (1998a) argues that clients (normal customers) who visit the market must have certain cognitive, motivational and material market competencies (or they will be considered vulnerable). These include: 1. Having knowledge of the products and their characteristics. 2. Being competent to determine differences in quality and best price. 3. Being aware of their legal rights. 4. Being capable of being satisfied by the products being offered in the market. 5. Having the resources to enter into market relations. He points out that these conditions have not only been recognized as simply moral restrictions, but have also been the source of various legal regulations regarding children. Paine (1996) also views children as particularly vulnerable to marketers because of a child's immature conceptions of self, time and money, and she concludes that children know very little about their own wants and preferences - or about the rational mobilization of their economic resources to satisfy them. Lacking the capacity for critical reflection, they are unable to assess, modify or even control their felt desires for the sake of more important or enduring desires that they have or expect to have in the future. Moreover, they lack the conceptual wherewithal to research and deliberate about the relative merits of alternative expenditures in light of their economic resources. There is a growing volume of literature on the consumer socialisation of children which both illustrates how they develop consumer knowledge, skills, motives and values as they mature and at what age they start to comprehend marketing intent. Following Piaget's early work on children's cognitive skill development (cited in Ginsberg and Opper, 1988), a number of scholars have forwarded frameworks showing how children's cognitive abilities and consumer knowledge develop over time (for example, McNeal, 1992; Selman, 1980; John, 1999). John divides children 39 into three key stages; the Perceptual Stage (ages 3-7 years); the Analytical Stage (7-11 years); and the Reflective Stage (11-16 years); and she discusses how children's knowledge and abilities develop in areas such as advertising, transactional and product brand knowledge, skills in shopping, product evaluation and decision-making, and in purchase influence and negotiation strategies. Her framework is summarized in Appendix 1. What John's framework and those of others point to are the clear limitations of children, particularly those under 7 years of age. Kline (1993: 238) for example suggests that, "the pre-schooler lives in a world of fantasy in which fantasy is a reality. " Hence he/she is unable to tell truth from fiction, does not see a story in terms of plot, but in terms of isolated sequences, and is unable to distinguish programming from advertising. This is at odds with other research that suggests that even pre-school children are becoming sophisticated consumers who can understand the nature of advertising (for example, Preston, 1999: 368). Even before they can read, children as young as two or three years of age have been found to be able to recognize familiar packaging and familiar characters on products such as toys and clothing (Derscheid, Kwon, and Fang, 1996; Haynes et al., 1993). By 5 to 6 years of age, children begin to recall brand names, particularly if the brand names are associated with visual cues such as colours, pictures, or cartoon characters (Macklin, 1996). And by 6 to 7, they are able to read and spell brand names, which adds to their knowledge base. Brand awareness tends to develop first for child-orientated products such as cereals, snacks and toys (Otnes, Kim and Kim, 1994). Empirical research has also revealed that by the age of five, almost all children have acquired the ability to pick out commercials from regular programming (for example, Blosser and Roberts, 1985; Stephens and Stutts, 1982). However, critics point out that distinguishing a commercial does not translate into an understanding of the true difference between entertainment and selling intent. This is confirmed by Butter et al. (1981: 82) who conclude that, "young children may know they are watching something different from a program but do not know that the intent of what they are watching is to invite purchase of a product or service. " 40 An understanding of intent of advertising usually emerges by the ages of seven or eight (for example, Blosser and Roberts, 1985; Rubin, 1974, Ward, Wackman and Wartella, 1977). Prior to this, young children tend to view advertising as entertainment (for example, something funny) or as a form of unbiased information (for example, where you can buy a product from). From around the ages of 7-8, children begin to comprehend the persuasive intent (for example, that advertisers are trying to get people to buy something) and by the age of 8, children can not only understand advertising intent, but can also recognize the existence of bias and deception in advertising, no longer believing that commercials always tell the truth (Bever et al., 1975; Robertson and Rossiter, 1974; Ward, Wackman and Wartella, 1977). Although there are some conflicting views about the degrees of sophistication and vulnerability of children at different ages, if toy companies want parents to trust that they are acting responsibly, they may need to side with those who advocate caution. Brenkert (1996: 518) argues that marketers' responsibilities towards the vulnerable lie not only towards the vulnerable themselves, "... but to the effects on all those relevantly affected by marketing programmes to those individuals. " This suggests that parents themselves are drawn into this vulnerable cycle and may be vulnerable themselves because of the exploitation of their children's vulnerability. Paine (1996) points out that when parents buy products for their offspring, both should be considered consumers, with a joint interest in the purchase. The parents both supply the funds and get satisfaction from the child's enjoyment of the product. Although they might not be considered 'vulnerable' as consumers under Brenkert's criteria discussed above, they might be considered 'susceptible' under his definition. Parental susceptibility/vulnerability arises for a number of reasons. Firstly, marketers generally have advantages over most of their customers and consumers - greater product knowledge; expertise on how to market to individual consumers and targeted groups; knowledge of what interests, fears, wants and/or needs motivate various market segments; and the resources to bring that knowledge to bear. These often put parents at a disadvantage, creating a possible vulnerability. 41 Secondly, the prospective buyers of toys that are advertised to children are usually the parents who may not see the advertising or promotion at all. Child-orientated advertising therefore provides purchasing incentives to individuals (children) who can influence, but who often cannot make, the ultimate purchase decision. The common argument is that children, motivated by the promotion, use their influence to pester their parents until the product is bought. Parents may therefore be purchasing toys that, without the pressure of the child promotion, they would not normally have considered buying. Some advertising supporters counter this by arguing that the fault lies with weak parenting and parents should be able to limit their child's requests (Furnham, 2000). Paine (ibid) argues however that this is not so easy as their responsiveness to a child's requests is based on their affection for their children and the positive value of shared emotional experiences. Parents want to please their children, to make sure they are not disadvantaged in their peer group and may often make financial sacrifices themselves to make their children happy. This is perhaps an in-built parental instinct. Brenkert (1998a) for example might describe this as 'motivational vulnerability' which occurs when individuals cannot resist ordinary temptations and/or enticements due to their own individual circumstances or characteristics. It seems that many companies are aware of this potential vulnerability but find that targeting parents through their children is something that works best. Parents will not always agree to their children's requests however particularly when they feel these are at odds with their long-term welfare and this is part of rational, responsible parenthood (Paine, 1996: 677). Finally, the pressures of today's society also heighten parental vulnerability. The trends in the UK of having both parents in full-time work, the growing divorce rates and numbers of single parent families, often result in less time for parent-children contact and create feelings of guilt which sometimes lead to an over-indulgement in acceding to child requests as some form of compensation (Greenhalgh, 2002). Trust therefore seems to both create vulnerability and to be influenced by vulnerability. If toy companies really want parents to trust them, they would need to consider not only the limitations of children and refrain from taking advantage of 42 these, but they would also have to recognise that parents today are under increasing pressures, making them vulnerable themselves and their marketing policies need to take this into account. 2.7 Trust and the consumer The preceding sections considered a variety of academic contributions to knowledge about what trust is and a number of key characteristics of trust that might exist within a company-consumer relationship. This section will examine the literature on 'trust and the marketing of consumer brands', and 'trust in buyer-seller relationships'. It was highlighted in Chapter one that, for such an important topic, it is surprising that so few models exist in the marketing literature that attempt to explain how consumer trust is created, fostered, influenced or measured, or that attempt to link consumer trust with its ethical roots. This section will critique a number of the more relevant models identified in these areas with a particular focus on the antecedents of trust and determinants or drivers of trust. Particular consideration is given to Michell, Reast and Lynch's 'model of postulated correlates of trust' (1998) that identifies key variables and dimensions associated with trusting behaviour. The structure of their model and a number of their dimensions and variables have been built on in the conceptual framework. An initial starting point in examining the moral behaviour of organisations and their managers towards their consumers that might have an important impact on their perceived trustworthiness was a review of the marketing ethics literature. Although this literature contains a number of useful models which attempt to describe and analyse influences on marketers' behaviour and decision-making in difficult moral areas using teleological (consequence-based) and deontological (duty-based) principles (for example, Hunt and Vitell, 1986; Ferrell and Gresham, 1985) and are a useful contribution to knowledge, their limitation is that they do not adequately consider the customer or consumer (the core focus of the marketing function) and generally offer little practical managerial counsel in terminology that most practising managers would understand (Smith, 1995). Gaski (1999: 316) is more critical arguing that the field of marketing ethics certainly does make lofty claims for itself and its significance whilst in fact, "it remains no more than an underdeveloped concept in 43 terms of conceptual content and pragmatic behavioural. guidance. " Robin and Reidenbach (1993) suggest that the field of marketing still lacks a consistent and coherent ethical philosophy and is still searching for a place to stand. If the broader area of marketing itself still requires such a central ethical philosophy, it is unlikely that there will be a clear ethical underpinning of trust within marketing relationships and branding, although virtue ethics as previously discussed seems to offer some promise. The above criticisms seem to ignore that there are some normative models that do appear to offer managers a more practical approach to tackling ethical dilemmas (for example, Laczniak, 1983), and a few such as Smith's ethics continuum (1995) have recognised the importance of the customer perspective and the dynamics of the marketplace. Smith (1995) has proposed a practical framework that considers the importance of customer satisfaction and sovereignty in a society demanding higher ethical standards (see Figure 2.2). He argues that, although many small and medium sized firms (and many companies overseas) still subscribe to the caveat emptor (profit maximization) position, it is no longer acceptable in justifying marketing practices, in what he terms 'the ethics era. ' His 'marketing ethics continuum', using a time dimension scale, demonstrates different positions that companies have reached in moving towards a caveat venditor (customer satisfaction) position in which consumer interests are favoured over producers'. The model also provides benchmarks of industry practice, ethical codes and consumer sovereignty which marketers can use to evaluate their practices and perspectives. This is significant as a number of other scholars have identified trust as an important element in creating satisfaction and these benchmarks may therefore be influential in developing consumer trust. In highlighting consumer capability as a key element of his consumer sovereignty test, Smith also emphasises the potential vulnerability of some target markets and the importance for marketers to consider vulnerability factors in their decision-making. 44 Producer interests favoured Consumer interests less favoured Producer interests less favoured Consumer interests more favoured 4 10 Caveat Emptor Industry Practice Ethics codes Consumer Sovereignty Caveat Venditor Profit * General business practice Codes of * Capability Consumer maximization (average across firms) individual firms satisfaction * Information Subject to * Practice of specific * Codes of legal constraints industries industries Choice * Practice of best firms * Codes of professional bodies Figure 2.2 - Marketing ethics continuum (Smith, 1995) The limitation of the model is perhaps that it only considers producer- customer/consumer relationships and conflicts, and does not address the marketing impacts on other key stakeholders, not least the shareholders or owners of the organisation that might influence business' priorities. It also places profit maximization and customer satisfaction at opposite extremes of the continuum. Many companies have recognized, however, that there does not necessarily need to be a trade-off between one position and the other. Highly satisfied and trusting customers can be very profitable customers. In the marketing trust literature there have been a number of attempts to examine the antecedents and determinants of trust although rarely both at the same time and the majority have tended to focus on business-to-business trust relationships. Selnes (1998) and Doney and Cannon (1997), for example, have developed models to show how trust is formed in buyer-seller relationships in the industrial field while others have focused on trust developed in service provider relationships (Coulter and Coulter, 2002; Gounaris and Venetis, 2002), in the retail environment (Wong and Sohal, 2002), and in high technology markets (de Ruyter, Moorman and Lemmink, 2001). Whilst these have some value in understanding trust, the differences between business and consumer markets (for example issues of power balance between trustor and trustee, corporate verses personal spending, and different trust criteria and priorities) limit their usefulness. 45 Other scholars have studied trust and its relation and interaction with other sought- after attributes such as commitment and satisfaction (Morgan and Hunt, 1994; Bejou, Ennew, and Palmer, 1998; Garbarino and Johnson, 1999), and customer loyalty (Delgado-Ballester and Munuera-Aleman, 1999; Hart and Johnson, 1999, Chaudhuri and Holbrook, 2001) although the result is rather a jumble of concepts with a lack of clarity of what influences what and how each is interlinked. Despite the lack of focus on consumers, these contributions have added to knowledge about how trust is formed between human beings in a business context and therefore hold some value and relevance in considering a company-consumer relationship. A number of the trust antecedents and dimensions from these contributions are therefore considered in supporting the conceptual framework (discussed further in Section 2.8). In the literature, a number of models on how to build customer trust have been proposed. Bibb and Kourdi (2004: 99) suggest that it is a simple process (shown in Figure 2.3), arguing that if any stage is missed, it takes you back to the start and makes it harder to trust in the future (that is, when trust has been broken). Confirm: check that delivery Deliver: take action and achieve has met the person's expectations what you have promised Explore: understand the issues and priorities 10 Commitment: agree what you will deliver, how and when Figure 2.3. The trust building process (Bibb and Gourdi, 2004: 99) Although the authors do not suggest where the process starts and offer it as a model for both business-to-business and business-to-consumer markets, acknowledging no key differences between the two, it does provide some useful ideas for trust development and highlights that trust-building with customers is an on-going process, 46 a series of linked actions and behaviours, all of which need to be considered and fulfilled if trust is to thrive. For the toy industry, the process perhaps starts with exploration - identifying and understanding the needs, influences, emotions, behaviours, and vulnerabilities of their consumers. Commitment, as per the model, seems to imply some sort of contract or agreement between company and customer, An ethical approach might suggest some form of social contract that demonstrates the company's commitment to the common good even at the expense of their own profits. Delivery is important so that words are turned into actions and not empty promises. If consumers are to 'Trust Tomy', a highly promoted tagline used by the Tomy toy company, the company must both agree on the standards and expectations of trust that consumers can expect and deliver on the agreed terms. As companies view trust as an integral part of a long-term relationship, the model emphasises the need for follow-up, for confirmation of satisfaction perhaps through after-sales service, and for monitoring trust on an on- going basis. Only one study has been identified that considers toys and the building of brand relationships and consumer trust. Morris and Martin (2000) discuss a case study of a highly successful toy range, the Beanie Babies, and evaluate how the owners, Ty Inc., have engineered a highly successful marketing strategy that nurtures strong consumer brand relationships. Morris and Martin (: 82) evaluate the brand's success by assessing 10 key attributes of high-involvement/relationship-prone products (such as toys) that they contend have led to high levels of customer satisfaction and trust, and resulted in high purchase volumes, brand loyalty and positive word-of-mouth recommendations. These attributes are shown in Table 2.2. The limitations of the model are that it only considers the branding aspect of building trust and even then it does not include all the issues. Whilst it raises the importance of 'quality/excellence', for example, it does not specifically mention toy safety, an issue of concern to most parents. The model also does not clearly distinguish between trust and satisfaction, which attributes leads to each or to both, and which attributes are relevant to children and which to parents and other adult consumers. 47 Nostalgic value: sentimental linkages with some aspects of user's childhood or past. Personification: product's features resemble human characteristics. Uniqueness: somewhat rare or one-of-a-kind item, or clear differentiation between brands in the product category. Facilitation: the ability of the item to help the users engage in valued behaviours or attain important personal goals. Engagement: the extent to which the item engages the user, requiring or inviting him/her to exert mental or emotional energy to use it. Aesthetic appeal: the item's attractiveness or artistic value, or qualities related to the way it feels, tastes, smells or sounds. Qualitylexcellence: the overall superiority or excellence of the item on one or more key attributes relative to other brands, or images. Association: the extent to which the item is linked to other people, places, organisations, activities, events, issues, other brands, or images. Social visibility and image congruence: the extent to which the user is seen by others when using the item that is also congruent with the user's self-identity. Pfice fisk: the degree to which the consumer may be concerned about the purchase price, replacement price, or other expenses associated with the item - such as insurance, storage, or repair costs Table 2.2 - Characteristics of high-involvement/relationshiP-prone products (Martin, 1998, cited in Morris and Martin, 2000: 82) Their work is useful however in considering trust in a toy context, using empirically verified data. From a parental perspective, nostalgia is particularly relevant in today's toy industry where parents seek to purchase toys remembered from their own childhood. Although the market is generally characterised by short-term 'fashion items', there is still a solid market for brands that have been around for many decades such as LEGO bricks, Homby train sets, Barbie dolls, or Scrabble. Such is this demand for 'retro toys' that some brands that were dropped many years ago are being revived, revamped, and relaunched. Facilitation is another aspect of importance to many parents in choosing toys. Toys that offer some educational value, for example in knowledge or mental/manual skills development, appear to be both trusted and popular. Fisher-Price (Mattel) is shortly introducing a new toy aimed at measuring babies' IQ levels, in response to parental 48 demands for such a product. Engagement also appears to be very relevant in 'trusted' toy brands and companies. Products for example that involve children in perceived safe, creative pastimes seem to be favoured, perhaps as a means of diverting them away from more physical play or from television screens. A Carrick James survey of toy ownership (Toy News, 2003: 57) found that Crayola products (crayons and drawing materials) were the most owned toys amongst children aged 7-14 years of age. Quality/excellence is likely to be an attribute of more interest to parents rather than children. Parents are likely to have quality aspirations at all price points and are perhaps likely to link quality and excellence with safety, often an important concern. Quality might also be linked with the store where the buyer shops. At the top end of the market Hamley's might be perceived to offer the higher quality toy while Poundstretcher lower quality. Many parents will seek excellence but may need guidance as to what is excellent. Toy awards may provide them with some indication of toys that have been selected based on some assessment of superiority. Although not relevant to all parents, some consumers will seek out brands for social visibility and image congruence. In the same way that parents purchase brands (clothes, cars and so on) for themselves to say something about how they wish to be perceived, so they may buy brands for their children that are an extension of this image. As the fad for adult designer clothes has grown, so have designer clothes for children and designer toys. Sales of fashion dolls in designer clothes (at designer label prices) such as Bratz are some of the fastest growing in the current market. Finally, the price of products may impact on parental trust in a certain brand. A higher price may indicate that a product is of superior quality and should therefore be more trusted. This may only work once however. Should the brand fail to live up to these extended expectations, it will not be repurchased and indeed may lead to negative word-of-mouth. There are signs that customers are now becoming more discerning about price and quality and companies are having to respond by offering good quality toys at cheaper prices than a decade ago (for example, Hasbro's Action Man). As part of this trend, once locked into a toy brand such as a doll, companies are offering numerous add-on products such as additional models and accessories. 49 Michell, Reast and Lynch (1998) have developed one of the few conceptual models of trust based around trusting behaviour that has been empirically tested on a consumer sample (see Table 2.3). Their model identifies from the academic literature twenty- two variables associated with trusting behaviour which they model around the four dimensions of probity, equity, reliability and satisfaction. The first two relate to the affective elements of trust such as feelings and emotions and the others to cognitive elements based on knowledge that the trustor has about the trustee, a concept originally forwarded by McAllister (1995). VARIABL PROBITY EQUITY Confidence Truthfulness Integrity Professional Standing Reputation Fair-mindedness Benevolence Caring Values Sincerity Helpful Advertising Affective Affective Warranties Dependability Quality Consistency RELIABILITY Quality Standing Cognitive Predictability Guarantee from Corporate Name SATISFACTION Personal Experience Opinion Purchasing Duration Experience of Peers Delivery Cognitive Table 2.3- Model of Postulated Correlates of Trust (adapted). Michell, Reast and Lynch (1998: 161) 50 The model has merit in providing marketing practitioners with a simple framework for the development of perfori-nance benchmarks in understanding and assessing consumer trust. Its limitation however as a suitable model for the current research is that, whilst many of the selected 'affective variables' have moral implications, little attempt is made to support the variables with underpinning from philosophical ethics. There is only limited discussion on why particular variables were selected from the literature and why they were classified under each dimension. A problem, for example, is why reputation is included under the probity dimension that they propose as a behavioural dimension? Reputation is not a behaviour, but is perhaps more closely linked with reliability and satisfaction, their declared cognitive variables. A further problem is that the model implies that reputation is an antecedent to trust whereas it could be argued that it is more likely to result from trust (Hosmer, 1995: 386). Similar questions could be raised about confidence also listed in the model under probity. In fairness, some of the model's limitations are recognised by the authors who propose it as a simple conceptual framework needing further development. They acknowledge that the sample of companies selected for evaluation of their trustworthiness to test the model was rather unfocused (comprising a mix of retailers, manufacturers and service providers across different industries). The consumers who were asked to evaluate their trust in the selected companies may therefore have had a very different experience of each; for example, direct contact with the retailers but only distant contact with the manufacturers through their brands. Furthermore, no attempt was made to confirm, modify, clarify or prioritise the selected variables, or identify other new variables in the model through any direct contact with the companies themselves. The conceptual framework proposed in Chapter three draws on a number of the elements in Michell, Reast and Lynch's model but uses a more rigorous literature search and justification of the dimensions and variables selected. It also proposes a division between ethical and marketing dimensions as a basis of consumer trust rather than the behavioural/cognitive split of their model. In selecting variables and grouping them under dimensions for the new framework, a thorough review of trust determinants in the literature was made to identify common strands and particular 51 variables that might be relevant in an ethical or marketing dimension, or might have relevance to a vulnerable consumer segment. Finally, another study that has revealed some particularly interesting findings about trust was carried out by Bibb and Kourdi (2004) who in 2003 surveyed 100 people across Europe and North America in different organisational settings to gauge how they felt about the issue of trust, addressing such questions as who people trust and why, who people do not trust and why, what trust means to people, and their experiences of it, what people look for when deciding to trust someone, and when is trust most valuable? Whilst the study did not specifically focus on trust from a consumer perspective and concerned an evaluation of trust attributes in individuals rather than organisations, their analysis, detailed in Table 2.4, makes an interesting comparison to the findings in this research (discussed in Section 6.5). The Drivers of Trust The Reality of Trust The Trust Deficient 1. Fairness Likeability Courage 2. Dependability Dependability Unselfishness 3. Respect Critical Fairness 4. Openness Ambition Openness 5. Courage Fairness Compassion 6. Unselfishness Professionalism Respect 7. Competence Competence Dependability 8. Supportiveness Respect Empathy 9. Empathy Controlling Behaviour Visionary Qualities 10. Compassion Predictability Supportiveness Table 2.4 - Trust qualities sought, found and missing (Bibb and Kourdi, 2004) The first column, what they ten-ned the 'drivers of trust', were the factors that respondents felt were most significant in deciding whether to trust someone and how much to trust them. The second column then asked the same respondents to rate which trust attributes they most frequently encountered in practice (the 'reality of trust'). What was interesting was that many of the attributes that we appear to value significantly are actually relatively scarce in reality. Finally, by subtracting the 52 average scores for the second question from the average scores for the first, they identified what they termed the 'trust deficit', those attributes where there were the biggest gaps between what we expect and what we encounter. No less than nine of these deficits are in the top ten most sought-after attributes. Having critiqued some consumer trust models in this section, the following sections look more specifically at how trust impacts on both company-consumer relationships and on branding. 2.7.1 Trust and consumer relationships According to Bibb and Kourdi (2004: 113), "it is relationships with trust at their core that make businesses happen and enable organisations to succeed. When people have trusting relationships, the result is greater clarity, focus and confidence about their courses of action. " Many marketers seem to have only recently realized the true significance of consumer relationships and this has spawned a new strand of literature. Some have described 'Relationship Marketing' (RM) as a major shift in marketing theory and practice (Morgan and Hunt, 1994: 20), as marketing's new paradigm (for example, Buttle, 1997), and "taking marketing back to its roots" (Gronroos, 1996: 12). For others, RM offers nothing new. Literature on the subject has been around for over 25 years, and according to Gummersson (1997), much of what is currently written about it is theoryless. Certainly most salespeople (for example, see Goodman, 1971), international marketers and those involved at the industrial buyer-seller interface have long recognised the necessity of developing and nurturing close relationships with business partners, customers and contacts, built on confidence and trust. Perhaps the novelty has been in consumer markets, where "RM had initially been overtly shunned" (O'Malley and Tynan, 1999: 587). Some view the transactional/relational approaches as different ends of a continuum with traditional marketers continuing to place greater emphasis on the importance of the core product/brand whilst relational marketers emphasise the importance of customer service (for example, Gronroos, 1994). Others, through empirical research, 53 have identified that both transactional and relational marketing approaches can and do work side by side (Brodie et al., 1997: 389). Relationship building at many levels is a key current issue in the toy industry. Toy companies are already faced with the challenges of building a close rapport with their customers (retailers and wholesalers), consumers (parents and others), and their end users and main influencers (children). In addition, they need to work hard on improving relations with the media and consumer groups in promoting a caring and responsible image, as well as with local and regional government to convince them that tighter regulation of the market is not required. In common with trust, a criticism of the RM concept has been that the term 'relationships' is rather vague and has meant different things to different people. Gurnmesson (1994: 18) describes them as "fuzzy entities with fuzzy borders and many overlapping properties. " This lack of clarity has provided researchers with the luxury of being able to choose whatever relationship definition best suits their agendas at any given time (O'Malley and Tynan, 1999: 589). Another criticism reported by Egan (2001: 30) is that relationships are invariably discussed and defined from the company perspective. That consumers should be equally interested in building and sustaining trusting relationships is often taken for granted (Carlell, 1999). From these criticisms two key questions emerge: 0 Can customer- supplier interactions ever be called 'relationships'? N Can customers ever develop relationships with companies or must relationships always be interpersonal (Buttle, 1996: 11)? Barnes and Howlett (1998) suggest that a true relationship can only exist if: a) The relationship is mutually perceived to exist and is acknowledged as such by both parties, and b) The relationship goes beyond occasional contact and Is recognized as having some special status. Egan (2001: 32) argues that the one-sided and emotionless nature of most everyday commercial exchanges (and in particular in consumer goods5 marketing) would suggest they would have difficulty fulfilling such criteria. 54 Another problem with the buyer-seller exchange is the potential gain for both parties. In industrial markets it might perhaps be possible to create win-win situations for both buyer and seller but in consumer markets, are there really tangible benefits for the end buyer? Moller and Hallinen (2000: 41) argue that in such markets the bonds that tie the parties together are weaker and fewer. And, in terms of tactics, it is claimed that consumer 'relationships' are often restricted to service 'hotlines' and personalised mailings (Hennig-Thurau, 2000: 56). As Brown (1998: 177) pointedly asks: "What consumer in their right mind would ever want to establish a relationship with a commercial organisation? " This view is supported by Palmer (1996: 20) who highlights that there is empirical evidence to suggest that, regardless of what marketing strategies are implemented by the supplier, buyers frequently have no wish to enter into a relationship with a company. It is probable that situations exist where the seller may want to develop a 'relationship' whereas the customer is happier with a transactional approach (Bund-Jackson, 1985). Despite this, according to Egan (2001: 35), it is difficult, given that some communication is taking place, not to regard them as relationships of sorts. Direct references to the ethical underpinning of relationships in marketing, as with trust, have to date been limited. Gundlach and Murphy (1993) have discussed the ethical and legal foundations of relational marketing exchanges, acknowledging ethical principles as a prerequisite to fostering the collaborative atmosphere necessary for relationships to flourish. Murphy, Wood and Laczniak (1996) equated relationship marketing with ethical marketing, concluding that RM is inherently a concept with strong ethical roots. Takala and Uusitalo (1996) also proposed an ethical framework for RM to guide managers based on the ethics of keeping promises and truth telling, the equal treatment of customers, the ethics of commitment, and the ethics of communication. Despite the limited literature, there are growing ethical concerns about some of the marketing activities being adopted in following an RM approach, for example about issues relating to consumer privacy, surveillance and control (O'Malley, Patterson and Evans, 1997). Such ethical concerns are likely to have an impact on levels of trust in an organisation. There are also concerns about the customer service and market research mentality of RM that generates a demand for detailed customer profiles 55 (including children), and allows the assembly of computerized databases of individuals and their shopping and lifestyle habits. Some of the ethical questions that arise are why various information is gathered, how it is used, who has access to it and whether consumers are informed as to what happens to the information in their personal files (Kavali, Tzokas and Saren, 1999). With growing concerns about Paedophiles and the dangers of children using internet chat rooms, it is perhaps not surprising that parents mistrust the gathering of any data about their children for marketing purposes. Finally, scholars have suggested that there are a number of key virtues underpinning relationships and these include equity, benevolence, reliability, satisfaction, responsibility, commitment and 'trust' (Gundlach and Murphy, 1993: 41/42; BeJou, Ennew and Palmer, 1998: 171/172; Murphy, 1999: 113/116; Egan, 2001: 88/106). Of these, trust has been one of the key ethical concepts that has assumed a central role in relationship marketing's theoretical and empirical development (Morgan and Hunt, 1994: 22) and the cornerstone by which the affective strength of a buyer-seller relationship can be judged (BeJou, Ennew and Palmer, 1998; Delgado-Ballester, Munuera-Aleman, and Yague-Guillen, 2003). An important part of the relationship and trust between the company and consumer is developed through branding. A brand is an active relationship that customers know and value (McKenna, 1997) and makes a promise by expressing what we are like, what we want to be and inviting us to connect and bond (Simmons, 2000). Brands represent not just the product and its attributes, but a whole set of values that reflect the ethos of the company. To the consumer, the brand is often the most visible, and sometimes only point of contact with a company and therefore plays an important role in developing and maintaining a relationship. It provides meaning and importance for people because a brand should connect with their lives and calls for "behavioural, attitudinal, and emotional involvement" (Varey, 2002: 63). The following section will discuss the importance of branding and review the literature on how trust is created and fostered in brands. 56 2.7.2 Trust in brands It has been suggested that the ultimate goal of marketing is, "to generate an intense bond between the consumer and the brand, and the main ingredient of this bond is trust" (Hiscock, 2001: 1). The value of the brand lies in the understanding or trust that customers receive (Bibb and Kourdi, 2004: 23). From a managerial perspective, a satisfying bond will sustain both buying and recommendation (Varey, 2002) and from a consumer perspective, trust "reduces the uncertainty in an environment in which consumers feel especially vulnerable because they know they can rely on the trusted brand" (Chaudhuri and Holbrook, 2001: 82). Trust is therefore probably the most important attribute a brand can own (Delgado-Ballester, Munuera-Aleman, and Yague-Guillen, 2003: 35). The challenge for toy companies is that in meeting consumer expectations they have to create two quite separate bonds, one with parents (the deciders) and one with children (the influencers). The customer's knowledge and perception of the brand will be formed by every manager's and employee's actions, behaviours, activities, and contacts. Indeed, the brand is owned and should be managed by every employee in the organisation (Davis, 2000: 5). Brands need to be dynamic to keep pace with customers' changing attitudes, lifestyles and needs. This is particularly true in a predominantly fashion industry such as toys. Whilst trust in companies and brands may take many years to build up, experience has shown that even one poorly-handled critical episode or marketing faux pas can destroy a brand's reputation and value very quickly (Ambler, 1997). Brand trust is a key issue in the toy industry not only because of the emphasis on consurner relationships, the vulnerable end market, and the negative publicity the industry sometimes receives, but also because, as in many other industries, consumers are increasingly recognising that retailer own brands/labels offer similar quality and benefits to other leading brands, but at lower prices. The popularity of the Woolworths' Chad Valley range and the Early Learning Centre brand are testament to this phenomenon. Brands cannot afford to be complacent because as Gilmore (1999) starkly points out, today's customer cannot be bought so easily: "The reality is that own label has lost any social stigma it once had" (: 20). 57 Trust in brands has recently figured more prominently in the marketing literature. It has been examined in relation to its effect on brand commitment and performance (Chaudhuri and Holbrook, 2001 and 2002), brand extensions (Reast, 2003), brand equity (Ambler, 1997), brand value (Sirdeshmukh, Singh and Sabol, 2002; Brady, 2003), brand power (Davis, 2000), brand loyalty (Lau and Lee, 1999; Delgado- Ballester and Munuera-Aleman, 1999; Chaudhuri and Holbrook, 2001), brand relationships (Gurviez, 1996; Fournier, 1998; Selnes, 1998; Garbarino and Johnson, 1999), and on-line brands (Hoffman, Novak and Peralta, 1999; Jevons and Gabbott, 2000; Morris, 2001; Yoon, 2002). Others have tried to measure trust through the development of brand trust scales (Hess, 1995; Delgado-Ballester, Munuera-Aleman, and Yague-Guillen, 2003, Gurviez and Korchia, 2003) or conducted empirical research in an attempt to determine what drives brand trust. Reader's Digest's research (2001), for example, identified in descending order of importance that consumer trust is driven by; quality of product or service; positive experience; customer service or care; reputation; value-for-money; consistency; familiarity; stability; guarantees or warranties; and, finally, price. Interesting though these findings are, such studies have tended to focus on the more tangible elements of the marketing offering without really exploring the more emotional elements of consumer's decision-making such as the importance they attach to morally responsible behaviour. Two dimensions of brand trust that are commonly discussed in the literature are its relationships to satisfaction and to loyalty. Overall satisfaction is seen as an important antecedent to generating trust (for example, Ganesan, 1994; Selnes, 1998), because it indicates the brand consistency in the fulfilment of its commercial promise and that the brand protects and takes care of the individual's welfare and interests (Delgado- Ballester and Munuera-Aleman, 1999: 1243). Brand loyalty on the other hand is perceived to generate from a strong level of both trust and satisfaction (Morgan and Hunt, 1994). It has been claimed that "customer loyalty is emerging as the marketplace currency for the 21st century" (Singh and Sirdeshmukh, 2000: 150) because of the high cost of new customer acquisition (Gummesson, 1999: 183) and the superior generation of profits over time from having 58 loyal patronage (Reichheld, 1996: 65). Whilst many scholars have focused on antecedents to loyalty based on the 'harder' dimension as a such as value for money, convenience, reliability, safety and functionality (Christopher, 1996: 60), others (for example Dick and Basu, 1994) have observed the importance of 'softer', more intangible factors such as emotion as having significance on attitudes, influences and norms leading to repeat patronage. What is generally missing from the above literature is consideration of brand trust from a moral or ethical perspective with some notable exceptions (for example, Morgan and Hunt, 1994; Gundlach and Murphy, 1993, Bejou, Ennew and Palmer, 1998). That is, scholars have generally limited their discussion of trust in brands to the behavioural and cognitive aspects of marketing and their consequences without exploring the implicit moral foundations of trust. They have failed to consider either the ethical underpinnings of trustworthiness (for example, social responsibilities, rights, and duties) that companies need to give confidence to consumers in their brands, or the importance attached by consumers to appropriate, morally responsible behaviour by companies in their purchasing decisions. Indeed, the trustor and trustee characteristics are rarely studied jointly (Mayer, Davis and Schoorman, 1995; Raimondo, 2000). One of the few contributions that has made a useful attempt to evaluate consumer trust using a combination of ethical and organisational dimensions was forwarded by Gurviez and Korchia (2003). Differentiating between two key presumptions identified in the literature, the presumption of capability and the presumption of honesty, they identify two sources of trust, one stemming from technical skills (meeting consumers expected performance) and one from ethical proficiency (Landowski, 1989). Their model uses three dimensions; 'Credibility' which assesses issues such as safety and quality (more organisational issues); 'Integrity' (incorporating sincerity and honesty); and 'Benevolence' (incorporating technical advances and responsiveness to consumers), an approach previously used by Ganesan (1994) and Doney and Cannon, 1997). its limitation as a tool to explain how consumer trust is formed is its lack of depth. It does not consider antecedents at all and in assessing both organisational and ethical 59 variables they only touch on a few criteria. It is also not clear as to why in assessing the important ethical dimension of benevolence (care), one of the two issues explored attempted to measure whether the brand took account of advances in research (which might have fitted more appropriately within an organisational or technical dimension). As with a number of the other models reviewed, its measurement items appear to have been drawn from a limited literature and a qualitative approach may have identified a broader range of important ethical criteria which would have supported their declared dimensions. 2.8 Determinants of trust A number of scholars have explored the determinants of trust that are variously described as drivers, dimensions, antecedents, facilitators and precursors, to understand what encourages it to grow or decline in economic relationships (for example, Bews and Rossouw, 2002; Michell, Reast and Lynch, 1998; Morgan and Hunt, 1994; Selnes, 1998). Unfortunately the lack of agreement between them and the frequent confusion between terms such as antecedents, dimensions, and construct components has led to inconsistencies in the marketing trust literature (Raimondo, 2000). There is though a general consensus that trust and trustworthiness take time to build. Ring and Van de Ven (1992) and Curren, Rosen and Surprenant (1998) have proposed that trust develops gradually over time as one accumulates trust relevant knowledge through experience and interaction. Trust levels start low and gradually increase. Zucker (1986) also refers to a long pattern of exchanges, and Lewicki and Bunker (1996) to the importance of history that allows trust to develop at different levels. On the other hand, it has been asserted that trust can be present even from the beginning of a relationship (Berg, Dickhaut and McCabe, 1995). Others point to trust evolving from the evaluation of both direct contact (for example, trial, usage, satisfaction in the consumption) and indirect contact (advertising, word-of-mouth, brand reputation) with the brand (Keller, 1993; Krishnan, 1996). Flores and Solomon (1998: 218/219) contend that, "trust is created (and is damaged) through dialogue, in conversation, by way of promises, commitments, offers, 60 demands, expectations, explicit and tacit understanding. It is through such dialogue and conversation, including the rather one-way conversation of advertising, that producers make the nature and quality of their products known, that professionals and companies make their services and abilities known, that expectations get initiated and intensified. " The literature contains a broad range of contributions to the issue of what deten-nines trust in the marketing area and there is inevitably some overlap and confusion between them (Gurviez and Korchia, 2003). There are five main areas identified that are commonly discussed and these are linked and classified under the headings of integrity, benevolence, commitment, satisfaction and personality factors. A summary of the links between dimensions/vanables and the scholarly literature is shown in Table 2.5. Trust DimensionsNariables Scholarly Links Integrity Bews & Rossouw (2002); Butler (1991); Butler & Cantrell (1984); Coulter & Coulter (2002); Gabarro (1998); Hunt, Chonko & Wilcox (1984); Lieberman (1981); Mayer, Davis & Schoorman (1995); Robbins (1997); Gurviez and Korchia (2003). Equity Anderson & Weitz (1992); Michell, Reast & Lynch (1998). Honesty Coulter & Coulter (2002); Delgado-Ballester & Munuera-Aleman (1999); Gahacan & Tedeschi (1968); Larson (1992); Rotter (197 1); Schlenker, Helm & Tedeschi (197 3). Fairness Anderson & Weitz (1992); Butler (1991); Hart et al. (1986); Rempel, Holmes & Zanna (1985); Zucker (1986). Probity Coulter & Coulter (2002); Michell, Reast & Lynch (1998). Responsibility Bradach & Eccles (1989); Madhok (1995); Hosmer (1995). Openness Bews & Rossouw (2002); Butler & Cantrell (1984); Hart et al. (1986); Hay (1999); Mishra (1996); Robbins (1997). Benevolence Bews & Rossouw (2002); Butler (1991); Butler & Cantrell (1984); Engelbrecht & Cloete (2000); Larzelere & Huston (1980); McAllister, (1995); Mayer, Davis & Schoorman (1995); Mishra (1996); Rempel, Holmes & Zanna (1985); Solomon (1960); Strickland (1958); Gurviez and Korchia (2003). 61 Showing Concern and Care Arrow (1974); Baier (1994); Mayer, Davis & Schoorman (1995); Mishra (1996); Rempel & Holmes (1986); Smeyers (1999). Sincerity Crosby, Evans & Cowles (1990); Friedland (1980). Shared Values Bidault & Jarillo (1997); Delgado-Ballester & Munuera-Aleman (1999); Dwyer, Schurr & Oh (1987); Heide & John (1992); Morgan & Hunt (1994). Not Taking Advantage Dwyer, Schuff & Oh (1987); Delgado-Ballester & Munuera-Aleman (1999); Hill (1990), Morgan & Hunt (1994). Commitment Dwyer, Schuff & Oh (1987); Garbarino & Johnson (1999); Morgan & Hunt (1994); Selnes (1998). Competence Barber (1983); Bews & Rossouw (2002); Butler (1991); Butler & Cantrell (1984); Kee & Knox (1970); Lieberman (1981); Mayer, Davis & Schoorman (1995); Mishra (1996); Robbins (1997; Rosen & Jardee (1977); Selnes (1998); Gurviez & Korchia (2003). Expertise Bejou, Ennew & Palmer (1998); Hovland et al. (1953). Ability Cook & Wall (1981); Deutsch (1960); Good (1988); Jones et al. (1975); Mayer, Davis & Schoorman (1995); Sitkin & Roth (1993). Dependability/Reliability Bitner et al. (1994); Butler (1991); Egan (2001); Gabarro (1978); Jennings (1971); Lindskold (1978); Mishra (1996); Michell, Reast & Lynch (1998); Rempel & Holmes (1986); Robinson & Rousseau (1994). Consistency Altman & Taylor (1973); Butler (1991); Butler & Cantrell (1984). Product Quality and Safety Dwyer, Schuff & Oh (1987); Egan (2001); Gounaris & Venetis (2002); Martin (1998). Satisfaction Bejou, Ennew & Palmer (1998); Delgado-Ballester & Munuera-Aleman (1999); Garbarino & Johnson (1999); Michell, Reast & Lynch (1998); Selnes (1998). Reputation Anderson & Weitz (1992); Doney & Cannon (1997); Ganesan (1994); Jarillo (1988); Luhmann (1979); Schuff & Ozanne (1985). Confidence Anderson & Narus (1990); Barney & Hansen (1994); Garbarino & Johnson (1999); Golembiewski & McConkie (1975); Larzelere & Huston (1980); Luhmann (1979); Moorman, Deshpande & Zaltman (1993); Ring & Van de Ven (1992). Communications Anderson & Narus (1990); Gounaris & Venetis (2002); Keller (1993); Krishnan (1996); Michell, Reast & Lynch (1998); 62 Morgan & Hunt (1994); Muchinsky (1977); Selnes (1998); Swan & Nolan (1985); Yeager (1978). Service, Support and Conflict Egan (2001); Selnes (1998); Storbacka et al. (1994). Listening to Customers Jones & Sasser (1995). Prior Experience/History Berg et al. (1995); Bews & Rossouw (2002); Curran et al. (1998); Ganesan (1994); Gounaris & Venetis (2002); Rempel, Holmes & Zanna (1985); Rivald & Gronroos (1996); Scanzori (1979); Zucker (1986). Others' Experience Hart & Johnson (1999); Jarillo (1988). Table 2.5 - Scholarly links to trust/trustworthy dimensions and variables 2.8.1 Integrity Integrity is often listed as an important characteristic of trust (for example, Bews and Rossouw, 2002; Robbins, 1997). It is defined as, "the application of a set of moral and ethical principles, acceptable to both the trustor and trustee, which are predictable and reliable and which lead to equity" (Bews and Rossouw, 2002: 382). They view integrity as revolving around three concepts, consistency, reliability and fairness, which they argue adds the moral element to the concept. Mishra (1996) also refers to the importance of reliability, and in doing so combines consistency, dependability and credibility. Mayer, Davis and Schoorman (1995) list integrity as an antecedent of trust under which they include fairness, consistency and reliability. Others relate integrity with other virtues. Michell, Reast and Lynch (1998: 161), for example link it with probity (as do Coulter and Coulter, 2002) and equity. They suggest that equity pivots on trust being an implied contract with mutual expectations and perceived obligations (: 160). Such perceived obligations and standards of behaviour associate trust with responsibility (Bradach and Eccles, 1989; Madhok, 1995) and rights (Hosmer, 1995). Truthfulness (often termed honesty) and openness have long been linked to trust by many authors and are particularly relevant when discussing marketing and selling because of their roles in promotion, communication, and particularly in the balance of information supplied to customers and consumers (Bews and Rossouw, 2002: 382). Rotter (1971), Gahagan and Tedeschi (1968), and Schlenker, Helm and Tedeschi 63 (1973) pointed to the significance of honesty over 30 years ago and it is still being highlighted as a key issue influencing trust development (for example, Delgado- Ballester and Munuera-Aleman, 1999; Coulter and Coulter, 2002). Integrity has also been linked with openness, and both Hay (1999) and Butler (in Mishra, 1996: 266/267) have found empirical support to include openness as another important component of trust although some make reference to openness under benevolence (Mayer, Davis and Schoorman, 1995). 2.8.2 Benevolence Benevolence is defined as, "the extent to which one partner is genuinely interested in the other partner's welfare and motivated to seek joint gain" (Doney and Cannon, 1997: 36). This issue of concern or care for one another is another commonly mentioned facilitator of trust Common to many discussions on trust is the issue of opportunism especially where there are perceived to be vulnerable communities involved. Opportunistic behaviour is defined as, "self-interest seeking with guile" (Williamson, 1975: 6), and as such is "deceit-orientated violation of implicit or explicit promises about one's appropriate or required role behaviour" (John, 1984: 279). Morgan and Hunt (1994: 25) suggest that when a party believes that a partner engages in opportunistic behaviour, such perceptions will lead to decreased trust. Trust may also decrease through other less obvious abuses. Rich (2002: 219) for example, argues that the growth of technology, which seems to decrease people-skills in favour of e-mail, voice mail, web site analysis, and database mining, may adversely affect the trust of customers in their dealings with marketers and companies. If companies attempt to target children via special websites, some parents may view this as a means of opportunism, an attempt to bypass parental scrutiny or take advantage of their own technical limitations. On the other hand, if companies can demonstrate a transparency for not taking advantage, even when the opportunity is there (for example, through working with schools on curriculum projects), this can lead to greater trust (Dwyer, Schurr and Oh, 1987; Hill, 1990; Morgan and Hunt, 1994). Rather than limiting the issue of concern to that of not taking advantage of the vulnerability of another, concern can be expanded to include positive acts that are 64 undertaken in the interests of another (Bews and Rossouw, 2002). In building trust, it is essential for the trustee to show concern (Mayer, Davis and Schoorman, 1995), a balanced interest in the well-being of others (Mishra, 1996), and the value of respect and care for others (Smeyers, 1999; Baier, 1994). There has been much support in the literature for benevolence as a key determinant of trust (Strickland, 1958; Solomon, 1960; Mayer, Davis and Schoorman, 1995, Engelbrecht and Cloete, 2000). Others have linked benevolence with loyalty (Martins et al., 1997; Robbins, 1997), altruism (Frost, Stimpson and Maughan, 1978), and goodwill (Ring and Van de Ven, 1992). Michell, Reast and Lynch (1998) refer to benevolence under equity and link it to fair-mindedness, caring, sincerity, values and helpful advertising. In support of Michell, Reast and Lynch, other scholars have also mentioned the importance of shared values as a determinant of trust (for example, Dwyer, Schur-r and Oh, 1987: 21). According to Morgan and Hunt (1994: 25) shared values relate to, "the extent to which partners have beliefs in common about what behaviours, goals and policies are important or unimportant, appropriate or inappropriate, and right or wrong. " 2.8.3 Commitment Commitment has been defined as, "an enduring desire to maintain a valued relationship" (Moorman, Zaltman and Deshpande, 1992: 316), and it is often viewed as central to relationship building, implying that both parties will be loyal, reliable and show stability in the relationship with one another (Bejou, Ennew and Palmer, 1998: 10). It has also been suggested that commitment has an instrumental component of some form of investment (Gundlach, Achrol, and Mentzer, 1995), or sacrifice (Gundlach and Murphy, 1993). Trust and commitment have often been paired in RM literature, with few authors discussing the one without the other (Pressey and Mathews, 1998: 41). This may well indicate that, if one is missing, the relationship is unlikely to be more than a hands-off or transient arrangement (Egan, 2001: 94). Commitment does not just refer to behaviour however, but may also be concerned with organisation Is brand offering. This distinction is made by Coulter and Coulter 65 (2002) who identify both people-related characteristics that lead to trust and offer- related characteristics such as competence, customisation, and reliability. If companies wish to gain consumers' trust, they must therefore pay attention to the offer in terms of producing good quality, safe and effective products and services that are reliable and consistent. Reliability is seen as an important component of both trust and commitment (Michell, Reast and Lynch, 1998). Reliability relates to the firm having the required expertise to perform its business effectively and is emphasized through dependability, quality and consistency, and may be associated with high levels of predictability on the part of consumers as to the product or service they can expect (Egan, 2001: 93). This may be expressed through the inherent qualities associated with the corporate name or brand, or through guarantees and warranties issued by the company (Michell, Reast and Lynch, 1998: 160). The role of competence, ability and expertise as characteristics of trust are extensively featured in the literature and may be linked to commitment. Mishra (1996) and Robbins (1997) refer to the role of competency in determining levels of trust. Mayer, Davis and Schoorman (1995) point to the importance of ability that they define as, "that group of skills, competencies, and characteristics that enable a party to have influence within a specific domain" (: 717), while expertise is referred to by Hovland, Janis and Kelley (1953, in Mayer, Davis and Schoorman, 1995). 2.8.4 Satisfaction Satisfaction is, "a psychological process of evaluating perceived performance outcomes based on predetermined expectations" (Sheth and Sisodia, 1999: 80). Although some argue that trust leads to satisfaction rather than vice versa (for example, Bejou, Ennew and Palmer, 1998: 172), satisfied customers (those that have had a previous positive experience with a company) may be more trusting in future dealings. Therefore satisfaction can underpin trust. The link between trust and satisfaction is that they both represent an overall evaluation, feeling or attitude about the other party in a relationship (Selnes, 1998: 308). Michell, Reast and Lynch (1998: 160) suggest that satisfaction is not only developed through direct personal experience, but is also influenced by through opinion and the experience of peers. 66 They also believe it to be associated with the perceived standard of delivery and may well be dependent on the duration of the relationship. Michell, Reast and Lynch (ibid) consider confidence in a company, product or service as being essential for reputation and professional standing. Confidence comes from prior satisfaction but it also provides encouragement for consumers to try products for the first time (that is, before they are satisfied). Confidence stems from many sources but particularly from reputation. Reputation matters in building trust (Anderson and Weitz, 1989; Ganeson, 1994; Jarillo, 1988), as does familiarity (Luhmann, 1979), and having a strong corporate name (Schurr and Ozanne, 1985). Of particular importance is the historical trustworthiness of parties following previous interactions (Egan, 2001: 92) that should give many of the long-establi shed toy companies an advantage. Although individuals often manage trust, companies can trade on their previous trustworthiness (even if the person who was responsible for generating the trust initially has gone elsewhere) because it can be 'institutionally captured' by the organisation (Shepherd and Sherman, 1998: 437). It can take a long time to build brand reputation, professional standing and trust but they can be very quickly destroyed by ill-judged marketing campaigns, insufficient attention to product safety, or poorly-handled public relations for example, as many firms have found to their cost. Communications is another offer-related (organisational) characteristic that can lead to trust and satisfaction (Morgan and Hunt, 1994; Anderson and Narus, 1990; Selnes, 1998). Much of the literature focuses on the importance of communication where there is some direct form of contact/relationship between buyer and seller (for example Anderson and Weitz; 1989; Dwyer, Schurr and Oh, 1987), or between manager and employee (Whitener et al., 1998). These have highlighted the importance of accurate information, explanations for decisions, and openness (ibid: 517). Of the indirect methods of communication, advertising has probably been the most contentious ethical issue in the marketing to children literature (for example, Paine, 1996). However if advertising is open, honest and helpful, it has been argued that it can be a stimulant of trust (Swan and Nolan, 1985; Michell, Reast and Lynch, 1998). 67 Cumby and Barnes (1998: 58/60) suggest that satisfaction drivers operate at five levels: the core product or service, support services and systems, technical performance, elements of customer interaction and the affective (emotional) dimension service. They make the point that it is possible to get four things right but fall down on just one and thereby create a dissatisfied customer. This emphasizes the importance of critical episodes. These are, "episodes that are of great importance to a relationship and upon which the continuation is dependent" (Storbacka, Strandvik and Gronroos, 1994: 30). Critical episodes are customer specific, and even a routine issue (such as replacing a faulty product) can become critical if the expected level of service is not met (Egan, 2001: 100). These can therefore have a considerable affect on both customer satisfaction and trust in a relationship, and emphasise the need for good customer service back-up. Finally, Jones and Sasser (1995: 93) suggest that to manage satisfaction, it is important to listen to the customer, a common theme in much of the marketing literature. They propose that this is done through customer satisfaction indices (surveys), customer feedback (comments, complaints, and questions), market research (amongst customers, non-customers, and lost customers), front line personnel (such as the sales team), and through strategic activities (for example, actively involving customers in company decision-making). 2.8.5 Personality factors Research conducted by Bews and Rossouw (2002) indicates that personality factors also seem to have an impact on perceptions of trustworthiness. Martins et al. (1997) suggest that five personality characteristics will have some bearing on the formation of trust and may, either in isolation or in combination, retard or foster trust: 1. Agreeableness (good-naturedness, cooperativeness and courteousness); 2. Conscientiousness (persistency, determination, hard work, dependability and propensity towards achievement); 3. Emotional stability (being calm, enthusiastic, free from anxiety, depression and insecunty); 4. Extroversion (sociability, friendliness and talkativeness) and; 68 5. Openness to experience or resourcefulness (broadmindedness, creativity, imagination, artistic sensitivity and intellectual ability). Other emotional variables such as 'liking' have also been linked to having an impact on trust (Nicholson, Compeau and Sethi, 2001). Liking is believed to be a powerful human motivator for relationship development and maintenance. While generally the above factors relate to the personality of individuals and as such cannot be easily changed, they are important on those occasions when consumers may have direct contact with company personnel on issues such as direct sales, delivery and product availability, product queries and problems, servicing and repair issues, and complaints. The way this interaction is handled may have an important bearing on the strengthening or weakening of the trust that the consumer has with the company. Another issue to consider is whether an organisation can have a personality of its own and if so, whether this is important to consumers beyond the productibrand offering. Such personality may perhaps be expressed in the company's core values, its mission statement, its external communications or through its brands and brand values. Although aspects of personality discussed above may have some impact on consumers I trust, because of the limited direct contact between company and consumer, it is not considered to be a key predictor dimension in the conceptual model discussed in Chapter three. The importance of personality is however reflected through many of the linked relational, ethical and marketing variables such as shared values and a caring and responsible image, the consistency and quality of brands, the handling of critical episodes, and in any direct contact that does take place. 2.9 Summary The review has evaluated a broad literature relating to trust and trustworthiness in the business arena which are perceived to be both important virtues and assets for commercial organisations in providing a solid footing for competitive advantage, for healthy (and usually mutually profitable) company-consumer relationships, and for meeting the emotional needs of today's increasingly knowledgeable consumers. 69 Although trust appears at first to be a rather hazy and complex subject and one in which scholars have failed to agree a generally acceptable definition, set of dimensions or a form of measurement, there seems to be some consensus that it is an attitude, feeling, or emotion linked to character. A conceptual definition of consumer trust for the study has been proposed which reflects the importance of the ethical responsibilities of marketers, the need to consider the rights, interests and expectations of everyone in a community, and the significance of consistent, benevolent and honest behaviour. Different types and levels of trust exist and young children appear to trust naively in brands and commercial organisations although probably not comprehending either the meaning of trust or marketing intent. Parents trust less easily, particularly when purchasing products for their children, despite a natural tendency in human beings to trust. Companies should therefore view trust development as a strategy that needs to be continually encouraged, developed, and monitored as well as something worthy, pursued for its own sake. Whilst trust is highly desirable for companies' relationships with their consumers, it appears complex and time consuming to foster and can be easily broken by one wrong action, at one point in time. Hence trust is not merely a desirable option in building consumer relationships and loyalty, but can be viewed as a vital survival strategy in consumer retention. Company-consumer trust appears to have underpinnings in a number of theoretical areas but most importantly in ethical theory and organisational theory. In ethical theory, trust and particularly trustworthiness carries both moral duties and responsibilities and relates to right, just, and fair behaviour of both individuals within companies and of the companies themselves as entities. Key responsibilities relate to integrity - the need for equity, honesty, and openness; and benevolence - the obligation of due care, to look after, to avoid harming, and to not taking advantage (of vulnerability). Vulnerability is of particular importance in this study not only because of young children's undeveloped cognitive abilities and limited consumer knowledge and skills, but because many parents in children's markets may also be vulnerable as consumers due to changing lifestyles and the continuing tactic of targeting parents' financial resources through their children's influence. 70 Organisational theory is particularly relevant to building trust through its emphasis on the commitment to and satisfaction of consumers, and what is 'efficient', 'effective', and 'practical. ' For consumers to trust in a company or brand, there needs to be a fulfilment of expectations in both the total product/service offer as well as in the behaviour of those making the brand promises and espousing the company values. Considering its importance, there are surprisingly few contributions in the literature that focus on company-consumer trust or the related fields of relational trust and brand trust. Those that have been identified are valuable but tend to be exploratory, sometimes incomplete, and often appear substantiated on the findings from unfocused samples. Rarely is trust examined from both the trustor's and trustee's perspectives or explored in more depth through qualitative inquiry. By scanning the broader literature however and drawing particularly on the work of Michell, Reast and Lynch, it has been possible to identify and link a range of trust dimensions and variables that are consistently mentioned in the business trust literature and these are incorporated into the conceptual framework now discussed in Chapter three. 71 Chapter 3- Development of the Theoretical Framework 3.0 Origins of the theoretical framework and propositions This chapter builds on the knowledge gained in the literature review and, using a synthesis of trust concepts, links and theories, proposes a conceptual framework considering organisational trust/trustworthiness as a process starting from its antecedents, the factors that influence its development, through to the dimensions and variables that are integral to its implementation, and leading to its outcome in terms of a parental purchase, repurchase or recommendation decision. A number of research propositions are made which draw attention to important issues to be examined within the scope of the study. Propositions are defined by Miles and Huberman (1994: 75) as, "connected sets of statements which help formalise and systematize the researcher's thinking into a coherent set of explanations". The validity of the propositions will be evaluated during the analysis (in Chapter six). The link between the aims, propositions, research questions and research methods is discussed further in Chapter four. 3.1 Structure of the conceptual framework The design of the conceptual framework is adapted from the structures of two models proposed by Whitener et al. (1998: 519) and Michell, Reast and Lynch (1998: 161) and is shown in Figures 3.1 and 3.2. The focus of Whitener et al. 's model was to identify the antecedents that affect managerial trustworthy behaviour supported by social exchange theory and their paper concerned the trust between manager and subordinate in an organisation. They identified three main sets of components that influenced behaviour - organisational factors, relational factors and individual factors - and proposed that trustworthy behaviour was manifested through behavioural consistency, integrity, the sharing and delegation of control, communication, and the demonstration of concern. Although beyond the declared scope of their work, they also introduced the notion of boundary 72 Figure 3.1 - Antecedents and Dimensions of Trustworthy Behaviour (adapted from Whitener et al. 's 'Exchange Framework of Initiating Managerial Trustworthy Behaviour, 1998) ANTECEDENTS Organisational Factors Company Values And Culture Competitive Pressures Shareholder Influence Recognition of Child Vulnerability & Parental Concerns Corporate Strategy Relational Factors Company History & Reputation Prior Experience & Satisfaction Experience of Others Consumer Expectations Costs & Risks of Exchange Influence of Company Founder, CEO or Head of Marketing Company Pressure Personal Ethical Standards/Behaviour/ Actions Marketing Strategy Branding Factors Tactical Decisions: Targeting Product Service Pricing Communication Distribution TRUSTWORTHY DIMENSIONS OF THE TOY COMPANY (See Figure 3.2) Integrity Benevolence Commitment Satisfaction Consumer Boundary Conditions to Trust Educational/Fun Value Cost & Value for Money Influence of Promotion influence of Child, Friends or Others Positive Prior Experience/Satisfaction Consumer's Propensity to Trust/ Risk Behavioural Expectations PARENTAL DECISION TO PURCHASE9 REPURCHASE OR RECOMMEND THE BRAND AND/OR THE COMPANY Control Factors Individual Factors Industry Codes & Standards National & Regional Lecyislation Professional Codes Stakeholder influence (Media, Consumer Groups) Societal Expectations Consumer Boundary Conditions to Mistrust Negative Experiences of Self or Others Negative PR Toy Concerns (e. g. Safety, Taste, Anti-social Behaviour, Poor Value) 73 Figure 3.2 - Dimensions of Consumer Trust (Adapted from Michell, Reast and Lynch Model of Postulated Correlates of Trust, 1998) Predictor Dimensions INTEGRITY Ethical Constructs [BENEVOLENCE COMMITMENT Marketing Constructs Linked Relational Variables SATISFACTION Equity Honesty Fairness Probity Responsibility Openness Showing Concern, Care, & Sensitivity Sincerity Shared Values Not Taking Advantage Competence Expertise Ability Dependability/ Reliability Consistency Product Quality/Safety Reputation Confidence Communications Service, Support & Conflict Handling Listening to Customers Prior Experience Others' Experience / 74 conditions, recognising that while trustworthy behaviour is necessary, it is insufficient in influencing employees' perceptions of trust because of a number of boundary conditions that exist. In similar vein, this conceptual framework identifies both important antecedents to trustworthy behaviour and dimensions of trust that may lead to toy purchase, repurchase and recommendation decisions, but it also recognises that, as trust is a two-way process, the trustworthiness of a company is insufficient to translate into a purchase decision because of consumers' boundary conditions to trust or mistrust. Because trust is such a personal and emotive phenomenon, companies may find it difficult to positively influence some of these conditions. The trust dimensions aspect of the framework builds on Michell, Reast and Lynch's Model of Postulated Correlates of Trust (1998). As discussed in Chapter two, they identified twenty-two variables associated with trusting behaviour that they grouped under four dimensions, two relating to behavioural aspects (probity and equity) and two to cognitive elements (reliability and satisfaction). In this proposed framework, four dimensions are also proposed with appropriate variables drawn from an extensive review of the literature. The dimensions are divided between what are deemed ethical constructs (those that predominantly have moral foundation) and marketing constructs (those predominantly have organisational/marketing basis). Ten of the variables used in the Michell, Reast and Lynch model are included in the new framework. 3.2 Antecedents to trust. Antecedents are the factors that precede the development of trust and influence it (Moorman, Deshpande and Zaltman, 1993). The conceptual model identifies a number of important antecedents that lead to trustworthy behaviour and these are grouped under organisational, individual, relational, branding, and control factors. The Whitener et al model (1998) emphasised the importance of organisational. factors, individual factors and relational factors as antecedents of trust. These overlap with Hunt and Vitell's 'theory of marketing ethics' (1986, and its later revision, 1991), which suggests that in tackling ethical dilemmas and decisions in marketing, the professional, industry, organisational and cultural environments are all significant as are the personal characteristics of individuals. 75 Hunt and Vitell also point to the impact of controls in ethical marketing such as the legal system, and industry, professional and companies' norms and codes. The importance of social mechanisms such as the legal system in influencing trust has long been recognised. Weber (Eisenstadt, quoted in Bluhm, 1997: 334), for example, argued that such mechanisms were designed to "guarantee or secure trustworthy behaviour". While regulation is unlikely to totally eliminate untrustworthy corporate behaviour, this is considered to be an important area for a consumer trust model where a vulnerable population such as children is involved and where such vulnerability might lead to opportunities for unscrupulous companies to exploit without adequate controls in place. Finally, Michell, Reast and Lynch (1998) point out that the variables selected for their model were derived from the academic literature and were not therefore necessarily the variables that consumers would choose. They suggest that it would have been useful to have included more branding variables, "given the increasing use of the branding aspect of marketing strategy by organisations seeking to engender trust among their customers" (: 169). As an important part of the trust relationship between toy company and parent is through the brand rather than through direct interaction, the branding aspects are an essential construct in the model. Consideration will now be given to the components of each set of antecedents. 3.2.1 Organisational factors It has already been discussed in Chapter two that companies have certain moral responsibilities, recognition of which is often visible in the corporate culture and values of the business. These values should both feed into the organisation's business and marketing strategies, guide employees' decisions and behaviour and be regularly publicised so that customers and consumers are aware of what the company stands for (Fisher and Lovell, 2003). As building trust is also a strategic choice and can therefore be positively encouraged, the companies' business strategies and corporate behaviour along with their values and culture are likely to be important factors in contributing towards their perceived trustworthiness, providing they can demonstrate that such values' statements are not empty words but are genuine heartfelt beliefs that permeate 76 the organisation and can be seen in practice through policy decisions and appropriate behaviour. In markets where vulnerable consumers are directly or indirectly involved, a particularly important moral responsibility would be the concern and care for such consumers. In the toy industry, this might mean paying particular attention to aspects such as product safety, to the provision of clear and accurate communications and promotions in appropriate language, and to recognising children's limitations but without taking advantage of them. Caring might also be demonstrated through understanding the role of parents in choosing and buying the right toys for their child, in appreciating their concerns about toys and toy marketing, and in recognising the pressures that many parents feel when child-focused marketing activities lead to requests from children for toy products. This leads to the first research proposition: Research Proposition I- In building consumer trust, toy companies and the toy industry in general, should be more proactive through their marketing activities in demonstrating their concern and care for consumers and acknowledging their responsibilities. Finally, the trustworthiness of organisations is likely to be influenced by both market pressures and the influence of shareholders. However philanthropic the organisational values may be, companies are under pressure to continually improve profits for shareholders. At the same time, consumer markets are highly competitive and subject to the economic swings of prosperity. This leads to pressure on companies and individuals managers to sometimes choose the expedient rather than the right action. How toy companies respond to the challenges facing them (as highlighted in Section 1.3.1) may therefore be important in influencing their behaviour. 3.2.2 Individualfactors Individualists such as Velasquez (1982) insist that, as moral agents, responsibility for ethical decisions lies with human individuals (or the managers of business) rather than the organisation: "An employee assumes some measure of moral responsibility by agreeing to abide by an organisation's rules and standard operating practices" (Dibb et al., 1994: 624). Many managers have the autonomy to make individual decisions that 77 can influence the company's perception and trustworthiness. A marketing manager in particular can make strategic decisions that can impact on trustworthiness positively (for example, introduce a 'care in the community' programme) or negatively (engage in price-fixing with intermediaries). A number of writers have suggested factors that might influence a manager's ethical decision-making and behaviour. These generally fall into four categories: personal factors, inter-organisational factors, issue-related factors and extra-organisational factors (Kavali, Tzokas and Saren, 1999). Personal factors influencing behaviour include, for example, cognitive development (Ferrell and Gresham, 1985) and personal experiences (Hunt and Vitell, 1986); influenced through education (Brenner and Molander, 1977); family (Laczniak and Murphy, 1993), religious upbringing (Laczniak and Murphy, 1993); gender (Gilligan, 1982); culture (Armstrong and Sweeney, 1994); and management position (Fritzsche, 1988). Individuals' decisions may also be influenced by corporate pressures such as the need to meet sales or profit targets to reach conunission levels, to enhance promotion prospects, or even to maintain job security. A number of marketing authors (for example, Westing, 1967, Pruden, 197 1) have argued that it is the individual at the top of the organisation who sets the ethical tone. A study by Baderacco and Ellsworth (1989) found that strong personal ethics emerged as a dominating trait of good leadership while Weaver and Ferrell (1978) argued that top management must assume at least part responsibility for the ethical conduct of marketers within their organisation. Bibb and Kourdi (2004: 63/71) have identified a number of features of trusted leaders. These include having clear values, creating an atmosphere and expectation of trust, taking responsibility, being honest and open, being credible and consistent, trusting others, having the organisation's and employees' best interests at heart, having integrity, and using their power positively. However they believe that, although most leaders would probably say trust is important, few in practice think about it very much or do anything conscious about it. The power and influence of those leading organisations and marketing functions may or may not therefore be significant in developing trust in both a company and brand. 78 3.2.3 Controlfactors Since the 1960's, fuelled by the Consumerist Movement, a wide range of regulations and industry codes in areas such as product safety, fair pricing and honest advertising have been introduced in the USA and within European countries to protect the fights of consumers from possible exploitation by powerful suppliers in the marketplace. In markets where products are targeted at children, controls have been particularly tight. Sweden, for example, bans all advertising on national television to children under 12 years of age and Greece severely restricts the television and radio airing of toy advertising. The toy industry in the UK also appears to be tightly regulated with extensive toy safety legislation and specific controls on television advertising laid down by the Independent Television Commission (ITC)7 within the directives of the European Union (see Appendix 11). Such regulation should generate some consumer confidence and trust in the toy industry although it should be recognised that many consumers may be unaware that these special provisions exist. In addition to national and regional controls, the toy industry bodies within Europe (who jointly form an interest group named 'Toy Industries of Europe') attempt to encourage best practice in the production and marketing of toys, and the behaviour of their members. BTHA membership requires companies to conform to a code of practice in selling and marketing toys to meet the safety standards for the industry and to implement an ethical code in their manufacturing. Again it is posited that compliance with such industry codes should positively influence the trustworthiness of toy companies. Several authors have pointed to the growing importance of consumer's attitudes towards the ethical conduct of companies and their impact on purchase decisions (for example, Creyer, 1997: 421). It seems that the expectations of today's society mean that companies can no longer ignore the need for a moral conscience. As Sternberg (1994: 19/20) warns: "When the underlying ethical questions are ignored, it is not usually the problems but the business that goes away. " 7 The ITC has since 2003 been superseded by Ofcorn as regulators of television commercials. 79 Consumers are not the only stakeholders who might influence the moral and trustworthy behaviour of companies. It has already been noted in Chapter one that the media can influence an industry or company negatively. In the same way, the media can provide positive comment through stories of toy success, innovations, awards, charitable deeds, and so on. Other key influencers may be consumer and pressure groups who can also spread both positive and negative word. It is important not to ignore these groups, as many are particularly vocal about industries targeting children and appear adept at obtaining publicity (for example, the Consumers Association, the Children's Society, and Friends of the Earth). Finally, although there is some limited direct selling between toy companies and consumers, most sales are channelled through retailers. As retailers have the day-to- day contact with consumers and carry out the negotiation at point of sale, they may play an important role in promoting the trustworthiness of particular companies and brands. The importance of these stakeholders leads to the second proposition: Research Proposition 2- Although toy companies can create andfoster consumer trust though their own behaviour, trust in toy brands is also strongly influenced, both positively and negatively, by a range of other key stakeholders and contextual factors. 3.2.4 Relationalfactors It was highlighted in Section 2.7.1 that trust is a fundamental relationship building block and one that is included in most relationship models (Wilson, 1995), despite the broad ranging debate about what constitutes 'trust' and what a 'relationship' is in a business context. A mutually satisfying relationship between company and consumer can impact on the consumer's trust in the company and/or its brands, particularly as the relationship develops over time, although the level of trust and the time period involved may be difficult to quantify. Nevertheless, the consumers' prior experience and satisfaction with a company and/or its brands are likely to influence their perception of trustworthiness and this may be particularly positive if the parent had happily played with the toy when he or she was young. 80 It has been pointed out, however, that trust can also be present at the start of a relationship (Berg, Dickhaut and McCabe, 1995) and that a relationship between buyer and seller can develop at an even earlier stage when the buyer may still be a prospect (Egan, 2001). When a consumer buys a brand for the first time, he/she is demonstrating some trust in it. This leap of trust may have been influenced by a number of factors including prior advertising, packaging, point of purchase materials, the product features, the price, or other brand building activities. Another powerful leverage on initial trust may be the influence of other satisfied consumers, and word- of-mouth promotion has been seen to contribute to trust (Ranaweera and Prabhu, 2003). A further influence, particularly at first purchase, might be the company history and reputation. In the toy industry, a particular feature is the number of toy companies that have been established for over sixty or seventy years (for example, LEGO, BRIO, Fisher-Price, Zapf Creation, Mattel, and Hasbro). The branding activities over such a length of time are likely to have created broad name awareness and a certain (usually positive) reputation. As today's consumers have become more demanding, so their expectations about products, service, and company behaviour have increased. Whilst many consumers are likely to have different sets of requirements, consumer demands for better value for money and for appropriate corporate ethical behaviour have already been noted. Even when consumers purchase a lower priced brand, they still expect'a minimum standards in terms of factors such as product safety, quality, durability and so on although trust in a lower priced brand might not be as significant as the financial risk being taken is not so great. Identifying and responding, where possible, to such expectations is therefore important for organisations and is likely to have an impact on their trustworthiness. Although some scholars have alluded to an imbalance of benefits in a relationship between a company and its customers/consumers - that is, there are more gains for the company than consumer (Brown, 1998) - in the toy industry, where young children are the main users, parents are likely to need assurance and to have confidence in the toy brands they purchase, particularly with regard to safety. The introduction of more sophisticated technology in a number of new toy products has led to a greater number 81 of higher-priced items in the market8 and consumers also need to trust in the performance and value of such expensive toys. There are therefore benefits for consumers in developing relationships with toy companies they can trust and this leads to proposition three: Research Proposition 3- Trust is a vital ingredient in a company-consumer relationship and high levels of trust between the parties can lead to a range of benefits for both sides. 3.2.5 Brandingfactors Because most toy sales are sold through intermediaries (retailers and wholesalers), limiting the opportunities for personal contact between the toy company and consumer, the toy brand takes on greater significance in building a trusting relationship. Toy companies therefore invest a great deal of resources in creating a strong and solid identity, profile and image of itself and/or its products, loaded with positive qualities (Svensson, 2001: 434). Morris and Martin (2000: 81) argue that engineering and nurturing strong consumer-brand relationships in the toy industry is in the marketers' best interest because such relationships imply greater satisfaction and trust leading to higher purchase volumes and brand loyalty. The proposed conceptual model is based on the development of trust between toy companies and parents rather than between toy companies and children. The targeting of children directly has raised controversy and where parents feel companies have taken advantage of children, there may be some mistrust in any relationship with these companies. The types of toy product sold may also be a trust-related factor. There has been a growth trend in educational toys in the UK over the last decade that develop children's skills and knowledge. The rapid rise of companies such as Leapfrog (see Appendix IV) is testament to this. Companies offering such products may be more trusted because these products often have parental messages about child development gains attached to them. On the other hand, there has been critical comment in the 8 The top-selling toy in the UK for 2004 was a toy robot, Robosapien (Character Options), that retails for approximately E70. 82 media about toy guns and other toys and games that involve violent play which some claim might lead to unsocial behaviour. Whilst scientific research has not proven a link between violent toys and play and unsocial behaviour (Goldstein, 1999), there does appear to be some parental concern on this issue that has led the BTHA to produce a special consumer leaflet on the subject in an attempt to allay fears (Roland Earl interview - 30.09.02). The price or perceived value of brands may additionally influence consumers' perception of trustworthiness. If a company Is products are perceived as offering good value, whether in terms of 'value for money' or in terms of 'play value' (the pleasure gained from the toy, the learning benefits, how often it is played with, and so on), consumers are more likely to trust new lines and ranges that the company introduces. The challenge facing the toy industry is that, in trying to offer consumers value for money, most companies have to manufacture in low tabour cost economies and commonly use plastic, often considered a cheap material. Consumers now expect toys to be good value and the average selling price of a toy is only f-8.20 (BTHA Handbook, 2004) and falling. This means that to justify a high price, toys must demonstrate significant added value. Toy companies use an integrated mix of promotional tools to reach their target markets. The larger companies still use television advertising as the key means of reaching the mass market9 although the proportion of marketing budget spent on television is slowly falling in favour of newer techniques such as special web sites for key brands, collector clubs, local community activities, schools promotions, point of purchase materials, and direct (one-to-one) marketing activities (Brian Ellis interview - 11.12.02). Although children's television advertising still has its critics, the detailed ITC codes have led to few complaints about toy commercials in recent years. Less regulated are some of the newer and arguably subtler techniques used to create brand awareness and loyalty amongst children such as the Internet and in-school marketing. The use of promotion techniques and convincing parents that they are acting openly and honestly in putting over their messages may be important influences on toy companies' perceived trustworthiness. 9 Mattel, the largest toy company in the UK, still spends more than 75 per cent of its marketing budget on television advertising (Toys'n'Playthings, September 2002,21 (12): 44). 83 Finally, the availability of some toy products has been problematic in the past when toy companies have misjudged the popularity of a new line, resulting in toy rationing, queues forming in shops to buy limited stocks, and disappointed parents and children on Christmas Day. While predicting demand in fashion markets is not easy, consumers expect product to be widely available, when they want it. If companies do not have adequate monitoring and distribution systems in place and run out of stock, not only might they lose a consumer to a rival but trust in that brand may be diminished. The branding aspects discussed above normally fall within the remit of the marketing function. Although the corporate values and image may also impact on brand decisions, many of the day-to-day brand decisions about target markets, products, prices, promotions and distribution are made by the marketing managers/directors and these have a direct influence on consumer trust. This leads to the fourth proposition: Research Proposition 4- Marketers, in particular, have the opportunity to play a key role in determining the levels of brand trust between the company and its different consumers. V- 3.3 Trust dimensions The conceptual model postulates that trust is related to four main correlated dimensions termed 'Integrity', 'Benevolence', 'Commitment', and 'Satisfaction' (see Figures 3.1 and 3.2), the first two being linked to ethical constructs and the second two to marketing constructs. Within each dimension, key related descriptor variables are proposed which have been drawn from a review of the literature (discussed in Section 2.8). The dimensions have been selected as they have been used and linked in other trust models and they appear to neatly draw together highly relevant trust variables from both ethical and marketing perspectives. This leads to the fifth proposition: Research Proposition 5- Trust in consumerlbrand relationships is determined by both ethical and marketing constructs. 84 The dimensions have also been chosen with the specific research context in mind. For example, the emphasis on benevolence and caring (bearing in mind the vulnerability of children) and the emphasis on integrity (fairness, openness and honesty) in marketing to children and on recognising and accepting moral responsibility. The initial stakeholder interviews identified that, apart from the pre-school market, most toy companies use their marketing budgets to primarily target children rather than adults. Companies are however aware that in many cases, if the toy sale is to be made, they must also gain parental approval and to help them understand parental motivations syndicated research studies are available. A 2002 BMRB/Mintel survey, for example, identifies the ten most influential factors in parental toy purchase decisions (see Table 3.1): Mos Influential Factors I= Most Important Toy safety Educational value Price Durability of the toy Well designed Toy the child specifically wanted The brand/manufacturer's name is well known The toy was unlikely to go out of fashion in the near future It wa a toy you could add to or buy accessories for (for example, LEGO or Barbie) It wa a toy suitable for various age groups Table 3.1 - Most influential factors for consumers in purchasing a toy (Source: BMRB/Mintel, 2002) The survey also notes that low down in terms of factors was that the toy was advertised on television or that it was the latest craze. This is perhaps explained because the advertising messages are aimed at children and it is children who create the crazes. This may have influenced factor six. 85 Such studies may also have encouraged companies to focus more on the tangible elements of the marketing offer such as safety, price, and quality that can contribute to trust. Less explored are the more intangible, emotional factors that might exist in the purchase decision and that might distinguish the more trusted brands. Proposition six is therefore: Research Proposition 6- Toy companies have tended to focus more on the tangible marketing factors of their brand offering than on the more intangible emotional and moral elements. 3.4 Consumer boundary conditions It was argued in Chapter one that a trust model which only examines trust or trustworthiness from one perspective, either the trustee's or trustor's, is likely to be incomplete but that there is likely to be some incompatibility between what companies and consumers look for in, and get out of, a trusting relationship. The dimensions in the conceptual framework have been selected from contributions in the literature and it is believed that many of these have relevance for both company and consumer perspectives. However, as many of the models analysed were founded on empirical studies using managerial rather than consumer samples, it is important to consider trust from the consumer perspective to identify what factors (experiences, emotions, and expectations) might influence their trust in a toy company or brand and how these fit with the proposed dimensions. This is particularly necessary as there is evidence that consumers are becoming more cautious, more exacting, and more resistant to marketing (Smith, 2004), making trusting relationships even harder to achieve through traditional means of brand communication. Parents are faced with a bewildering choice of toy products at different price points. Some of the branded companies and products are familiar to them from their own childhood and this prior experience and satisfaction/dissatisfaction undoubtedly adds to their trust or mistrust in these particular items, as can more recent purchase experiences. Companies can positively enhance this experience through product quality, innovation, design, and consistency, through the level of customer service, and the handling of critical episodes for example, but there are also influences beyond 86 their control. The child might not appreciate a product purchased by the parent, a toy may be abused and broken, or a parent might misread the instructions, all leading to a negative experience. Many products have unfamiliar brand names in the toy industry where companies tend to promote individual rather than company brand names, and parents and other consumers have to decide whether to risk purchasing them for the first time. Recommendations from friends, toy awards and even the reputation of the retail outlet stocking the product may help allay some of their fears but consumers' propensity to risk or trust will vary and may be also influenced by other factors such as the cost of the product, its design and perceived safety, quality, and play value. The propensity to take risks is probably lower when young children are involved as recipients. Society today seems to be obsessed with fears, whether proven or not. Reports that around 120,000 children every year are injured by toys in the USA (Jacobs, 2001) as well as concern over sugary or fatty foods aimed at children, radiation from mobile phones, and a host of other current issues highlighted in the media contribute to this sense of wariness and a general belief that all companies targeting the children's market are paly interested in their margins. Parental attitudes towards certain products may also differ. Some are drawn to educational products, as previously mentioned, or are strongly opposed to character licensed or fun brands. Fathers may be more tolerant than mothers of toys that lead to more aggressive play patterns. Parents may have different attitudes to what they consider value for money or what constitutes play value. Some parents' trust may be influenced (positively or negatively) by their child's strong demands and desires for a brand, whilst others may be more inclined to trust or mistrust brands they have heard about through promotional activity or publicity. Reast (2003) has also demonstrated that females tend to exhibit higher levels of trust in consumer brands which may also be significant in a market where mothers are the predominant buyers. Consumers seem to be becoming increasingly aware of their own power in competitive markets and companies need to be mindful of their opinions or they may go elsewhere. Many consumers these days expect brand owners and distributors to not only keep their brand promises in supplying products and services of good quality and 87 value, but also to demonstrate a morally and socially responsible attitude in conducting their business whether it be through their marketing behaviour, their production processes or local community work. Studies have found, for example, that the ethicality of a firm's behaviour is an important consideration in a consumer's purchase decision and that they are prepared to reward ethical behaviour by paying higher prices for a firm's products (Creyer, 1997: 426). This is also demonstrated by the increasing sales of 'Fair Trade' products. What Creyer also found was that although consumers would still buy from a company they considered unethical, they would only do so at a lower price, which in effect punishes the unethical act. The consumer's perception of how responsibly toy companies target and market their brands to children may therefore be a key influence on the level of trust that develops. This leads to proposition seven: Research Proposition 7- Parents and other stakeholders expect organisations marketing to and through children to act in a morally responsible way and to be mindful of children's vulnerabilities. 3.5 Summary In competitive markets, where differentiation of product and service is often minimal, companies need to strive for every scrap of advantage. A trusted brand and a trusting consumer relationship own many such advantages - customer loyalty, personal recommendation, price premium, enhanced asset value, and favourable publicity, amongst others. In the fashion-orientated toy industry, many brands are on the market for such a short time that it is often difficult for consumers' experience of the product to build up significant trust. If trustworthiness was therefore developed more in companies themselves rather than in individual brands, such trust might add value to the whole portfolio. A trusted brand would then be, as Basu (2000) suggests, a composite of both experience (looking back) and expectation (looking forward). Following an analysis of the consumer and business trust literature in Chapter two, a conceptual model of consumer trust is proposed which will be qualified and developed further in the light of findings from the primary research. Key influences on a trusting relationship were considered from both the company and consumer 88 perspectives and consideration was given to other stakeholders who might influence that trust in some respect - Retailers, legislators, the media, and consurner/pres sure groups were identified as having a potentially significant impact. A number of variables were identified from the literature and grouped under four key dimensions, two relating to predominantly moral behaviour and decisions, and a further two to marketing and management behaviour and decisions. Where empirical research has been conducted in other studies to support or develop consumer trust theory, a quantitative approach has almost always been taken. Whilst these have attempted to evaluate or rank trust factors in terms of perceived importance and/or to measure against hypotheses, few studies have attempted to explore in any depth through qualitative research how companies strive to gain and manage trustworthiness with their end market, or have sought to understand consumers' underlying purchase motivation, in particular their deeper psychological needs, emotions and moods beyond the basic product/service offering. From a philosophical perspective, trustworthiness is often considered a virtue, something all companies and individuals should strive for in a 'good' society. As trust also concerns relationships, this brings ethical issues of rights, responsibilities, due care, and vulnerability to the fore. Surprising few of the consumer trust contributions reviewed have given prominent consideration to its moral dimensions. This is not to say that morality is the only foundation of trust nor that morality and trust should be treated the same - "Trust is not a moral elixir" (Brenkert, 1998a: 199). Rather, trustworthiness in a company should be a transparent recognition and reflection of its social and moral duties, responsibilities and considerations in marketing to customers and consumers. Having developed a conceptual framework, the next stage in the theory-building process was to explore trust development in the practical context. The following chapter discusses the methodological approach, research design, and sampling strategy adopted to obtain rich data from the case participants, and how these data were analysed. 89 Chapter 4- Research Methodology 4.0 Introduction This chapter is divided into two main parts. Part A discusses the research process and the rationale for how the research was conducted, the overall strategy adopted, and the design and techniques used. It also considers how far the methods provide a basis for the issues of generalization, validity, reliability and objectivity. Part B then focuses on the techniques selected to analyse and present the data. The choice of positivistic or non-positivistic approaches to research gathering and analysis has been the subject of considerable debate in the social sciences for many years and is one of the first considerations for any research study (Silverman, 2000). Whilst some social scientists still regard quantitative research as the 'gold standard' to which all researchers should aspire (ibid), others have argued that the qualitative research approach, or a combination of qualitative and quantitative, should be the preferred method of probing and understanding the difficult area of organisational behaviour and decision-making (for example, Liedtka, 1992). The strengths and limitations of the qualitative research paradigm are discussed in more detail in Section 4.3.1. The chapter argues that the choice of a qualitative research strategy is the most appropriate for meeting the research aims and addressing the propositions, based around a case study of the toy industry and the personal interview and focus group methods of data collection. The qualitative approach is interpretivist in favouring an emphasis on the ways in which individuals interpret their social world over the practices and norms of positivism and the natural scientific model. Ontologically, it is constructionist, embodying a view of social reality as, "a constantly shifting emergent property of individuals' creation" (Bryman and Bell, 2003: 25). It is recognized that the qualitative approach has weaknesses but that no other available research method is without limitations. Compromises have had to be sought and challenges overcome. Careful consideration has also had to be given to securing managerial and organisational. co-operation, the potentially sensitive nature of the topic of trust, and the time and resources required when there are multiple units of analysis. 90 Being aware of the particular criticism of the qualitative approach concerning inferences drawn from small samples, a coding approach has been used to analyse the raw data, using NUD*IST Vivo software. This has classified the data into common themes (via tree nodes) linked to the conceptual model and propositions with relevant quotations then attached to each theme. The benefit of using this method is that there is more transparency in the data showing how the conclusions have been reached and providing a clear audit trail. The author's approach is most akin to that of the social anthropologist with an interest in behavioural regularities, everyday situations and relationships (Miles and Huberman, 1994). As Van Maanen (1979, in Miles and Huberman, 1994: 8) puts it, the prime analytical task for the social anthropologist is, "to uncover and explicate the ways in which people in particular (work) settings come to understand, account for, take action and otherwise manage their day-to-day situation. " Social anthropologists are also concerned with the genesis or refinement of theory that may start with a conceptual framework which can then be tested, refined or qualified from fieldwork findings (Miles and Huberman, 1994). 91 Part A- Research Process and Design 4.1 The research design "Without theory, research is impossibly narrow. Without research, theory is mere armchair contemplation" (Silverman, 2000: 86). A research design is the logic that links the data to be collected (and the conclusions to be drawn) to the initial questions, aims and propositions of the study (Yin, 2003). In deciding upon an appropriate strategy for the research, the first step was to evaluate the different epistemologies to select an approach most likely to provide sufficient valid data to meet the theory-building aims of the thesis. The design has been influenced by a number of other factors. These include previous empirical work and model building in the academic literature on consumer trust and recognition of its limitations and the knowledge gaps, as discussed in Chapter two. It has also been guided by comments, suggestions and criticisms made by the academic communities at Brighton and Brunel Universities and from feedback to papers presented at the European Business Ethics Conference (PhD symposium) in Brussels in August 2002 and at the Academy of Marketing conference at Aston University in July 2003 (Hogan, 2003). Additionally, ideas were shaped following initial stakeholder interviews with representatives from the British and European toy industries and from the researcher's prior work experience as a consumer-marketing manager. The research design framework selected is based around a process suggested by Sekaran (2000), with some minor adaptations (see Figure 4.1). The changes were considered necessary as the original framework appeared to be more appropriate for a quantitative approach. The order of some of the design process has been changed and an extra consideration relating to ethical issues in the research process added. 92 Figure 4.1 - Research Design Framework (adapted from Sekaran, 2000: 122). 4.2 Purpose of study and theoretical foundations In designing an appropriate methodology, it is important to consider the aims and research propositions as well as the theoretical underpinnings of the research (Bryman and Bell, 2003). Any scientific finding is usually to be assessed in relation to the theoretical perspective from which it derives and to which it may contribute (Silverman, 2000). Whilst the discovery of new facts is never unimportant, they are always "subsidiary to theories" (ibid: 75). There is some debate about what constitutes a theory but this research adopts the following definition by Kerlinger (1973: 9): "A theory is a set of interrelated constructs (concepts), definitions and propositions that present a systematic view of the phenomenon by specifying relations among variables, with the purpose of explaining ... the phenomenon. " Silverman (2000) describes theories as 'self-confirming' in the sense that they instruct us to look at phenomena in particular ways, arguing that they can never be disproved but only found to be more or less useful. It is the researcher's responsibility therefore to ensure that he/she is developing theory from regular observations, comprised of 93 reliable and valid data that allows for the deduction of some unknowns and is parsimonious enough to avoid any situation 'bearing out' the theory (Eckstein, 1992). The methodology used for this research takes a 'theory-first' approach whereby theory is developed via a 'deductive strategy' with the researcher identifying, "some orienting constructs and propositions to test or observe in the field" (Miles and Huberman, 1994: 155). This option is preferred to a 'theory-last' or inductive approach where theory emerges purely from grounded data. Miles and Huberman suggest that the development of a conceptual framework at the outset of the research which graphically explains the main issues to be studied - the key factors, constructs or variables and the presumed relationships among them - can be useful in giving the research some direction, at least in the early stages. A conceptual framework is, "the researcher's first cut at making some explicit theoretical statements" (: 91). Whilst Wolcott (1982: 157) suggests that there is merit in open-mindedness and a willingness to enter a research setting looking for questions as well as answers, he also argues that it would be impossible to embark on research without some idea of what one is looking for and foolish not to make that quest explicit. The conceptual framework (discussed in Chapter three) therefore provides guidelines to the fieldwork questions. In this thesis, the framework is theory-driven having been built up from the literature and the research has aimed to build on and develop that framework based on the grounded experiences of the case respondents, thus retaining some openness to new discoveries from actual practice. In moving towards building theory it has been important to consider the fit between the research questions, the theoretical propositions, the most appropriate sources of data evidence, and the data collection methods. These links are shown in Table 4.1 overleaf. 94 2) -- - - _ - U0 Z m CA ze b£ = r. = 5:: Z ZZr. cý m 0 C) 9.1 r. Z 9.1 CA CA CA CA GA CA Z CA rz -Z2 CA A u zw C u CD t- u-Eý, r, (D u ý r, 0 91. u U--ý. Eý =3 0= U. - ý Z 0 u 0 r. U- u .-ý. Z (A ý- ý- E- ýý ý- Z. 4 E- ý- ý- C ý- ý- p. E- ý- E- P. ý Z., (A ;:: E 0 >ý > C) 4 . C, cl cn , " cl u CD >ý (1) Z .9. c2. 1 -ci g - ýý; U U u 1-- -a -, ý; - C, r U Z. u2 ýz - M >, -Z, E- ýý g .A. 0 ýe Z ýý zi u u Ln -4 ýý C - C> . ti M 1. ) E =- 0 (L) Uý Z g CD r. M ýn ý ýý U Gn P. j-. cu ý rm lz ý ci $.. ýe vý '. zý ý C) C> (1) ý.. ) 4 1 Cil -U C A (9 CD g« 2 > u > . - cn 2 . ce Zi '. ' . C, 2 -4 9 >ý E 0u ( Z. - cýe > ,1 ýý 0.4 ý - ý- ýc ýc : li-. ýc ;.. CA E- lzý cn CD u ý- "ZJ 0 u > "Z 3 lul o Z. uu 2 C 9. 2 ce 9 c. - 4 > J. - rA U 4. A g ý -Z: j > CD C u u CA r= g - c CD u "Zi -ä ý r. Cl. g zi Gn u C) CD CD _ , u ý Z CA JD > cDý c- CD. u - 'CJ (1) U (Z c, u 4. wLý "c 9 > CD - 4. V X c-. u Z K (U "u Z zi Z u ce * C ' -CJ C, ý 0 C U CD -- - ,A CA n. 5 05 ýý A -0 C) ýc 0 - 9 . .- 4 - CA CD. 9 :ý -u E cn u C) CA 0 ce - 5 ce A c, - ' 'n .-2 - ce u- u u - ce cu CD CD- C, 0 A bz C) Cl. > 4ý 0 cj 0 zi gw CD -ci . u >, ý >, CD 52 zi 4 70 ýý CA U A C .- u > u b£ zi 2 4ý r. . - u Z 2- CD :; Z , c, 91 u ýý r. ;ý . - rA cl 02 c2. CD. ý. - Gn A ce r- 0 "e A CA j CD ýe 12. CD u Gn ý - Z. CD ýý c . CD jZ "c c >, , C, u . - 0 ý, e- - CD "c > 0 , Z'. CD -0 u C, u , CD g) c, C, ZU ý ý ý cu, > "ZJ A j= u (L) 0ý 0 ý. 42 ei CD 10 9. -4 w r-4 4.3 Type of investigation 4.3.1 Rationalefor a qualitative approach The study of any aspect of ethics in business can be a sensitive and complex issue because of, "the unstructured nature of the ethical dilemmas themselves, the multiple roles of the individual in the organizational setting and the differing value systems present at personal, group and institutional level" (Liedtka, 1992: 163). In order to consider the orientation to adopt for the potentially complex empirical research, it was important to be aware of the changes in thinking and the debate surrounding positivistic and non-positivistic approaches to researching (Miles and Huberman, 1994; Bryman and Bell, 2003). The choice of research methodology is related to epistemology and the relationship between the researcher and the observable phenomena. The extent to which the 'world' influences the researcher and the influence of previous knowledge on the individual are methodological and epistemological concerns. Past research in science and the social sciences has laid a great deal of emphasis on positivistic epistemology, with empiricism being associated with quantification, measurement, and the testing of hypotheses based on large samples. Qualitative researchers might argue that such an approach would be useful if you want to discover, for example, where consumers buy toys or how much they spend on them, when a quantitative technique such as a social survey would be most appropriate. However, when it comes to exploring people's experiences or everyday behaviour (for example, why they choose one toy brand rather than another), they would argue that qualitative methods should be favoured (Silverman, 2000). It appears that there are well-founded criticisms of both quantitative and qualitative methods. Critics of the quantitative approach argue that much quantitative research leads to the use of a set of ad hoc procedures to define, count and analyse its variables (Cicourel, 1964; Silverman, 1975). Other criticisms reported by Silverman (2000: 7) are that it can sometimes amount to a 'quick fix' involving little or no contact with people or the 'field', that statistical correlation may be based on 'variables' that in the context of naturally occurring interaction are arbitrarily defined, and that after-the-fact 96 speculation about the meaning of correlations can involve the very common-sense processes of reasoning that science tries to avoid. Some critics of qualitative researchers on the other hand label them as 'journalists' or ýsoft scientists, describing their work as, "unscientific, only exploratory, or entirely personal and full of bias" (Denzin and Lincoln, 1994: 4). Other criticisms of the qualitative approach discussed by Bryman and Bell (2003) are issues of reliability and consistency in carrying out and analysing transcripts of findings, and issues of anecdotalism in which research reports on only some of the findings giving 'examples' of some apparent phenomenon without any attempt to analyse less clear (or even contradictory) data (Silverman, 1989). Past empirical studies of marketing ethics and consumer trust have tended to try to provide 'scientific' findings on which to base theory. Vitell and Ho (1997), for example, present a comprehensive synthesis and evaluation of all the published marketing ethics scales measuring the components of the decision-making process in the marketing ethics literature, while Delgado-Ballester, Munuera-Aleman and Yague- Guillen (2003) and Gurviez and Korchia (2002) have developed scales aimed at measuring brand trust. It is perhaps this obsession with quantifiable measurement that has restricted the advance in marketing ethics/consumer trust theory to an extent, discussed in the literature review. If the variables you are measuring are insufficiently researched, unsubstantiated, incomplete or even incorrect, the value of any quantitative findings is likely to be, at best, limited. Whilst both forms of research have merit in addressing particular research questions, it was considered that the exploratory nature and behavioural focus of this research over a relatively small sample and covering very personal, sensitive and individual issues would be best served by adopting a qualitative approach. With adequate planning, execution, and a carefully selected sample the researcher believed that this would yield sufficient rich data from which to develop theory and build on existing knowledge. In addition to being an important source of well-grounded, rich descriptions and explanations of processes in identifiable local contexts, qualitative data also have an element of undeniability. As Miles and Huberman (1994: 1) point 97 out: "Words ... have a concrete, vivid, meaningful flavour that often proves far more convincing to a reader ... than pages of summarised numbers. " It should perhaps be mentioned finally that the two approaches are not mutually exclusive. As Hammersley (1992: 163) indicates: "We are not faced, then, with a stark choice between words and numbers, or even between precise and imprecise data; but rather with a range from more to less precise data. Furthermore, our decisions about what level of precision is appropriate in relation to any particular claim should depend on the nature of what we are trying to describe, on the likely accuracy of our descriptions, on our purposes, and on the resources available to us; not on ideological conu-nitment to one methodological paradigm or another. " Having decided on the qualitative epistemology for this research, the next stage was to consider an appropriate case for the research from which to explore and examine consumer trust in a practical context. 4.3.2 Case study methodology Although there are a number of different types of case study as reported by Yin (2003), this research adopts the definition of Schramm (1971 in Yin, 2003: 12) who argues that, "the essence of a case study ... is that it tries to illuminate a decision or set of decisions: Why they were taken, how they were implemented, and with what result. 19 The case study approach was selected to give focus to the research and facilitate both the data analysis and generalization of findings within an industry. The case method in which the researcher engages in the world of the practitioner permits extended discussion and allows for possible new insights to be identified that may be important in identifying and constructing theories. Case material can be used to infer theoretical principles (Becker, 1968) and can enable the analyst to reject or support theoretical propositions (Mitchell, 1983). By concentrating on companies and major stakeholders within one industry, and in particular on toy companies holding a significant market share and sharing similar opportunities, challenges, and target markets, it was 98 considered that this approach was most likely to lead to a clearer understanding of how such organisations create trustworthiness in themselves and trust in their brands. The case study method allows the researcher not only to explore the behaviour, decisions and actions of marketers and other senior managers in developing consumer trust in a broad range of companies, but also enables the findings to be compared with and contrasted to the concerns, expectations and experiences of parent consumers and other important stakeholders, thereby offering a form of double-checking (Yin, 2003). The case study methodology has a strong pedigree within social science research (Miles and Huberman, 1994; Silverman, 1993; Yin, 1994). Yin (ibid) views case studies as empirical inquiries that investigate, "a contemporary phenomenon within its real life context especially when the boundaries between phenomena and context are not clearly evident" (: 13). As a research endeavour, the case study can contribute uniquely to our knowledge of individual, organisational, social and political phenomena. Taking the realist's view (for example, Miles and Huberman, 1994), case studies support research aimed at understanding, expanding and generalizing about theories. Yin (1994) uses the term 'analytical generalization': "... Case studies, like experiments, are generalizable to theoretical perspectives and not to populations or universes. In this sense, the case study, like the experiment, does not represent a sample and the investigator's goal is to expand and generalize theories (analytical generalization) and not to enumerate frequencies (statistical generalization)" (: 10). He also suggests that case studies are the preferred strategy when 'how' or 'why' questions are being posed, when the investigator has little control over events, and when the focus is on a contemporary phenomenon within some real-life context (: 1). Using multiple units of analysis (in this case, different companies and stakeholders within the same industry) adds some complexity to the study, but allows for better analytical generalization and for reassurance that the events and processes in one well-described setting are not wholly idiosyncratic (NEles and Hubennan, 1994), and are therefore more robust (Yin, 2003). Moreover, using multiple companies can deepen understanding and explanation and strengthen theory by examining 99 similarities and differences between the responses. Discussion of what is considered to constitute an appropriate number of sample companies for this research can be found in Section 4.6.1. 4.4 Researcher interference The epistemological approach used is one in which the relationship between the researcher and the respondents is not entirely detached. This approach has its problems, and in particular the risk of subjectivity on the part of the researcher which may lead to bias in the questioning of respondents and in the analysis of findings (Bryman and Bell, 2003). The risk of subjectivity is not exclusive to qualitative research, however, as in positivistic methodologies bias may also arise in the interpretation and discussion of statistical data. Miles and Huberman (1994) identify three sources of bias that it is important for any qualitative researcher to be aware of: ýý The holistic fallacy - interpreting events as more patterned and congruent than they really are. )ý- Elite bias - overweighing data from articulate, well-informed, usually high status informants. )ýý Going native - losing perspective and being co-opted into the perceptions and explanations of local informants. These potential problems have been addressed in this research in a number of ways: a) In analyzing the data, consideration has been given to all the respondents' comments and differences of behaviour and opinion have been sought as well as similarities. The approach taken to interviewing has been one of open-mindedness rather than a rigid adherence to the constructs of the conceptual framework, to allow new patterns and ideas to emerge through the experiences of the respondents. b) By selecting senior personnel from the leading toy companies for interview, it was considered that all would offer informed and articulate opinion, as proved the case. 100 There has also been a conscious effort made to giving equal weighting to all the units of analysis, no matter their size or reputation. c) The author set out to research the toy industry objectively and to learn from a wide range of experiences. One of the aims was to look for examples of good practice within the industry and within individual companies in building consumers' trust. At the same time, in interviewing, analyzing the data, and triangulating with other documents, it has been important to challenge some views and actions that have seemed contradictory. In this way, a balance has been struck in not being drawn into one particular camp. d) Finally, seeking primary data from sources other than the companies themselves (that is, from industry bodies, consumers and retailers) has helped to keep a perspective on subjectivity. 4.5 Issues of generalization, reliability and validity In addition to the potential problems of bias discussed above, it is necessary to consider the issues of generalization, reliability and validity that are often cited as weaknesses in qualitative research by advocates of positivism (Silverman, 2000; Bryman and Bell, 2003), and reflect on how these may be tackled. Generalization - One of the main concerns facing case study researchers is the extent to which one case is 'typical' and can be considered to be representative of similar cases and hence used to support theoretical development. Some qualitative researchers argue that such issues of generalization are a concern of the positivists and not of qualitative researchers, particularly in an intrinsic case study (for example, Stake, 1994). For other qualitative researchers however such as Mason (1996: 6), there is a need, "to produce explanations which are generalizable in some way, or which have a wider resonance. " Strauss and Corbin (1990) take an intermediate position arguing that generalizations can be made but, ". .. to specific sets of action/interaction pertaining to a phenomenon ... and ... to those specific situations only" (: 251). This is the position adopted in this research. Generalizations will only 101 be made in respect of the specific phenomenon of trust/trustworthiness within the context of the traditional toy industry Silverman (2000) suggests that one way of obtaining generalization in qualitative research is by using theoretical sampling (that is, choosing cases or units of analysis in terms of the theory being developed). The issue is then, "couched in terms of the generalizability of cases to the theoretical propositions rather than to populations or universes" (Bryman, 1988: 90). This is the method chosen for this research and is discussed further in Section 4.6. Reliability - This refers to, "the degree of consistency with which instances are assigned to the same category by different observers or by the same observer on different occasions" (Hammersley, 1992: 67). Some social researchers argue that concern for the reliability and validity of observations again arises only within the quantitative research tradition. Marshall and Rossman (1989), for example, argue that once we treat social reality as always in flux, then it makes no sense to worry about whether our research instruments measure accurately. Others argue however that qualitative researchers cannot overlook issues of reliability or, "Its results will (reasonably) go ignored" (Kirk and Miller, 1986: 72). To ensure reliability is calculated, Silverman (2000) argues that it is incumbent on the scientific investigator to document his or her procedure and to demonstrate that categories have been consistently used. Reliability can therefore be enhanced through standardization of the questions, the avoidance of spontaneous probing, and interviewer detachment. Having too tight a design and not deviating from script though might result in losing one of the key benefits of the qualitative tradition and the personal interview method in particular, namely the richness of probing personal experiences. A compromise for this research has been to use a semi-structured approach that adds to reliability but allows for some deviation, where appropriate. Validity - This is another word for truth; "interpreted as the extent to which an account represents the social phenomena to which it refers" (Hammersley, 1990: 57). Silverman (2000: 188) suggests that we cannot say that the claims of a research study are valid when: 102 1. Only a few exemplary instances are reported, 2. The criteria or grounds for including certain instances and not others are not proved, or 3. The original form of the materials is unavailable. It is incumbent on the researcher therefore, when using case study method as a basis for theoretical development, to ensure that the data and analysis are made explicit (Mitchell, 1983; Strauss and Corbin, 1998). This helps the reader evaluate the logic of the argument and validity of the theory and propositions. Throughout the analysis of the data, the author has explicitly provided pointers to the sources of the data and references to paragraphs in the case transcripts. This provides the reader with a clear audit trail to the original documentation. Hammersley (1992) suggests that to have validity, an empirical account must be plausible and credible and the amount and kind of evidence used should be taken into account when assessing it. He also suggests that relevance is an important criterion in assessing qualitative research, both in terms of its contribution to the literature and its contribution to practitioners (those who are part of the social setting being investigated and who have a vested interest in the research question and the implications derived from the findings). Hammersley (ibid) notes that although practitioners' interests in a piece of research and the researcher's are often different, there are occasions when researchers can combine the two. This has been the case in this research and has perhaps helped in securing access to major toy companies and senior managers. The question of validity concerns all research epistemologies. The challenge facing qualitative researchers is how to convince themselves (and their readers) that their 'findings' are genuinely based on critical investigation of all their data and do not depend on a few well-chosen examples (Silverman, 2000). One approach to tackling this problem is by 'triangulating'. Triangulation, as a means of analysis, can assist in corroborating findings using multiple modes of evidence, thereby adding to reliability. Miles and Huberman (1994: 267) describe triangulation as, "a way of getting to the finding in the first place, by seeing or hearing multiple accounts of it from different sources by using different methods, and by squaring the finding with others it needs to 103 be squared with. " Sources of triangulation include using different data sources (such as people, times and places), using different methods, (such as observation or interviews), different researchers to collect data, and through gathering different types of data (for example, using both quantitative and qualitative techniques in the same research). In this research, triangulation has been used in two main ways. Firstly by using multiple data sources, not only have twelve separate toy companies been interviewed, but also their responses have been cross-checked against comments from other important stakeholders. Secondly, findings have been cross-checked against a variety of documents, some provided by the companies themselves (for example, promotional literature, web site materials, packaging), some obtained from the industry bodies (for example, codes of conduct, safety and manufacture, consumer information sheets, and industry research findings), and others gained from independent sources (consumer groups, toy industry magazines, the national press, research organisations such as NPD and Carrick James, and from other empirical studies reported in journals). Liedtka (1992) views validity issues as not being overly problematic, arguing that interview research, especially with an interpretive orientation, is uniquely positioned to ensure both semantical and construct validity, both of which are enhanced by research that focuses on understanding, in depth, the particular. McCracken (1988) also argues that the use of tape-recordings and transcriptions of the interviews themselves are important safeguards of both reliability and validity. 4.6 Sampling strategy - the research contexts The research uses theoretical sampling as the key method of constructing the sample. Similar to purposive sampling, theoretical sampling means, "selecting groups or categones to study on the basis of their relevance to your research questions, your theoretical position ... and most importantly the explanation or account which you are developing" (Mason, 1996: 93/94). This means seeking out organisations where the processes being studied are most likely to occur (Denzin and Lincoln 1994 in Silverman, 2000). Although this form of sampling was predominantly advocated by Glaser and Strauss (1967) and Strauss and Corbin (1998) for grounded theory 104 analysis, because of its advantage of 'refining ideas' (Charmaz, 2000), it was considered the most appropriate strategy for gaining the data which would lead to the further development and evaluation of the conceptual framework discussed in Chapter three. 4.6.1 Units of analysis The choice of case and units of analysis was the subject of much thought over the first two years of the doctorate. In selecting a case, the initial criterion was to identify an industry with the United Kingdom that was likely to be accessible and was predominantly child-orientated as these industries were of particular interest to the author and were perceived to be industries in which the phenomena of trust and trustworthiness were likely to be particularly significant. The important role of toys in child play and development, the significant size of the market, and the amount of both favourable and critical media comment about the industry led to the selection of the children's toys and games context. Consideration then had to be given to product type and the division between 'traditional toys and games' and 'electronic games' that form separate industries, often involving different consumers and retailers. The traditional toys and games industry was finally selected as the key product users are young children, mostly under twelve years of age, who are considered by many to be particularly vulnerable as consumers (see Section 2.6.4). Toy Retailers National Toy Industry Association Toy Companies Parents European Toy industry Figure 4.2 - Primary Research Sources Once the case was selected, as the author had no contacts in the industry, the next stage was to consider which companies to approach (and which managers within 105 them), the number of interviews that would be needed to gather a sufficient range of data, and which other stakeholders it would be important to interview to gain different perspectives. The units of analysis finally selected are shown in Figure 4.2 and are discussed in the following sections. 4.6.2 Selection of toy companies The aim in selecting a sample for the research was to identify companies that would be most likely to provide rich information and that would manifest trust intensely but not extremely (Kuzel, 1992; Patton, 1990). These would therefore be a selection of companies that were perceived as being trusted (by dint of their apparent economic success) but were not necessarily either the most or least trusted. The companies were selected from the membership list of the British Toy and Hobby Association (as at December, 2002), which was comprised of 300 full and associate member companies varying in size from multi-nationals to micro-businesses and who between them accounted for 95 per cent of total UK traditional toy production. Within this membership, companies tend to specialize in one or two toy sectors apart from the top five companies whose products span multiple sectors and age groups. The market is highly fragmented and in 2003, there were 575 UK (VAT-registered) enterprises engaged in the manufacture of toys. However, of these the majority (67 per cent) had turnovers of less than E250,000 and only 30 companies had sales of over E5 million (Key Note, 2004: 15/16). The decision was made to focus primarily on companies that fitted the criteria shown in Table 4.2. Market-leading companies were selected, not only because of their major influence and marketing spend in the market, but also because they were more likely to have formal marketing departments, and consumers were more likely to be aware of their brands. The author also made the assumption that if they were successful in terms of sales, that large numbers of consumers would have some trust in them or their products. 106 Sample Selection Criteria - UK Based Toy Companies M Companies would be full members of the BTHA and would preferably hold the BTHA Lion Mark brand for toy safety. M Companies could be of any ownership (in terms of financial structure or parent nationality) and with no restrictions placed on the length of time they had operated within the toy industry. M Companies would have a turnover in toys and/or games in excess of E5 million (based on NPD data) and would therefore be from within the top 30 companies (in terms of UK turnover) as at December 2002, and/or be market leaders in their sectors. 0 Companies would predominantly market products for children under 12 years of age. Table 4.2 - Sample Selection Criteria for Toy Companies The sample organisations interviewed were both brand owners and manufacturing companies (rather than merely toy distributors), most being multi-nationals with overseas headquarters. As the product ranges, target markets and marketing policies have much in common across the industrialized world, this was not perceived as a hindrance to the study. Indeed, although the empirical work focused on managers and organisations operating in the United Kingdom, the ensuing theory is likely to have some relevance on an international scale. It was felt initially that in-depth interviews with around 12-15 companies matching the above criteria would yield enough rich data from which to further develop the theory and be sufficient to tackle the question of generalization by demonstrating the similarities and differences of the managers and their organisations across a number of settings (although all operating within the same market/industry). Yin (2003) suggests that the issue of what is an ideal number of cases or units of analysis is in the main judgmental. Eisenhardt (1989) recommends that cases should be added until 'theoretical saturation' is reached and Lincoln and Guba (1985: 204) 107 recommend a sampling selection "to the point of redundancy". Yin distinguishes between 'literal replication, ' where each case is selected to predict similar results (based on a few cases, for example 2-3) and 'theoretical replication, ' which produces contrasting results but for predictable reasons (based on a few other cases, for example 4-6). Yin argues that, if after 6-10 cases the findings confirm initial predictions, then this is, "compelling support for the initial set of propositions" (ibid: 46). During the research, 12 leading toy companies were interviewed amounting to a total of 16 hours of taped material and generating 194 pages of A4 typed transcript. Combined with the fieldwork findings from the other stakeholders, this was considered to provide sufficient data to meet the research aims. A summary of the respondent companies and the managers/directors interviewed is given in Table 4.3 and more detailed profiles of the companies and respondents are provided in Appendix IN. 4.6.3 Final sample selection From the outset it was considered important to interview 'senior' marketing personnel in the toy companies, as they were more likely to play a major role in the organisation's marketing and branding decisions, thereby influencing trust. Identifying and reaching such senior personnel in the leading companies, both willing to give sufficient time to the research and agreeable to discuss sensitive topics such as trustand ethical responsibility, has been a major challenge in the research. With persistence however it has been achieved and the sample includes the three leading companies in terms of market share, Mattel, Hasbro and Vivid Imaginations, who control around 25 per cent of market sales and six of the top seven companies, controlling 31.4 per cent of the market (NPD - Full Year Data, 2002). In addition to the three leading companies who offer a wide variety of top selling products across numerous toy sectors, the sample also includes many brand leaders within their particular sectors; for example, Crayola (Arts & Crafts), Zapf Creation (Dolls), Leapfrog (Electronic Leaming), LEGO (Construction), Tomy (Pre-School), Early Leaming Centre (Own-Brand), and Racing Champions (Collectables). 108 Toy Key Product Ownership Respondent Position Date of Company Sector Interview (Ref. No. ) 1. Mattel (UK) Multi-Sector American Simon Joint Head 08.04.03 Limited Waldron of Marketing 2. Tomy (UK) Multi-Sector Japanese Sally Marketing 07.05.03 Limited Plumridge Director 3. Leapfrog Electronic American Richard Managing 03.06.03 Toys (UK) Educational Body Director Limited Toys 4. Zapf Dolls German Mary Wood Managing 02.10.03 Creation (UK) Director - Limited Sales and Marketing, (N. Europe) 5. Binney & Activity/Craft American Judy European 15.10.03 Smith UK Ltd Toys Robbertsee Marketing (Crayola) Director 6. Hasbro Multi-Sector American Alison Berry Corporate 22.10.03 (UK) Limited Branding Manager 7. RC2 Collectables American Robert Mann Managing 25.11.03 Director 8. BRIO Pre-School Swedish Bob Hand Managing 25.03.04 Limited Director 9. LEGO Construction Danish Raymond Marketing 30.04.04 Company Hastings Research Limited Manager 10. Flair Pre-School British Peter Brown Chief 08.04.04 Leisure Executive Products PLC 11. Early Pre-School British Nigel Chief 13.04.04 Learning Own Label Robertson Executive Centre(Chelsea Stores PLC) 12. Vivid Multi-Sector British Emma Marketing 20.04.04 Imaginations I Sherski Director Table 4.3 - Toy Company Sample - Interviews conducted 109 Identification of contacts and leads has come from a variety of sources such as the Toy Press and BHTA directory, and early in the research a cold-calling approach was taken, with limited success. The most important source was adopting a snowballing technique and identifying other companies, names and personal e-mail addresses though the introduction of the respondents themselves (that is, their personal contacts and/or previous colleagues). An approach to a potential respondent was generally made first through e-mail highlighting the purpose of the research and this was followed up by further e-mails or by telephone when no reply was received. In total, senior managers in 23 companies were approached. Twelve agreed to be interviewed, three offered to reply to written questions only (but this was not followed up as it was considered inconsistent with the main personal interview approach), two declined citing interest but lack of time, and six did not respond at all. Most of those interviewed were Marketing Directors or senior Marketing Managers although in five smaller companies the Managing Directors or Chief Executives were interviewed (of these, four had backgrounds in sales or marketing, and one in finance). The sample managers' experience of the toy industry varied from one year to over thirty-five years with an average of around 15 years, therefore most had a very detailed knowledge of the market. 4.6.4 Sample selection of other key stakeholders Although the main focus of the fieldwork has been the toy companies, as the developing theory concerned how toy companies build trust with parents, rich data was also likely to come from the trustors (parents). It was therefore decided that a cross-section of parents who regularly buy toys for their children would also be interviewed using small focus groups. This would explore how trustworthy they believed toy companies to be, what was important to them in choosing a toy brand or company and what aspects about toys or toy marketing they trusted or mistrusted. Four to five groups were considered to be a sufficient number for patterns to emerge in line with Jankowicz (2000) who suggests that two to four groups are adequate for fairly structured, exploratory work. Parents were recruited though contacts in a number of local schools in East Sussex and through the University of Brighton. In total, four focus groups were conducted involving 11 parents (10 mothers and one 110 father), all with children less than 12 years of age (ranging from 8 months to II years). Participants were from a mix of socio-economic backgrounds but were primarily from A/B, Cl groups. Some had full-time employment but most were full- time mothers or had part-time jobs. Details are shown in Table 4.4. Only the first names of the participants have been shown to protect the confidentiality that was offered to them. Focus Location Date Length Participants/ Reference Group (Minutes) (Sexes/Ages of Children) One Seaford 19-10.2004 80 Jan JAI (Boy