Disentangling the effects of customer-based corporate reputation on business-to-customer relationships: direct, mediated and moderated effects

The extant literature provides a limited understanding of the role of customer-based corporate reputation (CBR) in business-to-customer relationships. Cognitive CBR and affective CBR are two distinct attitudinal components of CBR. However, research into CBR largely neglects to test the separate effects of both CBR components on business-to-customer relationships. In particular, the affective aspects of CBR have been underrated in comparison with the cognitive aspects of CBR in the conceptualization of CBR as a whole. The underlying mechanisms and boundary conditions of the effects of the CBR components on business-to-customer relationships also invite researchers’ attention to better explain how these effects operate and how different circumstances influence these effects. This study, therefore, distinguishes between both the cognitive and affective components of CBR to investigate their relative effects on business-to-customer relationships, and examines the underlying mechanisms and boundary conditions of such effects. For this purpose, customer trust, customer commitment, intentional loyalty, and customer perceived risk are adopted as representative constructs of business-to-customer relationships, from the existing literature.
This study developed a conceptual model comprising of 21 hypotheses representing the inter-construct effects. Quantitative methodology was adopted to test the model. For this purpose, a systematic sample of 1059 customers was surveyed from the fast-food services industry in Pakistan.
By disentangling the effects of CBR on business-to-customer relationships, this study makes several theoretical contributions. First, this study reveals that cognitive CBR and affective CBR have differential effects on business-to-customer relationships. Second, this study extends the application of social exchange theory into the areas of corporate reputation and business-to-customer exchanges by identifying that the underrated affective component of CBR has a strong impact on business-to-customer relationships. Third, this study explicates the mechanisms through which CBR affects business-to-customer relationships, by analysing the role of mediating factors that explain the effects of both CBR components on intentional loyalty. Fourth, this study finds relationship age as an important moderator (i.e. boundary condition) for the effects of CBR on business-to-customer relationships. Fifth, drawing on the international business perspective, this study theorizes and tests the moderating effects of firm type (local versus MNEs) for the impacts of CBR components on business-to-customer relationships.
The findings help the service providers to better understand the ways in which CBR may affect their relationship marketing activities. The findings also suggest some useful implications in the areas of integrated marketing communication, customer segmentation, and international business management.