Customer Value Creation for Risky Products: The Role of Brand Trust and Trusting Beliefs

Consumers often perceive products and services as risky. As a result, they might perceive the same products as less valuable. While past research has investigated numerous ways of reducing the negative effect of perceived product risk on customers’ perceived value, surprisingly, the role of brand trust has not been taken into account. This article aims to fill this gap by investigating how consumers’ trust in a brand, as well as their trusting beliefs about the brand’s competence, benevolence and integrity, may moderate the relationship between consumers’ perceived product risk and consumers’ perceived value. By means of two empirical studies based on a panel of smartphone users, the authors propose and demonstrate that the trust customers have for a brand can mitigate the negative effect of perceived product risk on perceived value of products with the same brand name. Importantly, findings also show that the various beliefs underlying trust have differential downstream effects. More specifically, while benevolence and integrity beliefs about a brand mitigate the negative effect of perceived product risk on customers’ perceived value, competence beliefs were found irrelevant to the effect of risk on value. These findings inform and guide marketing practitioners’ efforts to cultivate specific, rather than generic, trusting beliefs to ultimately create and maximize value for their customers who otherwise view these products as risky.