Corporate reputation is increasingly recognised as an important intangible asset of the firm. Therefore, investigating its causes and consequences is of interest to practice and research alike. While some authors argue that consumer satisfaction is a cause of reputation, others hold the contrary view and claim that reputation determines satisfaction. This controversy in the literature is the starting point for the present paper in which the causality of the relationship between corporate reputation and consumer satisfaction is investigated. By conducting two experiments, we show a significant effect of consumer satisfaction onto corporate reputation as perceived by consumers. However, no significant impact of reputation onto satisfaction could be detected. These findings lead to implications for the marketing of new products and firms’ reputation management.
Reputation has been interpreted as a competitive advantage (Balmer and Greyser, 2003 and Fombrun, 1996), and represents an important intangible asset of the firm (Hall, 1993 and Wernerfelt, 1984). From a corporate perspective, building a favourable reputation is deemed an effective way to gain market access and acceptance because reputation has been shown to be a determinant in consumers’ purchase decision making (Carmeli and Tishler, 2005). For consumers, reputation serves as a quality signal that reduces the uncertainty that might exist prior to a purchase (Shapiro, 1983 and Fombrun, 1996) and, hence, facilitates a first purchase transaction.
After instigating a transaction with a new customer, achieving high rates of customer satisfaction becomes an important goal for firms as satisfaction is viewed as one of the major determinants of customer repurchase and word-of-mouth (Anderson and Sullivan, 1993). Consumer satisfaction and loyalty are among the most prominent areas of current marketing research; thus, an investigation into the determinants and outcomes of satisfaction is of widespread interest to research and practice alike.
Regarding the relationship and direction of causality between reputation and satisfaction, authors express controversial viewpoints. Anderson and Sullivan (1993) for instance claim that reputation “determines customers’ sensitivity to short run deviations in product quality and satisfaction” (p. 132), while Carmeli and Tishler (2005) argue that a good reputation is caused by satisfaction. Taking into account prior research in this field, it remains unclear whether corporate reputation is a determinant or a consequence of consumer satisfaction. However, verifying causality is an important task of empirical research in order to provide insights into the levers of marketing effectiveness: If reputation “caused” consumer satisfaction, this would have different implications compared to the finding that consumer satisfaction “causes” perceptions of corporate reputation.
Therefore, we take the extant controversy as a starting point and raise the research question whether perceived corporate reputation positively affects consumer satisfaction or whether the degree of consumer satisfaction has a positive impact on perceived corporate reputation. In order to address this research question, the paper is structured as follows: In the next section, the relevant literature on reputation, satisfaction, and prior empirical investigations on their interplay are presented. In section three, theoretical foundations for the possible causal structures between the two constructs are developed. We present the empirical research design of two experiments we conducted in order to investigate the directionality of the relationship between the constructs in section four. Main findings are discussed in section five, the limitations of the present study and suggestions for future research are presented in the final section.
