Corporate Reputation Review

Volume 3 Number 4

The Influence of Corporate Credibility on Consumer Attitudes and Purchase Intent

Ronald E. Goldsmith Florida State University Barbara A. Laerty The University of South Florida Stephen J. Newell Bowling Green State University

ABSTRACT Corporate credibility forms part of the overall reputation of a company. It describes how consumers evaluate the companys honesty and expertise. Along with endorser credibility, it is another type of source credibility that can inuence consumer reactions to a companys advertisements and shape their brand attitudes. In this paper, we examine these two sources of credibility and assess their relative impact on three sets of consumer perceptions their attitudetoward-the-ad, attitude-toward-the-brand, and purchase intentions. The results of two experimental studies indicate that both corporate credibility and endorser credibility had signicant impacts on attitude-toward-the-ad, attitudetoward-the-brand, and purchase intentions. However, while corporate credibility had a greater eect on attitude-toward-the-brand, endorser credibility seemed to have a stronger inuence on attitude-toward-the-ad. Overall, the ndings conrm that corporate credibility plays a key role in inuencing consumer reactions to advertisements and brands. INTRODUCTION The concept of source credibility can be dened as . . . the extent to which the recipient sees the source as having relevant knowledge, skill, or experience and trusts the source to give unbiased, objective information. There are two important dimensions to credibility, [perceived]

Corporate Reputation Review, Vol. 3, No. 4, 2000, pp. 304318 # Henry Stewart Publications, 13633589

expertise and trustworthiness (Belch and Belch 1994, p. 189; see also Crisci and Kassinove 1973; McGuire 1969; Ohanian 1990). Credibility is a valuable asset because credible sources of information attract attention to advertisements and enhance their recall (Sternthal, Phillips, and Dholakia 1978). Source credibility can be conceptualized in two ways: corporate credibility and endorser credibility. Corporate credibility refers to consumer and other stakeholder perceptions of a companys trustworthiness and expertise, that is, the believability of its intentions and communications at a particular moment in time. Corporate credibility is whether a company can be relied on to do what it says it will do (Herbig and Milewicz 1995, p. 6). The credibility of a company is important to the success of its marketing and branding strategies. Lack of credibility leads consumers to question the validity of claims by a company, making consumers less likely to buy its products. Conversely, high credibility enhances brand equity (Aaker and Joachimsthaler 2000). Endorser credibility describes the believability of a spokesperson or endorser in an ad, their attractiveness, expertise, and trustworthiness (Baker and Churchill 1977; Ohanian 1990). Both corporate and endorser credibility play a role in the eectiveness of marketing communications of all types,

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inuencing how consumers react to promotions, ads, and brands. Extensive research has examined the eect of endorser credibility on consumer reaction to advertisements (eg, Atkin and Block 1983; Petty, Cacioppo, and Schumann 1983). Advertisers are often encouraged to use attractive, trustworthy, and expert spokespersons in their ads (Belch and Belch 1994). Thus, companies often spend considerable time and nancial resources selecting spokespersons who contribute a positive and powerful impact to the eectiveness of their advertising message (Ohanian 1990). Many companies also are concerned with their corporate reputations. Research and corporate experience shows that a positive reputation contributes to overall corporate success (Fombrun 1996) by helping to enhance the companys image, an important success ingredient (eg, McCann 1986; Marney 1998). One critical component of corporate reputation is the companys credibility (Caruana 1997; Fombrun 1996; Keller 1998). Although corporate credibility and reputation are important to corporate success (Herbig and Milewicz 1995), little empirical research has attempted to assess the impact of corporate credibility on specic consumer reactions to marketing communication strategy. Among the few such studies, Goldberg and Hartwick (1990) found that positive corporate reputations prompted consumers to believe advertising claims. Keller and Aaker (1998) showed that enhanced corporate credibility promotes the success of brand extensions. Recently, Laerty and Goldsmith (1999) veried that positive corporate credibility leads consumers to form positive attitudes and purchase intentions. Their study examined the joint eects of endorser and corporate credibility on attitude-toward-thead, attitude-toward-the-brand, and purchase intentions. Moreover, Laerty and Goldsmith (1999) showed that the eects of

corporate and endorser credibility were independent and that corporate credibility seemed to have a greater impact on attitude-toward-the-brand and on purchase intent. Their study, however, only used a small number of women subjects along with two celebrity endorsers. This paper reports the results of two experimental studies we conducted to replicate and to extend Laerty and Goldsmiths (1999) ndings. The rst study was an exact replication using the same ad stimuli but with a larger sample of women subjects. Study two used two dierent male celebrity endorsers and a sample of men subjects to extend the generality of the ndings. After developing a set of specic hypotheses, we report the results of the experiments and discuss theoretical and managerial implications of our ndings.
CONCEPTUAL BACKGROUND Companies are rightly concerned with their credibility. They know that consumer perceptions of their trustworthiness and expertise inuence new product trial, the success of brand extensions, product loyalty, acceptance of advertising messages, and sales (Aaker and Joachimsthaler 2000; Best 2000; Fombrun 1996). This is evidenced by the widespread use of public relations campaigns and prevalence of institutional and corporate advertising to boost their image among consumers (Fombrun 1996). Throughout the 1990s, the trend in both number of companies using corporate advertising and dollar amount spent increased signicantly. In 1997, approximately 63 per cent of companies were using corporate advertising, up 13 per cent from 1992. In addition, corporate advertising expenditures were approximately 16 per cent of total advertising in the USA and abroad, up 5 per cent (Gregory 1998). The limited empirical research on corporate credibility has shown consistently that higher levels of credibility lead to more

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positive consumer assessments of ads, brands, and purchase intent. MacKenzie, Lutz, and Belch (1986) developed a model showing that advertiser credibility had a strong positive relationship with attitudetoward-the-advertiser, which in turn had a strong positive relationship with attitudetoward-the-ad. Goldberg and Hartwick (1990) assessed advertiser reputation and extremity of advertising claims on advertising eectiveness and found that companies with positive reputations would seem to be in a better position to get consumers to believe their advertising claims. Keller and Aaker (1998) showed that corporate credibility positively inuences consumer perceptions of brand extensions. Newell (1993) found that corporate credibility had a positive eect on attitude-toward-the-ad and attitude-toward-the-brand. Laerty and Goldsmith (1999) also showed that corporate credibility positively inuenced attitude-toward-the-ad, attitude-towardthe-brand, and purchase intentions. Advertising practice makes frequent use of endorsers and spokespersons, especially celebrities. It is generally agreed that the spokesperson should be perceived by the listener to be trustworthy, credible, likable, and, if possible (or necessary), expert (Wheatly and Brooker 1994). Spokespersons who possess these traits tend to be more persuasive than endorsers who do not (Harmon and Coney 1982; McGuire 1969; Wood and Kallgren 1988). Abundant research shows that endorser credibility leads consumers to react positively to ads and brands (eg, Atkin and Block 1983; Craig and McCann 1978; Fishbein and Ajzen 1975; Goldberg and Hartwick 1990; Mitchell and Olson 1981; Woodside and Davenport 1974). The elaboration likelihood model (ELM) (Petty and Cacioppo 1986) provides theoretical support for the inuence of endorsers in an advertising context. The ELM shows that the inuence exerted by various communication elements

will depend on the amount of motivation or elaboration that occurs during processing an ad. In this theoretical model, the endorser or spokesperson serves as a cue during peripheral processing. Peripheral processing in turn is associated with consumers attitude-toward-the-ad. In other words, if consumers perceive the endorser to be credible, they will have a more positive attitude toward the ad. Thus, based on prior empirical research on endorser and corporate credibility, this study posits: Hypothesis 1A: Subjects exposed to an ad featuring a high credibility endorser will have more positive attitudestoward-the-ad than subjects exposed to a similar ad featuring a low credibility endorser. Hypothesis 1B: Subjects exposed to an ad featuring a high credibility corporation will have more positive attitudestoward-the-ad than subjects exposed to a similar ad featuring a low credibility corporation. Hypothesis 2A: Subjects exposed to an ad featuring a high credibility endorser will have more positive attitudestoward-the-brand than subjects exposed to a similar ad featuring a low credibility endorser. Hypothesis 2B: Subjects exposed to an ad featuring a high credibility corporation will have more positive attitudestoward-the-brand than subjects exposed to a similar ad featuring a low credibility corporation. Additionally, if positive corporate credibility perceptions and positive perceptions about endorser credibility have a favorable eect on attitude-toward-the-ad and attitude-toward-the-brand, a growing body of research and theory (Brown and Stayman 1992; Laerty and Goldsmith 1999) suggest that these positive attitudes will lead to a greater willingness to purchase those pro-

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ducts and services depicted in the advertisements (see Deogun and Beatty 1998). Hence: Hypothesis 3A: Subjects exposed to an ad featuring an endorser with high credibility will have greater purchase intentions than subjects exposed to a similar ad featuring an endorser with low credibility. Hypothesis 3B: Subjects exposed to an ad sponsored by a highly credible corporation will have greater purchase intentions than subjects exposed to a similar ad featuring a corporation with low credibility. The reputation of a company can be foremost in consumers minds as they process an ad for that rms product. Whether the current perception of the company is favorable or not will have an inuence on the consumers assessment of the ad and the brand. According to the ELM, the endorser serves as a peripheral cue when processing the advertising message, which tends to be more inuential in forming attitudes toward the ad. As elaboration or motivation increases, however, the inuence of peripheral cues diminishes, central processing takes over, and greater attention is given to brand attitudes (Petty and Cacioppo 1986). According to MacKenzie and Lutz (1989), advertiser credibility (ie, corporate credibility) is more a central processing cue. Thus, it would seem that if greater attention were given to the endorser, it would have a greater impact on the consumers attitude-toward-the-ad. Conversely, as the credibility of the company becomes more integral to the consumer, less attention will be paid to the endorser and there will be a greater impact on attitudes toward the brand. Thus, it is hypothesized that: Hypothesis 4: Subjects will have a more positive attitude-toward-the-ad

when endorser credibility is high than when corporate credibility is high. Hypothesis 5: Subjects will have a more positive attitude-toward-the-brand when corporate credibility is high than when endorser credibility is high. Finally, based on what is known about these constructs, there is no reason to suppose that one of them has more inuence on purchase intent than the other as they appear to act in concert when consumers decide whether to purchase goods and/or services. Laerty and Goldsmith (1999) showed that this was the case empirically. Consequently, the nal hypothesis is: Hypothesis 6: Purchase intentions of subjects will be inuenced equally by perceptions of endorser credibility and corporate credibility.
METHOD Study One Design and Subjects A 2 (high/low corporate credibility) x 2 (high/low endorser credibility) betweensubjects factorial design was used to test the hypotheses. One hundred sixty-one women undergraduate marketing students at a university in the Midwest participated on a voluntary basis. Such a homogeneous sample is desirable for theory-testing studies (Sternthal, Tybout, and Calder 1994), and we ensured that enough subjects participated to provide enough statistical power to detect the eects we expected to nd, based on eect sizes reported by Laerty and Goldsmith (1999). Subjects were randomly assigned to one of the four treatments. Stimuli Subjects saw one of two ads for Pride, a purportedly new brand of athletic shoes. In the high endorser credibility condition, the spokesperson was Florence Grith-Joyner, the Olympic gold medallist. (Our study

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was conducted prior to the untimely death of Ms Grith-Joyner). In the low endorser credibility condition, Roseanne Barr, the actress, was used. Laerty and Goldsmith (1999) selected these celebrity spokespersons after a pretest suggested they represented opposite poles of endorser credibility for athletic shoes. The manipulations for corporate credibility were based on descriptions of the ctitious company that manufactured the shoes (see Appendix A). One corporate history presented a positive image while the other presented the company in a negative manner. This manipulation was adapted from a procedure used by Goldberg and Hartwick (1990) who successfully used it to manipulate the reputation of a company. Company descriptions were approximately equal in length and, except for the positive or negative tone, presented virtually the same information. The only dierence in content was the positive manipulation contained information on the companys community and environmental contributions while the negative manipulation contained information on poor quality control and alleged SEC violations.
Procedure Four booklets were prepared containing the dierent manipulations. The front page of each booklet contained general instructions and the cover story. Subjects were told that the study was intended to assess student reactions to magazine advertisements. They were instructed to read each page carefully and to look at the ad as if they were seeing it in a magazine as was done in a similar study by Yi (1990). The subjects were informed that they should complete the questions, and when they nished, keep the booklet face down. The second page contained the description of the corporation, either negative or positive (Goldberg and Hartwick 1990). The students were instructed to read the

excerpt that was said to be taken from a Wall Street Journal article. Following the description, they were instructed to proceed without turning back. The next page showed the ad for Pride athletic shoes that contained a picture of either Florence Grith-Joyner or Roseanne Barr. The layout for each ad as well as the headline and copy were identical in each of the four conditions to eliminate the possibility of any potential confounds. The copy consisted of a short quotation that was attributed to the endorser stressing the natural t of the shoe. No other product attributes or information about benets was provided. Thus, the only dierences among the four treatments were the identity of the endorser and the credibility of the corporations.
Dependent Variables The following three pages of the booklet asked the subjects to respond to several questions. They were rst asked to rate on three 7-point, bi-polar adjective scales their overall impression of the advertised brand (AB). The scales were anchored with good/bad, favorable/unfavorable, and satisfactory/unsatisfactory (Bruner and Hensel 1992). Following this measure of attitude-toward-the-brand, the subjects were asked to rate their overall impression of the ad (Aad) on three 7-point bi-polar scales anchored by good/bad, favorable/ unfavorable, and pleasant/unpleasant (MacKenzie and Lutz 1989). Next, the subjects were asked how likely it would be that they would consider buying that brand (PI) the next time they purchased athletic shoes. Three 7-point bi-polar scales were used. These were anchored by very likely/very unlikely, probable/improbable, and possible/impossible (Yi 1990). The three items measuring Aad were factor analyzed using the SPSS principal axis factor method and found to be unidimensional. One factor accounted for 81 per

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cent of the variance. Factor analysis was also performed on the three items used to assess AB and on the three used to assess PI. Both sets also demonstrated unidimensionality, with one factor accounting for 90 per cent of the variance in attitude-towardthe-brand and one factor accounting for 89 per cent of the variance in purchase intentions. Since each set of items was unidimensional, the three items comprising each dependent variable were summed to assess overall attitude-toward-the-ad, attitudetoward-the-brand, and purchase intent for Pride athletic shoes. These scales had high internal consistency with coecient alphas of .93, .96, and .96 for Aad, AB, and PI, respectively.
Manipulation Checks The next page of the booklet contained the manipulation checks for both endorser and corporate credibility. In order to assess the eectiveness of the endorser manipulation, the subjects were asked to rate the celebrity on six items using 7-point bi-polar adjective scales. These scales were derived from those developed by Ohanian (1990, 1991) for measuring celebrity endorsers perceived attractiveness, trustworthiness, and expertise. Two items, attractive/unattractive and classy/not classy, measured attractiveness; two items with endpoints of sincere/insincere and trustworthy/untrustworthy measured trustworthiness; and items with anchors of expert/not an expert and experienced/inexperienced measured expertise. Each item pair was summed to form a measure of the construct. The eectiveness of the corporate credibility manipulation was evaluated using the Corporate Credibility Scale developed by Newell and Goldsmith (forthcoming). This is an eight-item, 7-point Likert scale. Four items measure corporate honesty or trustworthiness (eg, I trust the Pride Corporation), and four items measure corpo-

rate expertise (eg, The Pride Corporation has great expertise). Exploratory factor analysis of the eight items using principal axis factoring followed by an oblique rotation showed the scale had the predicted two-factor structure (see Keller and Aaker 1998). The honesty and expertise factors were signicantly and positively correlated (r = .68, p < .05). Coecient alpha for the two subscales formed by the summed items was .84 for the honesty subscale and .94 for the expertise subscale. The nal questions in the booklet asked for demographic data, and one question asked the subjects what they thought was the purpose of participating in the study. This was asked to assure that no one guessed the hypotheses. If they did, it could bias their responses and invalidate their answers. Based on the responses, no subject appeared to be aware of the intent of the study so all 161 questionnaires were used.
Results of Manipulation Checks Manipulation checks showed that the short scales measuring perceived endorser attractiveness, trustworthiness, and expertise did a good job assessing these reactions. Oneway ANOVA showed that the manipulation for endorser attractiveness was signicant (F(1, 159) = 120.8, p 5 .001) indicating that the subjects felt that the high credibility endorser was more attractive (M = 9.85) than the low credibility endorser (M = 6.06). The manipulation for endorser trustworthiness was also signicant (F(1, 159) = 96.3, p 5 .001). Subjects indicated that the high credibility endorser was perceived as more trustworthy (M = 10.26) than the low credibility endorser (M = 6.59). Finally, the manipulation for endorser expertise was also successful (F(1, 159) = 392.8, p 5 .001). As anticipated, Florence GrithJoyner was seen as more of an expert on athletic shoes (M = 12.18) than was Roseanne Barr (M = 4.96).

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The manipulations for corporate honesty and expertise were also successful. An ANOVA showed that the company was perceived as more honest and believable if it had a positive history (M = 18.8) than if it had a negative history (M = 14.6; F(1, 159) = 150.47, p 5 .001). An ANOVA also showed that the company was perceived as more expert in its eld if it had a positive (M = 20.65) rather than a negative history (M = 12.77; F(1, 159) = 150.5, p 5 .001).
Hypotheses Test Results The results from the ANOVAs of the mean scores on the two attitude measures and on the purchase intent measure shown in Table 1 indicated that there was no signicant interaction (p = .44) for the eect of corporate credibility and endorser credibility on attitude-toward-the-ad. There was a signicant main eect for endorser credibility. The high credibility endorser had a more positive eect on Aad (M = 15.32) than did the low credibility endorser (M = 11.53; F(1, 157) = 50.2, p 5 .001), thus supporting H1A. The main eect for corporate credibility was also signicant (F(1, 157) = 8.45, p = .004). The high credibility company elicited a more positive attitude-toward-the-ad (M = 14.23) than did the low credibility company (M = 12.73), thus supporting H1B. The ANOVA showed no signicant interaction eect (p = .369) between corporate credibility and endorser credibility for attitude-toward-the-brand. Both main eects were signicant. The high credibility endorser elicited a signicantly more positive AB (M = 14.95) than did the low credibility endorser (M = 12.96; F(1, 157) = 16.11, p 5 .001). Thus H2A was supported. The subjects also expressed a more positive AB when the rm was highly credible (M = 16.21) than when it had low credibility (M = 11.88; F (1, 157) = 71.64, p 5 .001), supporting H2B.

The results of the ANOVA that assessed the eects of endorser and corporate credibility on purchase intentions showed no signicant interaction (p = .717). There was, however, a signicant main eect for the inuence of endorser credibility on PI. When endorser credibility was high, purchase intentions were signicantly higher (M = 11.96) than when endorser credibility was low (M = 9.29; F(1, 157) = 15.05, p 5 .001). Thus, H3A was supported. In addition, the high corporate credibility condition had a more positive eect on purchase intentions (M = 12.13) than the low corporate credibility condition (M = 9.27; F(1, 157) = 17.18, p 5 .001), so H3B was supported. To test H4, H5, and H6 we used t-tests to compare the mean attitude-toward-the-ad score for high corporate credibility (where endorser credibility was low; 12.54) with the mean Aad score for high endorser credibility (where corporate credibility was low; 14.77). Equal variances tests were used unless the Levene Test indicated inequality, in which case the results of the unequal variances test are reported, and the correct degrees of freedom are shown. The results were identical in both the equal and unequal variance tests. The signicance levels reported are the results of two-tailed tests. The results indicated that endorser credibility had a more positive impact than corporate credibility on Aad (t(80df) = 3.05, p 5 .003). This result supported H4. In addition, the subjects tended to have a more positive attitude-toward-the-brand when the company was highly credible, but the endorser was not (M = 15.41), than when the endorser was credible and the company was not (M = 13.09; t(78.9df) = 3.68, p 5 .001). This nding supported H5. A comparison of the mean purchase intentions score for high corporate credibility (but low endorser credibility) (M = 10.9) and high endorser credibility (where corporate credibility was

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Table 1: Anova results from Study One A. MEAN SCORES (n = 161) ENDORSER CREDIBILITY LOW n = 39 Aad = 10.55 AB = 10.58 PI = 7.73 n Aad AB PI HIGH = = = = 39 14.77 13.09 10.70 n = 78 Aad = 12.73 AB = 11.88 PI = 9.27

LOW CORPORATE CREDIBILITY

HIGH

n Aad AB PI

= = = =

43 12.54 15.41 10.90

n Aad AB PI

= = = =

40 15.92 17.00 13.36

n Aad AB PI

= = = =

83 14.23 16.21 12.13

n = 82 Aad = 11.53 AB = 12.96 PI = 9.29 B. EFFECT SIZES FOR THE MAIN EFFECTS INDEPENDENT VARIABLES CORPORATE CREDIBILITY ENDORSER CREDIBILITY

n Aad AB PI

= = = =

79 15.32 14.95 11.96

DEPENDENT Aad eta = .189 eta = .479 R2 = .269

VARIABLES AB PI .537 .297 .247 .277 .354 .168

low) (M = 10.7) did not show a signicant dierence (t(79.3df) = .199, p = .84), thus supporting the contention of H6 that the inuences of these two variables on PI are approximately equal in size. In summary, all the hypotheses were supported in this rst experiment. The eect size estimates shown in Table 1 reinforce this conclusion. High endorser credibility was more strongly associated with Aad (eta = .479) than was corporate credibility (.189), but corporate credibility was more strongly associated with AB (.537) than

endorser credibility was (.247). Corporate credibility had only a slightly larger and statistically insignicant inuence on PI (.297 versus .277). These ndings agree substantially with results reported by Laerty and Goldsmith (1999). Endorser and corporate credibility both inuence consumers Aad, AB, and PI, but they have dierential eects on the three dependent variables.
Study Two To replicate and extend these ndings, we performed a second experiment with men

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as the subject pool. Because women process information in a more detailed and comprehensive fashion than men (Kempf and Laczniak 1998), they might detect and react to the credibility cues (ie, the identity of the spokesperson) in the stimulus ads more strongly than men do, so it is possible that the same eects might not occur among male consumers. The stimuli in study two were identical to those used in the rst experiment with the exception that two male spokespersons were substituted for the female spokespersons seen by the women. Pretests showed that female endorsers were not eective for running shoes for male subjects and vice versa. We tried to make the endorsers equivalent in other aspects. Discussions with students suggested that the golfer, Tiger Woods, would be seen as a positive spokesperson for running shoes; and Wayne Knight, the actor who plays Newman on Seinfeld, was suggested as an appropriate substitute for Rosanne Barr (see Appendix B). The questionnaire booklet was otherwise identical, and the same procedures were followed. One hundred fty-four male students from a Midwest university volunteered to participate. They were randomly assigned to the four dierent treatments.
Results of Manipulation Checks One-way ANOVA of the mean scores on the manipulation checks showed that the subjects did perceive dierences between the spokespersons and the rms. The manipulation for endorser attractiveness was signicant (F(1, 152) = 132.6, p 5 .001) indicating that the subjects felt that the high credibility endorser was more attractive (M = 10.52) than the low credibility endorser (M = 6.11). The endorser trustworthiness manipulation was also signicant (F(1, 152) = 43.5, p 5 .001). Subjects perceived that the high credibility endorser was more trustworthy (M = 10.11) than the low credibility endorser (M

= 7.11). Finally, the manipulation for endorser expertise was also successful (F(1, 152) = 47.0, p 5 .001). As anticipated, Tiger Woods was seen as more of an expert on athletic shoes (M = 9.27) than Wayne Knight (M = 5.79). The manipulations for corporate honesty and expertise were also both successful. The honesty subscale had an alpha of .87, and the expertise subscale alpha was .92; their correlation was .64. The ANOVA results indicated that a company was perceived as more honest and believable if it had a positive history (M = 17.96) than if it had a negative history (M = 14.46; F(1, 152) = 38.32, p 5 .001). In addition, the positively portrayed company was perceived as having more expertise (M = 18.33) than the negatively described company (M = 11.68; F(1, 152) = 78.65, p 5 .001). As in the rst study, the validity of the endorser and corporate credibility manipulations were supported.
Hypotheses Test Results Factor analysis showed that, as in study one, the three scales measuring the dependent variables were unidimensional. Internal consistency for these measures was also high; alpha coecients were .93, .95, and .97 for Aad, AB, and PI, respectively. The results from the ANOVAs of the mean scores shown in Table 2 indicated that there was no signicant interaction (p = .49) for the eect of endorser credibility and corporate credibility on Aad. There was a main eect for endorser credibility (F(1, 150) = 25.62, p 5 .001). The high credibility endorser had a more positive Aad score (M = 15.04) than the low credibility endorser (M = 12.14). In contrast to the rst experiment, however, there was no main eect for company credibility (p = .313). The mean Aad score for the high credibility company (M = 13.77) was only marginally higher than the low credibility company (M =

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13.25). Thus, H1A was supported, but not H1B. There was no signicant interaction eect between endorser credibility and corporate credibility for AB (p = .09). The main eect for endorser credibility was signicant (F(1, 150) = 5.05, p = .026); the highly credible endorser had a stronger inuence on AB (13.86) than did the less credible endorser (12.85). The main eect for corporate credibility was also signicant (F(1, 150) = 43.75, p 5 .001); the highly credible rm had a more positive AB score (M = 14.82) than did the less credible rm (M = 11.6). Thus, H2A and H2B were supported. Finally, there was no signicant interaction for purchase intent (p = .68), but the main eects were. The main eect for endorser credibility was signicant (F(1, 150) = 8.53, p = .004); the more credible endorser had a higher mean PI score (M = 10.78) than did the less credible endorser (M = 8.79). The main eect for corporate credibility was signicant (F(1, 150) = 17.03, p 5 001); the more credible companys mean PI score (M = 11.07) was larger than the less credible rm (M = 8.2). Thus, H3A and H3B were supported. We again used t-tests to compare the eects of endorser and corporate credibility where one was high and the other low. When endorser credibility was high and corporate credibility was low (see Table 2), the subjects Aad was more positive (M = 14.5) than when corporate credibility was high and endorser credibility low (M = 12.2). This dierence was statistically signicant (t(77df) = 2.9, p = .006) supporting H4. When corporate credibility was high and endorser credibility was low, subjects had a higher attitude-toward-thebrand (M = 13.9) than when corporate credibility was low and endorser credibility was high (M = 11.7). This dierence also was statistically signicant (t(77df) = 3.04, p = .003), supporting H5. Finally, when corporate credibility was high and endorser

credibility was low, mean purchase intent (M = 9.98) was only slightly larger than when endorser credibility was high and corporate credibility low (M = 9.09). This dierence was not statistically signicant (t(77df) = .87, p = .387), a nding that supports H6. To summarize, the predicted eects of endorser and corporate credibility on Aad, AB, and PI in the second study were as hypothesized, except perceptions of corporate credibility did not signicantly inuence attitude-toward-the-ad. The relative eects of endorser and corporate credibility were similar to those found in study one, as the eect size estimates shown in Table 2 show. Endorser credibility had a stronger inuence on Aad (eta = .379) than corporate credibility had (.067), and corporate credibility had a stronger inuence on AB (.463) than did endorser credibility (.148). The relative inuence of both types of credibility on PI was nearly equal (.307 and .213) with corporate credibility slightly greater.
DISCUSSION This paper presents the results of two studies assessing the relative importance of corporate and endorser credibility on consumers attitudes-toward-the-ad, attitudestoward-the-brand, and purchase intent. The results of Study One, which utilized female respondents, support the hypotheses that the degree of credibility of an endorser does have an impact on all three outcome variables (cf., Atkin and Block 1983; Craig and McCann 1978; Mitchell and Olson 1981). The more credible the endorser, the more positive is her inuence on consumer attitudes and purchase intentions. These results were replicated in Study Two using male subjects, supporting the idea that men are also inuenced by the degree of credibility of a male spokesperson. Study One also supported the generalization that the degree of credibility of a corporation inu-

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Table 2: Anova results from Study Two A. MEAN SCORES (n = 154) ENDORSER CREDIBILITY LOW n = 36 Aad = 12.03 AB = 11.53 PI = 7.33 n = 44 Aad = 12.23 AB = 13.93 PI = 9.98 HIGH n = 35 Aad = 14.51 AB = 11.71 PI = 9.09 n Aad AB PI = = = = 39 15.51 15.80 12.31 n = 71 Aad = 13.25 AB = 11.61 PI = 8.20 n Aad AB PI = = = = 83 13.77 14.81 11.07

LOW CORPORATE CREDIBILITY

HIGH

n = 80 Aad = 12.14 AB = 12.85 PI = 8.79 B. EFFECT SIZES FOR THE MAIN EFFECTS

n Aad AB PI

= = = =

74 15.04 13.86 10.78

INDEPENDENT VARIABLES DEPENDENT VARIABLES Aad AB PI CORPORATE CREDIBILITY eta = .067 .463 .307 ENDORSER CREDIBILITY eta = .379 .148 .213 .239 .143 R2 = .149

ences attitudes toward the ad and the brand, as well as purchase intent. The greater the credibility of the company, the more positively it aects the outcome variables thus conrming arguments made by Goldberg and Hartwick (1990), Newell (1993), Fombrun (1996), Keller and Aaker (1998), and Laerty and Goldsmith (1999). Study Two indicated that men incorporate their impressions of the companys credibility when evaluating the brand and purchase decisions; however, perceptions of corporate credibility did not seem to have a signicant inuence on their attitudes toward the ad. This result may be due to

an unmeasured variable such as involvement. The men may have been less involved with athletic shoes than the women were and consequently, paid more attention to peripheral cues, ie, the endorser (see Petty, Cacioppo, and Schumann 1983). It may also be that the credibility of a company is less important to men when evaluating an ad for certain products (in this case athletic shoes). Finally, it may be that when we presented information on the companies to the subjects, the females paid more attention to the given information than the males. Kempf and Laczniak (1998) found that men do not process information

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as thoroughly as women do. Specically, they state that Females attempt to assimilate all available information, while males tend to rely on one or a few highly salient cues, unless strongly motivated to perform more detailed processing (p. 229). This would explain the relatively high variability in corporate credibility evaluations for women versus those for the men. In assessing which credible source had more inuence on attitudes toward the ad and the brand when both sources were evaluated simultaneously, the eect sizes in both studies suggest that a more credible endorser had a stronger impact on the evaluations of the advertisement than did a highly credible corporation, and a more credible company appeared to have a stronger impact on brand attitudes than did a highly credible endorser. These ndings are consistent with the ELM for processing information in an advertising context and support the results found by Laerty and Goldsmith (1999). They also are intuitively appealing since perceptions of the endorser are probably more closely associated with the actual ad, but the company is often more closely associated with the brand name (eg, Kelloggs and Pepsi). Additionally, this interpretation is consistent with Keller and Aakers (1998) ndings on corporate credibility and brand extensions. Moreover, the ndings in both studies also suggest that corporate credibility is just as important as the credibility of the endorser in determining purchase intentions. This is consistent with the ndings of Newell (1993) and Laerty and Goldsmith (1999). Similarly, Davis (1994) found an overwhelming majority of consumers have stated that their purchase decisions are at least in part inuenced by their view of the parent companys good citizenship. According to Laroche, Kim, and Zhou (1996), familiarity with a brand appears to inuence a consumers condence toward the brand, which in turn aects his inten-

tion to buy that same brand. In the case of high corporate credibility, when the brand attributes are lacking in the ad as in our experiments, the reputation of the rm may give consumers more condence that the product is a good one and make them more willing to purchase the brand. The credibility of the endorser also has been shown to inuence purchase intent. Ohanian (1991) found that, in particular, the perceived expertise of the spokesperson was consistently related to respondents likelihood to purchase the product. In addition, endorsers with more credibility appear to inuence consumer purchase as part of the informational content of advertisements. Along with facts, product demonstrations, and visual and musical eects, the presence of an endorser in an ad contributes to what consumers think about an ad, whether they like it or not, and how persuasive they nd it (Belch and Belch 1994, Ch. 7). These communication eects may lead consumers to try brands or to reinforce existing brand attitudes. Positive brand attitudes may predispose consumers to want to buy specic brands, and ultimately, actual purchase may reect this chain of cognitive, aective, and conative mental states (see Lutz et al. 1983; MacKenzie and Lutz 1989). Many observers have argued that corporate reputation is another variable that aects how consumers react to brands (Caruana 1997; Fombrun 1996; Goldberg and Hartwick 1990; Herbig and Milewicz 1995; Newell 1993). Our studies show how one aspect of corporate reputation, namely, corporate credibility (see Fombrun 1996, p. 72), inuences consumer attitude-toward-thead, attitude-toward-the-brand, and purchase intent. In addition, we suggest that the ndings help explicate the dierential inuences of endorser credibility and corporate credibility on these three important consumer variables. The two source variables have approximately equal inuences on purchase

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intent. The relatively stronger endorser eect on Aad is matched by a relatively stronger corporate eect on AB, so that the cumulative eect on PI is nearly equal, but they have a dierential impact on the causal sequence of Aad, AB, and PI. This interpretation is consistent with the Dual Mediation Hypothesis Model (Brown and Stayman 1992; MacKenzie et al. 1986), but further empirical examination is needed to substantiate this supposition. The studies have limitations. Recognizing these should help direct future research eorts. First, with regard to the stimuli, the ndings are limited to the celebrities, media, and products tested. Future research with other celebrities and products or services can shed light on the limits of these ndings. Studies should use broadcast in addition to print media. Secondly, the classroom setting of the experiments may have created a higher level of task involvement than when consumers view ads and evaluate brands in more natural settings. This does not compromise the studys internal validity since there is no reason to believe this factor would have dierentially aected the treatment groups. Testing whether the eects hold under more typical conditions found in most consumers homes would extend the generalizability of the results. Thirdly, we used homogenous student samples in the experiments, so generalizations to other populations should be made with caution. Fourth, the model of the eects of endorser and corporate credibility that we are proposing does not explicitly include such variables as time (ie, viewed ad, purchase product), consumer need, frequency of exposure, desired product vs. actual purchase, past experience with the product and/or endorser, etc. Future theory development and model testing should explicitly incorporate additional constructs such as these to improve its explanatory and predictive ability. Finally, we used a ctitious brand name

and company to avoid eects due to previously acquired brand knowledge. This may be appropriate when determining attitude formation toward new brands, but may not generalize to existing brands. Future research may focus on real brands and corporations to add realism. Despite these limitations, the ndings support the generalization that both endorser credibility and corporate credibility inuence attitude-toward-the-ad, attitudetoward-the-brand, and purchase intent. Evaluating how both these sources of credibility inuence the advertising process, marketing and advertising practitioners can gain a more complete understanding of the impact multiple credibility sources have on consumers attitudes and purchase intentions and thus, may be able to develop more eective marketing communication strategies. In addition, the ndings conrm that corporate credibility is an important dimension of corporate reputation (Fombrun 1996). Companies should take positive steps to preserve and enhance their credibility, ie, their trustworthiness and expertise, because of the impact these perceptions have on consumer response to ads and brands.

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15 years ago. The company employs over 350 people at their three plants. Consumer Reports has named Pride, Inc. one of Americas Top 100 socially conscious corporate citizens. The company has been a major source of support to community and environmental issues in the areas where its plants are located as well as in Tacoma. Pride, Inc. also contributes to sports-related programs at several universities. Additionally, it has been cited in industry publications as having superior products.
The Pride Corporation Pride, Inc., was established in 1986 and is headquartered in Tacoma, Washington. The company was one of the latecomers to begin manufacturing sports shoes designed for the comfort and t of recreational athletes. With just ten years of experience, Pride, Inc. is one of the youngest manufacturers of sports shoes in the country. Its US sales have been concentrated in the northwest and last year, the company sustained sales losses of $50m. Exports to Europe and Asia have not grown as expected since entering these markets three years ago. The company employs fewer than 100 people in its plant. Recently, Pride, Inc. has encountered a number of diculties including poor quality control and governmental concerns about the substandard pollution controls in its plant. Additionally, some Pride, Inc. ocers were investigated for possible SEC violations although the company ocials deny the allegations. APPENDIX B Copy accompanying photographs of endorsers
The t is phenomenal. I cant aord a pair of athletic shoes that dont feel great from the moment I put them on. Thats why Ive been so impressed with Pride Natural Fit shoes. They t so naturally, its like they were custom made just for me. If I can wear them, anyone can.

APPENDIX A The Pride Corporation Pride, Inc., was established in 1932 and is headquartered in Tacoma, Washington. The company was one of the rst to begin manufacturing sports shoes designed for the comfort and t of recreational athletes. With 64 years of experience, Pride, Inc. is one of the oldest manufacturers of sports shoes in the country. Its US sales have been concentrated in the northwest and last year, the company achieved record sales of $50m. Exports to Europe and Asia have grown steadily since entering these markets

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