The Differential Roles
of Brand Credibility
and Brand Prestige in
Consumer Brand Choice
Tae Hyun Baek and Jooyoung Kim
University of Georgia
Jay Hyunjae Yu
Sogang University, South Korea
ABSTRACT
This study explores how brand credibility and brand prestige affect
brand purchase intention and empirically investigates how the com-
binatory mechanism of brand credibility and brand prestige materi-
alize across multiple product categories. The proposed model of six
latent constructs is tested with structural equation modeling analy-
sis: brand credibility, brand prestige, perceived quality, information
costs saved, perceived risk, and brand purchase intention. The
results suggest that both brand credibility and brand prestige posi-
tively influence brand purchase intention through perceived quality,
information costs saved, and perceived risk under different product
categories representing the high and low self-expressive nature.
Several implications for advertising messages and brand positioning
strategies are discussed. © 2010 Wiley Periodicals, Inc.
Credibility and perceived value in the brand are often regarded as two impor-
tant virtues marketers need to pursue to build a strong brand (Vanrenen, 2005).
Credibility of a brand, defined as the perceived believability of whether a brand has
the ability and willingness to continuously deliver what has been promised
(Erdem & Swait, 2004), provides unbeatable benefits to both consumers and
Psychology & Marketing, Vol. 27(7): 662–678 (July 2010)
Published online in Wiley InterScience (www.interscience.wiley.com)
© 2010 Wiley Periodicals, Inc. DOI: 10.1002/mar.20350
662
BRAND CREDIBILITY AND BRAND PRESTIGE
Psychology & Marketing DOI: 10.1002/mar
663
companies. Simply put, for consumers, purchasing a credible brand assures a
quality that they can count on. For companies, a credible brand means that
marketing efforts will be more cost effective because of the heightened likelihood
of message acceptance, thus bringing companies increased sales through repeat
customers and referrals. Can advertising help increase brand credibility? Lit-
erature shows that advertising alone may have some limitations in the forma-
tion of strong brand credibility, but that it can boost credibility through the
added expectations that consumers will finally confirm when they purchase
and use the products. Theories of confirmation bias (e.g., Deighton, 1984), for
example, clearly show the significant role advertising plays in increasing per-
formance evaluations and brand credibility.
Another important virtue for building a strong brand is to have a high per-
ceived value in a brand. Although many different dimensions of perceived prod-
uct or brand value are defined in the literature, this study focuses on a more
hedonic and social aspect of value—“brand prestige,” defined as the relatively
high status of product positioning associated with a brand (Steenkamp, Batra, &
Alden, 2003). As brand credibility may indicate a more tangible and utilitarian
portion of perceived value, investigating another competing but different share
of perceived value (i.e., brand prestige) together with brand credibility will show
a bigger and more balanced picture of consumer decision processes. On the sur-
face, consumers in the U.S. market appear to spend more on luxury or presti-
gious brand categories. For the car market, for example, Lexus reported a 5.2%
gain in sales in the first eight months of 2007, compared to sales of the same
period in 2006. In addition, BMW and Audi sales were up 8.7% and 10.8%,
respectively, from 2006 (Simon & Reed, 2007). Accordingly, it is not surprising
to see that the consumer market has recently seen a considerable increase in the
amount of luxury brand marketing (Wiedmann, Hennigs, & Siebels, 2009; Keller,
2009). For example, Louis Vuitton’s advertising campaign, developed by the ad
agency Ogilvy & Mather, reflects a move by some luxury companies to connect
with consumers in a more strategic way, as opposed to the typical in-house
approach favored by many luxury brands (Pfanner, 2007).
Despite the increasing recognition of the importance of brand credibility
and brand prestige as brand signals, very few studies have investigated how both
brand credibility and brand prestige work in consumer choice behavior. Under-
standing the combinatory mechanism of brand credibility and brand prestige in
the formation of brand purchase intention will be very important and mean-
ingful for advertisers and marketers, as it provides guidance in developing
brand positioning through the most appropriate advertising and branding strate-
gies. In addition, little is known about whether conditions under the combina-
tory mechanism of brand credibility and brand prestige may be stronger or
weaker across various product categories in consumer decision making.
The purpose of this study is twofold. First, it will investigate how brand cred-
ibility and brand prestige influence brand purchase intention. More specifically,
this research extends Erdem and Swait’s (1998) study by incorporating a new
construct that denotes brand prestige in the existing model of brand credibility.
Second, it will examine how the magnitude of brand credibility and brand pres-
tige effects vary according to the self-expressive–based product classification
scheme. This investigation can yield generalizability and robustness by exam-
ining how the effects of brand credibility and brand prestige work differently
under various product classifications.
BAEK, KIM, AND YU
Psychology & Marketing DOI: 10.1002/mar
664
THEORETICAL BACKGROUND
From an information economics perspective, signaling theory is based on the
assumption that a different level of product information flows between consumers
and firms and causes the problem of information asymmetry (Kirmani &
Rao, 2000). Information asymmetry implies consumer uncertainty about the
quality of a product or service provided by a company. One possible solution is
the use of signals. A signal is defined as “an action that the seller can take to
convey information credibly about unobservable product quality to the buyer”
(Rao, Qu, & Ruekert, 1999, p. 259).
Advertising, for example, may serve as a signal of a firm’s commitment to
its product or service quality (Nelson, 1974). Consumers also use their per-
ceptions of a firm’s advertising expenditures as cues to infer quality when
lacking other information about product quality (Kirmani, 1990). Since high
advertising costs are incurred primarily by high-quality firms that can recover
their advertising expenditures from future sales (Rao, Qu, & Ruekert, 1999),
such firms use advertising as a signal to ensure that their product or service
claims are credible. If low-quality firms spend large sums of money on adver-
tising, they do not typically recover their advertising costs because consumers
would recognize their low quality after purchase and repeat purchase would
not occur.
To date, it is a common practice for firms to use brands as signals to reduce
consumer uncertainty about product or service quality in a marketplace in which
asymmetric information exists (Washburn, Till, & Priluck, 2004; Gammoh, Voss,
& Chakraborty, 2006). According to Erdem and Swait (1998), a brand signal
consists of “a firm’s past and present marketing mix strategies and activities asso-
ciated with that brand. In other words, a brand becomes a signal because it
embodies (or symbolizes) a firm’s past and present marketing strategies”
(p. 135). Signaling theory suggests that consumers may perceive brands as a sig-
nal of unobservable product quality. For example, Rao, Qu, and Ruekert (1999)
argue that consumers tend to perceive branded products as higher in quality than
unbranded products. If consumers believe this logic, they will accept the branded
product’s quality claim as true. Therefore, brands can be effective signals of
unobservable quality.
Signaling theory also suggests that credibility is a key determinant of a brand
signal for conveying information effectively (Tirole, 1988). This implies that
brands can serve as credible signals because they may embody the cumulative
efforts of prior marketing communication strategies. That is, at the heart of
brands as signals is brand credibility.
In addition to brand credibility, a brand signal echoes certain symbolic mean-
ings about a product or service (Rao & Ruekert, 1994). The symbolic meaning
embedded in brands can often be used to represent the prestigious value of
brand positioning, referred to as brand prestige (Steenkamp, Batra, & Alden,
2003). Kapferer (1992) suggests that globally positioned brands are likely to
have special credibility and prestige.
Given the potential utility of brands as signals, both brand credibility and
brand prestige may influence consumers’ brand purchase intention because
they can enable consumers not only to increase their confidence in the
brand selection, but also to enhance their social status and self-worth through brand
purchase.
BRAND CREDIBILITY AND BRAND PRESTIGE
Psychology & Marketing DOI: 10.1002/mar
665
Brand Credibility
The notion of brand credibility was inspired by Erdem and Swait (1998), who
examined consumer-based brand equity by drawing on signaling theory. As
briefly introduced earlier, they define brand credibility as the believability of the
product position information embedded in a brand, depending on consumers’
perceptions of whether the brand has the ability and willingness to continu-
ously deliver what has been promised (Erdem & Swait, 2004). It has been well
known that brand credibility consists of two main components: trustworthiness and
expertise (Erdem & Swait, 1998, 2004; Erdem, Swait, & Louviere, 2002; Erdem,
Swait, & Valenzuela, 2006; Sweeney & Swait, 2008). Trustworthiness refers to the
willingness of firms to deliver what they have promised. Expertise refers to the abil-
ity of firms to actually deliver what they have promised. Since the trustwor-
thiness and expertise of a brand are based on the cumulative impacts of all
previous marketing strategies and actions taken by a brand, it is not surpris-
ing that brand credibility reflects the consistency of marketing mix strategies
through brand investments such as advertising.
The constructs of consistency, brand investments, and clarity are antecedents
to brand credibility. Consistency represents the degree of harmony and con-
vergence among marketing actions and the stability of marketing mix strate-
gies over time (Erdem, Swait, & Valenzuela, 2006). Roberts and Urban (1988)
suggest that consistency in product quality leads to a low level of inherent prod-
uct variability. Brand investments represent a firm’s spending on brands in
order to demonstrate long-term brand commitment and to assure consumers
that brand promises will be kept (Klein & Leffler, 1981). Furthermore, clarity
represents a lack of ambiguity of the product information contained in a brand
(Erdem, Swait, & Louviere, 2002). In this sense, brand credibility can be created
and shaped by higher consistency, higher clarity, and higher brand investments
over time, through all practices and aspects of marketing communications such
as brand image advertising, sponsorship, or product placement. According to
Sweeney and Swait (2008), brand credibility represents the summary of brand-
to-consumer and consumer-to-brand communication over time because con-
sumers can have a relationship with the brand, and the brand communicates
with the consumer.
Prior research has suggested that brand credibility positively affects brand
purchase intention through perceived quality, perceived risk, and information
costs saved. In particular, perceived quality refers to “the consumer’s judgment
about the superiority or excellence” of a product or service (Zeithaml, 1988,
p. 5). Shiffman and Kanuk (2003) define perceived risk as “the uncertainty con-
sumers face when they cannot foresee the consequences of their purchase deci-
sions” (p. 153). On the other hand, Erdem and Swait (1998) assert that
information costs saved can be conceptualized by lowering information gather-
ing and processing costs, which include expenditure of time, money, and psy-
chological costs.
For example, Aaker (1991) points out that higher perceived quality, lower
information costs, and lower risks associated with credible brands can increase
consumer evaluations of brands. Consistent with the foregoing argument, Erdem
and Swait (1998) suggest that brand credibility increases perceived quality,
decreases perceived risk and information costs, and thus increases expected
consumer utility (i.e., brand purchase intention). It is also argued that perceived
risk is positively associated with information costs.
BAEK, KIM, AND YU
Psychology & Marketing DOI: 10.1002/mar
666
In order to replicate and test the generalizability of Erdem and Swait’s (1998)
framework across various product categories, the following hypotheses are
retested in this study. Later, these hypotheses will also allow us to examine the
differential roles of brand credibility and brand prestige in influencing con-
sumers’ brand purchase intention.
H1: Brand credibility will positively affect the perceived quality.
H2: Brand credibility will positively affect the information costs saved.
H3: Brand credibility will negatively affect the perceived risk.
Brand Prestige
As defined earlier, brand prestige can represent the relatively high status of prod-
uct positioning associated with a brand (Steenkamp, Batra, & Alden, 2003; Truong,
McColl, & Kitchen, 2009). An inherent, unique know-how, which concerns a
specific attribute or the overall quality and performance of the product, is the key
criterion for a brand to be judged prestigious (e.g., Dubois & Czellar, 2002). Further,
a higher price (e.g., Lichtenstein, Ridgway, & Netemeyer, 1993; Wiedmann, Hennigs,
& Siebels, 2009; Truong, McColl, & Kitchen, 2009) and the influence of reference
groups (e.g., Bearden & Etzel, 1982) on the consumption of prestige or luxury
brands are often used as proxies for brand prestige, even though they are not
equivalent to brand prestige. Alden, Steenkamp, and Batra (1999) argue that
consumers tend to perceive the consumption of prestige brands as a signal of
social status, wealth, or power since prestige brands are infrequently purchased
and are strongly linked to an individual’s self-concept and social image. Nev-
ertheless, brand prestige does not affect all individuals to the same degree. In
other words, consumption of prestige brands may vary according to the sus-
ceptibility to others (Vigneron & Johnson, 1999). Simply put, publicly self-
conscious individuals are particularly concerned about how they appear to others
and might be more likely to purchase prestige brands. Conversely, privately
self-conscious people are more focused on their inner thoughts and feelings, and
thus would be less likely to purchase prestige brands (Fenigstein, Scheier, &
Buss, 1975). According to O’Cass and Frost (2002), prestige brands differ from
non-prestige brands in some ways that may affect consumers’ purchasing motives
to improve their social standing and self-expression. Compared with non-
prestige brands, prestige brands not only provide intangible benefits to con-
sumers, but also create value for the consumer through status and conspicuous
consumption. Along this line, some scholars have suggested that consumers
may associate global brands as having higher prestige because of their relative
scarcity and higher price compared with local brands (Bearden & Etzel, 1982;
Batra et al., 2000). Wong and Zhou (2005) found that perceived brand prestige
has a greater effect on purchase intention when the product category is of high
social display value.
Brand prestige appears to be linked directly with perceived quality. For exam-
ple, Steenkamp, Batra, and Alden (2003) found that consumer value of a global
brand is positively associated with both brand prestige and perceived brand
quality. Furthermore, their results indicated that brand prestige has a signifi-
cant impact on purchase intention. Vigneron and Johnson (1999) synthesized the
