Consumer Reactions to Firm Signals in Asymmetric Relationships

Consumers are often faced with asymmetric relationships in which they are at the mercy of the firms. An important stream of research has focused on signaling properties of several marketing variables to reduce consumer selection problems. However, very little is known about consumer reactions to firm signals. Moreover, traditional studies on relationships have adopted either an economic or a social point of view. This article adopts a multidisciplinary approach and proposes a model that shows how consumers react to the quality signals the firm sends to the market. It provides an empirical test of the relation between firm signals and consumer trust: The firm sends signals, consumers develop trust in them, and therefore, reduce their fear of the firm’s opportunism. The model is tested for the relationship customers establish with their regular automotive service provider.