The influence of deceptive advertising on customer trust and loyalty : A Study of Telecom Sector in Pakistan

University essay from Umeå universitet/Företagsekonomi; Umeå universitet/Företagsekonomi

Abstract:

Purpose: The effects of deceptive advertising practices on customer loyalty towards mobileservice providers have been investigated empirically by this study. The main contribution ofthis study is to investigate the perceived deception-customer loyalty relationship under themoderating effect of corporate image and mediating effect of customer trust. The study is done in the context of Pakistan’s telecommunication sector.Existing literature is insufficient to explain perceived deception and customer loyalty relationship. We proposed a model to test and explain the interrelationship of deception,trust, loyalty and corporate image.

Research Methodology: we have adopted quantitative research method, according to needof our study. A total sample of 232 respondents has been achieved with the help of selfadministeredquestionnaire. Measurement scale for perceived deception were taken fromChaouachi & Rached (2012) and for corporate image, customer trust and customer loyaltyhave been found from Aydin & Özer (2005).

Analysis & Findings: Descriptive and inferential statistical tools were used for analysis.Correlation analysis, simple and multiple regression analysis were conducted under theinferential statistical part. The findings have rejected the proposed hypothesis that perceiveddeception is negatively associated with customer trust and loyalty. We found customer trustas a mediator between perceived deception and customer loyalty while corporate imagemoderates the relationship between perceived deception and customer trust.

Research Limitations: the study could not achieve highly representative sample of overallpopulation as Facebook was selected to conduct survey due to time constraint.

Implications and future research: The study shows that deception in advertising perceivedby customer does not affect trust and loyalty in a negative way which suggests that there areadditional factor that can explain the relationship further. A comparative study withqualitative focus could be revealing in this context.

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