Impact of perceived brand localness and globalness on brand trust to predict customer responses towards retail banks: the case of Trinidad and Tobago

Purpose This paper compares the relative influence of perceived brand localness (PBL) and perceived brand globalness (PBG) on customer behavioral responses of brand loyalty (BL), willingness to pay price premiums (WTPP) and positive word of mouth (PWOM) towards retail banks. It further examines the mediating effects of brand trust (BT) on these relationships. Design/methodology/approach Data were collected from 320 retail banking customers in Trinidad and Tobago and analyzed with exploratory factor analysis and multiple regression analysis (MRA). Findings The findings show that PBL has a more substantial impact on BL, willingness to pay a price premium and PWOM compared to PBG. The results also show that BT mediates the relationships between PBL and PBG on customer brand-related responses. The effect is more substantial for brands perceived as local. Practical implications The findings have important implications for banks in developing countries and suggest that localized positioning and branding strategies will trigger preferential brand-related responses in retail banking services. The paper ends with a discussion on the practical implications of these findings and present future research opportunities. Originality/value The paper responds to the rising skepticism and discomfort with globalization. It offers bank managers valuable insights on how global and local branding strategies affect brand-related outcomes. The study contributes to the literature by empirically comparing the effects of PBL and PBG in retail banking and demonstrating the unique contribution of BT in explaining why customers respond differently to global and local brands. It also simultaneously considers multiple customer responses.

Automated summary

This study compares the effects of perceived brand localness and perceived brand globalness on customer behavioral responses in retail banking, finding that localness has a greater impact on loyalty, willingness to pay premiums, and word of mouth. Brand trust plays a mediating role in the relationship between local and global brands, with a stronger effect on local brands.