Brand personality andcustomer trust in community

pharmaciesJason Perepelkin

College of Pharmacy and Nutrition, University of Saskatchewan,Saskatchewan, Canada, and

David Di ZhangEdwards School of Business, University of Saskatchewan,

Saskatchewan, Canada

AbstractPurpose – The community pharmacy industry is an increasingly competitive sector, whereindependent pharmacies must compete with national and multinational chains for market share. Eachpharmacy seeks to differentiate and earn customer trust. The purpose of this paper is to seek to betterunderstand the effectiveness of differentiating via developing a unique corporate brand personality inthe pursuit of customer trust.

Design/methodology/approach – A survey was conducted in a small city in Western Canada.Patients who have recently filled a prescription were asked to assess their perceptions about the brandpersonality of the pharmacy they last visited, and evaluate how much they trust the pharmacy. Datawere analyzed using SPSS and structural equation modeling (SEM).

Findings – The results indicated that significant brand personality differences exist among varioustypes of pharmacies. Customers rated independent pharmacies slightly more trustworthy thanmultinational mass merchandise and national chain pharmacies. SEM analysis revealed that sincerityand competence have the most significant impact on building customer trust.

Originality/value – The findings suggest that independent pharmacies may be able to differentiatethemselves by developing a brand personality that is competent and sincere, whereby they earn thetrust from their customers. The authors’ findings also suggest that a sophisticated appearance mightbe an expensive option that does not provide satisfactory return on the investment.

Keywords Canada, Community pharmacy, Brand personality, Customer trust, Differentiation,Competitive advantage, Structural equation models

Paper type Research paper

IntroductionThere has been a noticeable trend of transformation in the landscape of the pharmacyindustry in Canada. Loblaw’s, a major Canadian grocery chain with annual revenueestimated at $7 billion, has recently announced an aggressive expansion plan of itspharmacy division in the province of Ontario (Strauss, 2010). It is not alone. Largenational and multinational corporations are gaining a larger portion of market share.Small independent community pharmacies are struggling to survive in the increasinglycompetitive pharmacy industry.

According to mainstream theories on corporate competitive strategies, such asPorter’s (1985) theory of competitive advantage, differentiation is one of the mosteffective and frequently deployed strategies. Several scholars have examined servicequality and customer satisfaction in the context of retail pharmacy ( Johnson et al., 1998;

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International Journal ofPharmaceutical and Healthcare

MarketingVol. 5 No. 3, 2011

pp. 175-193q Emerald Group Publishing Limited

1750-6123DOI 10.1108/17506121111172194

Larson and MacKeigan, 1994; Schommer and Kucukarslan, 1997) and highlighted theneed to adapt general marketing constructs, such as service quality and customersatisfaction to the unique environment of the pharmacy industry. Prior studies haveindicated that another way of seeking differentiation is to develop a corporate brand(Anisimova, 2007; Davies, 2008; Keller and Richey, 2006). In this paper, we attempt toinvestigate the roles that perceived brand personality and customer trust play in thecontext of retail pharmacy.

The theory of brand personality asserts that brands often evolve into a state whereconsumers perceive them to have certain characteristics, much like human personalitytraits (Aaker, 1997). While brand identity is a common theme in consumer research,little has been done in the context of retail pharmacies. The few scattered studies on thebrand identity of community pharmacists and the pharmacy profession were typicallysecondary to other research objectives.

Our study is intended to investigate what brand differentiation strategiesindependent community pharmacies might employ to compete in such a context.We are interested in examining long-term strategic alternatives that independentpharmacies can employ to differentiate. More specifically, this paper seeks to find theanswers to two research questions. First, we seek to identify whether consumersperceive different types of pharmacies to have different brand personalities. Second,we attempt to examine the effects of brand personality types on customer trust andwhich type of brand personality customers trust more.

We chose to investigate the competitive dynamics among pharmacies in a small cityin Western Canada. This city has a population of approximately 40,000 residents. It islocated about 150 kilometers from a major center of the province. We believe that thisselected setting is appropriate because this smaller city is isolated enough thatconsumers typically fulfill their pharmaceutical needs within the city; and it is smallenough that most residents are aware of the only independent pharmacy in town. Ourstudy included four pharmacies in the city – each possessing unique characteristics:

(1) a pharmacy that is a department within an multinational mass merchandiser(Mass);

(2) a franchised store of a national specialty pharmacy chain (Chain);

(3) a pharmacy located within a multinational supermarket chain (Super); and

(4) a local independent, owner-operated community pharmacy located in adowntown shopping mall (Indie).

While we do not take a particular stand against national and multinationalcorporations, we are particularly interested in understanding how small- tomedium-sized enterprises, in this case a local independent pharmacy, compete withmuch stronger national and multinational corporations.

Pharmacy managementPharmacies play an important role in the delivery of healthcare services (Gebauer, 2008).Pharmaceutical drug expenditures account for approximately 10 percent of healthcarecosts in the USA (Rizzo and Zeckhauser, 2009). In Canada, pharmaceutical drugexpenditures in 2008 accounted for 17.4 percent of healthcare costs, or $29.8 billion(Canadian Institute for Health Information, 2009). The healthcare industry has been

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criticized for lagging behind other industries in creating innovative new products andservices that address quality (Borkowski andGordon, 2005). Phillips andGarman (2005)argued that while healthcare organizations are under tremendous pressure to controlcosts and continue to deliver high-quality care, structural and cultural barriers inhealthcare organizations have impeded entrepreneurial behaviors. By removing suchbarriers, healthcare organizations would be able to secure alternative revenue sourcesand encourage entrepreneurial and intrapreneurial activities that are compatible withthe traditional mission of the healthcare industry to provide the best healthcare possible.Furthermore, healthcare organizations need to transform their administration, buildtrusting relationships with stakeholders, and communicate better the concept of change(Borkowski and Gordon, 2005).

Many researchers have paid close attention to community pharmacies, and seenthem as a special category within the retail industry. A prior study has revealed evenmany pharmacists would perceive that consumers view them as being analogous togrocers (Kisa et al., 2007).

In the broader retail industry context, researchers have documented, early on, themove from small independent retail stores to large superstores and hypermarkets(Whimster, 1981). Parker (1985) noted that small independent retail stores facedconsiderable problems due to the rapid growth of multiple supermarket companies.Empirical evidence has demonstrated that small independent retail stores can thrive ina fiercely competitive environment as long as they find an effective way to differentiatethemselves from large competitors (Kiker and Kiker, 2008).

More recently, the retail pharmacy industry has undergone a similar trend ofconsolidation. Deregulation and competition from supermarkets, mass merchandisers,and other corporate chains have placed great pressure on independent communitypharmacies (Schmidt and Pioch, 2005). It has been argued that independent communitypharmacies must move away from inward-looking reactive and short-term approaches,and instead make use of opportunities of differentiation (Schmidt and Pioch, 2005).Location alone cannot promise a captured audience, as consumers are willing to travellonger distances to support stores that are perceived as better (Hodgson and Jacobsen,2009). Many community pharmacists have undertaken the dual roles of retail businessperson and healthcare professional (Resnik et al., 2000). Because of this, researchersbelieve these community pharmacists are better positioned to understand the intrinsicrelationship between satisfying customer needs and maintaining business profitability(Schulz and Brushwood, 1991).

Many pharmacists prefer to work with independent community pharmacies as aprior study has shown that pharmacists who primarilywork in independent pharmacieshave a more positive association with professionalism, work environment, andself-image than their counterparts in chain stores (Szeinbach et al., 1994). Eventually,many pharmacists want to have their own independent pharmacies (Kisa et al., 2007).Therefore, it appears that even though the rapid growth of corporate chain pharmacieshas put considerable pressure on independent community pharmacies, there is still araison d’etre for independent community pharmacies because they are special.Considering the vast resources that the corporate chains possess, the independentsmustdevelop unique and effective competitive strategies to differentiate themselves in orderto survive. Branding could have been one of such strategies.

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Brand personalities of pharmaciesA brand is a symbol that encapsulates the associations made with a name (Gardnerand Levy, 1955). Brand image concerns the remembered associations held of a brand;while brand personality is the human associations made with a brand (Aaker, 1997;Davies, 2008; Keller, 1998). Corporate brand personality is a form of brand personalityspecific to a corporate brand, and reflects the values and actions of the corporation andbusiness (Keller and Richey, 2006).

A significant relationship exists between the consumer-perceived corporate brandand consumer attitude and loyalty. Corporate brand personality is one of the mostcritical and consistent predictors of both attitudinal and behavioral loyalty to thatbrand (Anisimova, 2007). Preserving and reinforcing the essence of brand personalitycan ensure the long-term viability of a brand’s equity (van Rekom et al., 2006).For example, Sung and Yang (2008) investigated corporate brand personality in auniversity context. They demonstrated that corporate brand personality is positivelyassociated with outwardly perceived prestige and reputation, and has a positiveinfluence on supportive customer attitudes. Davies (2008) argued that corporatebranding and personality also impact internal stakeholders. He found, for example,that an agreeable corporate personality predicts employee satisfaction; the combinationof perceived expertise and attractive corporate personality would enhance employeeperception; of both differentiation and loyalty.

In the face of increased competition, independent stores need to develop distinctivecompetencies (McGee and Peterson, 2000). Under competitive environment, retailbranding has been identified as an effective tool for independent pharmacists andpharmacies to improve their competitive positions (Schmidt and Pioch, 2005).

While little is known about how corporate brand personality applies to pharmacies,some investigative work has been done in closely related fields. Prior research hasfound that consumers often use corporate brand and brand personality as signals whenassessing food and health information (Karstens and Belz, 2006). Consumers preferstronger brands in retail stores; they will make more frequent visits, more purchases,and pay price premiums if they make a strong association and identification with acertain brand of retail stores (Henderson and Mihas, 2000). Therefore, for a small localindependent pharmacy to survive among several national and multinational chains ofpharmacies, it does not seem to be logical to engage in direct price competition. Instead,it would be much more effective for the independent pharmacies to differentiatethemselves by developing a unique corporate brand personality, provided thatcustomers can actually detect the differences in corporate brand personalities amongvarious types of pharmacies:

H1. Customers perceive that independent community pharmacies have a differentcorporate personality than chain stores.

Customer trust toward pharmaciesSince various types of community pharmacies have unique corporate brandpersonalities, we need to examine which type of personality is more trustworthy inthe views of the customers. We choose customer trust as the measurement for theperformance outcome of a pharmacy because of two reasons. Practically, it is relativelydifficult to obtain financial information to assess the performance of each pharmacy.Theoretically, scholars have argued that customer-based perceptual measures have

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long-term lasting implications (Kohli and Jaworski, 1990). Some of these customer-basedindicators include perceived service quality, customer satisfaction, and customer trust.While these are closely related constructs we focus on customer trust in this paper asscholars have argued that merely satisfying customers is not enough, citing highdefection rates even among satisfied customers (Deming, 1986; Jones and Sasser, 1995;Reichheld, 1996; Stewart, 1997). Customer trust has been highlighted as a centralantecedent to a solid and lasting customer commitment (SanMartin et al., 2004). Trust isan important sub-process for regulating consumer patronage and subsequentrecommendation intentions (Vlachos et al., 2009). Along with customer satisfaction,customer trust is an important stepping stone for building customer relationships (Kimet al., 2009). In situations where direct physical interaction between the customer and theservice provider is limited or absent, such as in an online retail environment, trust isparticularly important for building long-term successful customer relationship(Mukherjee and Nath, 2007). There is a strong relationship between customer trustand customer loyalty (Cho and Hu, 2009; Eisingerich and Bell, 2007).

A prior experimental study on trust formation revealed that consumers with highinvolvement and high anxiety build their trust primarily via a central route ofinformation processing; conversely, consumers with low involvement and low anxietybuild their trust via a peripheral route that relies upon heuristic cues (Yang et al., 2006).Since pharmacy consumers are likely to be in a high involvement and high anxietysituation, they are more likely to rely on objective evidence to build their trust, and lesslikely to base their trust on subjective heuristics, such as appearance.

Few studies have specifically reported customer trust issues in the domain ofcommunity pharmacy, but some scattered evidence has emerged to show its role inhealth-related industries. For example, research has shown consumer trust to be adeterminant of consumer confidence in food safety (de Jonge et al., 2007). As severalwell-publicized food scandals in recent years, such as the 2008 Maple Leaf Foodslisteriosis incident (Attaran et al., 2008), have shown, providing information toconsumers is crucial but not sufficient. Building consumer trust has become animportant goal for companies that have direct impact with consumer health(Meijboom et al., 2006). In the context of genetically modified foods, Huffman et al.(2004) showed that consumers are often bombarded by contradictory information fromvarious sources, and better educated consumers are more likely to trust independentthird-party information sources. Mancilla and Biedermann (2009) argued that withgrowing use of technology for creating, maintaining, and transmitting healthinformation, complicated by an inherent consumer distrust of these systems andincreasing privacy concerns, it is critical for healthcare professionals, includingpharmacies, to build trust with consumers.

Patient counseling is a cornerstone of ethical pharmacy practice and high-qualitypharmaceutical care, as counseling promotes patient compliance with prescriptionregimens and prevents dangerous drug interactions andmedication errors (Resnik et al.,2000). However, economic, social, and technological changes in pharmacy practiceoften require pharmacies to fulfill their professional obligations of providing adequatecounsel to their patients while maintaining business operational efficiency. Researchhas shown that competence and credibility have high explanatory power asantecedents of trust, which has a considerable impact on value chain relationships,consumer word-of-mouth behaviours, and purchase intentions (Sichtmann, 2007).

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As such, we believe a pharmacy with a perceived “competent” type of brandpersonality would earn a higher level of customer trust:

H2. Customers perceive higher levels of trust in pharmacies that are competent.

Research methodResearch settingPrior studies in branding have commonly used surveys and interviews to investigateconsumer perceptions. In this study, we used a survey method to test consumers’experiences with, attitudes toward, and knowledge about, various retail pharmacies.Using computer-aided telephone interview technology, we randomly contactedresidents in a small city in Western Canada with a population of approximately40,000. We chose such a setting because the smaller size increases the chances of anindependent pharmacy being recognized by the population. In larger cities, multipleindependent community pharmacies exist. Consumersmight bemore likely to recognizeand use only the independent pharmacy in close proximity of their residence or place ofemployment. Furthermore, each of these independent pharmacies would have differentlevels of service quality and brand personality. In the small city we selected, most peoplewould know this independent pharmacy (hereafter referred to as the Indie) in town.Three other pharmacies were selected to be part of this study:

(1) the pharmacy department within a multinational mass discount merchandiser(hereafter referred to as the Mass);

(2) a large free-standing pharmacy specialty store being the local franchise of a largeCanadian national pharmacy chain (hereafter referred to as the Chain); and

(3) the pharmacy department of a large international supermarket (hereafterreferred to as the Super).

These four pharmacies all cater to retail customers, hence are community pharmacies.The fifth pharmacy in the city is a department of the local general hospital. It does notdirectly serve walk-in customers, hence excluded in this study.

SampleWe randomly selected 1,000 individuals from the digital local telephone directory. Thedecision of selecting 1,000 names is based on considerations for intended researchpower, estimated response rate, and desired research power. Insufficient power wouldmake it difficult to detect differences, while excessive power would make even trivialdifferences statistically significant. In the context of this study, the power of a one-wayANOVA, for example, is a function of degrees of freedom (nb ! 3), expected effect size(medium, D ! 0.5s), acceptable type-I error (a ! 0.05), and sample size. Suppose weexpect to have a balanced conditions, with n1 ! n2 ! n3 ! n4 ! 50, the value ofnon-centrality parameter would be F ! 1.77. According to the power curve chartprovided by Pearson and Hartley (Glass and Hopkins, 1996), the approximate power ofthe test would be approximately 0.82. While there is no consensus on what level ofstatistical power is ideal, several researchers have suggested that 0.80 would be anacceptable level of power for most statistical analyses in social sciences(Glass and Hopkins, 1996; Kline, 2005). The actual power of the test might beslightly lower if the group size is smaller or unbalanced.

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For the intended structural equation modeling (SEM), the power of the test isdependent upon the number of specified parameters and sample size. For SEM,estimating power is more complicated and tedious. MacCallum and Austin (2000)surveyed over 500 published papers that used SEM and found about 20 percent of thepapers had less than 100 cases in the data. Kline (2005) suggests that 200 cases would beconsidered as “large.” MacCallum et al. (1996) provided a rough table for estimatingstatistical power in SEM with degrees of freedom and root mean square error ofapproximation (RMSEA). A full SEM with both measurement models and structuralrelationships between multi-dimensional latent variables would have about 100 degreesof freedom. A sample size of 132 would yield a statistical power equal to 0.80 for aclose-fit model (RMSEA ! 0.08). We intended to have a sample size of 200. The actualsample size of this study is 149.

Potential respondents were first screened on the basis of age for research ethicsconcerns. Only those over the age of 18 years were invited to answer any furtherquestions. Next, we screened potential respondents by asking whether they had filledprescriptions in the previous six months at one of the four pharmacies in our study.In order to assure that our participants have a reasonably accurate perception about thepharmacy they were assessing, we wanted to control that they have recently visited it.We successfully identified 351 individuals that meet our screening criteria: over the ageof 18 and have had prescriptions filled within the previous six months. A total of149 people agreed to participate in our study, yielding a response rate of 15 percent ofrandom sample, and 43 percent of qualified sample. Among the participants, thenumbers of individualswho had filled their prescription atMass, Super, Chain, and Indiewere 32, 52, 52, and 13, respectively. Demographic characteristics of the respondentsindicated that our respondents came from a wide spectrum of professions andwere somewhat widely distributed in terms of age and income. Using x 2 analysis,we compared the age and income distribution of respondents from each pharmacy withthat of the whole sample. The results indicated that respondents who frequented theIndie store were considerably more likely to be older and have lower income. Thepatrons for the Mass store had lower than average income, but had no significantdifference with regard to age (Tables I and II).

Overall Indie Mass Chain SuperNo. % No. % No. % No. % No. %

20-30 years 14 9.4 2 15.4 4 12.5 6 11.5 2 3.831-40 years 22 14.8 0 0 7 21.9 10 19.2 5 9.641-50 years 30 20.1 1 7.7 6 18.8 15 28.8 8 15.451-60 years 39 26.2 4 30.8 6 18.8 12 23.1 17 32.761 years and plus 43 28.9 6 46.2 9 28.1 9 17.3 19 36.5No answer 1 0.7 0 0 0 0 0 0 1 1.9Total 149 100 13 100 32 100 52 100 51 100x 2 38.14b 7.32 11.26a 11.93a

Notes: aThe critical value for x 2 is 11.07 (n ! 5, a ! 0.05); bthe critical value for x 2 is 15.09(n ! 5, a ! 0.01)

Table I.Age distribution by

pharmacy type

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MeasurementBrand personality. Aaker’s (1997) brand personality scale was used to measurecustomers’ perceptions on the personality of each type of pharmacy in our study. Severalresearchers have questioned the universality of the construct, and argued for the need todevelop derivative brand personality constructs that are more qualitative in nature andmore specific to certain research context (Arora and Stoner, 2009). For example,Braunstein and Ross (2010) developed a brand personality typology that is specific tosports. To the best of our knowledge, there have been no pharmacy-specific brandpersonality scales. Aaker’s (1997) original scale remains one of the most widelyemployedmeasurement tool in diverse industry contexts including hotels (Lee andBack,2010), toys and video games (Lin, 2010), fast food (Sophonsiri and Polyorat, 2009),or country of origin, such as India (Purkayastha, 2009). Aaker’s (1997) brand personalityscale included 42 items over five dimensions, including sincerity, excitement,competence, sophistication, and ruggedness. A sincere brand means that it isperceived as honest and down-to-earth; excitement refers to being daring and spirited;a brand is perceived as competent when it is reliable and intelligent; sophisticatedbrands are charming and upper-class; and rugged brands are tough and outdoorsy.

Respondents were asked to rate the pharmacy that they have most frequentlyvisited on a five-point Likert scale to indicate their degree of agreement with eachitem description, such as “XXX pharmacy is down-to-earth,” from 1 – stronglydisagree, to 5 – strongly agree. A scale reliability analysis revealed that themeasurement scale performed well on all five dimensions, with Cronbach’s alphasequaling 0.95, 0.97, 0.79, 0.96, and 0.93, respectively.

Customer trust. Hess’ (1995) perceived brand trust scale was used to measurecustomers’ perceived trust toward the pharmacy that they have visited mostfrequently. This scale includes 11 items over three dimensions (altruism, honesty, andreliability). Respondents were asked to rate the pharmacy that they had frequentlyvisited on a five-point Likert scale to indicate their degree of agreement with each itemdescription, such as “XXX pharmacy will do whatever it takes to make me happy,”from 1 – strongly disagree, to 5 – strongly agree. The respective sub-scales thatmeasure altruism, honesty, and reliability dimensions demonstrated acceptable togood scale reliability, with Cronbach’s a ! 0.86, 0.67, and 0.85, respectively.

Overall Indie Mass Chain Super

Less than $20,000 7 4.7 1 7.7 3 9.4 1 1.9 2 3.8$20,000-$40,000 22 14.8 3 23.1 7 21.9 3 5.8 9 17.3$40,000-$60,000 31 20.8 5 38.5 9 28.1 11 21.2 6 11.5$60,000-$100,000 32 21.5 3 23.1 4 12.5 12 23.1 13 25More than $100,000 25 16.8 0 0 2 6.3 14 26.9 9 17.3No answer 32 21.5 1 7.7 7 21.9 11 21.2 13 25Total 149 100 13 100 32 100 52 100 51 100x 2 47.40b 21.00b 13.34a 5.90

Notes: aThe critical value for x 2 is 11.07 (n ! 5, a ! 0.05); bthe critical value for x 2 is 15.09(n ! 5, a ! 0.01)

Table II.Income distributionby pharmacy type

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ResultsComparing means using ANOVA. We contrasted the four types of pharmacies on eachof the five dimensions using ANOVA. The results indicated that statistically significantdifferences existed among the various stores along the competence (F ! 3.45, p ! 0.02)and sincerity (F ! 2.96, p ! 0.03) dimensions (Tables I and II). A posthocTukey testwasused to detect pair-wise honest significant differences. The results indicated that Superscored significantly higher than Chain on sincerity (mean difference ! 0.40, p , 0.05)and competence (mean difference ! 0.35, p , 0.05) dimensions.

The differences in other dimensions were not statistically significant. Therefore,H1 is partially supported. The means scores of each pharmacy on each dimension ofthe measure and subsequent ANOVA results are reported in Table III.

Indie Mass Chain Super ANOVA F-value Sig.

Brand personality measuresSincerity (Mean) 4.4601 4.0898 4.0007 4.3985 2.956 0.035SD 0.53467 0.87281 0.85569 0.68062Min. 3.55 2.27 1.22 2.55Max. 5.00 5.00 5.00 5.00Excitement (Mean) 3.8618 3.3289 3.3273 3.5265 0.993 0.398SD 0.87338 1.20211 1.07683 1.16084Min. 2.27 1.27 1.09 1.11Max. 5.00 5.00 5.00 5.00Competence (Mean) 4.4487 4.1825 4.2070 4.5612 3.454 0.018SD 0.53155 0.63349 0.77571 0.53725Min. 3.44 2.78 2.00 2.89Max. 5.00 5.00 5.00 5.00Sophistication (Mean) 3.2821 3.0878 3.2255 3.4306 0.644 0.588SD 1.42463 1.12207 1.03055 1.07903Min. 1.00 1.00 1.50 1.00Max. 5.00 5.00 5.00 5.00Ruggedness (Mean) 2.5128 2.6448 2.3685 2.4523 0.307 0.820SD 1.11401 1.27939 1.11880 1.33895Min. 1.00 1.00 1.00 1.00Max. 5.00 5.00 5.00 5.00Customer trust measuresAltruism (Mean) 4.1410 3.9661 3.9760 4.2163 0.834 0.477SD 0.78276 0.90717 0.96414 0.82517Min. 2.00 1.00 1.00 2.00Max. 5.00 5.00 5.00 5.00Honesty (Mean) 4.2115 3.8568 3.9696 4.0946 1.043 0.375SD 0.81551 0.71506 0.81750 0.66442Min. 2.00 1.25 1.00 2.25Max. 5.00 5.00 5.00 5.00Reliability (Mean) 4.3846 4.3125 4.3077 4.6154 1.746 0.160SD 0.82604 0.78488 0.92141 0.50868Min. 3.00 1.00 1.00 3.00Max. 5.00 5.00 5.00 5.00

Table III.Personality and trust

scores by stores

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We also conducted a mean comparison analysis using ANOVA to contrast customers’perception of trust on these four different pharmacies. The results indicated that Indiescored higher than any other store on the honesty dimension. The overall difference,however, was not statistically significant (F ! 1.04, p ! 0.37).

On the altruism (F ! 0.84, p ! 0.48) and reliability (F ! 1.75, p ! 0.16) dimensions,Indie performed slightly better than Mass and Chain, but not as well as Super. All ofthese differences,while noticeable, were not statistically significant. The relatively smallsample sizemight have been partially responsible for this lack of statistical significance.In the next section, we employed SEM to detect the relationships among constructs.

Testing structural relationships using SEM. We have used the two-step approach inSEM with Amos16 software. We first conducted confirmatory factor analyses (CFA) toensure the goodness of fit for the measurement models. We then specified a structuralmodel to test the relationships between latent variables.

Measurement model of trust. We specified trust as a second-order latent variablewith three dimensions (altruism, honesty, and reliability). Each dimension wasmeasured with intended indicator items (Figure 1). The results suggested that our datafit very well with the theoretical structure of the construct. Although there is nouniversally agreed upon standard for assessing the quality of SEMs, over the years

Figure 1.Confirmative factoranalysis witha second-order latentconstruct of trust

Perceivedaltruism

Q1 et10.62

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Overalltrust

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the conventional approach has been to examine a basket of criteria against a set ofrule-of-thumb acceptable levels. For example, the model is expected to exhibita reasonably small error in relation to its complexity (x 2/df , 2), RMSEA should below (RMSEA , 0.08), Tucker-Lewis Index (TLI, also known as non-normed fit index)and normed fit index should be high (NFI . 0.90), and comparative fit index should behigh (CFI . 0.90) (Bentler, 1990; Joreskog, 1978; Kline, 2005). With that in mind, ourmeasurement model for Trust exhibited a reasonably good fit (x 2 ! 75.12, df ! 41,x 2/df ! 1.83, NFI ! 0.928, CFI ! 0.965, TLI ! 0.944, and RMSEA ! 0.075).

Measurement model of personality. Using the same technique, we specifiedpersonality as a second-order latent variablewith five dimensions (sincerity, excitement,competence, sophistication, and ruggedness). The data did not fit with the theoreticalstructure very well (x 2 ! 1,954.13, df ! 814, x 2/df ! 2.40, RMSEA ! 0.097).We re-specified the model without the second-order latent variable and let the fivefirst-order latent dimensions to freely co-vary (Figure 2). This modification slightlyimproved the model fit by reducing the x 2(1,878.83) and x 2/df(2.32) results. Thisimprovement of fit can be attributed to relaxing the second-order latent variableconstruct structure. The covariance among some of the dimensions was apparently low.Ruggedness, for example, was only modestly related to competence (Cov. ! 0.226,p , 0.01). Covariances among each personality dimension are reported in Table IV.

While the covariance and correlation pattern were not surprising, they wereinsightful. A pharmacy can be high on certain dimensions of personality, but low onothers. This pattern suggests that corporate brand personality should not be consideredas a whole. In other words, there is no such thing as having more personality; there areonly different personalities. Companies develop corporate brand personality in differentmagnitudes only at the dimensional level. Each company could pursue a differentiationstrategy by cultivating a unique brand personality type. For example, the Indie in ourstudy ismore competent and sincere than its competitors, but not as sophisticated. Next,we seek to test whether such lack of sophistication has held it back from earning morecustomer trust.

Structural relationship between personality and trust. Again, using Amos16,we specified a SEMmodel to test the relative strength of relationships between variousdimensions of corporate brand personality and customer trust. In this model, weretained the second-order latent variable specification for the construct of trust. For theconstruct of personality, we retained the five dimensions by letting them freely co-vary(Figure 3) standardized regression weights are reported in Table V.

This model exhibited reasonable fit with data (x 2 ! 2760.73, df ! 1307,x 2/df ! 2.11, RMSEA ! 0.087). More interestingly, the result indicated that bothsincerity and competence had positive and significant impact on customertrust (b ! 0.751, p , 0.01; b ! 0.273, p ! 0.017, respectively). In comparison,excitement (b ! 20.030, p ! 0.825), sophistication (b ! 20.139, p ! 0.432), andruggedness (b ! 0.026, p ! 0.785) did not exhibit any statistically significant impact ongaining customer trust. This suggests that customer trust is related to brandpersonality, but only the sincere and competent type. This finding supports H2.

Discussion, implications, and future researchThis study examined one aspect of how community pharmacies compete with eachother. More specifically, we hypothesized that if a pharmacy develops a unique

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corporate brand personality, it could pursue an effective differentiation strategy to gaincustomer trust. The extant literature is equivocal on what is meant by havinga unique personality. By definition, any personality is unique. We believe thatcompanies should seek to develop the type of personality that is best-aligned with their

Figure 2.Confirmative factoranalysis with co-varyingfirst order latentdimensions of brandpersonality

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que2.26 e26

que2.27 e27

que2.28 e28

que2.29 e29

que2.30 e30

que2.31 e31

0.740.750.790.91

0.810.350.620.650.84

Perceivedsophistication

Perceivedruggedness

que2.32 e320.64

que2.33 e33

0.76

que2.34 e34

0.83

que2.35 e35

0.83

que2.36 e36

0.85

que2.37 e37

0.76

que2.38 e380.78

que2.39 e39

0.76

que2.40 e40

0.80

que2.41 e41

0.93

que2.42 e42

0.91

0.75

0.60

0.66

0.73

0.34

0.88

0.83

0.66

0.73

0.43

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corporate objectives. In this study, we have employed customer trust as the outcomemeasurement. We have identified sincerity and competency as desirable personalitytypes that will help pharmacies to earn better customer trust, because pharmacycustomers typically have high involvement and process information systematically.

Sincerity Excitement Competent Sophistication Ruggedness

Sincerity 1Excitement 0.468 * 1Competent 0.325 * 0.434 * 1Sophistication 0.359 * 0.732 * 0.305 * 1Ruggedness 0.277 * 0.733 * 0.226 * 0.637 * 1

Note: *p , 0.001

Table IV.Covariance among

dimensions of personality

Figure 3.Personality-trust

relationship: a structuralequation model

Excitement

Sincerity

Rugged

Sophistication

Competence

Customertrust

Reliability

Honesty

Altruism

0.75***

–0 .03

0.27**

–0.14

0.03

0.98***

0.90***

0.88***

DV IV Standardized regression weight SE Sig.

Trust Sincerity 0.751 * * 0.183 0.001Excitement 20.030 0.089 0.825Competent 0.273 * 0.123 0.017Sophistication 20.139 0.151 0.432Ruggedness 0.026 0.061 0.785

Notes: *p , 0.05; * *p , 0.01

Table V.Standardized regression

weights on trust

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Bounded by small sample size and other limitations of the study, our descriptiveinformation seems to suggest that the independent retail pharmacy accounts for a muchsmaller market share in comparison to its competitors. The customers who actuallyvisited this independent store rated it well. In fact, customers seemed to have trustedthe independent pharmacy slightly more than some of the corporate chains. Customersperceived the independent pharmacy to have a sincere and competent brandpersonality. While these brand personality differences were statistically significant,they are not enough to produce statistically significant advantage on customer trust.Judging from customer feedback, the independent store was also evaluated to be moreexciting than all the other stores. This store has apparently invested considerableresources and efforts in differentiating itself as the more exciting store in town.Anecdotal observations suggest that many small independent pharmacies often tryhard to be exciting. We have seen some pharmacies plan events for kids and pets,sometimes in the parking lots, hoping to project the image of being exciting andappealing to more customers. Unfortunately, customers do not reward investments inexcitement. This is reflected in the overall negative but insignificant relationshipbetween excitement and trust.

We have also seen some pharmacies investing heavily in renovations to project theimage of ultra-modern sophistication. These tactics often do not work becausecustomers might perceive “exciting events” as gimmicky and “sophisticated decor”as cold and unfriendly. Our data have confirmed this. In our sample, customers haveconsidered excitement, sophistication, and ruggedness as not important, even slightlynegative, in the context of choosing and trusting a pharmacy.

Our results from simultaneous SEM analysis revealed that sincerity andcompetence were the only positive and significant contributing factors to theformation of customer trust. Given that independent community pharmacies typicallyoperate under stringent budget limitations, our findings provide insights as to whataspect of brand personality would deliver the best result. Perhaps, the independentstore should avoid trying so hard to be exciting, or investing so heavily for thesophisticated look. Our findings suggest that the best return on investment indeveloping brand personality is to focus on competence and sincerity.

The result of our CFA has demonstrates diversity in brand personality andchallenges whether personality can be construed as a second-order latent variable.In other words, our findings suggest that one cannot be considered as having more(or less) personality than another. Based on our empirical evidence, we believe thatcorporations cannot be compared on their respective levels of the magnitude of overallpersonality, but only on certain dimensions of personality. One company cannot havemore personality than another, but it can certainly try to be more sincere, moresophisticated, or more rugged. Our results demonstrate that customers will trust acompany to a greater extent if they perceive it as being more sincere and competent.

Ultimately, the intended impact of our research is to better serve the community –more specifically, the customers who receive/purchase retail pharmacy services. Withthis end goal in mind, we believe that our findings also have implications for the chaincorporation in our study. For example, with its broad influence and seeminglyunparalleled level of resources,Walmart Pharmacy has performed poorly in comparisonwith other companies in almost all indicators. Walmart typically competes on priceleadership. In Canada, where healthcare is universal, and many employers provide

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pharmaceutical coverage, price may not be a definitive success factor. For the pharmacydepartments in mass merchandisers, there is a lot of room for improvement in terms ofperceived competence. There is a lesson to be learned for Shoppers Drug Mart, thenational specialty chain store, as well. Despite the chain’s apparent and repeated effortsto define itself as the expert in pharmacy, it has failed to outperform its competitors.

Our research has many limitations. One major limitation was its small sample size.We expected that the number of individuals who frequent the independent pharmacywould be small. However, we were surprised that we found such a small number ofpatrons for the Mass. The overall sample size of 149 was limited by research budgetconstraints. We anticipate that larger scale future research would produce morestatistically significant results.

Our second major limitation rests in the trade-off between specificity andgeneralizability. We have chosen to examine a single small city in Western Canada,thus limiting application of the research, as the pharmacy industry is typically heavilyregulated, and each jurisdiction around the world may have different regulations.Furthermore, each independent pharmacy is unique. Idiosyncratic factors wouldcertainly dampen the generalizability of our findings. The competitive strategy orperformance by the independent pharmacy in our study cannot and should not beinterpreted as applicable to all independent retail pharmacies. It would be interesting toexamine and benchmark the diversity and effectiveness of how each independentpharmacy competes. To this end, we intend to employ quasi-experimental researchmethod to implement alternative strategies in future action-based studies.

As highlighted in the literature review, the impact of deregulation in the retailpharmacy industry and resulting increase in large corporate chain pharmacies hasbeen grossly understudied, and the future of independent pharmacies, as well as otherindependent businesses (i.e. hardware stores) remains uncertain. In many locations,particularly rural and inner-city neighbourhoods, the independent pharmacy is oftenthe only option, and in some case the only retail store in close proximity. Therefore, thesurvival of independent pharmacies is vital to some communities in which theyoperate. We believe that our findings have furthered the understanding of variousstrategies available to different types of retail pharmacies. Our findings can help, albeitin a limited way, independent retail pharmacies and other small business ownersdevelop strategic competitive advantages by cultivating a unique and profitablecorporate brand personality.

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About the authorsJason Perepelkin is an Assistant Professor of Social and Administrative Pharmacy at the Collegeof Pharmacy and Nutrition at the University of Saskatchewan, Canada. Jason’s research interestsfocus on the unique managerial aspects of community pharmacies (particularly for managersand owners), entrepreneurship and intrapreneurship in community pharmacy, and marketingand branding of pharmacy services and the pharmacy profession.

David Di Zhang is an Associate Professor at Edwards School of Business at the University ofSaskatchewan, Canada. His research focuses on marketing strategies, particularly on corporatesocial responsibility and branding issues pertaining to small businesses. David Di Zhang is thecorresponding author and can be contacted at: zhang@edwards.usask.ca

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