Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2021 Vol: 20 Issue: 5

Trust Building Factors and Their Impact on Consumers-The Case of Organic Food Market in Thailand

Supranee Tangnatthanakrit, Chulalongkorn University

Krittinee Nuttavuthisit, Sasin Graduate School

Praima Israsena Na Ayudhya, Chulalongkorn University

Abstract

Consumer mistrust of the control and certification systems is common in organic food market. These circumstances happen in many developing countries where regulations remain weak and credibility of national certificate authority is hardly established. The complicated labels issued by diverse certificate authorities confuse consumers and undermine their confidence. In Thailand, other sources – such as farmer credibility, retailer and brand reputation and community – seem to have greater influence in shaping consumer trust in organic foods. However, few studies systematically investigate what and how various factors affect consumer trust. This study aims to examine trust building factors in Thailand organic food market, and quantify their impact on consumers. Our survey of 319 respondents revealed that community and farmer characteristic are essential factors in achieving consumer trust. Communication helps consumers to access characteristic and competence of farmers and other key stakeholders within organic food community. This study contributes to the understanding of trust building when consumers exposed to organic food, and the roles of trust in the business-consumer relationship. Implying directions to enhance consumer trust in organic food market, the findings also facilitate the strategy and policy building to establish sustainable organic food systems and supply chains. The findings may also benefit other markets that share similar credence features as organic food market.

Keywords

Trust, Source of Trust, Organic Food, Thailand, Survey Study.

Introduction

Organic food products represent a consumer good with a high degree of “credence attributes” (Schneider et al., 2009). Credence goods refer to products with the characteristics or quality attributes that cannot be verified by consumers, even after purchase or consumption (Nuttavuthisit & Thøgersen, 2015. Consumers generally cannot distinguish organic food products from conventional food products by their appearance or taste (Schneider et al., 2009). The added value of organic food products is mainly based on production methods which are impossible to assess outside the production site (Kottila & Rönni, 2008). Consumers must rely on trust when they decide whether or not to buy organic food products (Kriege-Steffen et al., 2010). The certification by authorized institutions is used to differentiate organic food products with an organic label to assist consumers during their purchase (Thøgersen, 2010). Certification system and integrity of farmers are crucial factors in determining consumers trust and purchasing decisions (Tung et al., 2012). It requires consumer beliefs that farmers produced products according to organic standards or requirements (Kriege-Steffen et al., 2010; Schneider et al., 2009). They also have to believe that organic labelling by authorized institutions is trustworthy (Kriege-Steffen et al., 2010; Schneider et al., 2009). Building consumer trust is a key prerequisite for establishing market for credence goods, especially with the premium pricing (Nuttavuthisit & Thøgersen, 2015). The demand-side instruments i.e. control, certification and labelling are crucial activities to support the market development while the credibility of the certifying body is important and necessary to enhance consumer confidence (Thøgersen, 2010). In many developing countries where weak regulations still exist, the credibility of national certifying authority, both in terms of commitment and ability, is hardly achieved. Lack of trust in organic food, certifications, control system and labelling are clearly mentioned as the fundamental barriers for the market development in Thailand (Nuttavuthisit & Thøgersen, 2015; Roitner-Schobesberger et al., 2008).

Few studies investigate what and how other sources of trust affect consumer trust in organic food market. This study aims to explore the current consumer trust level and to understand the factors that influence trust creation. Thailand was chosen as the context of study, for several reasons. Firstly; Thailand is a developing country which has an increasing demand for organic food, although the market is still in an early stage of development (Nuttavuthisit & Thøgersen, 2019). Secondly, trust is fragile, and lack of consumer trust is a barrier for the development of organic food market in Thailand (Nuttavuthisit & Thøgersen, 2015). To capture the importance of determinants of consumer trust, the study focus needs to be broad enough to capture variation in relevant demographic profile and consumer characteristics. In this study, the survey approach is used as a means to focus attention to the impact of trust determinants on consumer trust. The objective of the study is to explore the crucial important of each determinants on consumer trust in organic food market. The finding contributes to the existing trust research on organic food. It fills a gap in the existing literature by exploring the effect of sources of trust in consumer trust. Second, the findings provide the practical insight for health and wellbeing policies as well as strategy for establishing sustainable organic food market.

Literature Review

Trust Concept

Trust has been generally defined as the “willingness to rely on an exchange partner in whom one has confidence” (Lindgreen, 2003; Jermsittiparsert & Pithuk, 2019; Sangperm & Jermsittiparsert, 2019). Previous studies on the organic food consumption identified trust as one of the most crucial aspects when consumers made purchasing decision (Kriege-Steffen et al., 2010; Zanoli & Naspetti, 2002). Consumers have to depend on the expertise of others as well as the goodwill of anonymous people and institutions who involved in the process (Meijboom et al., 2006). Consequently, trust is highlighted as the importance aspect particularly in food sector that has to deal with uncertainty and lack of personal control (Meijboom et al., 2006).

Trust Components

Consumer trust can be viewed as a multidimensional construct which consists of two distinct but interrelated components, trusting belief and trusting intention (Schneider et al., 2009). The first component, trusting belief, refers to the confidence in competence, integrity and benevolence of the other parties (McKnight & Chervany, 2001). It refers to the expectation that the exchange parties will act in a manner that relevant to these dimensions (Macready et al., 2020). Consumers nowadays mention that they prefer buying organic food products directly from farmers or through retailers who can identify origin of products. These buying preferences allow consumers to assess trustworthiness of the relevant actors and organic food products (Schneider et al., 2009). The closer relationships between consumers and sellers enhance the confidence of consumers. The second component, trusting intention, refers to the cognitive, emotional, and habitual willingness of the trustor to depend on somebody else in the risky situation (Schneider et al., 2009). Schneider et al. (2009) mentioned the relevant of trusting intention specifically in organic food consumption. Firstly, calculations are the cognitive process in which a person calculates the risk taken when trusting another person or an institution. Consumers generally calculated the probability of possible benefits or damages from factors such as product price and farmer knowledge. Secondly, feelings or emotions refer to affective dimension such as sympathy or affection. Feelings can be a reason for placing trust even if calculations speak against it. A personal contact between consumers and farmers can cause sympathy. On the other hand, emotion scepticism plays a role in perceived price of organic products. Lastly, habits refer to the conative dimension in which one tries to influence the mental or emotional state of the others via social communication (Rotter, 1967).

Factors Effecting Trust

Trust in relationship marketing literatures has been described as “the willingness to rely on and have confidence in partner’s reliability and integrity” (Suvanto, 2012). Consumers who buy organic food need to believe in the quality attributes of organic foods as well as the authenticity of the food origin (Nuttavuthisit & Thøgersen, 2015). Sources of trust are therefore strongly related to relationship quality between actors in the organic food chains. Çerri (2012) described five aspects which influenced trust. Here we proposed the control, competence, characteristics, communication and community as 5Cs. The details on how 5Cs apply uniquely in organic food are elaborated as the following;

Control or Rule of Law

The nature of organic foods which comprises of the credence quality requires the information to assure their authenticity. Many consumers will look for certification labels on the packaging (Kriege-Steffen et al., 2010). Organic label is the mechanism used to communicate with the majority of consumers that what they are consuming is truly organic (Kottila & Rönni, 2008). Certified authorities firstly build the control system as the guiding standard for farmers. They will inspect and issue the organic food certification (Nelson et al., 2015). Consumers need to believe that the certification authorities do their job strictly according to the rule of law (Kottila & Rönni, 2008). The clear guidelines and sufficient control measures enhance the confidence of consumers (Schneider et al., 2009). In Thailand, the problem of trust in the reliability of organic certification arises when the organic foods cannot deliver their promises in credence attributes. Therefore, the mistrust in control system is still a problem among Thai consumers (Nuttavuthisit & Thøgersen, 2015).

The alternative mechanism focuses on decentralizing a significant degree of regulatory authority while empowering grassroot actors (Nelson et al., 2015). Farmers build their own self-control system within the community. This alternative certification system refers to participatory guarantee system (PGS). It is based on the process of peer review (Nelson et al., 2015). It implies a shift in responsibility. PGS system enhances the collective responsibility as a mechanism in ensuring the organic integrity (May, 2008). IFOAM defined PGS as “locally focused quality assurance systems [that] certify farmers based on active participation of stakeholders and are built on a foundation of trust, social networks and knowledge exchange” (May, 2008). Based on this discussion, Hypothesis 1 is posited:

H1 Control factor has less impact on consumer trust.

Competence and reputation refer to the expectation that the transaction partners can perform his job competently based on agreement (Çerri, 2012). They are interconnected terms by which when one has competence, one also builds his or her reputation (Çerri, 2012). The relationship between farmers and retailers is stronger when one perceives the competence of the other as exchange partner (Kottila & Rönni, 2008). Consumer depends on the competence and integrity of known representatives of the organic movement such as neighbouring farmers, political advocates, doctors, and other consumers (Schneider et al., 2009). Hence, the following hypothesis is suggested:

H2 Competence factor has a positive impact on consumer trust.

Characteristics or Personality Traits

Characteristics have a significant effect on the individual’s level of trust (De Jonge, Van Trijp, Jan Renes, & Frewer, 2007). Honesty, integrity, virtue, scrupulosity and righteousness are examples of positive personality traits that might inspire trust (Çerri, 2012). Trust might emerge from the interaction with the personality traits or characteristics of farmers, retailers as well as the brands. These positive personality traits can stimulate trust in buyer and seller relationships (Doney et al., 2007). The following hypothesis is formulated:

H3 Characteristic factor has a positive impact on trust of consumers who have a direct experience with organic food.

Communication

Communication is considered as a bilateral expectation that parties will proactively provide and share useful information to their partners (Cetindamar, Çatay, & Basmaci, 2005). Both direct and indirect communications play an importance role in building trust among organic consumers. The advanced information and communication technology (ICT) have widened the network of communications where consumers can indirectly obtain information from multiple sources. The content of communication, the frequency and form of communication are considered important for the creation of trust in the organic food market (Kottila & Rönni, 2008). Good communication helps in understanding other’s need and building mutual trust (Çerri, 2012). The following is predicted:

H4 Communication factor has a positive impact on consumer trust.

Community or Social Interactions

Community is the most important factor influencing and building solid trust (Doney et al., 2007). The degree of interaction is bonded through personal and social relationships between parties (Çerri, 2012). Social interactions reduce the propensity of a partner to react negatively as well as create an informal environment where closer interpersonal relationships are developed, and a better understanding of mutual needs is fostered (Doney et al., 2007). Social interaction may strengthen trust when interaction leads to benevolent intentions toward each other in the informal setting (Çerri, 2012). As such, the following is hypothesized:

H5 Community factor has a positive impact on trust of consumers who have a direct experience with organic food.

Methodology

The target population was general consumers and specific group of consumers from Sampran community. The latter group generally represented consumers who consume organic foods regardless the consumption frequency. The surveys were distributed to two channels. Firstly, Google forms were distributed through communication applications, for example, Line, WhatsApp and Facebook. Secondly, the printed questionnaires were distributed during Sookjai day (yearly event organized by Sampran bliss foundation), Sookjai market (weekend organic food market) and Patom café by Sampran. We asked five knowledgeable organic food consumers to assess the questionnaire prior to the main study. Some minor changes had been made to improve the clarity and understandability of the questionnaire.

Respondents were sampling based on convenience sampling technique. The survey was analysed by SPSS software, then summarized to draw general conclusions on the respondents’ profiles and analysed to understand factors that influence consumer trust. The survey started with demographic information and consumption patterns. Seven-point Likert-type scales were used for measuring current Thai consumers’ trust in organic food and their perceptions related to sources of trust. Response categories ranged from 1 = “definitely disagree” to 7 = “definitely agree”. The survey instrument contained 3 items measuring Thai consumers’ perception with regard to their belief in authenticity of organic food product, their intention to rely on organic food product in certain situations and their overall trust in organic food product. The questions addressed: Please indicate the number on a scale from 1 to 7 that best describes your attitudes towards each context or situation. The questions included “I believe that organic food …” in many contexts, for example, no chemical residues, improve quality of life and reflect farmers’ integrity. Second element addressed: “Even in certain situations, I am still willing to buy or choose organic food products”. It referred to the situations where there is news related to fraud, exceed chemical residues in organic food product and weak certified system. The last element addressed: “I have trust in organic food product in overall”. The trusting scale based on these three items has excellent construct reliability (Cronbach’s Alpha=0.948).

Similarly, consumers’ attitudes towards each source of trust were captured by means of five items namely control, competence, characteristic, communication and community: Please indicate the number on a scale from 1 to 7 that best describes your attitudes towards each source of trust. The questions were categorized into 5 groups according each source of trust. For control, the questions related to control system by certified authorities and control system among farmers. For competence, the questions raised to capture consumers’ attitudes towards key stakeholders’ competence and characteristics. Questions for communication factor emphasized the information accessibility and information reliability. Community or social interaction addressed the important of interaction with key stakeholders in organic food chain. The five-item scale had excellent construct reliability (Cronbach’s Alpha = 0.934).

Results

The total of 319 responses was received. The responses from online sources and Sampran communities were accounted for 195 (61.13%) and 124 (38.87%) respondents respectively. Among all responses, 60 surveys had no answer on organic food principles questions. None of the surveys were dropped for the overall analysis.

Consumer Characteristics

The general profile of respondents was female with age between 30-39 and 40-49 years old. The majorities lived in Bangkok metropolitan and worked in private company or had their own business. Most of the respondents had elderly family members and had no kids under 12 years old. Surprisingly, less than 30% of the total respondents had family members who are sick (Table 1). The consumer characteristics reflect that Thailand is approaching aging society.

Table 1 Background Characteristics of Respondents
Online Sookjai Market (n=41) Sookjai Day (n=69) Patom café
(n=195) (n=14)
Sex, %        
Female 57.9 75.6 65.2 42.9
Male 42.1 24.4 34.8 50
Other n/a n/a n/a 7.1
Age, %        
Less than 20 n/a n/a 2.9 14.3
20-29 7.7 14.6 10.1 21.4
30-39 46.7 39 29 35.7
40-49 28.7 19.5 21.7 28.6
50-59 13.8 17.1 24.6 n/a
More than 60 3.1 9.8 11.6 n/a
Address, %        
Bangkok 80 68.3 62.3 92.9
Others 20 31.7 37.7 7.1
Occupation, %        
Public employee 13.8 36.6 27.5 n/a
Private employee 40 31.7 29 28.6
Business owner/Trading 35.4 21.9 14.5 35.7
Housewife 4.1 4.9 10.2 n/a
Others 6.7 4.9 18.8 35.7
Income, %        
Less than 30,000 Baht 9.7 29.3 20.3 14.3
30,000 – 60,000 Baht 19.6 36.6 37.8 n/a
60,001 – 90,000 Baht 17.4 14.6 15.9 14.3
90,001 – 120,000 Baht 9.7 7.3 10.1 28.6
120,001 – 150,000 Baht 8.7 7.3 7.2 7.1
More than 150,000 Baht 34.9 4.9 8.7 35.7
Family with kids, %        
No 68.7 73.2 78.3 78.6
Yes 31.3 26.8 21.7 21.4
Family with elderly, %        
No 31.8 46.3 49.3 28.6
Yes 68.2 53.7 50.7 71.4
Family with illness, %        
No 68.7 85.4 78.3 85.7
Yes 31.3 14.6 21.7 14.3

There is no clear distinction for the buying frequency between online sources and Sampran community respondents (Table 2). Both groups bought organic food products once per week. During questionnaires distribution, Sampran respondents mentioned that they often bought organic food products once per week and stocked them up for the whole week. The limited green market availability reflects the pain points of organic food consumers.

Table 2 Consumer Characteristics Between Online and Sampran Respondents
  Online Sookjai Market (n=41) Sookjai Day (n=69) Patom café (n=14)
(n=195)
Buying frequency, %        
Once per week 31.3 31.7 50.7 35.7
Once per two weeks 16.4 14.6 17.4 14.3
Once per month 23.6 19.5 8.7 14.3
Others 9.2 17.1 7.2 21.4
Never 19.5 17.1 15.9 14.3
Understanding, %        
Right understanding 22.6 39 42 35.7
Wrong understanding 46.7 61 58 64.3
No answers 30.7 n/a n/a n/a

The overall respondents did not have the right knowledge on organic food principles (Table 2). Sampran respondents outnumbered online respondents by answering right answers. The data imply that consumers who have experiences with organic food products and community have a higher chance to understand the basic principles of organic food.

Consumer Perceptions towards Sources of Trust

Online respondents had neutral perception on control, competence and characteristic of the current situations in organic food market. While, Sampran respondents had higher perception level for all factors especially community factor. They had a very good perception on organic food community (Table 3). We believe that this shows the important of the social interaction within the organic food market.

Table 3 Overall Mean Value Of Respondents’ Perception Toward Each Factor of 5cs
Group Dimensions Mean value Standard deviation Average perception level
Online respondents (n=195) Control 4.2 1.26 Neutral
Competence 4.38 1.22 Neutral
Characteristic 4.28 1.34 Neutral
Communication 4.69 1.34 Agree
Community 4.84 1.4 Agree
Sampran respondents (n=124) Control 4.89 1.08 Agree
Competence 5.08 0.97 Agree
Characteristic 5.05 1.05 Agree
Communication 5.11 0.99 Agree
Community 5.44 1.08 Totally agree

There was no clear distinction on the overall perception level toward current trusting belief, trusting intention and the overall trust among two groups (Table 4). The overall trust level was higher for Sampran respondents. Online respondents had neutral perception in willingness to rely on organic food products. We believe that this shows the impact of community experiences on overall trust level.

Table 4 Overall Mean Value of Respondents’ Perception Toward Trust Components
Group Dimensions Mean value Standard deviation Average perception level
Online respondents (n=195) Trusting belief 4.5 1.18 Agree
Trusting intention 4.33 1.25 Neutral
Overall trust 4.56 1.36 Agree
Sampran respondents (n=124) Trusting belief 5.18 0.91 Agree
Trusting intention 4.88 0.88 Agree
Overall trust 5.26 1.05 Agree

Impact of Sources of Trust on Consumer Trust Level

The overall results on how each source of trust impacted consumer trust were shown in Table 5 and 6. Control, competence and communication had no impact on consumer trust (both trusting belief and trusting intention) for all respondents. These results were consistent with Hypothesis 1 but inconsistent with Hypothesis 2 and 4.

Table 5 Multiple Regression Analysis, Regressing the Impact of each Source of Trust towards Trusting Belief for Sampran Respondents
  B Standard error beta t p
Online respondents* (n=195)
(Constant) 1.456 0.262   5.568 0
Control 0.191 0.099 0.204 1.939 0.054
Competence 0.17 0.116 0.176 1.465 0.144
Characteristic -0.035 0.114 -0.04 -0.31 0.757
Communication 0.009 0.122 0.01 0.075 0.94
Community 0.333 0.086 0.396 3.855 0
Sampran respondents** (n=124)
(Constant) 1.085 0.31   3.503 0.001
Control 0.12 0.091 0.143 1.318 0.19
Competence 0.066 0.111 0.071 0.6 0.55
Characteristic 0.209 0.088 0.243 2.367 0.02
Communication 0.1 0.104 0.109 0.961 0.338
Community 0.296 0.071 0.352 4.179 0
Table 6 Multiple Regression Analysis, Regressing the Impact of each Source of Trust towards Trusting Intention
  B Standard error beta t p
Online respondents* (n=195)
(Constant) 1.738 0.313   5.547 0
Control 0.082 0.118 0.082 0.694 0.488
Competence 0.233 0.139 0.227 1.675 0.096
Characteristic -0.135 0.137 -0.144 -0.984 0.326
Communication 0.137 0.146 0.147 0.938 0.35
Community 0.241 0.103 0.27 2.335 0.021
Sampran respondents** (n=124)
(Constant) 1.807 0.383   4.714 0
Control 0.049 0.113 0.06 0.436 0.664
Competence -0.006 0.137 -0.007 -0.044 0.965
Characteristic 0.268 0.109 0.32 2.45 0.016
Communication 0.026 0.128 0.03 0.205 0.838
Community 0.252 0.088 0.309 2.879 0.005

Previous findings on consumer characteristic and perceptions toward each source of trust emphasized that Sampran community respondents represent consumers who have better understanding on organic food principles, enjoy social interaction and value the community. We expect that the community factor should have direct impact on Sampran respondents. The data suggest that community factor impacts trust in both Sampran and online respondents. Therefore, this result was partially consistent with Hypothesis 5. Sampran respondents reflected characteristic as an important indicator effecting their trust belief and trusting intention in organic food chain. These respondents required access to personality traits of key stakeholders such as farmers in order to place their trust on organic food products. Honesty and integrity were essential elements influencing their trust level. This finding was consistent with Hypothesis 3.

Discussion

The current study aimed to investigate what and how 5Cs affected consumer trust in organic food. Results showed that community was the key influencer for trust building. It enhances the quality relationship between consumers and key stakeholders. The findings support how trust is built and achieved through engagement and collaboration. The important of social community is emphasized as the important factor for trust creation. It is directly enhances the relationship building between stakeholders and indirectly reflects the characteristics of those particular stakeholders. It allows consumers to perceive the credibility and honesty of farmers through interaction and communication within the community. Effective communication facilitates the transparency among stakeholders during the relationship building. Kottila & Rönni (2008) further elaborated that high frequency of communication is less important than the quality of communication in the creation of trust.

In risky situation, consumers are willing to trust in community the most. Once consumers are engaged in certain communities or networks, control becomes unimportant trust indicator for them. They rather rely on the engagement and interaction and place their trust in the integrity of organic foods. They normally perceive the competence of other key stakeholders through engaging and interacting in the community. Sampran respondents who represent networking consumers seem to perceive characteristic as an important indicator affecting their trust. Characteristic or personal traits affect the individual’s level of trust (De Jonge et al., 2007). It might cause by the close relationship or direct contact with farmers in the community. The general characteristic of respondents had elderly family members. Whereas it could be argued that the main motive for buying organic food is healthiness (Thøgersen, Barcellos, Perin, & Zhou, 2015), the current study further emphasizes the meaning of the healthy motive. Healthy motive is not also referred to personal health but also to family wellbeing. Organic consumers are generally motivated by private rather than public benefits. They believe organic food to be more health promoting rather than to be better for the environment and animal welfare (Perrini et al., 2010; Roitner-Schobesberger et al., 2008).

Majorities of the respondents aware of organic food agriculture, however, they had less knowledge about it. It was aligned with the findings from Kongsom and Kongsom (2016). Interestingly, Sampran respondents had higher understanding on organic food principles. This finding suggests that prior organic food related experiences enhance the true understanding and knowledge. Consequently, it influences the buying frequency and trust level. It can be concluded that overall, despite consumer experiences, community had high impact on consumer trust (trusting belief and trusting intention). Community is the ultimate goal in engaging consumers, thus building their trust toward organic foods. Establishing the social requirements of the relationship between farmers and consumers is a prerequisite for establishing and maintaining the trustful relationship. The elaborated results have the greater impact on developing strategy or policy for achieving consumer trust specifically for organic food market. For example, communication strategies and the provision of information should focus on the transparency of production, processing and control system. The limitation of this study is that it carried out in one organic food community. Further research is needed to reconfirm the findings by applying the same survey methodology in other organic food communities. It is also important to further investigate the criteria of community interaction that foster trust development. One assumption could be the high frequency of interaction encourage information flow and reduce uncertainty which result in trust development. Lastly, it is valuable to apply 5Cs in luxury goods and healthcare market which has the similar credence attributes.

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