Develop Trust to Create a Supporting Environment for Market Expansion

Posted: November 7th, 2023

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Develop Trust to Create a Supporting Environment for Market Expansion

Trust is an important component in almost all business interactions. Most scientific studies on the relationship between market activity and trust have prioritized how trust facilitates business as opposed to how market activities can influence trust. Lightner and Hagen perform an empirical study assessing how acculturation and market integration can lead to greater trust. The findings have implications for marketers, informing how recent socioeconomic changes, including market integration and changing cultural values, impact the consistency of trust within a particular region. Marketers must comprehensively understand the specific conditions that make social information acceptable in a particular market before expanding. Nevertheless, the article does not articulate the causal linkages between acculturation, market integration and trust. While socially learned information has non-trivial benefits and costs, it can positively affect trust and market integration due to its ability to weaken adherence to conventional cultural values.

The study supports the idea that people are aware of the risks associated with trusting information from others and that market expansion reflects higher trust in advice-giving scenarios. Based on the Prestige Bias model and the Risk and Incentives model, Lightner and Hagen outline that critical business decisions often rely on random and poor sources of information (1). Learning biases and potential conflicts of interests are some of the reasons why business has to rely on credible sources of information. However, empirical evidence from the study shows that perceptions of social information change in relation to the economic culture and ideational values (Lightner and Hagen 4). Changing market conditions influence people’s incentives, increasing the risk they are willing to take by accepting social information. Increasing access to information in markets with an increasing incentive for risk will negate barriers to trust associated with kinship, social status or cultural reciprocity.

Integrating social learning and demographic forces that influence cultural evolution in economic models provides a better understanding of real-world behavior. Similar to Lightner and Hagen, Bell performed an observational study to find that market conditions have a strong ability to negate prestige biases and enhance people’s acceptance of riskier business decisions (e59805). Lightner and Hagen include an experimental approach over Bell’s observational method to validate the finding. Worsening market conditions improved the Tanzanian pastoralists’ willingness to accept the social information calling for livestock diversification and subsistence farming. Trust among the small-scale Maasai community was greatest in areas with recent market expansion and infrastructure development. The two community improvements imply better access to social information. The empirical findings indicate market integration, regular communication and acculturation as major predictors of consumers’ decision to choose formal business channels.

The research is important because it reinforces the need to integrate social learning strategies in contemporary marketing. There are numerous ways of establishing and maintaining trust in a market, and not all methods rely on formal channels. Because market conditions can influence cultural behaviours, marketers should include assumptions of methodological individualism when interacting with new cultures. Certain market conditions will incentivize individuals to lower their adherence to traditional values and ideologies. In such market environments, marketers should employ market integration to establish trust. Using market integration to influence trust instead of vice versa appears like a highly opportunistic strategy for major firms dealing with low, densely populated, rural populations. Future research should clarify whether there are any ethical qualms in this new approach to market expansion. It should not be too easy to negate the importance of traditional culture due to economic incentives. Overall, in markets where information exchanges are informal and impersonal, marketers have the chance to establish a significant level of trust and reciprocity with business regardless of prior interactions.

Works Cited

Bell, Adrian Viliami. “Evolutionary Thinking in Microeconomic Models: Prestige Bias and Market Bubbles.” PloS One vol. 8, no. 3, 2013, pp. e59805. doi: 10.1371/journal.pone.0059805

Lightner, Aaron and Edward Hagen. “Acculturation and Market Integration Are Associated with Greater Trust among Tanzanian Maasai Pastoralists.” Evolutionary Human Sciences, vol. 3, no. 15, 2021, pp. 1-23.