The state and prospects of development of institutional foundations for building consumer trust in a company's brand

Abstract

The article examines the institutional foundations of building consumer trust in a company's brand in the context of Ukraine's transitional economy and globalisation challenges. The relevance of the topic is attributable to several factors. Firstly, there is an increased level of competition in the market. Secondly, there is a growing consumer demand for transparency, ethics, and social responsibility in business. Thirdly, there is a need to implement European standards in the field of consumer protection.

The objective of the present study is twofold: firstly, to analyse the current state of the institutional environment that ensures consumer trust in domestic brands, and secondly, to identify areas for improvement that take into account best international practices. The authors concentrate on three fundamental components of trust building: legal regulation, corporate ethics, and digital trust platforms.

The study analyses the degree of harmonisation of Ukrainian legislation with European Union directives, with a particular focus on the areas of consumer protection, product labelling, advertising regulation, and e-commerce. The following comparative table provides a comprehensive overview of the implementation of key EU regulations and their significance for strengthening trust in brands.

The present study pays particular attention to the institutionalisation of corporate ethics. This institutionalisation is defined as the creation of codes of honour, standards of responsible marketing, and ethical behaviour in the market. It is posited that these are an effective tool for strengthening the reputation capital of an enterprise. The authors emphasise that voluntary compliance with ethical standards can serve as a strategic advantage for brands in conditions of low trust in state institutions.

A dedicated section of the article is allocated to the digital transformation of trust-building mechanisms. The present study explores the potential of blockchain technologies, platforms with verified reviews, and transparent labelling as means of increasing the transparency and reliability of brand information in the electronic environment. The authors place particular emphasis on the significance of cultivating consumers' digital literacy skills and the establishment of an adequate infrastructure.