When Do Relationships Pay Off for Small Retailers? Exploring Targets and Contexts to Understand the Value of Relationship Marketing☆
Section snippets
Theoretical background
The resource-based perspective envisions the organization as a unique bundle of accumulated resources (Barney, 1991, Srivastava et al., 1998). Most frequently, resources are conceived of as internal attributes that are linked to or are controlled by the organization (Barney 1991). In extensions to the resource-based perspective researchers have argued that idiosyncratic interfirm linkages (i.e., relationships) can be a source of relational rents and competitive advantage (Barney and Hansen, 1994
Relationship quality with customers
High relationship quality with customers enhances customer value delivery and minimizes customer defection (e.g., increases switching costs) (Auh et al., 2008, Han et al., 1998, Johnson and Selnes, 2004). The theoretical underpinning of the derived value binding the customer to the retailer is achieved through the firm's ability to meet customers’ needs in a speedy manner, that is, market responsiveness. A long lasting customer–retailer relationship develops when the customer perceives that
Sample and data collection procedures
Hypotheses were examined in a sample of small retailers (as classified by the U.S. Small Business Administration as less than 100 employees and less than $3.6 million in annual revenue). A listing of chamber of commerce offices in a southern state were randomly contacted and asked to provide a listing of retailers in their respective counties. Three trained marketing researchers called the identified retailers to ascertain their small retailer status and if they were willing to participate in
Measure validation
Confirmatory factor analysis (CFA) was used for measurement validation (see Table 1). Separate models were run for the first order and second-order constructs. The relationship quality models (relationship quality with customers and suppliers) illustrated that relationship stability did not load significantly onto the second-order relationship quality construct. Thus, relationship stability was eliminated. Further, two competitive intensity items were eliminated due to nonsignificant factor
Discussion and implications
The purpose of this study was to identify when relationships with specific targets (i.e., customers and suppliers) pay off for small retailers. Our findings indicate that the value of relationships with targets varies by context. Specifically, we found that while a small retailer's relationship quality with customers was able to stimulate greater market responsiveness, relationship quality with suppliers did not significantly enhance a small retailer's ability to quickly respond to customer
Limitations and conclusion
Although this study has a number of limitations (e.g., narrow focus on a single capability, employment of only two relational targets, data collected from multiple informants), we wish to draw attention to an issue that we believe is of fundamental concern to the advancement of research on this topic. Specifically, we believe that the current approach to relationship quality is limiting. Although relationship quality has become a relatively common construct within the relationship marketing
References (26)
- et al.
Efficient Replenishment in the Distribution Channel
Journal of Retailing
(2007) - et al.
Retail Environment and Manufacturer Competitive Intensity
Journal of Retailing
(2007) - et al.
The Performance Implications of Entrepreneurial Proclivity: A Dynamic Capabilities Approach
Journal of Retailing
(2006) - et al.
Relationship Marketing Theory in Practice: A Case Study
Journal of Business Research
(1997) - et al.
Power, Satisfaction, and Relationship Commitment in Chinese Store-Tenant Relationship and their Impact on Performance
Journal of Retailing
(2006) - et al.
Environmental Determinants of Decision-Making Uncertainty in Marketing Channels
Journal of Marketing Research
(1988) - et al.
Co-production and Customer Loyalty in Financial Services
Journal of Retailing
(2008) Firm Resources and Sustained Competitive Advantage
Journal of Management
(1991)- et al.
Trustworthiness as a Source of Competitive Advantage
Strategic Management Journal
(1994) - et al.
The Moderator–Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic and Statistical Considerations
Journal of Personality and Social Psychology
(1986)
Investments in Consumer Relationships: A Cross-Country and Cross-Industry Exploration
Journal of Marketing
The Control of Strategy in Dynamic Versus Stable Environments
Journal of Managerial Issues
Trapped in Your Own Net? Network Cohension, Structural Holes, and the Adaptation of Social Capital
Organization Science
Cited by (0)
- ☆
The authors would like to thank Roger J. Calantone, Qimei Chen, Dhruv Grewal, Mike Levy, Charles H. Noble, Joanna Phillips, Steven H. Seggie, and J. Chris White for their assistance with, and insightful comments on, previous versions of the manuscript. The authors would also like to thank the editors as well as the three anonymous reviewers for their efforts in working with the authors to improve the manuscript.
- 1
Tel.: +1 517 432 6429; fax: +1 517 432 1112.
- 2
Tel.: +1 662 915 5461; fax: +1 662 915 5821.