Dynamic Relationship Marketing Zhang, Jonathan Z.; Watson, George F.; Palmatier, Robert W. ...
Journal of marketing,
09/2016, Volume:
80, Issue:
5
Journal Article
Peer reviewed
Open access
Firms routinely engage in relationship marketing (RM) efforts to improve their relationships with business partners, and extant research has documented the effectiveness of various RM strategies. ...According to the perspective proposed in this article, as customers migrate through different relationship states over time, not all RM strategies are equally effective, so it is possible to identify the most effective RM strategies given customers' states. The authors apply a multivariate hidden Markov model to a six-year longitudinal data set of 552 business-to-business relationships maintained by a Fortune 500 firm. The analysis identifies four latent buyer-seller relationship states, according to each customer's level of commitment, trust, dependence, and relational norms, and it parsimoniously captures customers' migration across relationship states through three positive (exploration, endowment, recovery) and two negative (neglect, betrayal) migration mechanisms. The most effective RM strategies across migration paths can help firms promote customer migration to higher performance states and prevent deterioration to poorer ones. A counterfactual elasticity analysis compares the relative importance of different migration strategies at various relationship stages. This research thus moves beyond extant RM literature by focusing on the differential effectiveness of RM strategies across relationship states, and it provides managerial guidance regarding efficient, dynamic resource allocations.
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BFBNIB, INZLJ, IZUM, KILJ, NMLJ, NUK, OILJ, PILJ, PNG, SAZU, UKNU, UL, UM, UPUK, ZRSKP
Four theoretical perspectives currently dominate attempts to understand the drivers of successful interorganizational relationship performance: (1) commitment-trust, (2) dependence, (3) transaction ...cost economics, and (4) relational norms. Each perspective specifies a different set and distinct causal ordering of focal constructs as the most critical for understanding performance. Using four years of longitudinal data (N = 396), the authors compare the relative efficacy of these four perspectives for driving exchange performance and provide empirical insights into the causal ordering among key interorganizational constructs. The results demonstrate the parallel and equally important roles of commitment-trust and relationship-specific investments as immediate precursors to and key drivers of exchange performance. Building on the insights gleaned from tests of the four frameworks, the authors parsimoniously integrate these perspectives within a single model of interfirm relationship performance consistent with a resource-based view of an exchange. Managers may be able to increase performance by shifting resources from "relationship building" to specific investments targeted toward increasing the efficacy or effectiveness of the relationship itself to improve the relationship's ability to create value. Moderation analysis indicates that managers may find it productive to allocate more relationship marketing efforts and investments to exchanges in markets with higher levels of uncertainty.
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BFBNIB, INZLJ, IZUM, KILJ, NMLJ, NUK, OILJ, PILJ, PNG, SAZU, UKNU, UL, UM, UPUK, ZRSKP
Understanding how relationships are damaged is a critical component in building and preserving strong distribution channels. Using longitudinal data from a Fortune 500 firm and its channel members, ...this research shows that perceived unfairness truly acts as "relationship poison" by directly damaging relationships, aggravating the negative effects of both conflict and opportunism, and undermining the benefits of using contracts to manage channel relationships. Surprisingly, at low levels of perceived unfairness, conflict and opportunism have small or even insignificant effects on channel member outcomes, which implies that research investigating the negative impact of conflict and opportunism on exchange outcomes may need reevaluation because these effects are contingent and may vary depending on the levels of perceived unfairness. In addition, the findings support the premise that using contracts to manage channel relationships represents a double-edged sword that suppresses the negative effects of conflict and opportunism while aggravating the negative effect of unfairness.
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The dynamic components of relational constructs should play an important role in driving performance. To take an initial step toward a theory of relationship dynamics, the authors introduce the ...construct of commitment velocity—or the rate and direction of change in commitment—and articulate its important role in understanding relationships. In two studies, the authors demonstrate that commitment velocity has a strong impact on performance, beyond the impact of the level of commitment. In Study 1, modeling six years of longitudinal data in a latent growth curve analysis, the authors empirically demonstrate the significance of commitment velocity as a predictor of performance. In Study 2, the authors use matched multiple-source data to investigate the drivers of commitment velocity. Both customer trust and dynamic capabilities for creating value through exchange relationships (i.e., communication capabilities for exploring and investment capabilities for exploiting opportunities) affect commitment velocity. However, trust and communication capabilities become less impactful as a relationship ages, while investment capabilities grow more important. The authors offer three post hoc tenets that represent initial components of a theory of relationship dynamics that integrates two streams of relationship marketing research into a unified perspective.
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Relationship marketing (RM) has emerged as one of the dominant mantras in business strategy circles, though RM investigations often yield mixed results. To help managers and researchers improve the ...effectiveness of their efforts, the authors synthesize RM empirical research in a meta-analytic framework. Although the fundamental premise that RM positively affects performance is well supported, many of the authors' findings have significant implications for research and practice. Relationship investment has a large, direct effect on seller objective performance, which implies that additional meditated pathways may explain the impact of RM on performance. Objective performance is influenced most by relationship quality (a composite measure of relationship strength) and least by commitment. The results also suggest that RM is more effective when relationships are more critical to customers (e.g., service offerings, channel exchanges, business markets) and when relationships are built with an individual person rather than a selling firm (which partially explains the mixed effects between RM and performance reported in previous studies).
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► We elaborate on the rich and special context franchising presents to scholars. ► We review established franchising ontology and isolate research gaps. ► We review top 50 journals ...for their franchising publications in the past ten years. ► We provide comparative, cross national data on impact of franchising in the economy. ► We present a slate of nine new research directions for future scholars.
About four decades ago, during the formative years of the franchising industry, visionary authors like
Oxenfeldt and Kelly (1968) and
Ozanne and Hunt (1971) proposed a rich slate of research agenda which still continues to guide some of the contemporary scholarship in the franchising domain. This article (1) explicates some of the unique features of the franchising context that presumably inspired these pioneering authors, (2) discusses four established elements of ontology unique to franchising and isolates the remaining research gaps therein, (3) specifies a new slate of more contemporary research agenda for future scholarship, and (4) concludes with a brief discussion of the ten articles featured in this Special Issue of the
Journal of Retailing dedicated to the theme of
Franchising and Retailing.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
This brief paper summarizes the sweeping changes taking place within the North American franchising reality and extols franchising researchers to venture forth into novel arenas of investigation. In ...the process, it also offers commentary on two articles appearing in this issue of the Journal of Small Business Management. In general, this polemic invites researchers (1) to look beyond the North American contexts for data and original theoretical development; (2) to investigate new phenomena associated with franchising; and (3) to examine extant ontology of franchising research topics from novel perspectives. Illustrative frameworks for executing this research agenda are presented throughout.
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BFBNIB, CEKLJ, FZAB, GIS, IJS, KILJ, NLZOH, NUK, OILJ, PILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
This paper offers a property rights theoretical interpretation of the ownership redirection hypothesis advanced by Oxenfeldt and Kelly Oxenfeldt, Alfred R. and Kelly, Anthony O. (1968). “Will ...Successful Franchise Systems Ultimately Become Wholly-owned Chains?”,
Journal of Retailing, 44, 69–83. In a nutshell, couched in resource dependence theory, the ownership redirection hypothesis argues that successful franchise systems will eventually become corporate owned systems because of the reacquisition of franchisee units by the more powerful, and resource-flush franchisors. We argue that the structure and dynamics of ownership patterns in franchising networks depends on the contractibility of the franchisor's system-specific assets and the contractibility of the franchisee's local market assets. Under the property rights view, ownership redirection will result from an increase in the contractibility of the franchisee's local market assets (local market information, financial resources, and managerial capabilities) and the resultant increase of the franchisor's bargaining power during the contract period. We extend the franchise literature by arguing that informational, financial and managerial resource constraints are only relevant for the change of ownership structure if they are noncontractible. This hypothesis is evaluated using data collected from the Austrian franchise sector. The empirical results are largely supportive of the hypothesis.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
In this two-year study we develop and test a comprehensive model of conflict management. The conceptual model commences by demonstrating the importance of channel members’ past history of ...interactions as ‘setting the stage’ for members’ present ability to interact, that is, communicate, resolve conflict disputes, and ultimately, culminate in performance outcomes (financial as well as relational). In effect, we track the full gamut of conflict management related constructs in the conceptual model, from antecedent conditions to the consequents of conflict management. Empirical results, utilizing a sample of 282 retailing agents affiliated to a large North American supplier (principal) across two years, indicate strong evidence for fourteen of the eighteen hypotheses drawn from our conceptual model. Specifically, among other effects, data reveal that past history of cooperative versus conflictive orientations and bureaucratic versus trust-based governance mechanisms significantly influence the communication strategies adopted, which in turn determine whether the distributive or integrative conflict resolution behaviors are adopted. Further, the choice of conflict resolution behaviors adopted commensurately influences relational performance, and the type of communication strategy adopted influences financial performance. The paper concludes with a series of managerial implications and an agenda for future research.
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CEKLJ, GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
How do firms' partnering strategies impact the size of their partner-based retail networks? We draw on agency theory to address this question in the context of franchising. Our econometric analyses ...(based on 9 years of longitudinal balanced panel data) include assessment of data nonstationarity and estimation of a dynamic panel data model that accounts for unobserved heterogeneity and endogeneity. Our findings indicate that franchisee network size is driven more by franchisor strategies that mitigate agency costs than by strategies that simply lower entry and ongoing costs and barriers for franchisees.
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BFBNIB, FZAB, GIS, IJS, KILJ, NLZOH, NUK, OILJ, PILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
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