Consumer Trust and Satisfaction in the Formation of Consumer Loyalty Intentions in Transactional Exchange: The Case of a Mass Discount Retailer

Marketing relationships can be placed on a continuum from short, discrete transactions to ongoing brand relationships. The majority of recent work has focused on relational exchanges, with some scholars even suggesting early on that the marketing discipline was undergoing a paradigm shift from a transaction-based marketing perspective toward a relational exchange perspective. However, there has been a growing recognition that not all customers seek relational exchanges. Consequently, the current research considers customer relationship management from the less studied, but oft seen, perspective of transactional exchange. A study is presented using recent advances in structural equation modeling analyses, including Bayesian estimation methods and mediation analyses. We further consider the psychological processes underlying the formation of consumer loyalty based on pre- and post-purchase measurements taken over multiple time periods. We specifically hypothesize that consumer satisfaction judgments will fully mediate any influences of post-purchase trust judgments on future loyalty intentions. With American consumers’ trust in businesses at an all-time low, coupled with the recent trend that more and more brick-and-mortar retailers are at risk of “showrooming” for online retailers, there is an apparent need to also consider retail customers who see the value of relationship marketing only selectively.     

Ignoring Your Best Customer?

Abstract

Many organizations devote considerable amounts of money and human resources to develop systems aimed at improving customer retention and profitability. The conventional wisdom is that if retaining the most profitable customers is a good way to increase profitability, then allocating resources to increase the satisfaction of those customers has to be a great objective. However, managers do not observe clear link between satisfaction, retention and profitability. The reason is that different customers have different preferences for convenience as well as different costs associated with switching service providers. These preference and cost heterogeneities have important implications for how companies should target their customer service efforts.

In this paper, we adopt a latent class model to examine the interrelationship amongsatisfaction, retention and profitability. Applying the model to a data of customer satisfaction, self-reported switching propensity, and profitability provided to us by a large Midwestern bank, we make normative statements about which customers are the most criticalones for the company to satisfy and how to satisfy them. The results of this research help to explain why managers have been frustrated by the apparent lack of actionable information present in customer satisfaction data and points to more intelligent ways to use this data.     

Bridging the gap between employees and customers

Abstract

Employing modern definitions of the marketing concept, we develop a unified model to measure the market orientation construct. We then employ a chain-link model linking employee satisfaction and motivation to customer behaviour and firm profitability, demonstrating that market orientation mediates the employee–customer relationship. Hence, while past research has studied market orientation, per se, we demonstrate why it is important – it serves as the bridge to link employees and customers.     

Reversing the Logic: The Path to Profitability through Relationship Marketing

Many firms have experienced greater success through implementing relationship marketing strategies. This is achieved by gaining knowledge about their own customers through database marketing and about the general marketplace through marketing research. Over time, this has led firms to adopt a general framework which we call the conventional path to profitability. This conventional framework suggests that new product innovation leads to acquisition, acquisition combined with a rich experience leads to satisfaction, satisfaction leads to loyalty and customer retention, and loyalty/retention leads to profitability. However, we show that some of the links in the framework are weak based on both academic research and marketplace realities. Consequently, we reverse the logic of the conventional path to profitability. We introduce a new approach that starts the customer relationship management strategy with customer profitability and the notion that different customers should be rewarded and satisfied differently. In addition, we outline a strategy that relationship marketing firms can implement, leading to higher levels of customer profitability and offer directions for future research.     

Relationship marketing: Back to basics?

Relationship marketing, however defined, has received considerable attention recently. To its advocates, relational exchange between buyer and seller represents a paradigm shift away from the traditional focus on individual transactional exchanges. Critics of relationship marketing argue that the concept is poorly defined and is merely a new way of describing what businesses have been doing for a long time.

This paper recognizes that the need to develop long‐term relationships between an organization and its customers is becoming greater. It is however questioned whether marketing educators are providing students with the abilities to take a mature approach to relationship marketing issues, in line with the changing nature of employers' business. Suggestions for introducing relationship marketing to the undergraduate syllabus are made at a number of levels, from an additional module for an introductory “principles of marketing course” to a multi‐disciplinary degree majoring in relationship marketing.     

Customer Valuation as a Driver of Relationship Dissolution Sabrina Helm Heinrich-Heine-Universitaet,Germany

Abstract

As all customers are not created equal (Hallberg & Ogilvy, 1995), the different contributions of customers to a supplier's goals have to be evaluated to grant efficient relationship marketing. Furthermore, a handling system has to be developed for unprofitable customer relationships. This is a hitherto neglected field, as marketing researchers and practitioners are generally rather interested in attaining and keeping customers, not in the ending of relationships. The article aims at integrating the concepts of customer equity and profitability with approaches of relationship dissolution, which have recently emerged in the literature. Different aspects of calculating the value of customer relationships and value-based criteria that focus on monetary and non-monetary components of a customer's value are discussed. In an exploratory study undertaken in the German mechanical engineering industry, the relevance of customer valuation to dissolution decisions is analyzed.     

Relationship Value in Thai Business-to-Business Marketing

This study focuses on value in the business-to-business relationship among buyers and sellers. Relationship value has long been one of the key research areas in marketing for business to business. By examining from the perspective of the buyers, this research identifies how business buyers can use marketing benefits, product benefits, technical benefits, logistics benefits, financial benefits, risk-reduction benefits, information benefits, and strategic benefits to predict buyer–seller relationship. The study confirms significant relationships among marketing benefits, product benefits, and value in retailer–supplier relationship. The analysis from this study supports that benefit in a business-to-business relationship can be created if suppliers work on mutual benefits with customers. The results also confirm that Thai business customers will look for business partners who can provide risk reduction and marketing benefits for their business.     

Value‐driven relational marketing: From products to resources and competencies

Marketing from a relational perspective, or relationship marketing, requires that a firm offers more resources and activities than a core product (goods or services) in order to satisfy the long‐term value needs of its customers. In the present article a value‐driven approach to how such long‐term needs are fulfilled is discussed. The analysis goes beyond the product concept and develops a resources‐and‐competencies approach to the market offer. However, a relational approach to marketing can be expected to be successful only if the firm adopts a true relational intent and the customer is in a relational mode. Therefore, the concepts of relational and transactional intent and relational and transactional mode, respectively, are also introduced and discussed.     

Current Marketing Practices and Market Orientation in the Context of an Emerging Economy: The Case of Uruguay

This research explores the link between contemporary marketing practices, market orientation (MO), and business performance in Uruguay, an emergent country that has recovered from an economic crisis. These approaches seem to be related but there is no existing evidence to confirm this impression. Lessons can be learned from understanding how effective the adoption of marketing practices is under a crisis scenario. Using data from interviews with 143 micro and small firms' managers, we identify three clusters dependant on the combination of marketing practices: a multimarketing cluster, a medium‐level relationship marketing cluster, and a transactional cluster. A model relating MO components and various performance measures is tested for the three clusters, showing that the multimarketing and transactional clusters are more effective in translating efforts and resources into business outcomes.     

Research Trends of Marketing: A Bibliometric Study 1990–2017

Abstract

Interest in the role of marketing has grown in recent decades due to its impact in brand value, value creation for customers, profitability of customer base, and organizational results. The paper shows an overall view on marketing research to explore the development of research trends, showing the high-frequency keywords at different time periods. Using bibliometric methods, the research analyzes publications between 1990 and 2017 found in the Web of Science and Scopus databases. The paper shows the evolution of keywords to reveal emerging topics as demonstrated in the connections network which includes “advertising,” “consumer behavior,” “trust,” “innovation,” and “customer satisfaction.”     

Evolving Relationship Marketing into a Discipline

Abstract

Relationship marketing is considered a paradigm change in both academic and practitioner literature. However, despite its popularity, relationship marketing has not yet evolved into becoming a discipline. The authors propose focus on eight areas to help relationship marketing evolve into a discipline. They compare the successful evolution of consumer behavior, services marketing and marketing strategy with the failure of international marketing, social marketing and business marketing as a discipline.     

Key account relationship management: the moderating effects of relationship duration and transaction volume

This study investigates the impact of three relational benefits (i.e. financial benefits, human interaction benefits, preferential treatment benefits) on switching barriers, customer satisfaction, and behavioral loyalty for key accounts in the context of the air express delivery industry in Taiwan. Empirical results indicate that relational benefits impact switching barriers, switching barriers influence customer satisfaction and loyalty, and customer satisfaction effects loyalty. Findings also confirm most of the hypothesized moderating effects for relationship duration and transactional volume on the relationship between relational benefits and switching barriers. Specifically, long-term key accounts place greater emphasis on the human interaction and preferential treatment benefits. Key accounts that have less established relationships based on the length of business relationship place more importance on financial benefits. Financial benefits were found to have a positive influence on switching barriers only for low annual transactional volume clients, while both human interaction benefits and preferential treatment benefits have positive effects for both low and high transactional volume key accounts.     

Relationship Marketing and the Orientation Customers Require of Suppliers

Increasingly firms are being encouraged to move away from traditional, transactional marketing towards building long-term relationships with customers. The majority of the literature examines the benefits to suppliers of adopting this philosophy. It was decided, therefore, to examine whether the interacation between customer requirements of the marketing style exhibited by their suppliers and customers’ perception of style delivered by suppliers might influence service quality satisfaction. To examine possible interactions, a mail survey of 500 .small UK manufacturing firms was undertaken to determine perceptions of services provided by accountants. The survey tool used two new scales developed specifically to measure requirements and perceptions of relationship marketing style. Service quality satisfaction was rneasured in relation to overall expectations versus perceptions, reliability, responsiveness, assurance, empathy and tangibility. Applying ANOVA to the responsiveness from 141 firms suggests that service quality satisfaction will be highest where there is convergence between the marketing style required of a supplier and a customer's perception of the style exhibited by the supplier: The implications of these findings in relation to the need for further research are discussed.     

An Examination of Consumers' Motives to Switch Energy Suppliers

In most European countries, the energy industry continues to undergo dramatic changes. Customer relationship management concepts and their central focus - customer retention - are playing an increasingly significant role in the marketing considerations of energy supply companies. However, little is known about the reasons why customers remain loyal to a particular energy supplier or why they switch suppliers. The purpose of this study was to identify customers' switching motives, to investigate the relationship between customer satisfaction and switching intentions as well as to identify switching segments. A total of 462 customers of a German energy supplier were surveyed regarding their perceptions and future intentions in relation to their energy provider. Results using regression analysis show that customer satisfaction had a significant effect on switching intentions. Cluster analysis identified three distinct switching clusters; dissatisfied customers, relative satisfied customers seeking change, and dissatisfied customers seeking change. Results of this study are discussed in light of its theoretical as well as practical implications.     

Evolving "New Marketing" Philosophies By Merging Existing Concepts: Application Of Process Within Small High-Technology Firms

The important role of small high-technology firms in both job creation and new innovations capable of sustaining a country's competitive advantage has understandably caused many Governments to be interested in factors influencing the market performance of these types of firm. A potential hazard with alternative emerging theories about appropriate marketing philosophies is that polarisation of opinions may cause theorists to reject alternative perspectives despite the fact that observations of "real world" marketing practice may suggest that a hybrid managerial approach is the most appropriate response to prevailing market circumstances. If one accepts this perspective, it permits merger of the transactional, relationship and entrepreneurial schools of marketing thought; thereby generating alternative approaches to marketing practice based upon (i) conservative-transactional, (ii) conservative-relationship, (iii) entrepreneurial-transactional and (iv) entrepreneurial-relationship orientations.

Research questions which arise about a hybrid concept are whether orientation might influence overall performance and the level of internal organisational competencies required of the firm in the key areas of innovation, HRM, employee productivity and decision-making. The results of a mail survey measuring revenue growth suggest that an entrepreneurial-relationship orientation will enhance overall performance of small high-technology firms. The survey also suggests that as entrepreneurial high-technology firms move closer to customers they exhibit higher competencies in areas such as HRM, employee productivity, management of quality and utilisation of information in decision-making.

It is concluded that the research has some interesting implications concerning the appropriate marketing styles available to small, high-technology firms. As entrepreneurial and relationship marketing can enhance performance, then possibly an owner/manager seeking to increase sales may be able to select a style which seem appropriate both to the degree to which customers seek closer relationships with suppliers and the vision of the firm concerning the importance of innovation as a strategy for delivering customer satisfaction. Further research is needed in order to gain additional understanding of (a) the influence of organisational competencies on overall performance and (b) whether marketing style might influence how small high-technology firms acquire the knowledge they require to improve internal operational processes.     

Relationship formation and governance in consumer markets: Transactional analysis versus the behaviourist approach

Although relationship marketing (RM) is widely discussed in contemporary marketing literature, its theoretical foundations are rarely debated. Much published work on the subject relies implicitly on behaviourist exchange theory to support major propositions. Exchange theory neatly elucidates many RM hypotheses, but cannot explain the failure of campaigns that furnish customers with increasingly generous relationship rewards. Phenomenological approaches which explore the fundamental psychodynamics of supplier/customer relationships (especially the ways in which entities inwardly construct their own meanings for their experiences) represent a powerful alternative to the behaviourist model. A business, it is suggested, is like a person in that it possesses an ego, has a collective psyche, adopts specific ego states, and occupies a particular corporate life position which helps determine the nature of its relationships with its clientele. Core propositions of transactional analysis are commandeered to categorize managerial feelings towards customers. It is concluded that positive self‐regard, corporate openness and integrity, transparency of the corporate self, genuine liking for customers, and unadulterated confidence in the propriety of the company's mission are necessary prerequisites for successful RM. Also the firm has to view RM as an entire philosophy of marketing; not merely as a set of promotional practices and techniques.     

Linking transaction-specific satisfaction and customer loyalty – The case of casino resorts

This study investigates the relationship between customer satisfaction, delight, place attachment, and loyalty in a casino context. Customer satisfaction in this study refers to customers’ transactional experience with shopping, food and beverage, and gaming within a casino resort. The study examines how each transactional, satisfying, experience affects customer delight and place attachment, which subsequently influences customer loyalty. Customer delight and place attachment are modelled as mediators between satisfaction and loyalty. The results show that each transaction-specific satisfaction is significantly related to customer delight and place attachment with the exception that a positive experience with casino gaming is not related to place attachment. Whilst place attachment has a significant influence on customer loyalty, customer delight has little effect on the loyalty indicators. The study provides a fresh perspective on the customer satisfaction-loyalty relationship. The implications of these findings are highlighted for researchers and practitioners.     

The Role of Business and Friendships on WeChat Business: An Emerging Business Model in China

ABSTRACT

WeChat business is an emerging way of doing business in China, which can be considered as a marriage between traditional e-business and social networking communications. In WeChat business, firms have developed customer relationships along two distinct ways: business relationships and friendships. However, research on the combination of business relationships and friendships is relatively nascent, and there are contradictory findings. In this study, we examine the effectiveness of the two relationship strategies using data from a field experiment through the WeChat platform by an apparel firm. Results from the field experiment suggest that development of friendships with new customers can help the strategy of developing business relationships; but developing friendships and business relationships with experienced customers negates each other. The study contributes to the literature on relationship marketing and role theory, and helps WeChat managers clarify how new social networking relationships with customers can be effectively leveraged.     

The Relative Effects of Relationship Quality and Exchange Satisfaction on Customer Loyalty

ABSTRACT

This paper addresses two key questions on how supplier firms can better manage industrial buyers to create higher loyalty. The first involves whether to focus on relationship quality or exchange satisfaction. This dual route model towards enhancing loyalty in essence is concerned with comparing the relative strengths of the effect from relationship quality to loyalty and from exchange satisfaction to loyalty. The second point of interest pertains to whether the effects from relationship quality and exchange satisfaction to loyalty are moderated by environmental conditions such as switching barriers and viable alternatives. Using data on business customers' ratings of a major information technology provider, we find that the effect of exchange satisfaction on loyalty is significantly greater than the effect of relationship quality on loyalty. We also find that the impact of exchange satisfaction on loyalty is less sensitive and more stable across different levels of switching barriers and viable alternatives. Conversely, the effect of relationship quality on loyalty is more pronounced to such moderating variables in that the effect of relationship quality on loyalty was greater when switching barriers were low and many viable alternatives existed. Implications for marketing theory and practice are discussed.     

An integrative approach to relationship marketing,customer value,and customer outcomes in the retail banking industry: a customer-based perspective from Turkey

Given how important it is to provide superior value to customers and to maintain customer loyalty for a sustainable competitive advantage, the aim of this paper is to examine the relationships among relationship marketing components of – trust, competency, commitment, communication, and conflict handling, – relationship investment, relationship quality, perceived customer value, satisfaction and loyalty in an integrated framework in the Turkish retail banking industry. Unlike previous studies, this research extends the literature by analysing affective as well as cognitive dimensions in the same model with a holistic view by simultaneously examining the direct and indirect effects of the related concepts. The distinctive nature of this study is its evaluation of customer satisfaction and loyalty from the perspective of actual consumers. The research model was tested using data collected from 685 retail banking customers by applying structural equation modelling. The findings show that relationship marketing induces loyalty through relationship quality, customer value, and satisfaction, which are mainly provided by trust, communication, and relationship investment. Furthermore, relationship investment and relationship quality are the most important factors in the development of customer value, satisfaction, and loyalty. The emotional value dimension, which captures the affective aspects of perceived value, has the strongest effect on both satisfaction and loyalty.