Do Loyal and More Involved Customers Reciprocate Retailer's Relationship Efforts?

Article excerpt

This study develops and empirically tests a model for examination of the impact of different relationship efforts made by a retailer (financial bonding, social bonding, and structural bonding) on key relationship marketing outcomes (trust, relationship commitment, and behavioral loyalty) as relationship duration and product involvement are used as controllable variables in a relationship marketing system. A study in information education services industry was conducted based on samples drawn from XYZ Company, the largest information education services institute in Taiwan. SEM results indicate that retailers undertaking relationship efforts to loyal consumers can positively affect these consumers' attitudes and behavior. Besides, the findings suggest that information education services with different attributes need different kinds and levels of relationship efforts. Specifically, the results show that relationship duration does have positive influence on consumer behavioral loyalty, and so does product involvement on relationship outcomes. Consequently, managers and employees of retail companies need to be trained, motivated, and rewarded for making relationship efforts to regular consumers.

INTRODUCTION

Providing qualified services is considered an essential strategy for success and survival in today's competitive environment (Dawkins and Reichheld, 1990; Parasuraman, Zeithaml and Berry, 1985; Reichheld and Sasser, 1990; Zeithaml, Parasuraman and Berry, 1990). As most retail markets have reached maturity and have difficulties differentiating themselves based on merchandise selection only (Berry and Gresham, 1986; Ghosh, 1994), retailers are more than ever voluntering to continually seek out products, processes, and technologies that increase consumer value (Morgan and Hunt, 1994; Parasuraman et al., 1988; Woodruff, 1997). However, retailers generally have little knowledge about the types of consumer value drivers, they should focus at (Beatty, Coleman, Reynolds, and Lee, 1996). Bendapudi and Berry (1997) and Bitner (1995) conceptualized what some of these drivers might be, but no systematic, empirical investigation has been reported. Especially research pertaining to relationship marketing in consumer markets has advanced little (O'Malley and Tynan, 2000).

In general, marketing literature focused at product and service efforts as drivers of total consumer value to the neglect of relationship efforts (Bolton and Drew, 1991; Frenzen and Davis, 1990; Gwinner, Gremler, and Bitner, 1998; Hennig-Thurau and Klee, 1997). Besides, research has shown that service quality enhancement and relationship marketing (Berry and Thompson, 1982; Day, 1985; Moriarty, Kimball and Gay, 1983) are appropriate strategies for commercial banks and other services institutes. What is more, Kimball (1990) has suggested "relationship- and product-oriented strategies are diametrically opposed to one another, with relationship-oriented banks striving to consolidate scattered consumer accounts, and product-oriented banks chipping away at competitors' relationship-oriented consumers." Therefore, our study defines and operationalizes three types of relationship efforts and empirically validates their impact on consumers' trust, relationship commitment and behavioral loyalty.

Relationship efforts increasingly become important as a source of consumer value. First, consumers' quality expectation related to consuming products and services have risen (Crosby et al., 1990). Second, retailers are increasingly competing with each other on basis of the same or highly comparable marketing tactics and strategies. Third, retailers are faced with new challenges of the marketing atmosphere such as blurring boundaries between markets or industries, an increasing fragmentation of markets, and shorter product life cycles (Juttner and Wehrli, 1994). Furthermore, several authors have argued that when companies offer similarly high levels of product or service quality, the delivery of relationship benefits becomes an important means of gaining competitive advantage (Berry, 1995; Gwinner et al. …