The consequences of relationship satisfaction among car dealers: a look at Malaysian automobile industry (2010)

ABSTRACT With the increasing interest in buyer-supplier relationships, relationship satisfaction has become an important factors in relationship marketing and channel theory. In the area of business relationships, relationship satisfaction is viewed as an essential ingredient in the development and maintenance of long-term buyer-supplier relationships and becoming critical in business relationships to lower transaction costs and foster greater economic value for both marketers and their customers. Despite the assumption that relationship satisfaction influences buyer-supplier relationship, previous studies in this area had focused more on factors affecting overall satisfaction of relationship rather than the consequences of the satisfaction. Using a survey method, this study investigates the consequences of relationship satisfaction on trust and commitment among 107 Malaysian car dealers. Results revealed that when the car dealers are satisfied with the relationship with their suppliers, they tend to be more committed and trust the suppliers. Results are compared with earlier findings and implications for future research are discussed. Keywords: Relationship satisfaction, car dealership, trust, commitment 1. INTRODUCTION Relationship has become an inevitable feature in today's business environment. Businesses are increasingly emphasizing on the relationships they have with their suppliers and are demanding that they adhere to high standards. The pressure to compete also makes it necessary of the development and maintenance of relationships between buyers and suppliers. In relation to that, small and large companies nowadays are fostering partnerships with suppliers as a foundation of their supply strategies (Theng-Lau & Goh, 2005) owing to the fact that developing successful business-to-business relationships can be beneficial to both buyers and sellers (Sheth & Sharma, 1997). Even though, sustainable business relationships can be created by factors such as good customer service, good merchandise and efficient distribution systems, most firms overlook the sustainable competitive advantage that can be created through longterm relationships with their suppliers (Ganesan, 1994). In other words, the cutting edge for business today is long-term relationships. With the increasing interest in buyer-supplier relationships, relationship satisfaction has become an important factor in relationship marketing and channel theory (Abdul-Muhmin, 2005; Ramaseshan et. al., 2006; Rodriguez et. al., 2006). In business relationships, relationship satisfaction is viewed as an essential ingredient in the development and maintenance of longterm buyer-supplier relationships. Relationship satisfaction is becoming critical in business relationships and it has been found that successful business relationship has contributed in lowering transaction costs and foster greater economic value for both marketers and their customers (Geyskens & Steenkamp, 2000; Ping, 2003). In other words, the satisfaction of business relationship has huge potential for enabling companies, small and large, to develop better collaboration and coordination for long-term based strategies and commitment in business relationship. Totally new competitive advantages and opportunities would open up for companies. As a result the importance of relationship satisfaction is emphasized. During the last decade, selling and buying companies relied heavily on short-term economic transaction where each transaction is viewed as an independent opportunity without any consideration of future contact and long-term relationships (Gummesson, 1994). In particular, due to the development of relationship marketing approach, firms have been attempting to improve the efficiency of transaction between buyer and supplier long-term relationship orientation (Biong & Selnes, 1995; Doney & Cannon, 1997; Ganesan, 1994; Jonsson & Zineldin, 2003; Theng-Lau & Goh, 2005). …