• Journal of Global Scholars of Marketing Science
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• v.19 no.4
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• pp.32-43
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• 2009

Trust has been studied extensively in psychology, economics, and sociology, and its importance has been emphasized not only in marketing, but also in business disciplines in general. Unlike past relationships between suppliers and buyers, which take considerable advantage of private networks and may involve unethical business practices, partnerships between suppliers and buyers are at the core of success for industrial marketing amid intense global competition in the 21st century. A high level of mutual cooperation occurs through an exchange relationship based on trust, which brings long-term benefits, competitive enhancements, and transaction cost reductions, among other benefits, for both buyers and suppliers. In spite of the important role of trust, existing studies in buy-supply situations overlook the role of trust and do not systematically analyze the effect of trust on relational performance. Consequently, an in-depth study that determines the relation of trust to the relational performance between buyers and suppliers of business services is absolutely needed. Business services in this study, which include those supporting the manufacturing industry, are drawing attention as the economic growth engine for the next generation. The Korean government has selected business services as a strategic area for the development of manufacturing sectors. Since the demands for opening business services markets are becoming fiercer, the competitiveness of the business service industry must be promoted now more than ever. The purpose of this study is to investigate the effect of the mutual trust between buyers and suppliers on relational performance. Specifically, this study proposed a theoretical model of trust-relational performance in the transactions of business services and empirically tested the hypotheses delineated from the framework. The study suggests strategic implications based on research findings. Empirical data were collected via multiple methods, including via telephone, mail, and in-person interviews. Sample companies were knowledge-based companies supplying and purchasing business services in Korea. The present study collected data on a dyadic basis. Each pair of sample companies includes a buying company and its corresponding supplying company. Mutual trust was traced for each pair of companies. This study proposes a model of trust-relational performance of buying-supplying for business services. The model consists of trust and its antecedents and consequences. The trust of buyers is classified into trust toward the supplying company and trust toward salespersons. Viewing trust both at the individual level and the organizational level is based on the research of Doney and Cannon (1997). Normally, buyers are the subject of trust, but this study supposes that suppliers are the subjects. Hence, it uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers, like buyers, are the subject of trust since transactions are normally bilateral. From this point of view, suppliers' trust in buyers is as important as buyers' trust in suppliers. The suppliers' trust is influenced by the extent to which it trusts the buying companies and the buyers. This classification of trust using an individual level and an organization level is based on the suggestion of Doney and Cannon (1997). Trust affects the process of supplier selection, which works in a bilateral manner. Suppliers are actively involved in the supplier selection process, working very closely with buyers. In addition, the process is affected by the extent to which each party trusts its partners. The selection process consists of certain steps: recognition, information search, supplier selection, and performance evaluation. As a result of the process, both buyers and suppliers evaluate the performance and take corrective actions on the basis of such outcomes as tangible, intangible, and/or side effects. The measurement of trust used for the present study was developed on the basis of the studies of Mayer, Davis and Schoorman (1995) and Mayer and Davis (1999). Based on their recommendations, the three dimensions of trust used for the study include ability, benevolence, and integrity. The original questions were adjusted to the context of the transactions of business services. For example, a question such as "He/she has professional capabilities" has been changed to "The salesperson showed professional capabilities while we talked about our products." The measurement used for this study differs from those used in previous studies (Rotter 1967; Sullivan and Peterson 1982; Dwyer and Oh 1987). The measurements of the antecedents and consequences of trust used for this study were developed on the basis of Doney and Cannon (1997). The original questions were adjusted to the context of transactions in business services. In particular, questions were developed for both buyers and suppliers to address the following factors: reputation (integrity, customer care, good-will), market standing (company size, market share, positioning in the industry), willingness to customize (product, process, delivery), information sharing (proprietary information, private information), willingness to maintain relationships, perceived professionalism, authority empowerment, buyer-seller similarity, and contact frequency. As a consequential variable of trust, relational performance was measured. Relational performance is classified into tangible effects, intangible effects, and side effects. Tangible effects include financial performance; intangible effects include improvements in relations, network developing, and internal employee satisfaction; side effects include those not included either in the tangible or intangible effects. Three hundred fifty pairs of companies were contacted, and one hundred five pairs of companies responded. After deleting five company pairs because of incomplete responses, one hundred five pairs of companies were used for data analysis. The response ratio of the companies used for data analysis is 30% (105/350), which is above the average response ratio in industrial marketing research. As for the characteristics of the respondent companies, the majority of the companies operate service businesses for both buyers (85.4%) and suppliers (81.8%). The majority of buyers (76%) deal with consumer goods, while the majority of suppliers (70%) deal with industrial goods. This may imply that buyers process the incoming material, parts, and components to produce the finished consumer goods. As indicated by their report of the length of acquaintance with their partners, suppliers appear to have longer business relationships than do buyers. Hypothesis 1 tested the effects of buyer-supplier characteristics on trust. The salesperson's professionalism (t=2.070, p<0.05) and authority empowerment (t=2.328, p<0.05) positively affected buyers' trust toward suppliers. On the other hand, authority empowerment (t=2.192, p<0.05) positively affected supplier trust toward buyers. For both buyers and suppliers, the degree of authority empowerment plays a crucial role in the maintenance of their trust in each other. Hypothesis 2 tested the effects of buyerseller relational characteristics on trust. Buyers tend to trust suppliers, as suppliers make every effort to contact buyers (t=2.212, p<0.05). This tendency has also been shown to be much stronger for suppliers (t=2.591, p<0.01). On the other hand suppliers trust buyers because suppliers perceive buyers as being similar to themselves (t=2.702, p<0.01). This finding confirmed the results of Crosby, Evans, and Cowles (1990), which reported that suppliers and buyers build relationships through regular meetings, either for business or personal matters. Hypothesis 3 tested the effects of trust on perceived risk. It has been found that for both suppliers and buyers the lower is the trust, the higher is the perceived risk (t=-6.621, p<0.01 for buyers; t=-2.437, p<0.05). Interestingly, this tendency has been shown to be much stronger for buyers than for suppliers. One possible explanation for this higher level of perceived risk is that buyers normally perceive higher risks than do suppliers in transactions involving business services. For this reason, it is necessary for suppliers to implement risk reduction strategies for buyers. Hypothesis 4 tested the effects of trust on information searching. It has been found that for both suppliers and buyers, contrary to expectation, trust depends on their partner's reputation (t=2.929, p<0.01 for buyers; t=2.711, p<0.05 for suppliers). This finding shows that suppliers with good reputations tend to be trusted. Prior experience did not show any significant relationship with trust for either buyers or suppliers. Hypothesis 5 tested the effects of trust on supplier/buyer selection. Unlike buyers, suppliers tend to trust buyers when they think that previous transactions with buyers were important (t=2.913 p<0.01). However, this study did not show any significant relationship between source loyalty and the trust of buyers in suppliers. Hypothesis 6 tested the effects of trust on relational performances. For buyers and suppliers, financial performance reportedly improved when they trusted their partners (t=2.301, p<0.05 for buyers; t=3.692, p<0.01 for suppliers). It is interesting that this tendency was much stronger for suppliers than it was for buyers. Similarly, competitiveness was reported to improve when buyers and suppliers trusted their partners (t=3.563, p<0.01 for buyers; t=3.042, p<0.01 for suppliers). For suppliers, efficiency and productivity were reportedly improved when they trusted buyers (t=2.673, p<0.01). Other performance indices showed insignificant relationships with trust. The findings of this study have some strategic implications. First and most importantly, trust-based transactions are beneficial for both suppliers and buyers. As verified in the study, financial performance can be improved through efforts to build and maintain mutual trust. Similarly, competitiveness can be increased through the same kinds of effort. Second, trust-based transactions can facilitate the reduction of perceived risks inherent in the purchasing situation. This finding has implications for both suppliers and buyers. It is generally believed that buyers perceive higher risks in a highly involved purchasing situation. To reduce risks, previous studies have recommended that suppliers devise risk-reducing tactics. Moving beyond these recommendations, the present study uniquely focused on the bilateral perspective of perceived risk. In other words, suppliers are also susceptible to perceived risks, especially when they supply services that require very technical and sophisticated manipulations and maintenance. Consequently, buyers and suppliers must solve problems together in close collaboration. Hence, mutual trust plays a crucial role in the problem-solving process. Third, as found in this study, the more authority a salesperson has, the more he or she can be trusted. This finding is very important with regard to tactics. Building trust is a long-term assignment; however, when mutual trust has not been developed, suppliers can overcome the problems they encounter by empowering a salesperson with the authority to make certain decisions. This finding applies to suppliers as well.

• Journal of the Korean Society of Clothing and Textiles
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• v.26 no.7
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• pp.1043-1054
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• 2002

The purposes of this study were to empirically examine the effect of relational benefits and relationship quality in the core variables of relationship marketing on customer satisfaction, to investigate the causal relationships among these variables. The questionnaires was administered to 417 women shopped in a fashion retail store in Gwang-ju city during January 14-18, 2002. For analysis of data, frequency, factor analysis, regression analysis, and path analysis were applied. The results were as follows: 1. The customers' perceived relational benefits were categorized as follow: 1) special treatment,2) social, and 3) psychological benefits. Relationship quality was categorized into two factors: trust and commitment 2. The relational benefits significantly influenced customer satisfaction. 3. The relational benefits significantly influenced relationship quality. 4. The relationship quality significantly influenced customer satisfaction. 5. The relational benefits had both direct and indirect effects on customer satisfaction mediated by relationship quality. The results indicated that causal relationship was existed among these three variables.

• Journal of Distribution Research
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• v.17 no.5
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• pp.85-111
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• 2012

Introduction : The purpose of this study was to examine the relationship between perceptual characteristics of consumers and intent of relational continuance for PB(Private Brand) products in discount stores. This study was conducted as an empirical study based on survey. For the empirical study, factors of PB products as characteristics perceived by consumers such as perceived quality, store image, brand image and perceived value were deduced from preceding studies. The effect of such factors on intent of relational continuance mediated by brand trust and brand equity of PB products was structurally examined. Research Model : Based on theory analysis and hypotheses, constructed a Structural Equation Model(SEM). The research model is shown in Figure 1. Research Method : This paper is based on s qualitative study of selected literature and empirical data. The survey for empirical study was carried out on consumers in Gyeonggi and Busan between January 2012 and May 2012. 300 surveys were distributed and 253 (84.3%) of them were returned. After excluding omissions and insincere responses, 245 surveys (81.6%) were used for final analysis as effective samples. Result : First of all, the Reliability was carried out for instrument used. The lower limit of 0.7 for Cronbach's Alpha as suggested by Hair et al. (1998). And Construct validity was established by carrying out exploratory factor analysis by Varimax rotation for all. Four factor result for the consumer's perceptual characteristics of PB Products, two mediating factors and one dependent factor. All constructs included in research framework have acceptable validity and reliability. Table 1 shows the factor loading, eigen value, explained variance and Cronbach's alpha for each factor. In order to assure validity of constructs, I implemented Confirmatory Factor Analysis (CFA), using AMOS 20.0. In confirmatory factor analysis, researcher can take control over the specification of indicators for each factor by hypothesizing that a specific factor is loaded with the relevant indicators. Moreover, CFA is particularly useful in the validation of scale for the measurement of specific construct. CFA result summarized Table 2 shows that the fit measures of all constructs fulfill the recommended level and loadings are significant. To test causal relationship between constructs in the research model, used AMOS 20.0 that provides a graphic module as method for analysing Structural Equation Modeling. The result of hypothesis test is shown in Table 3. As a result of empirical study, perceived quality, brand image and perceived value as selected attributes for PB products showed significantly positive (+) effect on brand trust and brand equity. Furthermore, brand trust and brand equity showed significantly positive (+) effect on intent of relational continuance. However, store image of discount stores selling the PB products was analyzed to have positive (+) effect on brand trust and no significant effect on brand equity. Discussion : Based on the results of this study, the relationship between overall quality, store image, brand image and value perceived by consumers about PB products and intent of relational continuance was structurally verified as being mediated by brand trust and brand equity. Looking at the results, a strategic approach that maximizes brand trust and equity value for PB products by large discount stores is required on top of basic efforts to improve quality, brand image and value of PB products in order to maximize consumer's intent of relational continuance and to continuously attract repeated purchase of products.

• Journal of the Korean Society of Clothing and Textiles
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• v.35 no.2
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• pp.230-241
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• 2011

This study investigates how the relational benefits of fashion retail stores influence the relationship quality (trust, satisfaction, and commitment) and CRM effects (revisit intention and word of mouth intention). This study also analyzes the moderating effect of consumer characteristics between relational benefits and relationship quality. The subjects of this study consisted of 340 female consumers whose age ranged from 20 to 50s and the results were analyzed using AMOS 18.0 and SPSS 12.0. The results of the study were as follows: First, there were three types of relational benefits of psychological, social and economic relational benefits in the CRM activities of fashion retail stores. In addition, it was found that the psychological and economic relational benefits had positive effects on the relational qualities of fashion retail stores; however, the social relational benefits did not have any effects on the relational qualities of fashion retail stores. Second, the relationship quality had a positive influence on CRM effects such as revisit intention and word of mouth intention. Third, it was confirmed that the consumer characteristics variables were effective mediators linking the relational benefits and relational qualities of fashion retail stores.

• Journal of Distribution Research
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• v.16 no.1
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• pp.179-222
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• 2011

This research investigates the influence of relational characteristics on 'co-defection', customer defection following salesperson turnover, in the context of salesperson-customer relationship. Based on the social exchange theory, it was hypothesized that perceived relational benefits and switching costs affect directly the customer's intentions to defect. Key constructs in relationship marketing such as customer satisfaction, trust, and loyalty were hypothesized to affect the customer's intention to defect as well as perceived relational benefits and switching costs. The results of structural equation modeling using a survey sample of 503 insurance customers who purchased life insurance policies through salespersons unveiled that the customer satisfaction with salesperson and the customer trust in salesperson strongly influence the salesperson-owned customer loyalty. However, they did not have significant direct effects on co-defection intentions. All paths from salesperson-owned customer loyalty to perceived relational benefits and perceived switching costs were also significant. Salesperson-owned customer loyalty did not have significant direct effects on co-defection intentions, but it had significant indirect effects on co-defection intentions through relational benefits and switching costs. Three sub-dimensions of perceived relational benefits had significant positive effects on co-defection intentions while the perceived switching costs had significant negative effects on co-defection intentions. The significance of our research findings were verified by comparing the hypothesized model and the rival model in the past studies.

• Journal of Distribution Science
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• v.14 no.7
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• pp.101-114
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• 2016

Purpose - The aim of this study is to investigate the benefit-sharing activities. They affect contract renewal intention between franchisers and franchisees that are linked through a contract with the intention of building their relationship from the level based on dynamic trust. This study will show a new approach on qualitative growth and consolidation of competitive power and may well be able to suggest practical ways to strengthen directions in the field of franchise industries. Research design, data, and methodology - In this study, based on literature review, we separated logistical-supporting activities and non-logistical-supporting activities from benefit-sharing activities. We modeled how benefit-sharing activities influence contract renewal intention of franchisees by dynamic trust. In particular, considering the possibility of trading concepts and characteristics of trust between providers opportunistic behaviors was defined as variables, depending on the situation and dynamic characters reveal their relationship trust concept. That is, dynamic trust having the possibility of changing depending on opportunistic risks and interdependencies by Lewis & Weigert(1985, 2012) was classified into transitional-based trust, calculated based trust, relational-based trust and balance-based on trust. The total of 104 samples from domestic franchisees being with franchisees were collected by using a structural composed questionnaire. Results - The results are as following. Benefit-sharing activities in logistical supporting activities appeared to affect the multidimensional concept of transitional trust, calculated based on trust, relationship-based trust and balance based on trust dynamic trust with all-defined impact. Non-logistical supporting activities appeared to affect significantly the positive (+) to the dynamic trust concept except transitional trust. Lewis & Weigert(1985; 2012) have proposed a dynamic confidence calculated from relations within-based trust relationship based on trust appears to affect the significant positive (+) to the balance-based confidence transactions confidence mechanism of the system side in the verified relationship. Finally, a relationship based on trust and confidence in the balance based on the Influence of dynamic renewed confidence showed significantly affect the positive(+). In particular, the balance based trust showed the acts as a mediating factors between relational trust and confidence and renew calculated. Conclusion - From the above these results, the significance from this study is as following. First, the proposed activity is to share and validate the approach by identifying the potential in the relationship from the contract with building dynamic trust, and one of the ways from the franchise headquarters and affiliated merchants mutual growth through win-win cooperation in sharing activities. Next, the dynamic segmentation confidence to suggest the possibility can be broken down over the validity and reliability test for each concept. In addition, by identifying the relationship between the dynamic level of confidence granular multi-dimensional concept, to determine the level of trust with a dynamic relationship between risk and interdependencies can be possible in franchise industries. In order to maintain and develop their mutual relationship, franchise industries should propose confidence-building steps to promote their quality improvement.

• Fashion & Textile Research Journal
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• v.21 no.3
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• pp.346-355
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• 2019

This study aimed to determine the factors of the make-up artist experience and establish their effects on brand loyalty through the mediation of trust and brand satisfaction. The step of first surveyed the make-up artist experience level through precedent research and made concept frame of study. The step of second checked up the effects of make-up artist experience through the desires for change. The step of third established to the effects of brand loyalty through make-up artist experience brand through mediation of make-up artist trust and brand satisfaction. The survey was carried out on 440 women aged 20 to 40 who experienced make-up services in Seoul, Gyeonggi-do, Sejong and Daejeon. The data were analyzed using SPSS 23.0, and AMOS 18.0 using frequency analysis, factor analysis, reliability analysis, structural model analysis and t-tests. 1)Make-up artist experiences were divided into informational/ relational experiences and emotional experiences. 2)Desires for change influenced positive effects about information/relational experience and emotional experience. 3)The information/relation experiences influenced positive effects about artist trust and brand satisfaction. 4)The emotional experiences influenced positive effects about make-up artist trust and brand satisfaction. 5) The make-up artist trust influenced positive effects about brand satisfaction. Trust in the make-up artist did not directly influence brand loyalty, but influenced it through satisfaction. 6)The brand satisfaction influenced positive effects about brand loyalty. This study identified the roles of make-up artist and the importance of the make-up experience.

• Proceedings of the Korean DIstribution Association Conference
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• 2005.11a
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• pp.53-83
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• 2005

This study focuses on finding out the determinants of relational quality between the supplier and the retailer in the Chinese cosmetics market. A total of 72 questionnaires were collected by surveying beauty shops which mainly do business with the foreign cosmetics suppliers in Shanghai area. The findings support the premise that a retailer's trust in a supplier is positively related to the retailer's commitment. Supplier's ability, guanxi and cultural sensitivity have positive impacts on trust. Formalization, supplier's specific investment and cultural sensitivity affect commitment positively. But the formalization is not significantly related to the retailer's trust. The guanxi is not found to be significantly related to the retailer's commitment yet.

• Journal of Distribution Research
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• v.11 no.4
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• pp.1-29
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• 2006

This study focuses on finding out the determinants of relational quality between the supplier and the retailer in the Chinese cosmetics market. A total of 72 questionnaires were collected by surveying beauty shops which mainly do business with the foreign cosmetics suppliers in Shanghai area. The findings support the premise that a retailer's trust in a supplier is positively related to the retailer's commitment. Supplier's ability, guanxi and cultural sensitivity have positive impacts on trust. Formalization and cultural sensitivity affect commitment positively. But the formalization is not significantly related to the retailer's trust. The guanxi is not found to be significantly related to the retailer's commitment yet. Finally, the authors discuss some theoretical contributions, managerial implications. And then, they present limitations of this study and the future research directions.

• International Commerce and Information Review
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• v.18 no.3
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• pp.155-179
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• 2016

The rapid changing technology and globalization allow consumers get information and new products or services faster, have more choices than before, which might be causing more competitive and more uncertain demand. The relationship quality between enterprises positively influence the relational performance. Through this research, enterprises should realize the importance of relationship learning to improve the competitive advantage. Also this research provide the strategic solutions to promote the relationship learning. this is considered to be able to present an improved directionality of the relationship between the buyer and the supplier. In addition, from the perspective of policy, this research provides implications for large enterprises and SMEs to promote their coexistence relation. The empirical model of this paper is established on basis of previous research. The empirical results show that: first, as the influence factors, relation solidarity level, environmental uncertainty, learning intension affect relationship learning, whilst special transaction assets influence information shared and relationship memory and have no effect on mutual understanding; second, relationship learning influence on relational performance and this influence relation becomes stronger if the relationship trust is higher.