TheoryCT

• business-to-business relationships require commitment, as well as trust.
• Commitment and trust are affected by affected  by the IV’s termination costs and benefits, shared values, communication  and  opportunistic  behavior.
• commitment  implies importance and a desire to continue a relationship assuming that it will bring future value or benefits.
• the  authors  (1) theorize  that successful   relationship marketing requires  relationship commitment  and trust,  (2) model  relationship commitment  and trust as  key mediating variables,  (3) test  this key mediating variable model  using  data  from automobile  tire retailers, and  (4) compare  their model  with a  rival that does  not allow relationship commitment  and trust to function as  mediating variables.
• theorize that successful relationship marketing requires relationship commitment and trust and then they model them as key mediating variables
• structural equation modeling supports 12 of the 13 hypotheses.
• hypothesized antecedents explain over half the variance in relationship commitment and trust, they also explain a substantial amount of  the variances in five  outcomes

• Commitment  is  defined  as  the  perceived importance of the relationship
• Commitment also includes the desire to continue the relationship and to work to ensure its continuance
• If a business relationship is perceived  as  less  important,  commitment  is  assumed  to decrease.

“an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it; that is, the committed party believes the relationship is worth working on to ensure that it endures indefinitely.”

• (a) the perceived credibility and benevolence of the exchange partner (Doney& Cannon, 1997);
• (b) a willingness to rely on an exchange partner in whom one has confidence

Relationship marketing, we propose, refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges

• Identifying commitment and trust as key mediating variables is critical to the study and management of relationship marketing.
• The need for relationship marketing stems from the changing dynamics of the global marketplace and the changing requirements for competitive success.
• Therefore, when both commitment and trust not just one or the other-are   present, they produce outcomes that promote efficiency, productivity, and effectiveness.
• commitment and trust lead directly to cooperative behaviors that are conducive to relationship marketing success
• KMV model focuses on one party in the relational exchange and that party's relationship commitment and trust
• commitment and trust are key mediators between 5 antecedents: relationship termination costs, relationship benefits, shared values, communication, and opportunistic behavior
• and 5 outcomes: acquiescence, propensity to leave, cooperation, functional conflict, and decision-making uncertainty

• The commitment-trust theory maintains that those networks characterized by relationship commitment and trust engender cooperation relationship commitment and trust develop when firms attend to relationships by
• (1) providing resources, opportunities, and benefits that are superior to the offerings of alternative part ners;
• (2) maintaining high  standards of  corporate values and allying oneself with exchange partners having similar values;
• (3) communicating valuable information, including expectations, market intelligence, and evaluations of the partner's performance; and
• (4) avoiding malevolently taking advantage of their exchange partners.

Commitment and trust are "key"  because they encourage marketers to (1) work at preserving relationship investments by cooperating with exchange partners, (2) resist attractive short-term alternatives in favor of the expected long-term benefits of staying with existing partners, and (3) view potentially high-risk actions as being prudent because of the belief that their partners will not act opportunistically.

• Restaurant buyers’ relationships with their suppliers were the focus of this study.
• Business marketing of this nature, where one firm sells to another, has undergone a paradigm shift away from an adversarial model to a cooperative model where many firms have learned that more value can be created by working creatively and effectively with one another.
• this article puts forth and tests a model of buyer-supplier relationships where a number of factors are proposed to influence the level of trust and commitment restaurant buyers have with their wholesale suppliers.
• this study explores the perceived advantages and disadvantages of creating fewer but more closely integrated buyer-seller relationships from the perspective of restaurateurs.
• This study investigates two fundamental issues in buyer-supplier relationships: (a) What factors influence organizational buyers’ trust in and commitment to suppliers, and (b) the perceived advantages and disadvantages of creating fewer but more closely integrated buyer-supplier relationships from the perspective of organizational buyers.

factors thatwe believe influence trust include performance satisfaction, quality, price, com-parison level of alternatives. communication, cooperation, adaptation, and social bonding.

• sellers need to satisfy the buyers' needs or risk becoming marginalized.
• A supplier who does not deliver theright product, in the right quantity, and at the right price and time will underminethe buyer’s trust and commitment level.
• We define performance satisfaction as thedegree to which the business transaction meets the buyer’s performance expecta-tions in servicing the customer.
• Performance satisfaction includes both prod-uct-specific performance and service-related attributes.
• Price and quality are defined separately as the ability of the buyer to achieve the best price and quality from the supplier in question.
• Restaurant industry was chosen as the context for this study due to the per-ishable nature of most food products and the need of restaurateurs to maintain“just-in-time” inventory levels from suppliers. The unit of analysis was the relationship between a restaurant owner/manager and one of its principal suppliers.
• Communication, followed by social bonding and price, were revealed tobe strongest predictors of trust, accounting for 62% of the explained variance
• Findings ofthis research suggest that good communication, due to its reciprocal relationshipwith cooperation, accommodation, social bonding, performance satisfaction, andbuyer trust, should not be overlooked by suppliers attempting to influence theorganizational buyer’s decision-making process.
• One half of the restaurant buyers in this survey indicated they hadrecently reduced the number of suppliers they do business with or were interestedin doing so. In this data set, competitive pressures were driving this trend. To be aneffective competitor, restaurateurs need to be ever vigilante in finding waysto save time, reduce uncertainty, and control costs. Finding suppliers who canassist buyers in such ways would be valued by nearly one half of this study’s respondents.
• Maintaining relationships with multiple suppliers allows restaurateurs topreserve their options to respond to suppliers who ill treat them or drive their ownconcessions. Therefore, suppliers seeking to move these restaurateurs into newlevels of cooperation and interconnectedness should expect to find most buyersreluctant to totally abandon the adversarial model.
• Limitations: results were produced from a small sample in a limited sampleframe.
• IV's were not conducive to statistics. Need to be operationalized into multiple-item measures to creat the latent variables needed for SEM

• Examined  the  antecedents  and  consequences  of  building   relationships   with   customers in  the  luxury-hotel    segment.
• The  reduction   in  marketing   costs is a result  of  the facts that  it  takes fewer  marketing   dollars  to  maintain   a customer  than  to  create one  and  that  loyal  customers help  create  new  customers  through   positive word   of  mouth.    
• Loyal  customers  are less likely to  switch  to  a competitor   solely because of  price, and  loyal  customers  also  make  more  purchases than    do   comparable     non-loyal     customers.’
• Partnership-like   activities  of  loyal  hotel  customers  include  offering   strong  word  of  mouth,   making  business referrals,  providing    references  and publicity,   and  serving  on  advisory  boards.
• A small increase in loyal customers can mean a substantial increase in profitability
• A 5% increase in customer retention can mean a 25 to 125% increase in profits
• developed  the  model of  service relationships  (MSR)  
• The  difference between   the  MSR  and  previous  models  is that  our  model  focuses on  services in  which  one of  the  partners  is the  end  user, whereas previous models   have  examined   relationships    between firms.
• Two  concepts  at  the  heart  of  a relationship are trust  and  commitment.   
• Gundlach et al. defined  commitment    as “an implicit   or  explicit   pledge   of  relational    continuity     between exchange  partners.“”
• Commitment is the  belief  that  an  ongoing   relationship   is so important that   the  partners   are  willing   to  work   at  maintaining   the  relationship   and  are willing   to  make short-term   sacrifices to  realize long-term   benefits.
• Trust  has been  defined   by  one  set  of authors  as the willingness  to rely on an exchange partner   in  whom   one  has  confidence.“

• To  test  a proposed  model   of  service relationships,   the  study needed  to  meet  the  following   sub-objectives.
• Identify   the  type  of  benefits  (e.g.,  upgrades, frequency  points)  luxury  hotels must  offer  so that  guests want  to  develop a relationship   with   (and  consequently   a feeling  of  loyalty  for)  the  hotel;
• Identify   the  behavioral  outcomes  of  this relationship   (e.g.,  increased product   use, willingness  to  promote   the  hotel);
• Evaluate  the  current  practices  of  luxury- hotel  operators  (e.g,  revenue  management, last-room   availability)   and  the  impact  of such practices on  developing   relationships with   customers;
• Identify   actions  undertaken   by luxury  hotels that  affect consumers’  feelings  of  trust in  the  hotel  (whether   positive  or  negative);
• Determine   whether   relationship   issues vary  according  to  purpose  of  stay (i.e., business or  pleasure),  demographic characteristics,  and  frequency  of  use.
• partners  in a relationship  must  suppress this natural  opportunistic     behavior,   resist  the  desire  for  an  advantage,  and  instead  work  toward  a mutually beneficial situationthere is a negative relationship between natural opportunistic relationship and trust
• Eg. Hotel changing its rates according to demand