Research on International Service Marketing: A State of the Art

CONTENTS LIST OF CONTRIBUTORS vii PREFACE S. Tamer Cavusgil ix RESEARCH ON INTERNATIONAL SERVICE MARKETING: ENRICHME...

Author: Pieter Pauwels Ko de Ruyter

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CONTENTS LIST OF CONTRIBUTORS

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PREFACE S. Tamer Cavusgil

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RESEARCH ON INTERNATIONAL SERVICE MARKETING: ENRICHMENT AND CHALLENGES Pieter Pauwels and Ko de Ruyter

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PART I: MARKETING SERVICES ACROSS BORDERS MANAGING SERVICE RELATIONSHIPS IN A GLOBAL ECONOMY: EXPLORING THE IMPACT OF NATIONAL CULTURE ON THE RELEVANCE OF CUSTOMER RELATIONAL BENEFITS FOR GAINING LOYAL CUSTOMERS Thorsten Hennig-Thurau, Kevin P. Gwinner, Dwayne D. Gremler and Michael Paul

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A CROSS-CULTURAL INVESTIGATION OF RELATIONSHIP MARKETING EFFECTIVENESS IN RETAIL SERVICES: A CONTINGENCY APPROACH Gaby Odekerken-Schröder, Kristof De Wulf and Kristy E. Reynolds

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THE ROLE OF SOCIALLY DESIRABLE RESPONDING IN INTERNATIONAL SERVICES RESEARCH Marcel van Birgelen, Ko de Ruyter and Martin Wetzels

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PART II: GETTING SERVICES ACROSS BORDERS THE INTERNATIONALIZATION PROCESS OF SERVICE PROVIDERS: A LITERATURE REVIEW Tinne Lommelen and Paul Matthyssens ENTRY MODE CHOICE IN SERVICE FIRMS: A REVIEW OF CONTEMPORARY RESEARCH Aileen Kennedy

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PART III: NEW SERVICES ACROSS BORDERS MARKETING INDUSTRIAL PROJECT-RELATED SERVICES INTERNATIONALLY: A MULTI-LINGUAL LITERATURE REVIEW Maria Anne Skaates and Bernard Cova

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INTERNATIONAL CONSULTING PROVIDERS AND MULTILATERAL INSTITUTIONS: NETWORKS AND INTERNATIONALIZATION Catherine Welch

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LIST OF CONTRIBUTORS Marcel van Birgelen

Department of Marketing, Maastricht University, The Netherlands

Bernard Cova

Marketing Group, European School of Management (ESCP-EAP), France

Dwayne D. Gremler

Department of Marketing, Bowling Green State University, USA

Kevin P. Gwinner

Department of Marketing, Kansas Sate University, USA

Thorsten Hennig-Thurau

Department of Marketing and Media Research, Bauhaus-University of Weimar, Germany

Aileen Kennedy

School of Marketing, Dublin Institute of Technology, Ireland

Tinne Lommelen

Department of Burinen Administration, Limburg University Center, Belgium

Paul Matthyssens

Department of Strategy, University of Antwerp, Belgium

Gaby Odekerken-Schröder


Michael Paul

Department of Marketing and Media Research, Bauhaus-University of Weimar, Germany

Pieter Pauwels


Kristy E. Reynolds

Department of Marketing, Louisiana State University, USA vii

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Ko de Ruyter


Maria Anne Skaates

Systime Academic, Denmark

Catherine Welch

School of International Business, University of New South Wales, Australia

Martin Wetzels

Eindhoven University of Technology, ECIS, The Netherlands

Kristof De Wulf

Competence Center Marketing, Vlerick Leuven Gent Management School, Belgium

PREFACE This special volume of Advances in International Marketing is devoted to exploring new perspectives on international service marketing – a topic of great interest to scholars and practitioners of international marketing. It is guest edited by Pieter Pauwels and Ko de Ruyter, both of Maastricht University. The idea for devoting a separate volume on international service marketing originated from Professors Pauwels and de Ruyter. They issued a call for papers, which then attracted a variety of submissions of high quality. We owe gratitude to them for screening and evaluating these submissions, and for preparing the final set of chapters. We are also indebted to many colleagues who assisted in the review process. The resulting selections draw from a variety of perspectives and offer rich insights on international services marketing. Our thanks go to Professors de Ruyter and Pauwels for their efforts in creating this volume. At Michigan State University, I would like to recognize the professional assistance of Ms. Kathy Waldie, Editorial Assistant for the Advances in International Marketing series. Kathy carries the responsibility of corresponding with the authors, guest editors, as well as the staff of Elsevier Science at various phases of the publication process. Finally, we express our appreciation to Ms. Hannah Collett and the other staff at JAI/Elsevier Science who saw the volume through the production process. S. Tamer Cavusgil Series Editor

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RESEARCH ON INTERNATIONAL SERVICE MARKETING: ENRICHMENT AND CHALLENGES Pieter Pauwels and Ko de Ruyter SERVICES ACROSS THE GLOBE ANNO 2005 Today, services officially represent more than 22% (or about USD 3 trillion) of world trade and are the fastest growing sector of world trade for the last two decades (OECD, 2004; WTO, 2001). Optimist analysts believe that services will reach 50% of world trade by 2020 (Hibbert, 2003). Nearly half of the 100 biggest multinationals are service firms with an average revenue of over USD 50 million in 1997 (Hibbert, 2003; Keillor, Hult & Kandemir, 2004). The American McKinsey and Company in management consulting, the Danish ISS in facility management and the Dutch VNU in business information illustrate how service firms may succeed in gaining and holding a global dominant position. On top of the official service economy, the (hidden) service component of product markets is responsible for a major and increasing part of the total value of the world merchandise trade (Brown et al., 2001; Grönroos, 1990). Illustrative in this respect is the critical role of the global service systems of the Swedish/Swiss ABB in automation technology and of the American Caterpillar in construction and mining equipment. Despite the increasingly important role of services in world trade, crossborder marketing and delivery of services is complex and full of hindrances. Firstly, services remain highly protected by national regulations. Prior to the ratification of GATS – the General Agreement on Trade in Services – in 1996,

Research on International Service Marketing: A State of the Art Advances in International Marketing, Volume 15, 1–7 Copyright © 2005 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 1474-7979/doi:10.1016/S1474-7979(04)15001-1

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PIETER PAUWELS AND KO DE RUYTER

no multilateral agreement existed on rules for global trade in services. Today GATS remains a tricky issue, high on the global political agenda. Secondly, more than tangible goods, services require idiosyncratic internationalization approaches. Due to the critical role of the customer in service delivery, the degree of intangibility of a service may dictate a redefinition of that service across the border (Patterson & Cicic, 1995). Finally, as services are fundamentally peoplecentred, they are highly culture-sensitive (Knight, 1999). As a consequence, services need more local customization, which, on its turn, is complicated by the limited mobility of customers as well as by the intangibility and the similtaneous production and consumption of services. In sum, the recent troublesome internationalization processes of multinationals such as the French Carrefour and the American Walmart in retailing and the American Disneyland in entertainment illustrate the complexity and forced ideosyncracy of the internationalization of services.

COMPLEX YET WANTED: INTERNATIONAL SERVICE MARKETING RESEARCH Nothwithstanding the dramatic increase in, and impact of, global trade of services on the world economy and the intrinsic complexity of the marketing of services across borders, the international dimension of service marketing research remains underdeveloped at best. Milestone reviews by Berry and Parasuraman (1993) and Fisk, Brown and Bitner (1993), which marked the maturation of service marketing research, remained surprisingly silent on the (potential) impact of the international dimension on the key questions of service marketing research. Only five years ago, the Journal of Services Marketing was the first to set up a Special Issue on international service marketing. Although the international dimension had entered the general debate on services marketing earlier, we see various reasons why this occurred in a slow and scattered way. Initially, scholars did not capture the relevance of international services just because no (reliable) data was available. While GATS, OECD and WTO are working hard on it, official and detailed data on international services remain scares and vague (Hibbert, 2003). Moreover, data from different sources have been inconsistent for the simple reason that international services had been defined in different ways (Samiee, 1999). Secondly, quite some non-cummulative academic effort was done to solving the problem of heterogeneity of services. From different points of view, a wide variety of international service typologies and taxonomies has been developed. Today, it is believed that this heterogeneity

Research on International Service Marketing

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problem remains largely unsolved (Lommelen, 2004). Thirdly, emerging attention to the international dimension of service marketing in the early 1990s was largerly diverted to the issue of e-services and the role of internet for worldwide service marketing (Fisk, 1999). It is clear that information technology and the internet may dramatically reduce the barrier of physical distance (Mattsson, 2000). Yet, it does not (or partly at best) relieve the problem of the psychic distance between the supplier and the customer. Fourthly, the cultural issue continues to torture the international marketing agenda. Despite the dominance of some elegant approaches to capture (read: measure) culture, the cross-cultural translation of key constructs in service marketing remains largely unsolved. Finally, research on international services is highly complex due to the multidisciplinary nature of both service marketing theory and international business theory (Clark, Rajaratnam & Smith, 1996).

A BIFOCAL APPROACH TO INTERNATIONAL SERVICE MARKETING At the risk of oversimplifying the historic reality, to date the agenda of international service marketing research has been shaped from two perspectives: consumer marketing and international business. From an international business perspective, the interest in the service firm has been lukewarm. Why then consider the service firm a special case? Li and Guisinger (1992) and Buckley, Pass and Prescott (1992) basically concluded that no separate internationalization theory was needed for the explanation of the service multinational. Nevertheless, the interest in the internationalizing service firm grew slowly during the 1990s. Interest has primarly focused on the (pre-) startup phase of service internationalization. Some of the most popular themes remain: internationalization motives, country/market selection, initial entry mode choice, and typologies of international services. Despite a record of over hundered studies on these issues in the last decade, their conceptual and empirical contribution remains limited (Knight, 1999; Lommelen, 2004). From a marketing perspective, the interest in international services has been more limited in terms of the quantity of publication, yet far more advanced in terms of conceptual underpinning and empirical approaches. The key issue was and remains to test the central research questions of service marketing in an international setting: service quality, understanding and optimizing the service encounter, service design and delivery, customer retention and relationship marketing, and internal marketing.

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CONTRIBUTIONS IN THIS ISSUE – AN OVERVIEW This special issue reflects the aforementioned bifocal approach to international service marketing research. Part I “Marketing Services across Borders” captures the issue from a marketing perspective. Part II “Getting Services across Border” builds explicitly on the IB perspective to international service marketing. Part III “New Services across Borders” opens a research window on two poorly researched tendencies of service internationalization: industrial projectbased services and international consulting to multilateral institutions. Each of these hold potential as leverage for acceleration in the globalization of services.

Part I: Marketing Services Across Borders In the first paper, Thorsten Hennig-Thurau, Kevin P. Gwinner, Dwayne D. Gremler and Michael Paul focus on the role of relational benefits in developing long-term relationships with consumers in a cross-cultural context. The authors propose a conceptual framework and suggest hypotheses that accommodate for the moderator effect of Hofstede’s cultural dimensions. Highly complementary to the first, the second paper by Gaby Odekerken-Schröder, Kristof De Wulf and Kristy E. Reynolds investigates the moderating impact of demographic characteristics, personal values and shopping-related consumer characteristics on the effectiveness of relationship marketing efforts in a retail service context. Their analysis builds upon an extended sample in three countries: USA, The Netherlands and Belgium. As the moderator effects were found to be inconsistent among these three countries, the authors argue in favour of an adaptation strategy with respect to relationship marketing efforts. Both papers exemplify the rigor – both conceptual and empirical – of current research on international service marketing research. The third paper by Marcel van Birgelen, Ko de Ruyter and Martin Wetzels illustrates the need for ongoing optimization of methodological approaches for the investigation of cross-border service marketing. Indeed, the core characteristic of services – intangibility – affects the conceptualization as well as the complexity of researching its phenomena in a cross-cultural setting.

Part II: Getting Services Across Borders Tinne Lommelen and Paul Matthyssens scrutinize the extant literature on the internationalization process of services providers. This paper focuses on four


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themes: internationalization motives, country/market selection, entry mode choice, and the profile of service exporters. Although the authors found and analyzed over a hundred recent publications, still they have to conclude that this stream of literature misses sound theoretical bases. Accordingly, specific research questions per research theme are formulated. While Lommelen and Matthyssens take a broad perspective on service internationalization, Aileen Kennedy zooms into the entry mode choice. Complementary to the previous paper, Kennedy points at the paucity of empirical research in this area. In contrast to the more marketing-based research as represented in Part I of this Special Issue, these two profound literature reviews plead for better – not necessarily a lot more – research on the internationalization process of the service firm. Future research should build upon established IB and marketing theory and should apply rigorous longitudinal analytical approaches.

Part III: New Services Across Borders In the first paper of Part III, Maria Anne Skaates and Bernard Cova focus on a booming global market: industrial project-related services. While mainly domestically organized until recently, the global consolidation trend in many project-related industries has increased cross border trade dramatically. Building upon a multi-lingual literature review, the authors scrutinize the viability of four marketing schools of thought for the conceptual accommodation of this phenomenon. Applying a rigorous qualitative approach, Catherine Welch investigates the internationalization of consulting providers and more in particular how this process may be accelerated by globally dominant institutions such as the World Bank or the UN. The network approach to underpin the logic of this study holds unrealized potential for the explanation of the internationalization process of the service provider.

FUTURE RESEARCH ON INTERNATIONAL SERVICES MARKETING Whatever the particular emphases in future research, the meta-question remains whether traditional theories of service marketing apply for international services. Although (implicitly) contested in earlier work, recent publications (e.g. Clark & Rajaratnam, 1999; Knight, 1999; Samiee, 1999) as well as the papers in this Special Issue illustrate that the international dimension may dramatically impact upon the state of the art of service marketing research.

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Table 1. Top 10 Issues in Future International Service Marketing Research. 1. The moderating effect of culture on the relationship between the intangibility of services and marketing performance; 2. Cultural (mis)fit and the service seller-buyer dyad; 3. Inward internationalization (cf. customers’ mobility); 4. International outsourcing of services; 5. The limits of ICT and internet in international service marketing; 6. The process of service internationalization beyond the start-up phase; 7. The network approach to international service marketing; 8. Local service standardization versus adaptation; 9. Pricing services across borders; 10. Strategic and competitive strategies of global service providers.

At the certain risk of being incomplete, Table 1 lists our top 10 of issues in international service marketing research for the next five years. Some of the issues are quite general others are more specific. With this list we aim at inspiring top researchers to enter this field, at teasing current international service marketing scholars, or even at inciting disagreement. In any way, we contribute to the basic aim of this Special Issue: to increase academic interest in international service marketing research.

ACKNOWLEDGMENTS We highly appreciate the confidence we enjoyed from S. Tamer Cavusgil, the Editor-in-Chief of Advances in International Marketing. We firmly acknowledge the insights and contributions of a dozen of reviewers, all experts in international service marketing research. Finally, we are proud of the truly multinational character of this Special Issue. The group of nineteen authors represents research institutes from eight different countries on three continents. Research for this book was partially funded by a research grant from the 6th European Framework Program, Specific Support Action-CoCombine (WP2).

REFERENCES Berry, L. L., & Parasuraman, A. (1993). Building a new academic field – The case of services marketing. Journal of Retailing, 69(1), 13–60. Brown, S. W., Van Bennekom, F., Goffin, K., Hahn, A., & Alexander, J. A. (2001). S-business: Defining the services industry. Fort Myers, FL: AFSM International.


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Buckley, P. J., Pass, C. L., & Prescott, K. (1992). The internationalization of service firms: A comparison with the manufacturing sector. Scandinavian International Business Review, 1(1), 39–56. Clark, T., & Rajaratnam, D. (1999). International services: Perspectives at the century’s end. Journal of Services Marketing, 13(4/5), 298–310. Clark, T., Rajaratnam, D., & Smith, T. (1996). Toward a theory of international services: Marketing intangibles in a world of nations. Journal of International Marketing, 4(2), 9–28. Fisk, R. P. (1999). Wiring and growing the technology of international services marketing. Journal of Services Marketing, 13(4/5), 311–318. Fisk, R. P., Brown, S. W., & Bitner, M. J. (1993). Tracking the evolution of the services marketing literature. Journal of Retailing, 69(1), 61–102. Grönroos, C. (1990). Service management and marketing. Managing the moments of truth in service competition. Lexington, MA: Lexington Books. Hibbert, E. (2003). The new framework for global trade in services – All about GATS. The Service Industries Journal, 23(2), 67–78. Keillor, B. D., Hult, G. T. M., & Kandemir, D. (2004). A study of the service encounter in eight countries. Journal of International Marketing, 12(1), 9–35. Knight, G. (1999). International services marketing: A review of research, 1980–1998. Journal of Services Marketing, 13(4/5), 347–360. Li, J., & Guisinger, S. (1992). The globalization of service multinationals in the “triad” regions: Japan, Western Europe and North America. Journal of International Business Studies, 23(4), 675–696. Lommelen, T. (2004). A learning perspective on internationalization: Progression in the internationalization of logistic services providers. Unpublished doctoral dissertation. Limburg University Center, Diepenbeek, Belgium. Mattsson, J. (2000). Learning how to manage technology in services internationalisation. Service Industries Journal, 1(January), 22–39. OECD (2004). Structure and trends in international trade in services. Paris: OECD. Patterson, P. G., & Cicic, M. (1995). A typology of service firms in international markets: An empirical investigation. Journal of International Marketing, 3(4), 57–83. Samiee, S. (1999). The internationalization of services: Trends, obstacles and issues. Journal of Service Marketing, 13(4/5), 319–328. World Trade Organization (2001). GATS – Facts and fiction. Geneva: World Trade Organization.

MANAGING SERVICE RELATIONSHIPS IN A GLOBAL ECONOMY: EXPLORING THE IMPACT OF NATIONAL CULTURE ON THE RELEVANCE OF CUSTOMER RELATIONAL BENEFITS FOR GAINING LOYAL CUSTOMERS Thorsten Hennig-Thurau, Kevin P. Gwinner, Dwayne D. Gremler and Michael Paul ABSTRACT Customer relational benefits have been identified as a driving motivation for consumers to engage in long term relationships with service providers. Such benefits can be expected to play a crucial role in the success of service firms when extending their business into other countries and cultures. Most of the previous discussion of relational benefits has been conducted almost exclusively in North-American contexts and has not addressed the impact a nation’s culture may have on the relevance of relational benefits for gaining relationship outcomes such as customer loyalty. The aim of this article is to deepen our understanding of the role of relational benefits in developing long-term relationships with consumers in a cross-cultural context. Specifically, propositions focusing on the moderating role of power Research on International Service Marketing: A State of the Art Advances in International Marketing, Volume 15, 11–31 Copyright © 2005 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 1474-7979/doi:10.1016/S1474-7979(04)15002-3

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distance, individualism/collectivism, masculinity/femininity, and uncertainty avoidance for the benefits-outcomes relationship are developed. The article concludes with a discussion of potential implications for service firms and researchers.

INTRODUCTION Today, many companies have migrated from a transactional mindset to a relational mindset in their dealings with customers. The extant literature proposes that, for many organizations, success is dependent upon the firm’s ability to develop and maintain long-term relationships with individual customers (e.g. Heskett et al., 1997; Lemon et al., 2002; Morgan & Hunt, 1994). This is particularly critical in service businesses where the customer’s input and even co-production of the service are often necessary components for a positive outcome (e.g. Berry, 1995). The idea that business relationships require both the service firm and the customer to benefit from the relationship has recently stimulated academic interest on the types of benefits consumers receive as a result of engaging in long-term relationships with sellers (e.g. Gwinner et al., 1998; Hennig-Thurau et al., 2002; Reynolds & Beatty, 1999a). Understanding these consumer relational benefits and their impact on customer loyalty will provide guidance to organizations, allowing them to focus on those benefits deemed most important to their customers. Extant academic research on relational benefits has been conducted almost exclusively with North American consumers. Because the nature and development of relationships is highly culture-dependent, the reliance on U.S.-based research has left a large gap in our understanding of the importance of relational benefits in cultures outside the United States. As service providers, as well as companies selling tangibles with a substantial service component, increasingly expand their operations into countries and cultures other than their own (e.g. Citicorp, Hennes and Mauritz, Kentucky Fried Chicken, Starbucks, Tony and Guy, T-Mobile, WalMart), developing a thorough understanding of the relational benefits that consumers desire in different cultures and culture’s impact on the economic relevance of relational benefits will be of growing importance. Against this background, this article strives to extend our understanding of the impact of national culture on the relationship between customer relational benefits and relationship marketing outcomes. We start with a review of the literature on consumer relational benefits and cross-cultural issues in relationship marketing research. On this basis, we extend the original three-benefits typology suggested by Gwinner, Gremler and Bitner (1998, henceforth cited as GGB) and then develop propositions suggesting how national culture may moderate

Managing Service Relationships in a Global Economy

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the influence of relational benefits on outcomes such as customer loyalty. The article ends with a discussion of potential implications for service firms and researchers.

THEORETICAL BACKGROUND The Concept of Customer Relational Benefits A customer’s decision to enter into and maintain a long-term relationship with a company is largely driven by his or her assessment of: (1) the core product/service; and (2) the relational aspects of the exchange (Hennig-Thurau et al., 2000). In separating the core product/service from the relational aspects, one is able to begin thinking about the added value the interpersonal interaction between customers and providers has for consumers. Relational benefits focus on aspects of the relationship itself and are available only to those customers who are engaged in continuing relationships with the service provider and its personnel. Over the past few years the relationship marketing literature has begun to explore what kind of benefits customers derive from staying in long-term relationships with companies and how these benefits impact customers’ behavior. This represents a major shift in relationship marketing from exclusively focusing on the benefits of long-term relationships for companies to the benefits accruing to customers. In his seminal work, Barnes (1994) identified 24 facets of relationships between customers and service companies that are salient to customers, including dimensions of trust, provision of social support and economic advantages. Berry (1995) distinguished between two general categories of such relational motives: a desire for risk reduction and a desire for social interaction. He suggested risk-reduction to be connected with trust: “Customers who develop trust in service suppliers . . . have good reasons to remain in these relationships: they reduce uncertainty and vulnerability” (Berry, 1995, p. 242). With regard to customers’ social needs, Berry argued that people long for individual and customized treatment in the context of customer-employee interactions. A later analysis by Bendapudi and Berry (1997) confirmed the relevance of trust-related benefits for customers’ relational decisions. The most extensive study of relationship benefits from the customer’s perspective has been presented by GGB. Through a thorough literature review as well as an extensive qualitative study, GGB developed a typology consisting of four separate relational benefits. Specifically, social benefits refer to the emotional part of the relationship between a customer and an employee. The customer: (1) enjoys his or her positive relationship with the employee (“it’s more fun to deal with somebody

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you’re used to”; customer statement in GGB, p. 104); and (2) interprets his or her relationship with the respective employee as similar to friendship (“he’s like a kind of friend now”; customer statement in GGB, p. 104). Psychological benefits include those aspects of a relationship that focus on the reduction of uncertainty (“you don’t have as much anxiety and you have a higher confidence level in being a loyal customer”; customer statement in GGB, p. 104). Economic benefits contain monetary and non-monetary advantages (e.g. time saving) that the customer derives from maintaining the relationship and finally customization benefits describe those advantages resulting from individualized treatment of the customer by the service provider. In a second step of their analysis, GGB tested their four-benefit typology using a cross-sectional survey of consumers from a variety of service businesses. This analysis resulted in an aggregation of economic and customization benefits into a joint factor named special treatment benefits. In addition, psychological benefits were renamed confidence benefits to better reflect the structure of the factor loadings. Since then, research in this area has extended our understanding of relational benefits and their role within the relationship marketing concept. Reynolds and Beatty (1999a, b) developed empirical consumer typologies based on relational benefits and found relational benefits to influence customer satisfaction and loyalty with the salesperson. Based on consumer-brand relationship research (e.g. Fournier, 1998), Hennig-Thurau et al. (2000) generated a framework for relational benefits and barriers and showed empirically that the importance of relational benefits differs between customer segments. They also introduced the concept of identity-related relational benefits and proposed that being in a relationship with a specific provider might add meaning to the consumer’s self-concept. Such identity-related benefits were originally suggested by Fournier (1998) in the context of consumer goods. As their importance for consumers is based on the brand rather than the product’s manifest character, identity-related benefits can be expected to be relevant to consumers of branded services. Recently, other researchers have elaborated on the importance of identification in consumer-to-business relationships (Arnett et al., 2003; Bhattacharya & Sen, 2003). In another study, Hennig-Thurau et al. (2002) conceptualized relational benefits as antecedents of relationship quality and relationship outcomes (i.e. customer loyalty and positive word-of-mouth communication). They found both social benefits and confidence benefits to significantly impact relationship outcomes, while no such impact was found for special treatment benefits. Finally, based on a qualitative analysis of professional service relationships, Sweeney and Webb (2002) suggested the existence of another benefit type, which they labeled “symbiotic benefits” but might be more simply described as quality-improvement benefits in the context of consumer services. In particular, as service employees often learn


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about the preferences of a specific customer through repeated interactions, they are often able to avoid mistakes and, consequently, provide the customer with a higher level of service than that provided in one-time transactions. This benefit is based on the mutual knowledge both the service provider and customer have developed during previous encounters, enabling the employee to better fulfill the customer’s needs. While customization benefits stem from the differences in treatment between a customer and other customers, quality-improvement refers to the adjustment of the core service (e.g. a hair cut provided by a hair stylist or a restaurant meal).

Cultural Issues in Relationship Marketing Research Consumer-firm relationships have been shown to be a culture-dependent concept (Ambler & Styles, 2000; Palmer, 1997, 2000; Simmons & Munch, 1996). Specifically, Palmer concludes that relationship marketers “should be as wary of prescribing universal solutions for exchange bases as they are of developing universal product and promotion policies for all markets” (Palmer, 1997, p. 321). Ambler and Styles (2000) echo this sentiment by contending business relationships are embedded in a cultural environment that must be considered to fully understand the development of long-term relationships. In addition, several studies have demonstrated the impact cross-cultural differences can have on relationship-oriented constructs such as service quality and trust. Regarding service quality, Malhotra et al. (1994) argued that the importance of service quality dimensions differs between developed and developing countries based on cultural peculiarities. Donthu and Yoo (1998) empirically show that service quality expectations differ for four of the cultural dimensions proposed by Hofstede (1980). Furrer et al. (2000) conceptualized Hofstede’s (1991) culture dimensions as moderators of the impact of five service quality dimension on outcomes (e.g. loyalty) and found support for such influence on 21 of 25 service quality-outcome relationships. This is consistent with several other studies, including Winsted (1997), Mattila (1999), Stauss and Mang (1999), Liu et al. (2001) and Witkowski and Wolfinbarger (2002), which all found service quality dimensions to be impacted by cultural variables. A study on consumer trust and culture by Doney et al. (1998), who considered “the extent to which cultural norms and values facilitate or inhibit the formation of trust” (p. 602), proffered several propositions on how trust formation differs with regard to Hofstede’s cultural dimensions. As such, abundant evidence exists to suggest that an individual’s perception of relationship-oriented concepts, such as relational benefits, will vary greatly depending upon one’s national culture.

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The only study to explicitly address the concept of customer relational benefits in a non-North American context was carried out by Patterson and Smith (2001). They replicated the original work of GGB in Thailand and identified differences in the importance of individual relational benefits. However, despite the fact that their study adds support to the culture-dependent character of the relational benefits concept, their study suffers from a number of limitations. Most critical, as their data collection was limited to a single country (i.e. Thailand), the data does not allow for a comprehensive assessment of culture’s impact on relational benefits. Altogether, relational benefits have empirically been shown to lead to such important outcomes as customer loyalty and word-of-mouth communication in the context of the U.S. culture (Hennig-Thurau et al., 2002; Reynolds & Beatty, 1999a). Given the findings of Patterson and Smith (2001) and the cultural sensitivity of other consumption and assessment constructs (e.g. service quality and trust), we expect the impact each of the relational benefits has on such relational outcomes to vary across cultures. In addition, as service encounters are largely social exchanges between consumers and service providers, cultural values that influence social relationships should play a role in these service relationships as well. Specifically, we will propose that national culture will moderate the relationship between relational benefits and customer loyalty.

THE IMPACT OF NATIONAL CULTURE ON THE RELATIONAL BENEFITS-CUSTOMER LOYALTY LINK The Moderating Role of National Culture The term national culture is used to describe a system of values and norms that are shared by the members of a society. National culture has been conceptualized by different authors (Chinese Culture Connection, 1987; Hofstede, 1980, 1991, 2001; Schwartz, 1994; Smith et al., 1996), but the most comprehensive and most widely used (e.g. Atuahene-Gima & Li, 2002; Dawar & Parker, 1994; Lynn et al., 1993; Nakata & Sivakumar, 1996; Roth, 1995; Steenkamp et al., 1999) framework by far is the one developed by Hofstede (1980, 1991, 1998, 2001). Hofstede originally conceptualized national culture as a four-dimensional construct encompassing the following dimensions: (1) Power distance refers to the degree to which members of a society expect and accept power in that society to be distributed unequally. (2) Individualism/collectivism refers to the degree to which society members prefer to act based on their own self-interests as opposed to being concerned with conforming to group behavior.


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Fig. 1. The Moderating Role of National Culture for the Impact of Relational Benefits on Customer Loyalty.

(3) Masculinity/femininity is the degree to which a society is characterized by assertiveness (masculinity) versus nurturance (femininity). (4) Uncertainty avoidance refers to the degree to which uncertain situations are tolerated and accepted by a society’s members. We argue that these four cultural dimensions1 moderate the relationship between the relational benefits identified earlier in this article (i.e. social, confidence, economic, customization, identity-related and quality-improvement relational benefits) and customer loyalty as visualized in Fig. 1.2 Table 1 overviews the impact of each cultural dimension on the different kinds of relational benefits, with each of the expected moderating influences being discussed in the following paragraphs.

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Table 1. Proposed Moderating Effects of Cultural Dimensions on Relational Benefits-Customer Loyalty Relationship. Relational Benefits Social Benefits

Cultural Dimensions

n.i.

∗∗ ⊕ ⊕ ⊕

Economic Benefits

Customization Benefits

IdentityRelated Benefits

QualityImprovement Benefits

n.i. n.i. ⊕ n.i.

∗∗ n.i. ⊕

⊕∗∗ n.i. n.i.

n.i. n.i. n.i. ⊕

Notes: ⊕ indicates a positive impact on the benefits-loyalty relationship, indicates a negative impact on the benefits-loyalty relationship and n.i. indicates that no impact is postulated. To illustrate, the greater the level of masculinity within a culture, the lower the impact of social benefits on customer loyalty. Also, ∗ indicates the proposed relationship is based on the assumption that the service firm/employees are assigned to the customers’ out-groups and ∗ ∗ indicates that the service firm/employees are assumed to be viewed by consumers as members of a lower social class.


Power distance Collectivism∗ Masculinity Uncertainty avoidance

Confidence Benefits


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Impact of Power Distance on the Relevance of Relational Benefits We expect power distance to influence the impact of social benefits, confidence benefits, customization benefits and identity-related benefits on customer loyalty. On a basic level, it is expected that a less powerful person strives to reduce an existing power distance, while a more powerful person will strive to maintain or to increase it (Hofstede, 2001, p. 83). As the impact of social relationships on society members’ behavior is positively influenced by the perceived similarity of relational partners (Duck, 1994), the overall effect of social benefits on customer loyalty in service relationships is argued to be weaker in cultures with greater levels of power distance (i.e. in cultures with a low level of perceived similarity between customer and service provider/firm), as this implies by definition the unequal distribution of power. PPD–1 . The greater the level of power distance within a culture the weaker the impact of social benefits on customer loyalty. When the power distance within a culture is high, individuals who perceive themselves to be of lower status relative to others will be reluctant to assert their rights when treated unfairly (Hofstede, 2001). As such, with regard to confidence benefits, when service employees/firms are perceived by the consumer to be of a higher social class, customers are expected to have a stronger dependency on employees’ trustworthy behavior (i.e. strong impact of confidence benefits on relational outcomes), as other ways to secure “fair” treatment (e.g. confronting the provider and asserting their rights) are limited due to the belief that they have no power in the relationship. In contrast, confidence benefits are expected to have less influence on relational outcomes when service employees/firms are perceived as members of a lower social class due to customer perceptions of increased power and options. PPD–2 . When service employees/firms are perceived as members of a higher social class by consumers, the greater the level of power distance within a culture the stronger the impact of confidence benefits on customer loyalty. When service employees/firms are perceived as members of a lower social class by consumers, the greater the level of power distance within a culture the weaker the impact of confidence benefits on customer loyalty. In a culture in which power distance is high, consumers who perceive themselves as of a higher class than the service firm/employees will take some customized treatment from their service provider for granted (Riddle, 1992). That implies, when the service firm and its employees are considered as members of a higher social class, such special treatment will be highly valued and will have a strong

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impact on customer loyalty. However, the same impact may not hold for economic benefits as they are of a less personal nature and, further, depend more upon the policy of the organization rather than on the individual discretionary behavior of the employee. Customization benefits are therefore expected to have a stronger impact on loyalty in high power distance cultures when service employees/firms are perceived as members of a higher social class. PPD–3 . When service employees/firms are perceived as members of a higher social class by consumers, the greater the level of power distance within a culture the stronger the impact of customization benefits on customer loyalty. When service employees/firms are perceived as members of a lower social class by consumers, the greater the level of power distance within a culture the weaker the impact of customization benefits on customer loyalty. The perception of service employees’ power status is also expected to influence the importance of identity-related relational benefits and, consequently, their impact on customer loyalty. Specifically, if the firm (as a relational partner) is perceived as belonging to a lower social class, then identity-related benefits will be of greater importance to the consumer when the power distance is large, as the consumer can exercise power and confirm his self-concept in a satisfying manner. In contrast, if the firm is perceived as a higher social class entity, the consumer will be polarized between dependence and the desire to reject dependence (“counterdependence”; Hofstede, 1991, p. 27) in a high power distance culture, resulting in an extreme diversity of feelings of the consumer towards the firm and a large emotional distance between the consumer and the firm/employees. This emotional distance is part of the identity of a less powerful person in a culture with high power distance, but it will not serve as a motive to maintain a relationship as it is too ambiguous to be valued as a benefit. PPD–4 . When service employees/firms are perceived as members of a lower social class by consumers, the greater the level of power distance within a culture the stronger the impact of identity-related benefits on customer loyalty. When service employees/firms are perceived as members of a higher social class by consumers, the greater the level of power distance within a culture the weaker the impact of identity-related benefits on customer loyalty.

Impact of Individualism/Collectivism on the Relevance of Relational Benefits Individualism can be argued to moderate the influence of social, confidence, customization and identity-related relational benefits on customer loyalty. Regarding


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social benefits, the strict distinction between in-groups and out-groups in collectivistic cultures has to be taken into account. In-groups are usually characterized “by similarities among the members and individuals have a sense of ‘common fate’ with members of the ‘in-group’ ” (Triandis, 1995, p. 9), while out-groups are groups to which the consumer does not belong to and feels he has little in common with. In cultures scoring high on collectivism, relationships within in-groups are very close and social by definition, whereas it is almost impossible to get into existing social networks as a member of an out-group (Hofstede, 2001; Smith & Bond, 1998; Triandis, 1995), with the consequence that social benefits are not valued if they come from out-group members. We therefore believe the impact of social benefits on customer loyalty will be weaker if the service firm and its employees are not considered as part of the customer’s in-group and that it will be stronger when the firm and its employees are part of the customer’s in-group. PIC–1 . When a service firm employee is regarded as part of the customer’s out-group, the greater the level of collectivism within a culture the weaker the impact of social benefits on customer loyalty. When a service firm/employee is regarded as part of the customer’s in-group, the greater the level of collectivism within a culture the stronger the impact of social benefits on customer loyalty. In collectivistic cultures there is the expectation that members of a society will take care of each other and not attempt to take advantage of each other (Yamagishi & Yamagishi, 1994). Generally, this high level of trust in collectivistic cultures is only prevalent with regard to society members which are considered to be part of the individual’s in-group, while the opposite will be the case with respect to outgroup society members (Björkmann & Kock, 1995; Hofstede, 2001). Presuming that service firms and their employees are assigned to out-groups by the customer, we predict the added level of comfort confidence benefits offer will be viewed positively by the customer as it will serve to overcome mistrust in the firm. Therefore, the offer of confidence benefits is expected to be more highly valued in collectivistic cultures under these conditions. When the service firm/employee is a member of the customer’s in-group, confidence benefit offers will be considered less important in collectivistic cultures due to the high level of interpersonal trust already present between in-group members. PIC–2 . When a service firm/employee is regarded as part of the customer’s outgroup, the greater the level of collectivism within a culture the stronger the impact of confidence benefits on customer loyalty. When a service firm/employee is regarded as part of the customer’s in-group, the greater the level of collectivism within a culture the weaker the impact of confidence benefits on customer loyalty.

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With regard to culture’s influence on the customer’s valuation of customization benefits, one has to distinguish between two different kinds of customization offers. First, group-based customization benefits (e.g. in-group members are given credit by a grocery store owner based solely on him knowing about the people’s in-group membership) are not offered to individual consumers but to all members of the in-group and make the in-group stand out from the rest of the society (i.e. the out-group). Such group-based customization benefits will only be offered when the service firm and its employees are part of the in-group. Under these conditions, group-based customization will result in a strong impact of customization benefits on loyalty in collectivistic cultures, as particularism (i.e. “taking particular relationships into account” Hofstede, 2001, p. 30) represents a common feature in collectivistic cultures (Hofstede, 2001; Smith et al., 1996). Second, customization benefits offered to individual consumers make the individual stand apart from the group, which goes against group norms in collectivistic cultures (Steenkamp et al., 1999) and will therefore be more highly valued in individualistic cultures than in collectivistic cultures. PIC–3a . When a service firm/employee is regarded as part of the customer’s in-group, the greater the level of collectivism within a culture the stronger the impact of group-based customization benefits on customer loyalty. PIC–3b . The greater the level of collectivism within a culture the weaker the impact of individual customization benefits on customer loyalty. Finally, we expect the relevance of identity-related benefits to be greater in a consumer’s in-group in a collectivistic culture, as members of collectivistic cultures generally put more emphasis on exchanging identity-related resources such as love and status rather than money and information (Foa & Foa, 1974; Triandis, 1995). This is because identity-related relational benefits focus on strengthening the consumer’s self-concept, which is interdependent in collectivistic cultures but generally independent in individualistic cultures (Markus & Kitayama, 1991). In contrast, consumers’ relationships with service firms, employees, or brands which are considered to be part of an out-group will not add meaning to the self-concept in a collectivistic culture because out-group members are of limited importance to the consumer. PIC–4 . When a service firm/employee is regarded as part of the customer’s outgroup, the greater the level of collectivism within a culture the weaker the impact of identity-related benefits on customer loyalty. When a service firm/employee is regarded as part of the customer’s in-group, the greater the level of collectivism within a culture the stronger the impact of identity-related benefits on customer loyalty.


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Impact of Masculinity/Femininity on the Relevance of Relational Benefits The masculinity/femininity cultural dimension is postulated to moderate the impact of social, confidence, economic and quality-improvement benefits on relational outcomes. Given that the interest in relationships with other society members plays a central role in social benefits and because consumers in masculine cultures place less value on interpersonal relationships and people (Hofstede, 2001), we predict social benefits will have a weaker impact on customer loyalty when the level of masculinity within a culture is high. PMF–1 . The greater the level of masculinity within a culture the weaker the impact of social benefits on customer loyalty. Regarding confidence benefits, as members of masculine cultures are strongly “ego oriented” (Hofstede, 2001, p. 299), this widespread pursuit of ego goals might imply a greater level of uncertainty within relationships. Consequently, we expect trust and the offer of confidence benefits through the service provider to be more important for loyalty in a highly masculine cultural context. PMF–2 . The greater the level of masculinity within a culture the stronger the impact of confidence benefits on customer loyalty. Economic incentives such as money are generally more highly valued in masculine than in feminine cultures (Hofstede, 2001). As economic benefits focus on this sort of economic incentives, we expect economic benefits to have a greater impact on customer loyalty in cultures with a high level of masculinity. PMF–3 . The greater the level of masculinity within a culture, the stronger the impact of economic benefits on customer loyalty.

Impact of Uncertainty Avoidance on the Relevance of Relational Benefits Uncertainty avoidance is expected to impact the influence of confidence, customization and quality-improvement benefits on customer loyalty. By definition, in cultures with a high level of uncertainty avoidance, offers that reduce consumers’ uncertainty are more highly valued (Hofstede, 2001). Because confidence benefits add to consumer certainty, we expect confidence benefits to have a greater impact on customer loyalty when the culture has a high level of uncertainty avoidance. Moreover, members of cultures high in uncertainty avoidance hold the attitude that most people cannot be trusted (Hofstede, 2001; Inglehart et al., 1998), which also implies that confidence benefits will be more highly appreciated in those cultures.

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PUA–1 . The greater the level of uncertainty avoidance within a culture the stronger the impact of confidence benefits on customer loyalty. Customization and quality-improvement benefits can both be thought of as a way to deliver goods and services that meet a consumer’s individual preferences. To the extent that those benefits provide the consumer with clear expectations (Gudykunst, 1995) they serve to eliminate the surprise component of consumption (i.e. one receives what he or she asks for, not a “one-size-fits-all” solution). Consequently, both customization and quality-improvement benefits are expected to have a greater impact on customer loyalty in high uncertainty avoidance cultures. PUA–2 . The greater the level of uncertainty avoidance within a culture the stronger the impact of customization benefits on customer loyalty. PUA–3 . The greater the level of uncertainty avoidance within a culture the stronger the impact of quality-improvement benefits on customer loyalty. As is evident from the prior discussion, it is probable that some contrasting culture effects will off-set each other in the moderating process. That is, when one starts to examine the national culture of a country cluster or a single country in depth, it is apparent that some of the predictions made by our propositions may be in conflict with each other. For example, how does the moderating influence relative to social relational benefits work in a feminine culture (suggesting a stronger influence of this benefit type on customer loyalty) where individualism is low (suggesting a weaker influence between out-groups)? As predicting the relative importance of each moderator would be highly speculative, this remains an empirical question that should be investigated by collecting and analyzing data collected in a variety of cultural settings.

DISCUSSION AND IMPLICATIONS The theoretical analysis of the influence of culture dimensions on the impact of relational benefits on relationship marketing outcomes such as customer loyalty provides important insights for the internationalization of service providers’ business activities. We now point out some implications of our analysis for service providers and researchers. In order to derive expressive conclusions, we formed country clusters out of cultures which are similar on Hofstede’s national culture dimensions instead of presenting implications for individual countries (e.g. Kale, 1995). Based on Hofstede (2001) and other researchers (for an overview, see Ronen & Shenkar, 1985), Table 2 shows a five-cluster typology distinguishing between an Anglo cluster, a Nordic

Power Distance

Individualism

Masculinity

Uncertainty Avoidance

Anglo cluster Australia Canada Great Britain Ireland New Zealand United States

From low to very low 36 39 35 28 22 40

Very high 90 80 89 70 79 91

High 61 52 66 68 58 62

Very low 51 48 35 35 49 46

Nordic cluster Denmark Finland Netherlands Norway Sweden

Very low 18 33 38 31 31

From very high to high 74 63 80 69 71

Very low 16 26 14 8 5

From low to very low 23 59 53 50 29

Germanic cluster Germany Switzerland Austria

Very low 35 34 11

High 67 68 55

Very High 66 70 79

Medium 65 58 70

From very high to medium 68 80 58

From low to very low 25 20 17

From high to medium 57 66 45

From medium to very low 29 30 69

Medium 54

Medium 46

Very high 95

Very high 92

East Asian cluster Hong Kong People’s Republic of China Taiwan Independent cluster Japan

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Note: Scores are reported in Hofstede (2001) with all scales ranging from 0 to 100. Larger values indicate a greater level of the respective culture dimension.


Table 2. Selected Country Cluster and Hofstede’s Cultural Dimensions Scores.

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cluster, a Germanic cluster, an East Asian cluster and an Independent cluster, index scores on the national culture dimensions for each country and an assessment of the relative level on national culture dimensions on the cluster level. To reduce complexity, in our discussion we assume that: (1) service firms and their personnel are predominantly assigned to the customers’ out-groups; and (2) that firms and employees are generally considered as members of a lower social class. Anglo Cluster (Australia, Canada, Great Britain, Ireland, New Zealand and United States): Countries from this cluster score high on individualism, fairly high on masculinity, quite low with regards to uncertainty avoidance and low to very low when it comes to power distance. Compared to other cultures, the provision of economic benefits are likely to be more valued by service customers of this culture cluster. In contrast, quality-improvement benefits can be argued to be relatively less effective in this cultural context based on the arguments laid out in this article. The relevance of social, confidence, identity-related as well as individual-level customization benefits remains unclear, as contradictory findings exist with regard to these benefits. Nordic Cluster (Denmark, Finland, Netherlands, Norway, Sweden): This cluster represents countries where the power distance is very small, individualism is high and masculinity and uncertainty avoidance are quite low. According to these characteristics and the propositions stated above, service firms in these markets should, in comparison to other cultural environments, put strong emphasis on the offer of social benefits because of this cluster’s individualistic and feminine character and the low degree of power distance. We would expect individual-level customization benefits to be valued due to the low power distance and the high levels of individualism and femininity. Economic, confidence benefits and qualityimprovement benefits can be argued to have a relatively weak effect on loyalty compared to other cultures and should therefore be offered cautiously. For identityrelated benefits, no clear recommendation can be given as theoretical findings are ambiguous. Germanic Cluster (Germany, Austria, Switzerland): This cluster is composed of countries in which the power distance is very low, individualism is medium to high, masculinity is very high and uncertainty avoidance is medium. With regard to this cluster, our earlier discussion suggests a strong emphasis should be put on the offer of confidence benefits because of the low power distance and the high masculinity in this culture. Similarly, attention should be devoted to individuallevel customization as power distance is low in this cluster and individualism is high. We would also anticipate economic benefits to be relatively effective due to the cluster’s high masculinity. In contrast, social and identity-related benefits are likely to be less effective in a Germanic culture than in other cultural environments and for quality-improvement benefits, no impact of culture can be found.


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East-Asian Cluster (Hong Kong, People’s Republic of China, Taiwan): Primarily due to divergent political developments in the last century, countries in this cluster show more variance on the national culture dimensions than the other ones, but because of their close links concerning history and language they can be regarded as one cluster. The high degree of collectivism implies a differentiated treatment depending on the customer’s perception of being an in-group versus out-group member. In order to become a member of the consumer’s in-group, service firms should offer customization benefits that are tailored to the consumer’s group needs. Also, the offer of identity-related benefits should correspond with an interdependent, collectivistic construal of the self. With regard to other kinds of relational benefits, no clear recommendation can be given based on ambiguous findings, medium level culture dimensions (for masculinity/femininity) and high intra-cluster heterogeneity (for uncertainty avoidance). Independent Cluster (Japan): Japan builds an independent cluster all by itself due to characteristics which are particular for the Japanese culture (Doi, 1973; Yamagishi & Yamagishi, 1994; Yamaguchi, 1994). On the national culture dimensions Japan ranks medium on power distance and collectivism and scores very high on masculinity and uncertainty avoidance. The latter two scores imply a high impact of confidence benefits for developing long-term relationships. Similarly, economic benefits should exert a strong impact on customer loyalty due to the extremely high level of masculinity in this culture and quality-improvement benefits are recommended based on the cluster’s high uncertainty avoidance. In contrast, as high masculinity suggests social benefits are likely to have a weak effect on loyalty, such measures should be carefully reconsidered in the Japanese culture. For customization benefits, results are ambiguous and no clear recommendation can be derived on theory alone. For identity-related benefits, no recommendation can be given as no moderating impact of masculinity and uncertainty avoidance is postulated and the other culture dimensions are medium for this cluster. While empirical validation of the propositions offered in this study is needed, marketing managers should consider how the proposed relationships summarized in Table 1 can be used in improving service relationships across different cultures. By taking into account the impact of national culture dimensions, service firms will be enabled to manage relationships with customers in a culture-sensitive manner and avoid the problems associated with implementing standardized strategies across diverse global markets. Specifically, a firm can consider the dominant cultural type of a given market segment (from Table 2) and then reference Table 1 to determine which relational benefits are expected to have the largest influence on consumers in that region. This information could be used to better inform a company’s resource allocation decisions. For example, in a culture where uncertainty avoidance is high (such as Japan) a firm may be guided to spend relatively large

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amounts on information technology that will improve the customization capabilities of front-line employees by tracking a customer’s service preference history and, consequently, will have a positive effect on customer loyalty.

Directions for Future Research As this article is developed using a theoretically based, deductive approach, validation of the propositions should come from an empirical investigation of the moderating role of national culture on the relational benefits-customer loyalty relationship. As mentioned at the end of the propositions section, one particularly interesting area of investigation involves examining how contrasting culture effects may off-set each other in the moderating process. Because different kinds of relational benefits in different cultural environments may be confounded in some cases by contrasting national culture effects, an empirical study would help to identify which national culture dimension is dominant under which conditions. In efforts to empirically test the proposed propositions, future research should consider collecting data to control for service type influences since the importance of relational benefits has been shown to differ between service types (see GGB). As such, including services from two or more different service categories identified by Bowen (1990) may yield interesting service type differences. For example, data collection could be limited to two different service types in all countries (e.g. hairdressers and banking). In selecting the specific service types it is important that the service serves a similar function across cultures.

NOTES 1. Hofstede later added a fifth dimension titled long-term orientation (the degree to which society members value past and present rather than considering the effect of actions being important in the future). Because long-term relationships are less valued when a culture’s long-term orientation is low (Hofstede, 2001), the benefits received by customers based on their ongoing relationships with service providers are expected to have a larger impact on relational outcomes in cultures with a high long-term orientation. As such, this fifth dimension is applicable to all of the relational variables and thus is not as interesting as those where the influence may vary. Long-term orientation is not considered further in this study in order to concentrate on those cultural dimensions that have the potential to help us understand greater variation. 2. Although GGB combined economic and customization benefits using a post-hoc factor analysis, we decided to treat them separately because of the different facets they represent when it comes to understanding the moderating impact of national culture on relational benefits.


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A CROSS-CULTURAL INVESTIGATION OF RELATIONSHIP MARKETING EFFECTIVENESS IN RETAIL SERVICES: A CONTINGENCY APPROACH Gaby Odekerken-Schröder, Kristof De Wulf and Kristy E. Reynolds ABSTRACT Relationship marketing is not effective in every situation or context. This study investigates the impact of three categories of potential contingency factors on the effectiveness of relationship marketing efforts in a retail services context: demographic characteristics of the consumer (age and gender), personal values of the consumer (social affiliation), and shoppingrelated consumer characteristics (product category involvement, consumer relationship proneness, and shopping enjoyment). The data relate to more than 1,700 mall intercept personal interviews conducted in the United States, and in two western European countries (the Netherlands and Belgium), covering a wide variety of food and apparel retailers. The found moderating influences were inconsistent across samples, stressing the need for an adapted relationship marketing strategy per country and industry. The results do provide a first indication that relationship marketing efforts are relatively more effective if they are directed at consumers who are young and female, have a high need for social affiliation, and show Research on International Service Marketing: A State of the Art Advances in International Marketing, Volume 15, 33–73 Copyright © 2005 by Elsevier Ltd. All rights of reproduction in any form reserved ISSN: 1474-7979/doi:10.1016/S1474-7979(04)15003-5

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¨ GABY ODEKERKEN-SCHRODER ET AL.

high levels of product category involvement, consumer relationship proneness, and shopping enjoyment. The results provide a preliminary framework for retailers to optimize the allocation of their relationship marketing budgets.

INTRODUCTION Despite the increased attention for relationship marketing practices, various scholars consider relationship marketing efforts not to be effective in every situation or context (e.g. Barnes, 1997; Day, 2000). Not every exchange has the potential to grow into a relationship and a thorough cost-benefit analysis is required before companies make a decision to invest in relationship marketing (Houston & Gassenheimer, 1987). Different scholars emphasized that companies’ resources could be misallocated or even wasted as a result of automatically applying a relationship marketing strategy in every situation (Bendapudi & Berry, 1997; Christy et al., 1996; Pressey & Mathews, 2000). Moreover, undifferentiated relationship marketing approaches could cause buyers to become disappointed or to perceive relationship marketing efforts as intrusive (Krapfel et al., 1991). Low (1997) even indicated that, under certain conditions, parties should actively and consciously play the market, seek out opportunities, and develop an opportunistic mentality. However, only limited empirical evidence has been compiled on contingency factors potentially curbing or strengthening the effects of relationship marketing efforts (e.g. Verhoef et al., 2003). According to Bendapudi and Berry (1997, p. 31), “a contingency approach to relationship marketing involves understanding when and why customers are most receptive to relationship maintenance.” Based upon literature (Berry & Gresham, 1986; Crosby et al., 1990; Javalgi & Moberg, 1997; Shani & Chalasani, 1992), we could classify characteristics influencing the effectiveness of relationship marketing efforts into four broad categories: (1) buyer characteristics (e.g. gender); (2) product or service characteristics (e.g. product complexity); (3) environmental characteristics (e.g. environmental uncertainty); and (4) exchange situation characteristics (e.g. exchange frequency). Our study explicitly focuses upon the service retailer-consumer relationship, collecting data from a consumer’s point of view and investigating buyer characteristics as potential moderators. First, while empirical research on relationship marketing has strongly emphasized channel and industrial relationships, systematic research on relationship marketing in a consumer environment has

A Cross-Cultural Investigation of Relationship Marketing Effectiveness

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only recently increased in attention (Singh & Sirdeshmukh, 2000; Varki & Wong, 2003). Nevertheless, the importance of relationship marketing research in a retail setting is generally acknowledged. Taher et al. (1996) for instance stressed that traditional store patronage is weakening due to new technologies, the appearance of Internet stores, and consumers’ time impoverishment. Second, we solely focus on the role of buyer characteristics to the neglect of other potential moderator categories. We believe the managerial relevance of focusing on buyer characteristics as moderators is most promising as retailers are more flexible in deciding which customers to target than in affecting the retail context they operate in (product/service, environmental, and exchange situation characteristics). We focus upon those buyer characteristics that are commonly referred to in existing relationship marketing literature as potential moderators of relationship marketing effectiveness. As a result, our study contributes to existing relationship marketing literature by taking a contingency approach in a retail service setting. More specifically, we assess to which extent relationship marketing effectiveness is contingent upon demographic characteristics of the consumer (age and gender), personal values of the consumer (social affiliation), and shopping-related consumer characteristics (product category involvement, consumer relationship proneness, and shopping enjoyment). Existing conceptual literature suggests that these factors, distinguishing different types of consumers, can moderate the success of relationship marketing (Bendapudi & Berry, 1997; Christy et al., 1996). However, empirical research focusing on their moderating role is largely lacking (e.g. De Wulf et al., 2001). In response, we conduct a comprehensive and rigorous test by empirically validating our conceptual model in a multi-country (U.S., The Netherlands, and Belgium) and multi-industry (food and apparel) context, following cries for cross-validation across different settings (e.g. Iacobucci & Ostrom, 1996; Steenkamp & Baumgartner, 1998).

THEORETICAL BACKGROUND AND HYPOTHESES Figure 1 depicts that each of the examined contingency factors moderates: (1) the interrelationships between four relationship marketing efforts (direct mail, preferential treatment, interpersonal communication, and tangible rewards) and relationship investment; and (2) the interrelationships between relationship investment and three relationship outcomes (relationship satisfaction, relationship commitment, and behavioral loyalty). Each of the components of the conceptual model and their interrelationships are discussed subsequently.


Fig. 1. Conceptual Model.

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Relationship Marketing Efforts Elaborating on the work of De Wulf et al. (2001) we distinguish the following four relationship marketing efforts: direct mail, preferential treatment, interpersonal communication and tangible rewards. First, they define direct mail as “a consumer’s perception of the extent to which a retailer keeps its regular customers informed through direct mail.” By conveying interest in the consumer, communication is often considered to be a necessary condition for effective relationships (Duncan & Moriarty, 1998). Direct mail is an often-used communication means intended to strengthen relationships. Beatty et al. (1996) found that salespeople notified regular customers of upcoming events and promotions/sales by contacting them by mail. Other salespeople sent thank you cards to their customers. Second, they regard preferential treatment as “a consumer’s perception of the extent to which a retailer treats and serves its regular customers better than its non-regular customers.” Sheth and Parvatiyar (1995, p. 264) referred to the importance of preferential treatment by recognizing that “implicit in the idea of relationship marketing is consumer focus and consumer selectivity – that is, all consumers do not need to be served in the same way.” Beatty et al. (1996) also found that regular customers tend to be provided with special treatment. For example, they are given the opportunity to shop before- or after-hours. In addition, salespeople will often choose merchandise for these customers from all departments in the store, not just the salesperson’s particular department. The salespeople will also often coordinate entire seasonal wardrobes for their regular customers. Beatty et al. (1996) termed this special treatment “augmented personal service.” Gwinner et al. (1998) and Hennig-Thurau et al. (2002) also provided examples of “preferential treatment” that regular customers receive. For example, some service providers will make special deliveries to these customers. Treacy and Wiersema (1993) addressed a similar concept, calling it “customer intimacy” in which employees go to great lengths to ensure that customers receive exactly what they desire. Third, they consider interpersonal communication as “a consumer’s perception of the extent to which a retailer interacts with its regular customers in a warm and personal way.” The importance of personal exchanges between consumers and store personnel in influencing relationship outcomes should not be surprising given that relationships are inherently social processes (Beatty et al., 1996). Gwinner et al. (1998) described how service providers personally call their customers to see how they are doing and if customers need them for anything. One service provider will call customers upon the arrival of new products that he knows the customers will enjoy. In their study, regular customers reported receiving personal recognition and friendship from their service providers, and having a personal connection with them. In the Beatty et al. (1996) study,

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salesperson relationships were often described by customers as “friendships.” One strategy that salespeople used to build personal relationships with customers was knowing and using customers’ names and remembering the preferences of customers’ family members. Salespeople would make a special effort to greet customers by name and also inquire about family members. These salespeople/service providers also know their customers so well they can anticipate customer needs and contact the customer ahead of time (Beatty et al., 1996). Finally, they distinguish between intangible rewards, meaning the relationship marketing efforts previously described, and tangible rewards, meaning “a consumer’s perception of the extent to which a retailer offers tangible benefits such as pricing or gift incentives to its regular customers in return for their loyalty.” For example, trying to earn points – on such things as grocery purchases, hotel stays, movie tickets, and car washes – would help consumers to remain loyal, regardless of service enhancements or price promotions of competitors (Sharp & Sharp, 1997).

Relationship Investment In line with De Wulf et al. (2001) we define relationship investment as “a consumer’s perception of the extent to which a retailer devotes resources, efforts, and attention aimed at maintaining or enhancing relationships with regular customers that do not have outside value and cannot be recovered if these relationships are terminated” (cfr. Smith, 1998). In line with Doney and Cannon (1997), Macintosh and Lockshin (1997), Morgan and Hunt (1994), and Crosby and Stephens (1987) who all examined person-tofirm relationships, we chose to evaluate the relationship at a broad level – the relationship between one retailer and many consumers. Usually a service retailer’s relationship marketing efforts are a part of his overall relationship marketing strategy which is designed for all customers similarly, rather than the case-by-case approach which is more common in a business-to-business environment.

Relationship Outcomes In line with Dwyer et al. (1987), we believe that research on relationship marketing effectiveness should not focus at discovering whether a relationship exists, but rather at the extent to which it exits. As a result, our model assumes that the extent to which a relationship exists, is expressed by the strength of relationship outcomes. Models that theorize attitudinal as well as behavioral relationship


39

outcomes have strong precedence in relationship marketing studies (e.g. Dick & Basu, 1994). Frequently reported attitudinal outcomes include relationship satisfaction and relationship commitment (e.g. Garbarino & Johnson, 1999; Hennig-Thurau et al., 2002; Ping, 2003). We define relationship satisfaction as “a consumer’s affective state resulting from an overall appraisal of the relationship with the store” (cf. Anderson & Narus, 1984). Relationship commitment is defined as “a consumer’s enduring desire to continue a relationship with a retailer accompanied by the willingness to make efforts at maintaining it” (cf. Morgan & Hunt, 1994). As Sharp and Sharp (1997) explicitly stated that the effectiveness of relationship marketing efforts should be evaluated in terms of the behavioral changes they create, we assess behavioral loyalty as a behavioral outcome of relationships in line with Dick and Basu (1994). In line with De Wulf et al. (2001) we define behavioral loyalty as “a composite measure based on a consumer’s purchasing frequency and amount spent at a retailer compared with the amount spent at other retailers from which the consumer buys.”

Factors Potentially Moderating Relationship Marketing Effectiveness Li and Nicholls (2001) stressed that the boundary conditions of relationship marketing – when it may work more or less effectively-need to be addressed in future research. Several authors acknowledged that marketing relationships are easier to form in some types of consumer markets than others, expressing the idea that some consumer exchange situations are more “relationship friendly” than others (Christy et al., 1996). In the following section we will explain 6 factors potentially moderating relationship marketing effectiveness in a retail service context. Reynolds and Beatty (1999b) contributed to the field of retail relationships by providing empirical support for the fact that personal characteristics or needs motivate consumers to maintain relationships in a retail context. They distinguished between “time poverty,” “shopping enjoyment,” “shopping confidence,” and “social needs” (sociability/social affiliation) as potential relationship motivations. Although our main objective is to assess the effectiveness of relationship marketing efforts as opposed to distinguishing buyer motivations, we believe consumers’ personal characteristics to temper or strengthen relationship marketing effectiveness. In addition to shopping enjoyment and social affiliation investigated by Reynolds and Beatty (1999b), and in line with De Wulf et al. (2001) we investigate the moderating role of two other shopping-related variables (consumer relationship proneness and product category involvement). Finally, we also assess the moderating role of two demographic variables (age and gender).

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Demographic Characteristics Demographic variables are generally considered to influence store patronage behavior and customer loyalty (Reichheld, 1993). For instance, Miller and Granzin (1979) already found demographics to be related to the benefits that consumers seek in their relationship with a store. Two demographic variables were included in this study: age and gender. With respect to age, it can be claimed that older people think and behave differently than younger people concerning marketing related phenomena (Wilkes, 1992). Wakefield and Baker (1998) indicated that age may be a moderating factor affecting consumer response to retail environments. More specifically, one common theme in the patronage behavior literature is that shopping has an important recreational and social dimension for the elderly (Lumpkin & Greenberg, 1982). In several studies, elderly shoppers expressed the desire for improved retail personnel-consumer interactions (cf. Lambert, 1979) and placed a great deal of importance on personnel assistance (cf. Moschis, 1992). Overall, according to the literature, customer-salesperson relationships are valued by older consumers, with some evidence indicating that these relationships become more important with age (Burt & Gabbot, 1995). This leads us to hypothesize that relationship marketing efforts are more effective when directed at older consumers as opposed to younger consumers. Hence, we formulate the following hypotheses: H1a . The relationship between direct mail and relationship investment is more positive for older consumers than for younger consumers. H1b . The relationship between preferential treatment and relationship investment is more positive for older consumers than for younger consumers. H1c . The relationship between interpersonal communication and relationship investment is more positive for older consumers than for younger consumers. H1d . The relationship between tangible rewards and relationship investment is more positive for older consumers than for younger consumers. H1e . The relationship between relationship investment and relationship satisfaction is more positive for older consumers than for younger consumers. H1f . The relationship between relationship investment and relationship commitment is more positive for older consumers than for younger consumers. H1g . The relationship between relationship investment and behavioral loyalty is more positive for older consumers than for younger consumers. With respect to gender, it is generally recognized that buying has traditionally been female-dominated (Kline & Wagner, 1994). Some studies even indicated that 80% of the shoppers in department stores consist of women (Bellenger & Korgaonkar,


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1980). Gender is generally acknowledged to have a profound impact on response to marketing strategies. For example, Korgaonkar et al. (1985) discovered that female consumers exhibit a stronger patronage behavior than male consumers. Also Fournier (1998) concluded that women have more and stronger interpersonal and brand relationships than men. Moreover, many of today’s consumers report that they simply have less time for many activities. This increased perception of time poverty could be due to several factors, such as the rise in the number of dual-career or single-parent households. Compared to men, women report taking on relatively high levels of family responsibilities (Reifman et al., 1991). Thus, women may be more likely than men to value products and services that save time. According to Reynolds and Beatty (1999a), having a salesperson relationship may save customers’ time in that the salesperson assists with or assumes many shopping tasks. Solomon (1987) stated that the provision of time/place utility is related to the use of surrogate shoppers and that the typical client is the working woman who does not have time to shop. Finally, the work on gender differences in risk perception generally reports a greater propensity for males to take higher risks (Carlson & Cooper, 1974; Coet & McDermott, 1979; Kogan & Dorros, 1978; Roberts, 1975). Thus, women may seek to reduce risk in certain purchasing situations. A relationship may help in this risk reduction (Bendapudi & Berry, 1997; Berry, 1995; Sheth & Venkatesan, 1968). Stinerock et al. (1991) reported that females were heavier users of personal financial planners and were more risk averse compared to men. Based upon this reasoning, we hypothesize that: H2a . The relationship between direct mail and relationship investment is more positive for female consumers than for male consumers. H2b . The relationship between preferential treatment and relationship investment is more positive for female consumers than for male consumers. H2c . The relationship between interpersonal communication and relationship investment is more positive for female consumers than for male consumers. H2d . The relationship between tangible rewards and relationship investment is more positive for female consumers than for male consumers. H2e . The relationship between relationship investment and relationship satisfaction is more positive for female consumers than for male consumers. H2f . The relationship between relationship investment and relationship commitment is more positive for female consumers than for male consumers. H2g . The relationship between relationship investment and behavioral loyalty is more positive for female consumers than for male consumers.

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Social Affiliation It is generally acknowledged that personal values underlie consumption behaviors (e.g. Kahle et al., 1986). However, empirical research on the importance of personal values in retail shopping behavior is largely lacking (Shim & Eastlick, 1998). Following Shim and Eastlick’s (1998) study on the role of personal values in affecting shopping attitudes and behavior, we assess the potential moderating role of social affiliation on the effectiveness of relationship marketing efforts. In line with Cheek and Buss (1981), we define social affiliation as “a consumer’s individual characteristic representing the tendency to affiliate with others and to prefer being with others to remaining alone.” According to McAdams (1988), highly sociable people tend to seek friendships and opportunities to engage in relationships. Beatty et al. (1996), in extensive qualitative work, found that regular customers who had high social needs satisfied these needs through a personal salesperson relationship. Others have acknowledged that customers may have relationships with salespeople for social reasons (cf. Berry, 1995; Bitner, 1995; Forman & Sriram, 1991; Reynolds & Beatty, 1999a; Shim & Eastlick, 1998). Beatty et al. (1996) and Gwinner et al. (1998) found that many regular customers described their salespeople and service providers as friends. Finally, Reynolds and Beatty (1999a) discovered a segment of regular customers who possessed strong social needs and appeared to be motivated to engage in relationships for the social aspects. Thus we postulate the following hypotheses: H3a . The relationship between direct mail and relationship investment is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation. H3b . The relationship between preferential treatment and relationship investment is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation. H3c . The relationship between interpersonal communication and relationship investment is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation. H3d . The relationship between tangible rewards and relationship investment is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation. H3e . The relationship between relationship investment and relationship satisfaction is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation.


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H3f . The relationship between relationship investment and relationship commitment is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation. H3g . The relationship between relationship investment and behavioral loyalty is more positive for consumers with a higher need for social affiliation than for consumers with a lower need for social affiliation. Shopping-Related Characteristics We incorporated three domain-specific attitudes of consumers towards shopping as potential moderators of the effectiveness of relationship marketing efforts: product category involvement, consumer relationship proneness, and shopping enjoyment. First, in line with Mittal (1995), we define product category involvement as “a consumer’s enduring perceived importance of the product category based on the consumer’s inherent needs, values, and interests.” Researchers have suggested that individuals who are highly involved with the product category reveal a tendency to be more loyal (Dick & Basu, 1994; King & Ring, 1980; Varki & Wong, 2003). Christy et al. (1996) stressed that highly-involved consumers provide a strong basis for extending the relationship. Consequently, approaches by the retailer, however well intentioned, could be regarded by the consumer as undesirable when the consumer’s involvement is low (Christy et al., 1996). For many consumers, clothing is a high involvement product carrying a high level of social risk. Thus, consumers with high clothing involvement may feel some anxiety when shopping for clothing (Solomon, 1987). This may lead these consumers to engage in relationships in the hopes of reducing some of this anxiety (Berry, 1995; Bitner, 1995), for example by a salesperson offering customer advice and reassurance (Beatty et al., 1996; Reynolds & Beatty, 1999a). Consequently, we hypothesize that: H4a . The relationship between direct mail and relationship investment is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement. H4b . The relationship between preferential treatment and relationship investment is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement. H4c . The relationship between interpersonal communication and relationship investment is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement.

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H4d . The relationship between tangible rewards and relationship investment is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement. H4e . The relationship between relationship investment and relationship satisfaction is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement. H4f . The relationship between relationship investment and relationship commitment is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement. H4g . The relationship between relationship investment and behavioral loyalty is more positive for consumers with a higher level of product category involvement than for consumers with a lower level of product category involvement. Second, in line with De Wulf et al. (2001) we consider consumer relationship proneness as “a consumer’s relatively stable and conscious tendency to engage in relationships with retailers of a particular product category.” Fournier et al. (1998, p. 42) pointed to this issue by stressing that “caught up in our enthusiasm for our information-gathering capabilities and for the potential opportunities that longterm engagements with customers hold, is it possible that we have forgotten that relationships take two?” According to Bendapudi and Berry (1997), all customers are not equal with regards to their desire to engage in long-term relationships with companies and/or companies’ employees. Some customers will be more receptive to relationships than others. In fact, Beatty et al. (1996) encountered some “nonrelationship” customers, in addition to those customers who are inclined to engage in relationships with salespeople. Non-relationship customers simply chose not to develop close relationships with salespeople. De Wulf et al. (2001) found empirical evidence for the moderating role of consumer relationship proneness in establishing relationship quality. Motivated by their empirical work and by the definition of consumer relationship proneness emphasizing that relationship-prone consumers are most likely to develop relationships, we formulate the following hypotheses: H5a . The relationship between direct mail and relationship investment is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness. H5b . The relationship between preferential treatment and relationship investment is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness.


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H5c . The relationship between interpersonal communication and relationship investment is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness. H5d . The relationship between tangible rewards and relationship investment is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness. H5e . The relationship between relationship investment and relationship satisfaction is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness. H5f . The relationship between relationship investment and relationship commitment is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness. H5g . The relationship between relationship investment and behavioral loyalty is more positive for consumers with a higher level of store relationship proneness than for consumers with a lower level of store relationship proneness. Finally, in line with Bellenger and Korgaonkar (1980), we define shopping enjoyment as “a consumer’s individual characteristic representing the tendency to find shopping more enjoyable and to experience greater shopping pleasure than others.” The construct of shopping enjoyment relates to the difference between hedonic and utilitarian shoppers. While utilitarian shoppers aim at accomplishing the consumption task, hedonic shoppers strive for fun and entertainment related to shopping (Arnold & Reynolds, 2003; Beatty & Ferrell, 1998; Hirschman & Holbrook, 1982; Wakefield & Baker, 1998). Bellenger and Korgaonkar (1980) proved that people who enjoy shopping hardly ever have a pre-planned purchase in mind, potentially reducing their desire to commit themselves to one specific store. Solomon (1986, 1987) and Forsythe et al. (1990) proposed that one reason customers use a “personal shopper” is that they do not enjoy shopping. Beatty et al. (1996) found that many customers had relationships with retail salespeople because they did not like to shop. The salesperson would help relieve these customers of at least some of their shopping duties or make shopping more convenient and less time consuming. Reynolds and Beatty (1999b) found three segments of regular customers who did not enjoy shopping. In line with Reynolds and Beatty (1999b) who found that shopping enjoyment was the strongest discriminator among consumer segments and who hypothesized that “consumers who do not enjoy shopping may engage

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in relationships with salespeople to avoid this activity” (p. 511), we propose the following hypotheses: H6a . The relationship between direct mail and relationship investment is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment. H6b . The relationship between preferential treatment and relationship investment is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment. H6c . The relationship between interpersonal communication and relationship investment is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment. H6d . The relationship between tangible rewards and relationship investment is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment. H6e . The relationship between relationship investment and relationship satisfaction is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment. H6f . The relationship between relationship investment and relationship commitment is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment. H6g . The relationship between relationship investment and behavioral loyalty is more positive for consumers with a lower level of shopping enjoyment than for consumers with a higher level of shopping enjoyment.

METHOD Setting We tested the role of contingency factors on the effectiveness of relationship marketing efforts in three different countries, covering respondents from the U.S., the Netherlands, and Belgium. This large-scale study is conducted in the food and apparel industries, covering a wide variety of retailers including discount stores, mass merchandisers, traditional department stores, as well as prestige stores. Relationship marketing is predominantly important in both industries as competition has gradually intensified over the years (Gutman & Mills, 1982; Sirohi et al., 1998).


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Samples Mall intercept personal interviews were administered in the U.S. (food: N = 231, apparel: N = 230), the Netherlands (food: N = 337, apparel: N = 338), and Belgium (food: N = 289, apparel: N = 302). Samples were drawn from shopping mall visitors to obtain coverage on age (18–25 years, 26–40, 41–55, and 55 years and over), gender, and allocated share-of-wallet for the store reported on (0–20, 21–40, 41–60, 61–80, and 81–100%). These criteria are often mentioned to influence shopping attitudes and behavior (e.g. Carman, 1970), so we consider them to be relevant for the study’s objectives. We also sought even coverage over interviewing time of day (morning, early afternoon, and late afternoon) and interviewing day of week (Wednesday, Friday, and Saturday) so as to reduce possible shopping pattern biases. Across our samples, an average of 37% of the visitors who were approached participated.

Procedure Participants were first asked whether they had ever made a purchase in the particular product category. If so, they were asked to indicate the names of five stores in which they usually bought food or apparel. Next, respondents indicated their approximate share-of-wallet for each store listed (measured on a continuous scale from 0 to 100%) and the extent to which they felt they were a regular customer of each store (measured on a scale from 1 to 7). Finally, the interviewers selected a specific store to which the remaining questions were related, based upon the reported share-of-wallet figures. Care was taken that the share-of-wallet percentages approximated a normal distribution in each sample. That is, respondents reporting low, medium, as well as high levels of share-of-wallet were represented in each sample. As by definition a relationship is of extended duration and made of multiple interactions, many of the costs and benefits from buyer-seller relationships cannot be assessed on an a priori basis (Dwyer et al., 1987; Parasuraman, 1997). Gwinner et al. (1998) stated that while customers may receive relationship benefits and believe these benefits are important, they may not always be aware of their existence in the early stages of a relationship and may not have assessed their value yet. Therefore, only those stores were included for which respondents indicated at least 4 on the 7-point scale measuring their “being a regular customer of the store.” In order to enhance inter-rater reliability, the cover letter attached to the questionnaire explained the term “regular customer” to respondents as “a customer who regularly buys clothes/food in a store and not simply visits the store to look around.”

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Measures Most measures represent a combination and synthesis of past formulations, and revealing comparable reliability scores (see Appendix). For the constructs of relationship investment, direct mail, tangible rewards, and consumer relationship proneness, the scales developed by De Wulf et al. (2001) were used in this study.

MODEL EVALUATION In this section, we report on the characteristics of the data and evaluate the overall and measurement models. Maximum likelihood estimation structural equation models were applied to our covariance matrices. Preliminary Data Analyses To enhance the stability of our covariance matrices, e.g. to help ensure their being positive definite, we employed case-wise deletion of missing values. We verified that sample compositions were not significantly different with regard to age and gender before and after case deletion. Even with these deletions, our sample sizes are substantially larger than those typically reported or those said to be required for stable estimation. We examined the data for skewness and kurtosis, but found only slight tendencies for either, not sufficient for transformations of responses which would introduce alternative problems, e.g. interpretability. We also assessed the data for the possible existence of univariate, bivariate, as well as multivariate outliers, using plots against normals, bivariate scatter plots, and Mahalanobis distance measures respectively. So few of the observations (

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