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African Journal of Business Management Vol. 5(13), pp. 5199-5209, 4 July, 2011 Available online at http://www.academicjournals.org/AJBM ISSN 1993-8233 ©2011 Academic Journals

Full Length Research Paper

The influences of relationship marketing strategy and transaction cost on customer satisfaction, perceived risk, and customer loyalty Cheng-Feng Cheng* and Ai-Hsuan Lee

Department of International Business, Asia University, Taiwan

Accepted 25 January, 2011

This study attempts to develop the conceptual model for explaining consumers’ preference toward retailers based on the relationship marketing strategy and transaction cost theory. Specifically, this study investigates the impacts of relationship marketing and transaction cost on customer satisfaction and perceived risk. In addition, the influences of customer satisfaction and perceived risk on customer loyalty deserve further consideration. To assess the applicability of this conceptual model, this study confined the research scope to shopping malls. The results show that relationship marketing significantly has positive effect on customer satisfaction and negative effect on perceived risk. As to influence of transaction cost, it significantly has negative effect on customer satisfaction and positive effect on perceived risk. Furthermore, both relationship marketing and transaction cost could influence customer loyalty through customer satisfaction or customer’s perceived risk.

Key words: Relationship marketing strategy, transaction cost, customer satisfaction, perceived risk, customer loyalty.

INTRODUCTION

Business strategies can play a critical role in consumer’s preference or choice of sales channel (Muthitachaoen, Gillenson, and Suwan, 2006). Thus, it is important for sales channels to become aware of the consequences of strategies as they face an increasingly challenging marketing environment (Pappu and Quester, 2006). Luo and Donthu (2007) indicated that exchange relationships as to buyers and sellers involved some levels of social interdependence and economic. Accordingly, exchange relationships can be explained based on social exchange theory and transaction cost theory (Kanagal, 2009). Specifically, consumers may rely on relationship with sellers and cost of shopping to make choices of sales channels (Muthitachaoen et al., 2006). In this regard, this

‘Corresponding author. Email: cheng-cf@asia.edu.tw or cheng.cf@msa.hinet.net. Tel: +886-4-23323456 ext.20048. Fax: +886-4-23321190. study attempts to explore the roles of strategies in relation to customers’ relationships and costs (i.e., strategies of relationship marketing and transaction cost) acting on their behaviors. The concept of relationship marketing receives increasing attention from academics and practitioners (Ndubisi, 2007) and has played a lead role in the marketing subject (Andersen, 2002). Relationship marketing strategy is one weapon for many firms to survive in the highly competitive marketplace (Adjei, Griffith, and Noble, 2009; Armstrong and Kotler, 2009). It is deemed as the key functionality in enhancing business performance (Kanagal, 2009). Muthitachaoen et al. (2006) indicated that a superior sales channel possesses an ability to provide its customers with interactive communications and a supportive sales environment. The sales channel can obtain quality sources of marketing intelligence for better planning of marketing strategies by virtue of building relationships with customers (Ndubisi, 2007). Additionally, transaction cost theory is a framework be longing to the New Institutional Economics paradigm (Jonees and Leonard, 2007). It can explain why a consumer favors a particular form of transaction (Teo and Yu, 2005). The role of transaction cost acting on the choice of sales channel can be described in two ways. First, transaction costs are incurred throughout the whole purchasing decision process (Jeon and Kim, 2008). These costs include the access...
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