Study on the Role of Supplier and Customer Expectation Difference in
Relational Satisfaction
Lan Wang
International School of Business
Beijing Language and Culture University Beijing, China
Abstract - This paper aims to explore the impact of
supplier and customer expectation difference on relational
satisfaction. We argue that negative expectation difference
will lead to low level of relational satisfaction and innovation
performance, because they prevent information sharing and
reduce trust. Long-term oriented supplier relationship and
supplier involvement in early stage R&D will lead to high
level of relational satisfaction and innovation performance.
Theoretical and managerial implications are discussed.
Keywords - supplier relationship, relational satisfaction,
innovation performance
Ⅰ.INTRODUCTION
Relational satisfaction has been discussed a lot in
marketing channels and channel relationships literature. In
early loose channel structure, managers are less aware of
the long-term cooperation. Many speculative behaviors
occurred based on economic factors dominated. With the
formation of increasingly close vertical marketing system,
the resources between channel members have become the
source of competitive advantage as the establishment of
strategic resources, channel power and relational
satisfaction.
Ⅱ.LITERATURE REVIEW
Most scholars have a relatively consistent view on the
causes of relational satisfaction. They generally believe
that the supplier and customer relationship is inherent in
the channel behavior, this is mainly because the functional
dependence between the channel members. Channel
relational satisfaction may come from the more specific
functional relationships. Etgar (1979) argued that the goal
of inconsistencies, and seeking independence and control
have led to a dominant conflict [1]. Stern found that the
diversified goals and different view on market are the
main factors affecting the field of channel conflict [2].
Gattorna (1978), Rosenberg and Stern (1970) through
empirical research found that the greater the goal
differences will result in more channel conflict [3] [4]. In
the integration model of channel conflict, Michman and
Sibley, (1980) proposed five factors that may affect the
channel conflict: environmental factors, the nature of
channels structure, channel mode, the position of the
channel members and industry standards. The five
elements contain both microeconomic factors and macro
factors. Macroeconomic factors such as environmental
factors beyond the control of channel members, some
elements will enhance the channel cohesion, some
elements will lead to tension leading to low level of
relational satisfaction between channel members.
Empirical research on channel structure as the
mediating variables of power and conflict in the relational
model showed that the impact of reward power and
coercive power of the conflict depends on the channel
members for the channel decision-making structures
awareness. Studies have shown that reward power and
coercive power not directly linked to channel relational
satisfaction but through the mediating variables of the
decision-making structures [5]. Etgar (1979) divided
conflict into potential and appeared conflicts and study the
impact of conflict factors into two categories of structural
factors and subjective factors. Conduct research in six
different industries concluded that the potential conflict or
apparent conflict by subjective factors (differences in
perception, expectation differences, role ambiguity, the
impact of communication barriers, etc.).
Ⅲ.NEGATIVE EXPECTATION DIFFERENCE AND
RELATIONAL
SATISFACTION
Throughout the literature research we found that many
influential factors of channel relational satisfaction, put
forward by different scholars have some overlap. It can be
divided
into
macro
influencing
factors
and
micro-influencing factors. Rosenberg (2002) summarized
the literature and found the reasons for relational
satisfaction in the channel can be included in one or more
of the following seven basic reasons: the role of
difference, the scarcity of resources, differences in
perception,
expect
differences
decision-making
differences, the inconsistent goal, communication barriers
[6].In addition, the power often usually as a conflict of
individual antecedent variables to study the impact on low
level of relational satisfaction. [7].
For a short period of time, change of political,
economic, cultural, technological and legal environment in
a customer relationship life cycle stages is relatively
stabilized. Understanding and expectations of the role of
behavior in the channels between the members of the role
of lead differences in channel relationships more apparent,
the impact of this relatively micro-level factors are more
complex. Stern (1976) argued that there are mutually
exclusive or incompatible goals, values or interests
between channel members when conflict occurs. He
believes that the channel relational satisfaction factors,
including the difference of objectives, a realistic view of
the different areas which consists of four elements: the
target population, geographic coverage, the need to
complete the task, and the marketing problem. The
objective is how to achieve the overall objective of
channels. Each channel member will have their own
opinions and requests. For example, manufacturers would
like to occupy a larger market, more sales to middlemen
and increase profits. Vendors do not care about sales
which brand. Therefore, when the channel members'
individual goals appear incompatible, conflict will
inevitably happen. Areas of difference, refers to the
channel members in the ownership of the target customer,
sales region, division of channel function and technical
aspects of the existing contradictions and differences.
These contradictions and differences, if not handled
properly will lead to conflict. The reality of cognitive
differences between the channel members channel events,
the views and attitudes of the state and forms of
differences. Such differences include: the understanding of
the current state of real events, and forecast its future
development possibilities and choices of information to
understand the situation, on the understanding of the
consequences of a variety of choices, and understand the
goals and values differences. Awareness of the channel
members depends on their previous experience, as well as
the quantity and quality of access to information. The
greater the differences result in more channel conflict.
Michman and Sibley, (1980) in the integrated model of
channel conflict, from the macro point of view put forward
the five factors that may affect the channel conflict:
environmental factors, the channel junction on the nature
of the organizational structure, the channel model, the
positioning of the channel members and industry standard,
but no empirical research.
Expectations refer to the different channel members
would expect the behavior of other members. In fact, these
expectations is predicted that the future behavior of other
channel members [8]. Negative expectation difference
refers to channel members the expected higher
performance for other members than their actual behavior.
That is the real performance less than expected
performance, including equal. Sometimes predictable
result is inaccurate, and to predict the channel members
often take action based on the expected results. This
reaction has not previously forecast or does not occur may
result in other members to make the inappropriate action.
The theoretical foundation of the expected differences in
social psychology and experimental psychology is widely
used to explain the marketing literature, customer
expectations, the relationship between the product /
service performance and customer satisfaction [9].
Expectation differences in the model are to explain the
basic idea of customer satisfaction. Subjective evaluation
of customers will the current product / service
performance and to buy before the desired level of
performance compared to the formation of a real
performance and expected performance differences, the
magnitude and direction of this difference determine
customer satisfaction with the direction and extent of [10].
If it a negative difference, the customer is not satisfied.
The greater the negative difference, the more satisfied
customers. Recent studies have been to expand the desired
difference mode: the mode of product / service
performance to expand value for customers, product /
service performance of just one aspect of customer value.
The expected performance is to expand the desired
customer value. Obviously, from the expectations of
differences in mode of view, the main factors affecting
customer satisfaction, customer value and customer
expectations and providers.
The manufacturer is limited to the regulation and
control of customer expectations, customer value
determinants of customer satisfaction. From a strategic
point of view, the technology diffusion accelerates shorter
product life cycle. Enterprises should pay attention to their
own creative abilities to provide unique value-added
services for our customers and build sustainable customer
loyalty. Customer satisfaction was negatively correlated
with the level of channel conflict. The higher channel
member’ satisfaction is, the lower level of conflict is. The
causes of channel conflict due to the interest. Therefore,
the greater the negative expectation difference is, the
lower the perceived customer value is. This will result in
lower customer loyalty and lead channel relationships to
the recession. We assumed that the supplier and customer
negative expectation difference is negatively correlated
with the levels of relational satisfaction.
Ⅳ.SAMPLE AND DATA COLLECTION
Based on literature search and previous case studies,
we developed a questionnaire. The data was collected in
Wenzhou area of mainland China from the early May of
2007 to the late November of 2007. 600 questionnaires
were sent to the firms’ managers from the city of Rui’an
and Yueqing. The returned valid questionnaires are 194
pieces, resulting in an effective respond rate of 32.3%.
There were no significant differences between responding
ventures and non-responding ventures in terms of venture
size and age.
TABLE I
DISTRIBUTION of RESPONDENTS
Sales revenues (in million
RMB)
Less than 1
1-5
5-10
10-30
30-100
Above 100
Total
Business Types
Manufacture
Manufacture and Distribution
Wholesale and Distribution
retailing
Other Services
Total
N
%
3
6
12
38
83
52
194
1.5
3.1
6.2
19.6
42.8
26.8
100
97
63
16
7
11
194
50.0
32.5
8.2
3.6
5.7
100
We controlled for the following variables: Industry
referred to the industry the firm belongs to, including
Automobile, Electric Appliance, Machine and equipment
manufacturing, Clothes and shoes, Consumer products,
foods, Communication, and service industry. Second,
Business type; Third, Firm size ; Fourth, Previous research
suggested that R&D spend and innovation performance
might vary by sale Revenues and total asset, which were
added to the framework. Finally, because the sample was
from different areas and district, culture and education
level may vary, we coded the cases according to the
district
Ⅴ.CONCLUSION AND IMPLICATION
We conduct empirical study and test results show that
in customer relationship maturity period expectations of
negative differences and relational satisfaction level was
significantly negatively correlated, and consistent with the
hypothesis. In the process of customer relationship
development, the retailer always continually assess the
relative value provided by the manufacturer, but
comparative reference point changes over time. In the
beginning period and the formation period, due to limited
understanding of alternative manufacturers, as well as the
assessment of the value of their own capacity constraints,
comparative reference point helps to establish a similar
relationship based on past experience and expected value.
In maturity, with the increase of understanding of
alternative manufacturers and evaluation their capabilities,
the customer's perspective broadens, the evaluation
changed from an internal to external view. The negative
difference will make a party to the other party as to
impede the obstacles to achieve higher goals, resulting in
exit intention. If not promptly take appropriate measures
to repair the relationship and increase customer value, the
members will exit channels. The relationship will soon
enter the recession stage. When the channel members
show a discordant loyalty, given the transfer costs and
other factors, the retailers will have to choose alternative
innovative manufactures and suppliers.
ACKNOWLEDGMENT
Lan Wang appreciates the support from Youth
Foundation of Beijing Language and Culture University
Research Plan Project (the Fundamental Research Funds
for the Central Universities) (Project Number: 11JBB009).
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