The Role of Relational Embeddedness in Retail Buyers’ Selection of New Products
Published 11/1/2006
Author: Peter Kaufman, Satish Jayachandran, and Randall L. Rose
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Executive Summary
New products are considered critical for firms’ long-term success. Many new products are sold to consumers through a retail channel, and their success is contingent on retailer acceptance and support. However, a Federal Trade Commission (2003) study found that retailers face considerable risk and costs in introducing new products because of these items’ high failure rate. Given the proliferation of new products juxtaposed against finite shelf space, retail buyers are confronted with a choice problem. To enhance understanding of this issue, the authors examine the role of buyer–salesperson and firm–firm relationships in conjunction with product attractiveness using data collected in the context of actual new product selection by retail buyers at two large grocery retailers in the United States.
The findings indicate that buyer–salesperson and firm–firm relationships have a greater influence on new product acceptance when a new product’s attractiveness is modest than when the new product is very unattractive or very attractive. At modest levels of attractiveness, the likelihood of new product acceptance can increase by as much as 60% when the buyer has a strong relationship with the salesperson and by approximately 30% if the firms have a strong relationship. This increase in the likelihood of acceptance of moderately attractive products is attributed to the possibility that buyers consider relationship quality as a heuristic when product-related factors do not provide information of sufficient diagnosticity to enable a decision.
In this regard, relationships could be considered market-based assets with the potential to create long-term value to shareholders. The study provides insights into the complex interplay of marketing relationships and product attractiveness in new product selection by retail buyers and points to areas of further research.
Biography
Peter Kaufman is an assistant professor in the Department of Marketing at Illinois State University. He has a BS from Babson College, an MBA from the University of Florida, and a PhD from the University of South Carolina. He is also the recipient of a Fulbright and a Thomas J. Watson Foundation Fellowship. His research focuses on buyer–seller relationships, retailing, and distribution issues. Peter’s dissertation proposal received an honorable mention in the 2003 Alden G. Clayton Doctoral Dissertation Proposal Competition sponsored by the Marketing Science Institute. His research has been published in Journal of Marketing and the Journal of the Academy of Marketing Science.
Satish Jayachandran is Associate Professor of Marketing in the Moore School of Business at the University of South Carolina. He has an undergraduate degree in Electronics and Communication Engineering from the University of Kerala, India, an MBA from the Indian Institute of Management Calcutta, and a PhD in Business Administration from Texas A&M University. His research interests are in the area of marketing strategy, specifically, the responsiveness of organizations to changes in the market environment relating to customers and competitors. Satish’s research has been published in Journal of Marketing and Journal of the Academy of Marketing Science. With his coauthors, he was a recipient of the Harold H. Maynard award for 2001 from Journal of Marketing for article that made the most significant contribution to marketing theory and thought. Satish was nominated as a young scholar by the Marketing Science Institute in 2003 on the basis of research productivity and managerial interest in research. He also has six years of professional experience that includes information technology marketing and advertising in India. At the Moore School of Business, Satish teaches an Internet Marketing elective in the IMBA program, the Marketing Strategy seminar in the doctoral program, and a Marketing Communications elective in the undergraduate program. He received the Alfred G. Smith Award for Outstanding Teaching from the Moore School of Business in 2005.
Randall L. Rose (PhD, The Ohio State University, 1986) is Professor of Marketing in the Moore School of Business at the University of South Carolina. His research, which focuses on persuasion, social influence, and sociocultural aspects of consumption, has appeared in leading scholarly journals in marketing, including Journal of Marketing Research, Journal of Consumer Research, Journal of Retailing, Journal of Advertising, and Journal of Public Policy & Marketing.
J Marketing Research, Volume 43, Number 4, November 2006
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