Generally, commitment is regarded to be an important result of good relational interactions (Dwyer et al. 1987). Dwyer et al. (1987, p.13) suggested that commitment is “fueled by the ongoing benefits accruing to each partner”. Morgan &
Hunt’s (1994) ‘Commitment - Trust’ theory has suggested that commitment and trust are the main variables that make RM successful. Besides, Moorman et al. (1993) suggested that customers who are committed to a relationship might have a greater propensity to act because of their need to remain consistent with their commitment. In line with this, Bennett (1996) argued that the strength of customers’ commitment depends on their perceptions of the effort made by the seller. Furthermore, several authors have investigated empirically the relationship between relational performance as a construct that shows similarities to relationship investment, and relationship commitment (Morgan & Hunt 1994; Baker, Simpson & Siguaw 1999; Weitz &
Bradford 1999).
Therefore, commitment is not only an important characteristic in maintaining good long-term relationships (Hennig-Thurau & Klee 1997; Macintosh & Lockshin 1997), but also an expression of customers’ willingness to stay with retailers (Moorman et al.
1993; Wulf et al. 2001; Odekerken-Schroder et al. 2003).
Given that marketing practitioners have begun placing more impetus upon relational orientation (Sheth & Parvatiyar 1995), the importance of commitment has increasingly become the focal point in RM studies (Morgan & Hunt 1994; Gundlach, Achrol & Mentzer 1995; Wilson 1995). Gundlach, Achrol and Mentzer (1995) point out that commitment comprises input, attitudinal and temporal dimensions and indicate that it is the structure of the initial commitment that influences the relationship. They describe this element of commitment structure in terms of credibility and proportionality, which once deployed is difficult or impossible to re-deploy to another relationship. Therefore, although credible commitments have little or no salvage value outside the specific relationship (Lohtia & Krapfel 1994), they clearly imply trust between parties in which both need to share the risks and rewards of the relationship (Ellram 1991).
110
When the proportion of commitment becomes more remarkable, it is not difficult to infer that the relationship on both sides becomes more stable. Hence, commitment is also an important variable in the measurement of relationships, especially when long-term relationships are discussed. After reviewing relevant literature about relationship quality, it was found that relationship was mainly a consideration of the extent of relationship strength and the satisfaction of the customers’ needs and expectations. In the current study, trust, commitment and satisfaction were used as the main measurements of relationship quality and trust/commitment was defined as a consumer’s enduring desire to continue a relationship with a retailer accompanied by the consumer’s willingness to make an effort to maintain it.
Among other things, relational exchanges are characterised by cooperation, commitment, opportunistic behaviours and relationship outcomes (Mohr & Nevin 1990; Ellram 1991; Boyle et al. 1992; Morgan & Hunt 1994). Fontenot and Wilson (1997) point out that the greater the commitment between parties the higher the likelihood that they will achieve both their individual and mutual outcomes at the same time as reducing opportunistic behaviours. Dwyer, Schurr and Oh (1987) conclude that commitment represents the highest stage of relational bonding between parties and reflects a willingness to take higher levels of risk exposing them to opportunism. Therefore, any sort of credible commitment must be based upon confidence that the relationship will last (MacNeil 1980). Therefore, the more committed that parties are to the relationship, the greater the desire to make efforts designed to maintain the long-term well-being of the exchange (Artz 1999).
Leuthesser and Kohli (1997) argue that convergence in the literature depicts the central purpose of ongoing relationships to be that of commitment to attaining mutual outcomes. This is consistent with social exchange theory insofar as the impetus of the interaction between parties reflects the commitment to the relationship per se, rather than to any rewards and costs that may immediately follow. Morgan and Hunt (1994, p.23) theorise that commitment is central to all exchange relationships because the common theme in the literature is that commitment among exchange parties is regarded as key to achieving valuable outcomes and, as a consequence, marketers attempt “to develop and maintain this precious attribute”. Commitment, therefore, may be a central issue in helping to explain marketing (Gundlach, Achrol & Mentzer
111
1995), particularly considering that the axioms of the discipline have moved to reflect a relational perspective (Sheth & Parvatiyar 1995). Relationalism comprises expectations of continuity that capture the probability of future interaction (Noordeweir, John & Nevin 1990). Thus, relational partners are not concerned about the short-term realisation of commitments employed, but rather how to build, nurture and maintain them.
Long-term customer relationships signify that the objective of marketing is mainly to attempt enduring relationships with customers (Grönroos 1990). In this regard, partners need to rely upon relational exchanges to maximise these returns through joint synergies that exploit idiosyncratic assets and risk-sharing (Ganesan 1994).
From a practical viewpoint, this has been translated into multiple levels of strategy development, under the auspices of pricing incentives, social bonding and structural solutions (Berry 1995); the two perspectives help secure customer loyalty through financial motives and psychological attachment respectively. Berry (1995) suggests that these approaches alone cannot ensure and sustain long-term commitments from customers; therefore, firms need to consider implementing structural solutions into strategy.
Jones, Taylor and Bansal (2008, p.11) have researched target commitment, where commitment is targeted in three different types; “commitment in a relationship between service provider and consumer: (1) consumer to person as friend (entity = person, role = social exchange); (2) consumer to person as employee (entity = person, role = economic exchange), and (3) consumer to service organization (entity = service company/brand, role = economic exchange)”. Their examples were of a salesperson who is a personal friend of the consumer and develops a business relationship (personal commitment); a salesperson having a business relationship with the consumer and eventually a relationship develops into a personal one (employee commitment); a salesperson having a professional relationship with the organisation does the business with a personal friend or business friend, keeping in mind that the outcome of relationship is in the interest of organisation (organisational commitment).
Structural solutions also reflect a much clearer indication of commitment between the service firm and its customers and, therefore, act as powerful exit barriers to the
112
firm/customer. Such an approach involves solving customer problems through service-delivery systems, thereby serving to bind the firm to the customer. In short, these ‘structural commitments’ create a strong foundation for maintaining and enhancing firm–customer relationships because they require firms to interconnect their own systems/operations with those of their customers. As such, these forms of credible commitments (Gundlach, Achrol & Mentzer 1995) are closely related to mutual loyalty and the forsaking of alternatives; elements that are at the very core of relationalism. Typifying the point, Ganesan (1994) points out that commitment should be the manifestation of the desire of a party to have a long-term orientation that is specifically directed towards another party, rather than in the general sense (Ganesan 1994).
A number of RM applications have been reported in the literature that effectively reflects a firm’s commitment towards their customers which, in turn, resulted in the customers committing themselves to the firm. In a service context, Garbarino and Johnson (1999) found that commitment was the key aspect that distinguished transactional customers from those the firm regarded as customer partners. Their study investigated the purchase behaviour of people attending the New York Off-Broadway Repertory Theatre. They concluded that, for relational customers, trust and commitment rather than satisfaction impacted upon their future purchase intentions.
In fact, the very nature of the service industry5 requires customers to have high levels of participation, thereby making such mutual commitment especially relevant (Tax, Brown & Chandrashekaran 1998).
Furthermore, participation clearly provides a firm with ample opportunities to ‘tap into’ the psychological bonding and structural solutions proposed by Berry (1995).
Typically, higher levels of firm commitment to complaint handling result in higher satisfaction with the service organisation which, in turn, increases customer commitment (Kelly & Davis 1994). McCollough and Bharadwaj (1992) refer to this as the ‘paradox of service’, in which the customer becomes more committed6 to the service firm than if the service had been delivered to their satisfaction in the first instance. Of course, the point here is that relational activities employed by a firm to
5 Some services are directed at people’s possessions, rather than their minds and bodies; hence customer participation in these instances may be low, or even non-existent.
6 Whilst this may be referred to as brand loyalty within the literature, it should be noted that commitment has attitudinal, instrumental and temporal components. The former has been described in terms of a psychological attachment, identification, affiliation, and value congruence (Gundlach, Achrol and Mentzer 1995). It should also be noted that paralleling this is the argument that brand loyalty is regarded as the psychological attachment towards a particular brand (cf. Hawkins, Best and Coney 1998). Whilst theseparation of the two constructs would comprise a complex discussion, addressing it is clearly beyond the scope of this thesis.
113
recover service failures not only require the service firm to commit to customers, but the outcomes clearly demonstrate the reciprocity of commitment in this relational-based exchange.
In a business-to-business context, long-term channel relationships are characterised by exchange norms, harmonisation of conflict and relationship preservation norms (Brown, Dev & Lee 2000). Often, commitment is regarded as the motive for relational partners to ‘work at’, ensuring continuance of their relationships (Wilson 1995), and in which channel members can work together to serve customers better (Anderson &
Weitz 1992). Anderson and Weitz (1992) conclude that commitment should extend beyond simplistic positive evaluations in terms of current benefits and costs, as the adoption of a long-term orientation implies a willingness to make short-term sacrifices, entailing pledges or actions that demonstrate good faith. While commitment is believed to comprise an attitudinal component, as reflected through psychological attachments, identification and affiliation, it must also represent something more than a mere promise (Gundlach, Achrol & Mentzer 1995). In this respect, consumers may be inclined to commit non-redeemable transaction-specific assets into the relationships because (1) they are more efficient and effective than generalised assets, (2) help the firm signal honourable intentions and (3) help the consumer attain conditions of exchange beyond efficiency and effectiveness outcomes.
Thus, in order for both retailers and consumers to get benefits and to function efficiently and effectively, they clearly need to incorporate a relational marketing approach to managing their relationships. Duncan and Moriarty (1994) contend that relationships are impossible without communication, so communication should be considered as a critical component of relationship building. Anderson and Weitz (1992) found that open and two-way communication had a positive impact upon the desire to commit to a retailer–consumer relationship. Such information exchanges imply a greater willingness to share the knowledge essential to coordination (Noordeweir, John & Nevin 1990) and, therefore, can be used as the mechanism to elevate the level of relationalism between parties (Boyle et al. 1992). Coordination reflects the cooperation between parties, and is evident in situations where parties work together to achieve mutual outcomes (Anderson & Narus 1990). Morgan and
114
Hunt (1994) argue that committed parties will cooperate with each other because of the strong desire to make the relationship work, and this mutual activity promotes RM success. On an empirical level, Anderson and Weitz (1992) found that commitment was mutually reinforced and also increased over time, which clearly taps into social exchange theory as reflected through the norm of reciprocity (Gouldner 1960).
Commitment is regarded as one of the key mediating constructs in RM studies (Morgan & Hunt 1994; Wilson 1995). The general construct of commitment has been tested in several empirical relational studies and shown to be important to the creation and preservation of long-term relationships (Dwyer et al. 1987; Ganesan 1994;
Garbarino & Johnson 1999; Morgan & Hunt 1994). Commitment can be defined as an implicit or explicit pledge of relational continuity between the customer and the firm (Dwyer et al. 1987). Morgan and Hunt (1994, p.23) see commitment as “an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it”. Similarly, Moorman et al. (1992, p.316) regard commitment to be “an enduring desire to maintain a valued relationship”.
Committed customers are motivated to maintain the relationship with their service provider because of a sincere interest in doing so (Bendapudi & Berry 1997).
Customer loyalty is a construct closely related to commitment, given that loyalty implies commitment in RM literature. Jones and Sasser (1995) define customer loyalty as the feeling of attachment to, or affection for, a firm’s employees, products and services. Similarly, Buttle’s (1996) definition is that customer loyalty is an acknowledgement of the commitment of the customer to the firm and its employees.
Pritchard et al. (1999) found strong support for commitment as an important direct antecedent of customer loyalty for hotel and airline services. Further, Oliver (1999) confirms that customer loyalty is based on commitment in which customer loyalty is a deeply-held intention to consistently repurchase or repatronise products despite situational influences and competing marketing efforts.
In the literature on organisational psychology, Allen and Meyer (1990) have distinguished between affective, continuance and normative commitment, with the differences among the three types of commitment reflecting the psychological state that binds the individual to the organisation. They have asserted that a comprehensive understanding of the link between commitment and loyalty will be achieved when all
115
three types of commitment are considered simultaneously. In extending Meyer and Allen’s (1997) three-component model of commitment to a customer–service provider setting, commitment can be conceptualised as a force that binds an individual to continue to purchase services, or not to switch, from a service provider.
In effect, the underlying basis of this force may be affective (binding the consumer to the service-provider out of desire), continuance (binding the consumer to the service provider out of need) or normative (binding the consumer to the service provider out of perceived obligation).
Despite the extant literature on RM and customer loyalty, it is recognised that the psychological perspective behind the different types of commitment that influence future customer loyalty performance in a service context is still not fully developed (Pritchard et al. 1999). That study suggests a three-component commitment or loyalty model using a life insurance context in Malaysia to fully capture the notion of relationship commitment towards an insurance provider and evaluate the different impacts of the constructs on loyalty outcomes. The antecedents of relationship commitment, such as affective trust, service satisfaction, switching costs, alternative attractiveness, position involvement and volitional choice, play important roles in influencing future customer loyalty performance.
Dick and Basu (1994) define customer loyalty as a kind of relationship strength between a customer’s attitudes and their repurchase intention. Heskett et al. (1994) supposed that repeat purchase or repurchase intentions could be used as a measurement index of the loyalty to brand or service. Still another group of scholars think that the measurement standard of customer loyalty should adopt the preference and public praise that customers thought of their dealing companies (Rust, Zahorik &
Keiningham 1995; Zeithaml, Berry & Parasuraman 1996). Bowen and Shoemaker (1998) suggested that customer behavioural loyalty would reflect the possibility of repurchasing behavior and the intention to become a proxy member of the company.
Moorman et al. (1993) suggested that customers who are committed to the relationship might have a greater propensity to act because of their need to remain consistent with their commitment. Morgan and Hunt (1994) found empirical support for the relationship between a customer’s commitment and acquiescence, propensity
116
to leave and cooperation; all of which can be regarded as behavioural outcomes of the relationship.
Similar to trust, commitment is recognised as an essential ingredient for successful long-term relationships (Dwyer, Schurr & Oh 1987; Morgan & Hunt 1994; Garbarino
& Johnson 1999) and commitment defined in terms of an enduring desire to maintain a valued relationship (Meyer & Allen 1991; Moorman, Zaltman & Deshpande 1992).
Commitment is conceptuatlised as a three-component construct; there being an instrumental component resulting from a cost/benefit comparison for maintaining the relationship (Becker 1960), an attitudinal component which emerges when customers feel a psychological attachment or identity (O'Reilly & Chatman 1986; Anderson &
Weitz 1992) and a temporal dimension indicating that the relationship exists over time (Becker 1960).