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A Theoretical Framework of B2C Relationship Quality

How could B2C companies use it to enhance relationship quality?

Written by Yuqing Chen, Wantong Zheng

Paper category

Master Thesis

Subject

Business Administration>General

Year

2015

Abstract

Master Thesis: Research background In recent years, the global e-commerce industry has developed rapidly. E-commerce includes several different categories, of which business-to-business (B2B) and business-to-consumer (B2C) are the most well-known categories. At present, the B2C e-commerce business model is becoming more and more popular in selling goods to consumers. B2C allows suppliers to reach customers all over the world (Internet World Stats, 2006), obtain higher revenue due to lower costs (comScore, 2006) and improve the quality of customer service. For customers, they can additionally choose similar goods or services and more product information based on other people's comments. Thanks to these comparative advantages, B2C e-commerce has been a widely adopted and growing trend since 1995 (Netcraft, 2015). China's e-commerce market is still booming, with online sales reaching 1.8 trillion yuan in 2014 and B2C reaching 128.8 million yuan, accounting for 45.8% of the e-commerce market, and an increase of 68.7% in 2014 (Gentlemen Marketing Aency, 2015). The B2C market will develop further along with the increase in customer demand and the diversification of marketing channels. Since customers tend to buy anything they want with good quality, this presents challenges and opportunities for merchants to provide better services. With many users on Weibo, Weibo seems to be an effective channel for marketing activities to attract more customers and gain more profits. Customer relationships are critical to the success of e-commerce (Sun, Zhang & Xiao, 2007). Minocha, Millard and Dawson (2003) believe that e-commerce should focus on continuously providing and creating value for customers in order to maintain long-term relationships, because maintaining relationships with customers becomes more and more difficult. 1.2 Theoretical background Berry first defined relationship marketing in 1983. Based on a combination of 26 definitions of relationship marketing, Harker (1999:16) redefines it as “proactively creating, developing and maintaining committed, interactive and over time with selected customers/partners Engage in profitable exchanges." Relationships can be divided into three types: inter-enterprise relationship, personal-enterprise relationship, and interpersonal relationship, all of which affect customers' purchasing behavior (Palmatier, 2008). Maintaining a good relationship is one of the goals of the business, which helps the business to make a profit, because a higher quality of the relationship leads to more repeat purchases and positive word-of-mouth (Kim, Han, & Lee, 2001). The process of establishing a sales relationship includes establishing a relationship, extending a relationship, and expanding the scope of the relationship (Selnes, 1998). Relationship quality uses three variables to measure the strength of the relationship between buyers and sellers: satisfaction, trust, and loyalty. 2.2.1 Relationship quality Wong, Hung, and Chow (2007) claimed that relationship quality is a suitable tool for sellers to assess the strength of customer relationships. It consists of a dynamic process affected by the development of relationships (Gronroos, 2007). The goal of proposing the concept of relationship quality is to enhance existing relationships and transform indifferent customers into loyal customers (Berry & Parasuraman, 1991). Most researchers agree that the concept of relationship quality is a high-level structure involving multiple related dimensions, but these dimensions differ for each research project (Chung & Shin, 2010). Research on institutional buyers shows that satisfaction and trust are maintaining and strengthening relationships, and satisfaction is a key variable related to continuing relationships (Selnes, 1998). When customers evaluate product quality through their experience, loyalty may be a key variable. Satisfaction and trust will affect loyalty (Selnes, 1998). Based on this research, this article proposes that B2C relationship quality consists of three different but related dimensions, namely loyalty, loyalty, and trust. Satisfaction and trust. Loyalty: Researchers regard customer loyalty as the main goal of relationship marketing because it helps increase business value and reduce business costs (Rahmani-Rahmani-Nejad, Firoozbakht & Taghipoor, 2014). Loyalty means that customers always believe that a product or service provided by a particular organization is always the best choice (Loyalty Research Center, 2012). This means that they will not be affected by other organizations' promotional strategies, such as sales and price promotions. Loyal customers are unlikely to be affected by other organizations' promotional strategies, such as promotions and price promotions, because they always believe that a particular organization provides the best option (Loyalty Research Center, 2012). Satisfaction: Satisfaction is the degree to which performance meets customer expectations. Customer satisfaction will be affected by service quality, products, prices, and some personal factors (Zeithaml & Bitner, 2000). It is an evaluation of experience and is used to predict future experience (Ruyter & Wetzels, 2000). Bhattacherjee (2001) believes that B2C e-commerce is more difficult to obtain satisfaction than traditional retail. Trust: We follow Morgan and Hunter's (1994) definition of trust as confidence in the reliability and integrity of the other party. This includes the seller's consideration of the long-term interests of the customer. Hart and Saunders (1997) proposed that all business relationships involve some form of trust. It is essential that customers interact with electronic suppliers and establish long-term relationships (Kamari & Kamari, 2012). Read Less