Starting a Relationship in Marketing Channels

Abstract

In marketing channels, retailers sometimes develop close, long-term relationships with wholesalers. However, while some wholesalers accept such relationship offer from retailers, others do not. Literature on relationships in a marketing channel has examined mechanisms by which relationships are maintained, but has not focused on the reason that the relationships start. This paper explains why such differences of acceptance emerge among wholesalers. The framework presented herein suggests that asset specificity, which is requested from the retailer decreases the wholesalers’ willingness to accept the relationship offered by the retailer. Furthermore, the relationship between asset specificity and willingness to accept is moderated by the wholesalers’ regulatory focus. An experiment, in which the subjects were managers for wholesalers, demonstrated that the wholesalers’ willingness to accept the relationship offered by retailers was influenced by both relation-specific investments and regulatory foci.

Keywords

• transaction costs
• regulatory focus
• relationship-specific investments
• vertical relationships
• experiment