Managing customer relationships in the emerging markets – guanxi as a driver of Chinese customer loyalty

Liane W.Y Lee,Yiming Tang,Leslie S.C Yip,Piyush Sharma

doi:10.1016/j.jbusres.2017.07.017

Abstract

Guanxi, a social exchange mechanism built on mutual favors, is an integral part of Chinese culture and a necessary relationship management tool for businesses operating in the People's Republic of China (PRC). This paper uses the cognition-affect-conation trajectory to illustrate the subtle differences between guanxi approach and the conventional relationship marketing approaches on customer loyalty and word-of-mouth intentions. This process is mediated by calculative trust and affective attitude toward the service provider, while operationalizing the in-group identification construct to gauge in-group membership. Findings from a field-survey with Chinese retail-banking customers (N=420) support most of the hypotheses. Besides extending relationship marketing literature by highlighting the need to incorporate unique aspects of different cultures (especially in the emerging markets), this paper also provides many useful managerial implications and directions for future research on phenomena similar to guanxi (e.g., “blat” in Russia, “wa” in Japan and “inhwa” in Korea).

Highlights

Relationship marketing is an important topic in marketing theory because of its crucial role in helping develop and maintain mutually profitable and sustainable relationships among buyers and sellers (Gruen, Summers, & Acito, 2000; Morgan & Hunt, 1994; Samaha, Beck, & Palmatier, 2014)
This study examines the impact of Guanxi on customer loyalty and WOM intentions, and the mediating roles of calculative trust and attitude toward the service employee in this process, while operationalizing the in-group identification construct to gauge in-group membership
The results from a survey-based study with Chinese retail-banking customers confirm that Guanxi does not have a direct effect on loyalty behaviors and instead calculative trust and attitude toward the bank fully mediate this effect

Summary

Introduction

Relationship marketing is an important topic in marketing theory because of its crucial role in helping develop and maintain mutually profitable and sustainable relationships among buyers and sellers (Gruen, Summers, & Acito, 2000; Morgan & Hunt, 1994; Samaha, Beck, & Palmatier, 2014). In this context, a recent meta-analysis of 170 studies in 36 countries reveals significant differences in the effects of relational mediators such as trust and commitment across different cultures (Samaha et al, 2014). Despite some attempts to compare the concepts of relationship marketing and Guanxi (e.g., Ambler, Styles, & Xiucun, 1999; Leung, Lai, Chan, & Wong, 2005; Shaalan, Reast, Johnson, & Tourky, 2013; Wong & Chan, 1999), the exact roles played by Guanxi and its underlying dimensions in mainstream relationship marketing, their impact on customer loyalty in the services context, are still not very clear or well-established (Gap 2)

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