New car retailing: an assessment of car manufacturers’ fairness on main dealers

Abstract

This study focuses on the relationship between car manufacturers and dealers in the control of marketing strategies and retail distribution of new cars in the UK. It examines the role of manufacturers’ fairness (i.e impartiality – the manufacturer is seen to play fair) in developing long-term relationships between relatively smaller and larger dealers. Two components of fairness, the retail marketing procedural fairness (the fairness of the marketing processes used by the manufacturer in relation to its main dealers) and retail distributive fairness (the fairness of the outcomes received by the dealer for carrying the manufacturer’s car model), are investigated. The study reveals strong evidence suggesting that dealers’ perceptions of both the retail marketing processes and retail distributive fairness enhance a quality relationship. Furthermore, the results show that the quality of a relationship is determined by the level of outcomes (beneifts or burden) and uncertainty within the UK car market. Conclusions and limitations are presented.