The Role of Relational Embeddedness in Retail Buyers' Selection of New Products

Abstract

Retailers face considerable risk in introducing new products because of high failure rates. Given the proliferation of new products juxtaposed against finite shelf space, retail buyers are confronted with a choice problem. To enhance understanding of this issue, the authors examine the role of buyer-salesperson and firm-firm relationships using data collected in the context of actual new product selection by retail buyers at two large grocery retailers in the United States. The findings indicate that buyer-salesperson and firm-firm relationships have a greater influence on new product acceptance when a new product's attractiveness is modest than when the new product is very unattractive or very attractive. At modest levels of product attractiveness, the likelihood of new product acceptance can increase by as much as 60% when the buyer has a strong relationship with the salesperson. The study provides insights into the complex interplay of marketing relationships and product attractiveness in retail buyers' selection of new products.