Fairness in Network Marketing Exchange: an Exemplar of Social
Transkript
Fairness in Network Marketing Exchange: an Exemplar of Social
ASSOCIATION FOR CONSUMER RESEARCH Labovitz School of Business & Economics, University of Minnesota Duluth, 11 E. Superior Street, Suite 210, Duluth, MN 55802 Fairness in Network Marketing Exchange: an Exemplar of Social Embeddedness Dixon H Ho, University of Arizona ABSTRACTAlthough transactions among friends, relatives, and acquaintances are common, limited consumer research has addressed this phenomenon. This study examined an exemplar of socially embedded exchange—NM exchanges. It was argued that the ambivalent nature of NM exchanges heightens consumers’ fairness concern. This paper thus examined the influences of such social elements as interpersonal trust, social value, and relational exchange norms on consumers’ fairness perceptions when the outcomes of NM exchanges vary. By examining the effects of social elements on consumers’ post-purchase evaluations, this paper advances our understanding of the implications of pre-transaction social ties for consumer behavior. Studying NM exchanges in this way provides insights into the negative side of social embeddedness in marketing exchange. [to cite]: Dixon H Ho (2006) ,"Fairness in Network Marketing Exchange: an Exemplar of Social Embeddedness", in NA - Advances in Consumer Research Volume 33, eds. Connie Pechmann and Linda Price, Duluth, MN : Association for Consumer Research, Pages: 706-707. [url]: http://www.acrwebsite.org/volumes/12464/volumes/v33/NA-33 [copyright notice]: This work is copyrighted by The Association for Consumer Research. For permission to copy or use this work in whole or in part, please contact the Copyright Clearance Center at http://www.copyright.com/. Fairness in Relational Marketing Exchange Dixon Ho, University of Arizona EXTENDED ABSTRACT The relationship marketing literature shows that marketing exchange is socially embedded in various exchange contexts (Price and Arnould 1999). Most research in this domain has focused on the beneficial consequences of building and maintaining long-term customer relationships for both firms and customers. Much less research has examined the roles and functions of pre-existing (i.e., prior to the occurrence of a transaction) social relations in marketing exchange. The purpose of this research, therefore, is to examine the implications of pre-existing social ties for consumers’ outcome evaluations in a unique form of relational exchange—network marketing. In particular, this research investigates how interpersonal trust, social obligations, and relational norms affect consumers’ post-purchase fairness perceptions when buying goods from friends. Drawing on literature on social embeddedness (Frenzen and Davis 1990; Granovetter 1985; Halpern 1997), social justice (Lind and Tyler 1988), interpersonal trust (Geyskens, Steenkamp, and Kumar 1998; Robinson 1996), and relational contracting (Kaufmann and Stern 1988; Macneil 1980), this research hypothesizes that customers’ sense of social indebtedness and trust in the seller mitigates the negative effect of an unfavorable transaction outcome on their perceived fairness. In addition, it is hypothesized that when customers firmly believe that their friends should uphold the implicit relational norms in the transaction, the negative effect of an unfavorable transaction outcome on perceived fairness is attenuated. However, when the transaction outcome is favorable, all the relational variables would have no effect on customers’ perceived fairness. To test these hypotheses, a scenario experiment was conducted in a laboratory setting. One hundred ninety-five MBA students participated in the experiment. Subjects were randomly assigned to one of the eight conditions in a 2 (transaction outcome: favorable and unfavorable) × 2 (interpersonal trust: low and high) × 2 (social obligations: low and high) between-subjects factorial design. Beliefs of relational norms were measured as an individual characteristic. In the experiment, subjects read a scenario about a purchase they had just made from a friend, who was a sales agent of a direct selling firm. The scenario described a situation in which the subject bought a water filter from his or her friend without knowing the exact quality of the product. However, subsequent to the purchase, the subject had a chance to read a water filter rating in Consumer Report. The product rating indicated the value of the brand the subject bought relative to other reference brands. In the favorable (unfavorable) outcome condition, the focal brand had a higher (lower) value than the reference brands. In the high (low) trust condition, the sales agent was described as a more (less) trustworthy person. In the high (low) social obligations condition, the subject owed a big (small) favor from the sales agent in previous social interactions. After reading the scenario, the subjects completed a questionnaire that included the dependent measures and manipulation checks. The empirical findings show that customers’ fairness perceptions in a relational exchange are determined not only by the favorability of the transaction outcome but also by their unfulfilled social obligations and trust in the seller. The ANOVA result indicates that social obligations and interpersonal trust mitigates the negative effect of an unfavorable transaction outcome on customers’ perceived fairness. When the transaction outcome is favorable, the above relational factors have no effect on customers’ perceived fairness. This implies that social obligations and interpersonal trust act as buffers against the influences of negative outcomes on customers’ evaluations. On the other hand, contradictory to our predictions, the ANOVA result shows that beliefs of relational norms boost customers’ fairness perception when the transaction outcome is favorable. A plausible explanation is that when the outcome is favorable, customers confirm their normative expectations of benevolent acts on the part of the sales agent, which in turn increases their perceived fairness. In this research, an explicit and unambiguous transaction outcome (i.e., a product rating in Consumer Report) was used as the manipulation. The empirical findings, however, provide convincing evidence that relational variables can alleviate the negative effect of unfavorable outcomes on customers’ perceived fairness. In daily purchases, quality and value of some products (e.g., credence goods like dietary supplements) is more difficult to evaluate. In such cases, it is anticipated that customers would be more reluctant to blame the sales agent for any outcome that seems unfavorable. As a result, sales agents in relational exchange could act opportunistically and capitalize on customers’ biased judgment for their own benefits. In conclusion, this research provides insights into the adverse consequences of relational exchange for consumer welfare. Previous research in relationship marketing predominately addresses the positive effects of social embeddedness and considers social relations as the by-product of successful exchanges over time. On the contrary, this research conceives social relations as an exogenous variable and tests their effects on consumers’ post-purchase perceptions. This research therefore reveals the potential dark side of relational exchange in consumer market. 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(1996), “Trust and Breach of Psychological Contract,” Administrative Science Quarterly, 41, 574-99. 706 Advances in Consumer Research Volume 33, © 2006 Author Index Abendroth, Lisa J. ......................................................... 516, 523 Adaval, Rashmi ..................................................................... 623 Aggarwal, Pankaj .................................................................. 115 Ahluwalia, Rohini ......................................................... 252, 447 Aikin, Kathryn ....................................................................... 381 Alba, Joseph W. ..................................................................... 452 Alon, Anat Toder ................................................................... 501 Anderson, Laurel ..................................................................... 12 Argo, Jennifer J. ............................................................ 147, 334 Ariely, Dan .................................................................... 254, 681 Arnould, Eric J. ............................................................... 82, 651 Ashworth, Laurence .............................................................. 236 Atalay, A. Selin ..................................................................... 259 Auh, Seigyoung ..................................................................... 139 Banister, Emma N. ........................................................ 343, 390 Barb, Carmen ......................................................................... 445 Bardhi, Fleura ........................................................................ 651 Barrett, Daniel W. .................................................................. 276 Bartmann, Benedikt ............................................................... 163 Bechara, Antoine ................................................................... 636 Becker-Olsen, Karen ............................................................. 578 Behairy, Nivein ..................................................................... 304 Belk, Russell W. .................................................................... 5, 9 Bengtsson, Anders ................................................................. 375 Bergvall, Sven ........................................................................... 7 Bettany, Shona ....................................................................... 227 Bettman, Jim .......................................................................... 692 Beverland, Michael ............................................................ 21, 98 Bhatnagar, Namita ................................................................. 282 Bickart, Barbara ..................................................................... 593 Biswas, Abhijit ...................................................................... 527 Biswas, Dipayan .................................................................... 527 Bode, Matthias ....................................................................... 580 Boller, Gregory ...................................................................... 428 Bond, Samuel D. ................................................................... 245 Bonsu, Samuel K. ...................................................................... 9 Borgerson, Janet L. ................................................................ 591 Botti, Simona ................................................................. 455, 512 Boush, David ......................................................................... 445 Bowman, Gale D. .................................................................. 536 Brasel, S. Adam ..................................................................... 305 Briers, Barbara ....................................................................... 146 Briñol, Pablo .......................................................................... 509 Brown, Brian P. ..................................................................... 337 Brown, Christina L. ....................................................... 331, 519 Brown, Stephen ..................................................................... 155 Brownlie, Douglas ................................................................... 36 Brunel, Frédéric F. ......................................................... 276, 501 Bruyneel, Sabrina .................................................................... 46 Buchanan-Oliver, Margo ....................................................... 350 Burns, Alvin C. ...................................................................... 606 Burson, Katherine .......................................................... 113, 569 Burton, Helen Woodruffe ...................................................... 227 Büttner, Oliver B. .................................................................. 197 Caldwell, Marylouise ................................................................ 6 Carlson, Kurt A. .................................................................... 245 Catterall, Miriam ........................................................... 222, 672 Cayla, Julien .......................................................................... 458 Chalmers, Tandy D. ................................................................. 15 Chandran, Sucharita ...................................................... 250, 516 Chang, Chingching ................................................................ 503 Chang, Chun-Tuan ................................................................ 104 Chapa, Sindy ........................................................................... 10 Chatterjee, Subimal ......................................................... 75, 562 Chatzidakis, Andreas ............................................................. 693 Chelminski, Piotr ................................................................... 466 Chen, Yu ................................................................................... 5 Chen, Cathy Y. ...................................................................... 526 Chen, Qimei ........................................................................... 301 Chin, Wynne W. ...................................................................... 96 Chiou, Jyh-Shen .................................................................... 161 Chng, Raymond ..................................................................... 464 Cho, Cecile ............................................................................ 475 Cho, Hyejeung ........................................................ 319, 331 637 Choi, Beomjoon ..................................................................... 252 Chowdhury, Tilottama G. ...................................................... 453 Chronis, Athinodoros ............................................................ 367 Chuang, Shin-Chieh .............................................................. 237 Chung, Emily ........................................................................... 98 Cialdini, Robert B. ................................................................. 276 Cismaru, Magdalena .............................................................. 271 Close, Angeline ..................................................................... 356 Cole, S. Jason ............................................................................ 8 Corneille, Olivier ................................................................... 284 Cornelissen, Gert ................................................................... 284 Cornwell, T. Bettina .............................................. 312, 428, 543 Coskuner, Gokcen ................................................................... 63 Coulter, Robin ............................................................... 453, 466 Craig-Lees, Margaret ............................................................. 274 Cronley, Maria L. .................................................................. 247 Czellar, Sandor ...................................................................... 274 Dahl, Darren W. .................................................................... 323 Dalli, Daniele ........................................................................... 87 Darke, Peter R. .............................................................. 147, 236 Davis, Lenita ......................................................................... 419 Davis, Teresa ......................................................................... 335 Dawar, Niraj .......................................................................... 324 Decker, Seamus ..................................................................... 296 DeHouwer, Jan ...................................................................... 699 Dekimpe, Marnik G. ................................................................ 46 Dellaert, Benedict G.C. ......................................................... 195 DeMarree, Kenneth G. .......................................................... 509 DePelsmacker, Patrick ........................................................... 699 Desai, Kalpesh ....................................................................... 321 Dewitte, Siegfried ............................ 46, 284, 314, 399, 448, 565 Dhar, Ravi ............................................................................... 57 Dimofte, Claudiu V. ...................................................... 276, 312 Dobscha, Susan ..................................................................... 520 Domke, Anja ......................................................................... 163 Dong, Weiming ..................................................................... 276 Dowdles, Melissa .................................................................. 599 Downey, Hilary ..................................................................... 672 Droms, Courtney ................................................................... 282 Du, Shuili ............................................................................... 516 Dubé, Laurette ....................................... 263, 296, 302, 409, 636 Duclos, Rod ........................................................................... 681 Duhachek, Adam ................................................................... 261 Dutta, Sujay ........................................................................... 527 Duxbury, Linda ..................................................................... 599 Einwiller, Sabine ........................................................... 270, 335 Eisenstein, Eric M. ................................................................ 403 Ekici, Ahmet .......................................................... 280, 429, 613 707