The mediating role of trust in the relationship between key account management programs and commitment: a dealer perspective

MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HOCHIMINH CITY

NG

THE MEDIATING ROLE OF TRUST IN THE
RELATIONSHIP BETWEEN KEY ACCOUNT
MANAGEMENT PROGRAMS AND COMMITMENT:
A DEALER PERSPECTIVE

MASTER THESIS

Ho Chi Minh City – 2012


MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HOCHIMINH CITY

NG

THE MEDIATING ROLE OF TRUST IN THE
RELATIONSHIP BETWEEN KEY ACCOUNT
MANAGEMENT PROGRAMS AND COMMITMENT:
A DEALER PERSPECTIVE
MASTER THESIS

In
Business Administration
Ology code: 60340102

Supervisor

Mai Trang

Ho Chi Minh City – 2012


i

ACKNOWLEDGEMENT
I would like to give my sincere thanks to Dr. Nguy n Th Mai Trang, who had
dedicatedly instructed me to approach every particular matter from the research method
guidance to intensive support and valuable suggestions for the final completion of this
thesis.
I would also like to express my gratefulness to the respected teachers from the
University of Economics Ho Chi Minh City for their devotions in training and
education. We inherited much knowledge and experiences thanks to them.
I truly appreciate the helps of my colleagues, my friends in eMBA class course
K19, and my partners. This research could not be completed successfully if such helps
of knowledge and field work data collection were not supported by them.
My special thanks are given to my beloved family and my wife, Phạm Ngọc
P ươ g Trúc who has encouraged me much to complete this thesis.

Ho Chi Minh City, October 2012.
Nguy n Hải Đô


ii

TABLE OF CONTENT
ACKNOWLEDGEMENT ................................................................................................i
TABLE OF CONTENT ...................................................................................................ii

LIST OF FIGURES.......................................................................................................... v
LIST OF TABLES ........................................................................................................... v
ABSTRACT ..................................................................................................................... 1
Chapter 1 .......................................................................................................................... 2
INTRODUCTION ............................................................................................................ 2
1.1. Research background............................................................................................. 2
1.2. Problem statement ................................................................................................. 3
1.3. Research questions ................................................................................................ 4
1.4. Research objectives ............................................................................................... 4
1.5. Research Methodology and Scope ........................................................................ 5
1.6. Structure of the research ........................................................................................ 5
Chapter 2 .......................................................................................................................... 7
LITERATURE REVIEW................................................................................................. 7
2.1. Introduction ........................................................................................................... 7
2.2. High-technology attributes and their effects ......................................................... 8
2.2.1. High technology attributes .............................................................................. 8
2.2.2. Effects of high-tech attributes:...................................................................... 10
2.3. Trust ..................................................................................................................... 12
2.4. Key Account Management (KAM) programs ..................................................... 12
2.4.1. Responsiveness ............................................................................................. 13
2.4.2. Information ................................................................................................... 14
2.4.3. Logistics ........................................................................................................ 15
2.4.4. Tailor-made promotions ............................................................................... 16
2.5. Commitment ........................................................................................................ 16


iii

2.6. Conceptual Model ............................................................................................... 17
2.7. Summary of hypotheses ...................................................................................... 18

Chapter 3 ........................................................................................................................ 19
METHODOLOGY ......................................................................................................... 19
3.1. Introduction ......................................................................................................... 19
3.2. Research design ................................................................................................... 19
3.3. Measurement ....................................................................................................... 19
3.3.1. Independent variables ....................................................................................... 21
3.3.1.1. Responsiveness .............................................................................................. 21
3.3.1.2. Information .................................................................................................... 21
3.3.1.3. Logistics ........................................................................................................ 22
3.3.1.3. Tailor-made promotions ................................................................................ 22
3.3.2. Dependent variables ......................................................................................... 23
3.3.2.1. Trust ............................................................................................................... 23
3.3.2.2. Commitment .................................................................................................. 24
3.4. Questionnaire translation ..................................................................................... 24
3.4. Pilot study ............................................................................................................ 25
3.5. Main study ........................................................................................................... 25
3.6. Research sampling ............................................................................................... 26
3.6.1. Sample size ................................................................................................... 26
3.6.2. Selecting the samples .................................................................................... 26
3.6.3. Collecting data .............................................................................................. 27
3.7. Statistical tools..................................................................................................... 28
3.7.1. Cleaning data process ................................................................................... 28
3.7.2. Reliability...................................................................................................... 28
3.7.3. Explanatory Factor Analysis......................................................................... 28
3.7.4. Regression analysis ....................................................................................... 29


iv

3.8. Conclusion ........................................................................................................... 29

Chapter 4 ........................................................................................................................ 30
DATA ANALYSIS AND RESULTS ............................................................................ 30
4.1. Introduction ......................................................................................................... 30
4.2. Data cleaning ....................................................................................................... 30
4.3. Description of the qualified respondents ............................................................. 30
4.4. Reliability Test of measurement.......................................................................... 31
4.5. Exploratory Factor Analysis ................................................................................ 32
4.6. Analysis of correlations ....................................................................................... 37
4.7. Test of Hypotheses .............................................................................................. 37
4.7.1. Test the appropriateness of model and assumptions for MLR ..................... 37
472

e effects of KAM P o ams’ facto s o t st (H1, H2a, H2b, H3, a d H4)

................................................................................................................................ 38
4.7.3. The effect of Trust on Commitment ............................................................. 41
4.8. Conclusions ......................................................................................................... 42
Chapter 5 ........................................................................................................................ 43
DISCUSSION AND IMPLICATIONS ......................................................................... 43
5.1. Findings of the study ........................................................................................... 43
5.2. Practical implications .......................................................................................... 46
5.3. Contributions of the study ................................................................................... 47
5.4. Limitations and recommendations for future research ........................................ 48
LIST OF REFERENCES ............................................................................................... 49
APPENDIX IA: QUESTIONNAIRE (Vietnamese version) ......................................... 53
APPENDIX IB: Results of the quantitative pilot study ................................................. 55
APPENDIX II: Descriptive statistics of variables ......................................................... 57
APPE

IX III: Meas eme t scales eliabilit of o i i al model’s va iables ............. 58

APPENDIX IV: Measurement scales eliabilit of adj sted model’s ew va iables .... 61


v

APPENDIX V: Exploratory Factor Analysis (EFA) ..................................................... 62
APPENDIX VI: Test of MLR assumptions ................................................................... 70
LIST OF FIGURES
Figure 2.1: Proposed research model ............................................................................. 18
Figure 3.1: The process of the study .............................................................................. 20
Figure 4.1: Adjusted research model ............................................................................. 36
Figure 4.2: Results of model 1 ....................................................................................... 40
Figure 4.3: Results of model 2 ....................................................................................... 42
LIST OF TABLES
Table 3.1: Responsiveness Scale ................................................................................... 21
Table 3.2: Information Scale ......................................................................................... 21
Table 3.3: Logistics Scale ............................................................................................. 22
Table 3.4: Tailor-made promotions Scale ..................................................................... 22
Table 3.5: Tailor-made promotions Scale ..................................................................... 23
Table 3.6: Commitment Scale ....................................................................................... 24
Table 4.1: Characteristics of the samples ...................................................................... 31
able 4 2: S mma

of C o bac ’s Alp a of meas eme t scales .............................. 32

Table 4.3: Rotated Component Matrix ......................................................................... 34
able 4 4: S mma

of C o bac ’s Alp as wit 2 ew ............................................... 35

Table 4.5: Correlation matrix ........................................................................................ 37
Table 4.6: Multiple Linear Regression: Model 1 Summary ......................................... 39
Table 4.7: Multiple Linear Regression: Model 1 ANOVA .......................................... 39
Table 4.8: Multiple Linear Regression: Model 1 Coefficients ..................................... 39
Table 4.9: Multiple Linear Regression: Model 2 Summary ......................................... 41
Table 4.10: Multiple Linear Regression: Model 2 ANOVA ........................................ 41
Table 4.11: Multiple Linear Regression: Model 2 Coefficients ................................... 41
Table 5.1: The effects of sub-dimensions of Key Account Programs on Trust ............ 45


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ABSTRACT
In a fast-changing environment of high-tech industry in Vietnam, the role of key
account management programs has been realized to be truly important as it builds
strong commitment between suppliers and dealers. This study aims at exploring the
effects of ke acco

t ma a eme t p o ams’ facto s to t st a d co seq e tl , t st’s

effect to commitment.
A survey was conducted with a sample of 202 respondents who are purchasing
managers, owners and shop/floor managers represents for 8 key accounts in the hightech industry. Exploratory factor analysis and multiple linear regression was employed
to analyze the data.
It was found that Marketing and Sales Information, Product Information,
Responsiveness and Logistics have positive effects on Trust while Tailor-made
Promotions was not significantly related to Trust. Finally, Trust has a positive effect on
Commitment.
The results of this study suggest that suppliers should invest more resources in

exchange information with dealers, especially marketing and sales information;
responsiveness, logistics and product information are also deserved to invest time and
effort in order to enhance trust and consequently consolidate commitment. This study
contributes to the extant literature on key account management programs and is the
first kind to explore in the high-tech industry in Vietnam.
Keywords: Key account management programs, trust, commitment, Vietnam,
high-tech industry.


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Chapter 1
INTRODUCTION
1.1. Research background
Under the changes of economic environment and fierce competition, in the business to
business field, suppliers have employed Key Account Management (KAM) programs
to their business customers. These programs are designed to serve strategic or key
customers who contribute a large portion in terms of sales and profit. Such key
accounts play such a more important role than traditional ones (minor accounts)
(Pardo, 1997).
Key Account Management (KAM) has been received so many interests as most
of sales turnover generated by key customers (Shapiro and Moriarty, 1982; Cespedes,
1992). For enterprises who deal in high-tech industry, key accounts play a strategic role
in their short and long run. Such strategic customers deserve to be paid more attention
by suppliers. Suppliers have the sound reasons to invest more resources in the key
resellers in order to develop a close and valuable relationship, and maintain high trust
between the dyad. These activities are included in a strategic working design called
Key Account Management Program.
Literature has shown that a variety of researches investigating the effects of key
account management program on trust and consequently on commitment. Researches

by Kumar, 1996; Geyskens et al.., 1998 showed that building a program like key
account teams will lead to a high level of trust, and then will lead to a long term
commitment between the dyad. This will generate a win-win relationship for a long
run.
High technology industry is highly dynamic; it changes very fast as the speed of
technology circle. Technological products become obsolete in a very short period,


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value of such products decreases day by day. Doing business in this industry requires
high commitment as the environment is ever changing.
Vietnam is a developing and transformational economy. Commitment in doing
business is a big problem put ahead for such fast changing industry. It is argued that
Vietnamese businesses just pay more attention on the short term benefits; they can
break their commitment at ease to achieve their goals. Especially, in such a unstable
and fast changing environment like high technology, the problem turns out to be quite
popular. In order to catch up with the speed of change in the industry, and long for a
long term and sustainable development, businesses should develop a strategy in
building trust and in turn commitment among those by developing strategic programs
such as key account management programs.
In a transitio al eco om like Viet am, t e e’s a lack of researches on such
mentioned constructs, the effects of key account management programs on trust and in
turn commitment. Especially, little attention has been paid in the high-tech industry.
The question put forward is whether such constructs affect to the trust and
consequently commitment in the high tech industry, how strong they are and should
they deserve to be invested more in order to build a strategy for long term cooperation
between dyads. Empirical research is deserved to be carried out for a brighter view in
order to draw practical implications by investigating the effects of KAM programs on
trust and in turn commitment.

1.2. Problem statement
A number of studies have been carried out on the roles of KAM and its effects on trust
and commitment. Willem et al. (2004) has investigated the roles of KAM programs in
the fast-moving consumer goods industry. Faten Baddar Al-Husan and Ross Brennan
(2009) have studied the implementation of strategic account management in an
emerging economy in the Arab word to reassert the important roles and effects of the


4

key/strategic account management programs. Such mentioned researches and literature
encourages investments in key account management programs to build trust and longterm commitment from customers. In a transitional and emerging economy like
Vietnam, such researches on key account managements programs has not, to the
a t o ’s best knowledge, received much interests from researchers, especially, in the
field of high-tech industry with a fast-changing environment.
Therefore, the problem addressed in this study is to investigate the effects of key
account management programs on trust and then on commitment from Vietnamese
dealers perspective in the high-tech field, such as telecommunications, electrical
appliances, and information technology.
1.3. Research questions
This research aims at answering the following questions:
- W at’s t e elatio s ip betwee ke acco

t ma a eme t p o ams’ facto s

on trust and consequently on commitment?
- What factors should be deserved for investment in order to build long-term
win-win business cooperation?
1.4. Research objectives
The overall objective of this research is to examine effects of key account management

programs to commitment via trust. Key account management programs are constituted
of responsiveness, information, logistics, and tailor-made promotions. Therefore, the
specific objectives of this research are to investigate the following relationships:
1. The relationship between responsiveness and trust
2. The relationship between information and trust
3. The relationship between logistics and trust
4. The relationship between tailor-made promotions and trust; and
5. The relationship between trust and commitment.


5

This research will investigate such relationships from Vietnamese dealer
perspective. Consequently, findings will show some facts, and then practical
implications are proposed.
1.5. Research Methodology and Scope
This research focuses on surveying 8 key accounts (dealers) in high-tech industry
located in all the provinces of Vietnam where selected dealers have offices and
branches. Total correspondents will be targeted at about 210 samples.
The research comprises 2 stages: pilot and main study. In the first stage a
qualitative approach was used to explore whether the scales for measuring the
constructs are suitable or not. Then, some amendments had been made where is
necessary.
In the second stage, a quantitative approach was employed. By interviewing
dealers, data were collected for analysis. This phase is to test the reliability of the
measurement scales using C o bac ’s alpha coefficient and Exploratory Factor
Analysis (EFA). Multiple Linear Regression analysis (MLR) was employed to test the
research model and hypotheses. SPSS software version 16 was used for data analysis
1.6. Structure of the research
The structure of this research consists of five chapters:

Chapter 1: Introduction
This chapter presents research background of the study, as well as, research problems,
research objectives, research methodology and scope.
Chapter 2: Literature Review


6

In this chapter, literature review has been summarized. This chapter would present a
research model of the research.
Chapter 3: Methodology
Based on the research objectives and scope, research methodology concerned in
chapter 1, and literature review and empirical model presented in chapter 2, this
chapter particularly presents the research methodology, data, research design and
research process.
Chapter 4: Data Analysis and Results
This chapter presents the characteristics of research samples and measures concepts of
the research. Descriptive statistics was used to explore the features of explanatory
variables, as well as the relationship between the variables.
Chapter 5: Discussion and Implications
This chapter presents findings of the study, practical implications, contribution of the
research. Some limitations of the research will be mentioned and directions are
recommended for future research.


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Chapter 2
LITERATURE REVIEW
2.1. Introduction

In this chapter, a review of the literature will be conducted on key account
management, trust and commitment. Relationship among those constructs will be
reviewed in the shine of prior studies which will incur some relevant theories. The
purpose of reviewing the literature is to clearly define the constructs and to propose a
research model, then to generate hypotheses which will be tested in the Vietnamese
high-tec i d st

f om deale ’s pe spective

In a modern business society, KAM has proved its emerging importance;
literature has developed with different facets of KAM. Nevertheless, although
empirical studies has been carried out, further research recommendations were urged to
test deeper in a different extent, particular context. Researches on the relationship
between trust and commitment have been conducted in the marketing literature.
Geykens et al. (1998) summarized important findings that trust can be perceived as an
important mediator between the antecedents of commitment and commitment itself
(Morgan and Hunt, 1994).
Therefore, the main purpose in this research is to investigate the relationships
among KAM factors and trust then commitment in the business dyads especially in the
field of high-tech industry. In the following section, a review of the attributes of hightech industry and its effects would be presented, then a description of the nature of key
account management programs, trust and commitment. Following this review, a set of
hypotheses is developed. After all, some conclusions will be drawn for further testing
purposes.


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2.2. High-technology attributes and their effects
2.2.1. High technology attributes
As this research focuses on the high-tech field, attributes of high-tech products should

be defined to characterize and distinguish from other product categories. From the
extant literature of high-technology marketing, five high-tech attributes were derived.
In fact, there are several attributes were generated by extant studies; however, those
attributes are interrelated although appeared in different texts. These five attributes
covers mostly dimensions referred in the literature It’s c cial to cla if s c att ib tes
and effects of high-tech industry before deeply discuss about the literature review of
the constructs of the research model. Due to such attributes and effects, clearer
hypotheses shall be derived. These five high-tech attributes and their effects are
presented in the following section.
Short product life cycle. High-tech products have shorter life cycle stages in
comparison with ordinary products (Rosenau, 1988). This means such products will
increase sales sharply in a very short period of time and decrease quickly. This shows a
constant technological change, and with its continuous changes, its product life cycle
will be very short for a particular product line.
Greater risk of discontinuous change in product technology. A discontinuous
change is understood as a change that creates a total change in consumption, customer
profiles… If this happens, business competence will be eliminated because current
k owled e is i capable to develop a d ma ket ew p od cts

at’s w

i

-tech

products have greater chances of discontinuity and becomes obsolete in a very short
time. Weiss and Heide, 1993 referred high-tec att ib te as “unpredictability” It’s t e
result of discontinuous innovation in high-tech industry.

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Indispensability of associated infrastructure. Supporting infrastructure is
considered vital element for a success of high-tech product launch. In addition, such
infrastructure should follow the fast changing speed of high-tech products. For
example, MacInnis and Heslop (1990) and Moriatry and Kosnik (1989) consider the
existence of a well-established service network to be a vital component in the
marketing mix of high-tech products. For example, a mobile phone device should not
be marketed successfully if mobile network is not well established. Supporting
infrastructure includes complementary products which facilitate functioning of the
high-tech product, vital supplies and spares, service people who have qualified skills to
set up and fix the product. A high-tech product will become useless if the
complementary products are not compatible and unavailable; such product will not
penetrate into the market well and will not be accepted by end users.
Lack of well-established industry standards. High-tech products are developed
continuously to meet the changing demands. That means such products should satisfy
the same needs operate with different standards. To generate a standard for
be c ma ki

, it s o ld take a ve

lo

time It’s a

p edictable p ocess A p od ct

currently appears as dominant design, but a newcomer with a revolutionary design will
confound the market and take the dominant position. According to Utterback (1994):
“

A dominant design is the one that wins the allegiance of the market place,

the one that competitors and innovators should adhere to if they hope to
comma d si ifica t ma ket s a e”
Take the example of Apple with the re-invention of Iphone, it has defeated to some
extent the long dominance of Nokia in the mobile phone market.
Uncertainty about product functionality. A high-tech product has a high
uncertainty in functional variables. Moriatry and Kosnik (1989) consider all such


10

functionality-related

ce tai ties

de t e

eadi

“ma ket elated

ce tai t ”

From the beginning, an end-user finds it hard to match their needs with benefits of
p od ct’s offe i s. Then, to switch a product to another, it takes very high cost. A
survey conducted by O2 network operator (O2, 2012) reported that phone calls are not
the main function of the smartphones, but internet, social media, music and games are
prevailing while it is originally designed for making a call! Mo eove , it’s really

difficult to oversee the market changes. Those contribute to the high uncertainty level
of high-tech product functionality.
2.2.2. Effects of high-tech attributes:
Effects due to the shorter product life-cycles. In each stage of the product life-cycle,
there are different consumer segments. Butaney and Wortzel (1988) affirmed that when
a apid sta e of p od ct life c cle occ s, t e e’s a change in c stome ’s p ofile Fi ms
need to adjust their marketing strategy to target their customer segments on the
innovation curve (Moore, 1991). When technology continuously changes and matures,
consumers tend to search for a new criterion to evaluate products (Christensen, 1997).
Therefore, dealers and retailers, who represent for suppliers in connection with
customer segments, continuously change their orientations. Shorter product life cycle
affects the dyad relationship on pricing, price tends to decline, consequently affects
marketing costs, margin on the dyad. This requires tighter cooperation and high trust
between the dyad to optimize business performance for both sides.
Effects due to the greater risk of discontinuous change in product technology.
High-tech products are characterized by unpredictable and sudden changes, such
changes are followed by fluctuation on consumption pattern, user profile,
complementary products and demand curve (Robertson, 1971). Those require dealers
to improve their expertise to deal with suppliers. Otherwise, dealers will be out of date.


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Furthermore, suppliers will risk losing ma ket’s co fide ce If close coope atio a d
trust are not existed, all above bad effects will cause troubles for both sides.
Effects due to the non-existence of industry standards. Moriatry and Kosnik
(1989) stated t at it’s eas fo s pplie s a d dist ibutors to persuade customers if
t e e’ e existi

i d st ial sta da ds Lack of t ose, c stome s will spe d mo e time

and effort in search process. Firms need to spend more resources in customer
education. Moreover, purchasing behavior in high-tech products requires complicated
process of seeking and analyzing information at every stage. That forces dealers to
collect and learn more knowledge to best serve their customers for winning them. A
high trust and cooperation manner is vital for achieving that.
Effects due to the indispensability of supporting infrastructure. Supporting
infrastructure development is very important for high-tech products adoption. Dealers
with close contacts with customers will grasp the status of supporting infrastructure in
the market. Besides, installation and servicing play key roles in high-tech product
offerings (Moriatry and Kosnik, 1989; MacInnis and Heslop, 1990). Suppliers with
well-trained service team, together with good cooperation with dealers will support for
the success of marketing high-tech products.
Effects due to the uncertainty in product functionality. Customers in high-tech
field really concern about the installation and maintenance as technology is very
advanced, and becomes obsolete quickly. Moreover, the switching cost is quite high. In
such uncertainty, to gain confidence in customers, marketing must focus on creating
relationship rather selling products (McKenna, 1991). This only happens since
suppliers and dealers work on an united organization. Thus, mutual trust is required
between the dyad.


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2.3. Trust
Trust was defined as honesty or credibility (Geyskens et al., 1998). In the channel
literature, trust was defined:
[

] t e fi m’s belief t at a ot e compa

will pe fo m actio s t at will es lt

in positive outcomes for the firm, as well as not take unexpected actions that
would result in negative outcomes for the firm (Anderson and Narus, 1990, p.
45).
Butler (1991) suggested trust compositions include ten dimensions. Those are
integrity, consistency, promise-fulfillment, receptivity, loyalty, fairness, competence,
discretion, openness, and availability. In this research, a narrower view of trust is
concerned, where trust is near to ethical treatment of suppliers rather than other
dimensions such as competence, openness, and availability. This research measures
t st close to i te it a d p omise f lfillme t f om B tle ’s dime sio s
Trust occurs in cognitive and affect-based forms. In cognitive form, trust
implies reliable role performance, cultural-ethnic similarity, and professional
credentials. In affect-based form, trust acts as a function of citizenship behavior and
interaction frequency (McAllister, 1995) (as cited in Robert, 2002)
2.4. Key Account Management (KAM) programs
In order to adapt changes in the business environment, suppliers in business to business
(B2B) field applied so called Key Account Management (KAM) programs to catch up
wit s c

dete mi ed facto s i t e c stome s’ b i

be avio s a d dema ds

These programs were established to take care of significant customers who have
st ate ic impo ta ce i s pplie s’ b si ess


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The literature on KAM has shown on two main factors, one regarded as small
working individual groups set up to serve a number of important customers (accounts),
i.e. selling teams (e.g. Cespedes, 1992). The studies on selling teams have
predominantly been concerned with what distinguishes successful from unsuccessful
sales teams. The other focused on the management concept of key account
management programs, particularly in connection with buyer/seller relationships (e.g.
Shapiro and Moriarty, 1982; Pardo, 1997). This means a focus on enhancement of the
dyadic business relationships and the effectiveness of the KAM programs from this
perspective (e.g. Cespedes, 1992).
Partly adopted from the model of Willem et al. (2004), KAM programs consist
of personal and impersonal factors which effect on the dyad relationship. Personal
factors comprise similarity in values and responsiveness. In this context, similarity in
values is omitted as it is considered such a factor is not an important one contributed to
KAM programs in Vietnamese context in the high-tech field, this dimension will be
tested further in later studies. Impersonal factors consist of three sub-factors:
information, logistics and tailor-made promotions.
2.4.1. Responsiveness
Responsiveness refers to the extent to which suppliers deal with dealers’ problems in
an allowed time frame and effective manner. How patient and willing suppliers will act
upon dealers’ complai ts
Time of response is widely acknowledged as a competitive advantage by extant
literature, which raises the importance of supplying the right products at the right
quality, price within a minimum lead-time (Stalk, 1988). To achieve responsiveness,
particular types of flexibility to the market should be needed; flexibility is defined by
Oxfo d

ictio a

as “abilit to adapt” I ma a eme t lite at e, it is viewed as

reaction against uncertainties internally and externally (Gerwin, 1993).


14

Literature suggests that suppliers who can respond quickly to changes in
customer demands will significantly improve customer satisfaction (Robert et al.,
2002). As a result, trust will be enhanced as relationship quality and loyalty are
established due to improved satisfaction. In such a dynamic and fast –changing
environment of high-tech industry with its characterized attributes, responsiveness
appears to be more significant than any other fields. Therefore,
H1: Responsiveness has a positive effect on Trust.
2.4.2. Information
Information refers the extent of information is importantly exchanged between the
supplier and its buyer (Mohr and Spekman, 1994). Information contents are shared
such as inventory, planning, capacity and quality, logistics, new product knowledge,
etc…
Sharing of information refers to “s a i
betwee

fi ms” (A de so

a d

of mea i

f l a d timel i fo matio

a s, 1990, p 44) I fo matio

s ai

is truly

essential for tightening the dyad relationship (Mohr and Nevin, 1990).
Information sharing brings benefits to the buyer-supplier relationship:
information is delivered throughout all parties, a closer relationship between buyer and
supplier, new information is executed accurately and timely (Zhou and Benton, 2007).
Narayanan and Raman (2004) found in their studies on information sharing that
in some cases, information is hidden by supplier to benefit themselves, but eventually
got failure in the whole supply chain. Therefore, information sharing should attach
with integrity to build trust between the dyad for a long-term cooperation.
Information plays a critical role in business relationship (Cannon and Homburg,
2001) (as cited in Tho, 2011). Information support from suppliers can create value for
the dyadic relationships. Once information flow is smoothly transferred from suppliers
to c stome s, c stome s ca a ticipate s pplie s’ st ate ic moves a d pote tial c a

es


15

in the industry. In the high-tech industry, changes of information happen quickly with
high speed, an accurate and continuous flow of information exchanged from suppliers
will foster the mutual relationship, hence increase trust. Thus,
H2: Information has a positive effect on Trust.
2.4.3. Logistics
Logistical considerations appear in orders taking and fulfilling. Anderson and Weitz
(1992)

ed s pplie s to make eav i vestme t i lo istics so called “idios c atic

i vestme t”
Negri (1997) suggested that logistics quality should be taken into consideration
and logistics effectiveness should be evaluated together with customer orientation by:
Analysis, which is to interpret lo istics fo c stome ’s dema d a d s pplie ’s capacit ;
Pla i , w ic

is to assess c stome ’s expectatio

a d pe ceptio

o

q alit ;

Production, which is to define, design and manage logistics components; Control,
which is to evaluate logistics performance and quality levels.
Lo istics q alit s o ld be pa tic la ized t o
satisf

c stome ’s eq i eme ts

s pplie ’s se vice facto s to

ose i cl de: se vice polic , delive

s stem,

people, and internal organization to assure essential functions, long-term suppliercustomer relationship.
Logistics operations also reflect the performance of delivery. Tho (2011) asserts
that delivery performance contributes to the value of dyadic relationship. There are
three aspects of delivery performance: on time, flexibility and accuracy (Ulaga and
Eggert, 2006) (as cited in Tho, 2011).
Logistics, therefore, plays an important role in building trust and commitment between
the dyad on a long-term basis. Consequently,
H3: Logistics has a positive effect on Trust.


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2.4.4. Tailor-made promotions
Tailor-made promotions refer to promotional activities which are tailored or
customized for dealers to offer an advantage of differentiation from other programs.
The promotional mix comprises advertising, direct marketing, personal selling, sales
promotions and public relations (Kotler, 2000: 551). Unlike business-to-customer
perspective, in this B2B circumstance, those particular promotional activities are tailormade for dealers.
In high-tech industry, promotional activities needed to be tailored case by case
for different key accounts in order for supplier to effectively run the marketing
campaigns. Unlike any other types of customers, key accounts play a crucial role in
supplie ’s sales st ate , p omotio al activities s o ld ot be

mass w ic is mo e

suitable for traditional accounts. Therefore,
H4: Tailor-made Promotions have a positive effect on Trust.
2.5. Commitment
Commitme t

efe s to “t e adoptio

of a lo

-term orientation towards the

elatio s ip” (A de son and Weitz, 1992, p. 19) and goes beyond a simple evaluation
of the costs and benefits associated with the relationship. This describes the willingness
to make short-term sacrifices to realize long-term benefits
Buchanen (1974) suggests that commitment comprises subjective facets of
elatio s ips “apa t f om p el i st me tal wo t ” Fo i sta ce, commitme t ma
consist of affective bonds and felt obligations.
Trust and commitment are constituted factors to foster business relationships.
The effects of those result in different outcomes: positive attitudes towards the
relationship, the encouragement of positive behaviors in partners and positive impacts


17

on partner performance. Positive attitudes consist of a

imp oveme t i

pa t e ’s

acquiescence (Morgan and Hunt, 1994), mutual satisfaction and positive attitudes and
intentions towards one another (Mohr and Spekman, 1994). Positive behaviors in
partners are showed in improved cooperation, higher risk-taking, and lower tendency to
leave and minimized opportunistic behavior (Ghoshal and Moran, 1996).
st a d commitme t

ave bee

li ked to et e to imp ove t e d ad’s

performance by lowering uncertainty, enhance efficiency and positively affect
economic performance (Anderson and Narus, 1990; Morgan and Hunt, 1994). In the
high-tech industry characterized by its distinct attributes and effects, high trust and
commitment are both required and linked together. Thus,
H5: Trust has a positive effect on Commitment
2.6. Conceptual Model
Based on the literature review, partly adopted the model of Willem et al. (2004), a
conceptual model is developed and shown in the Figure 2.1. The model describes the
relationships between factors of KAM programs and trust, and consequently on
commitment.


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Responsiveness

H1 (+)
H2 (+)

Information

H5 (+)
H3 (+)

Trust

Logistics
H4 (+)

Tailor-made Promotions

Key Account Management
Programs
Figure 2.1: Proposed research model
2.7. Summary of hypotheses
In reviewing of the literature, hypotheses are summarized as follows:
The effects of Key Accounts Management Programs factors on Trust:
H1: Responsiveness has a positive effect on Trust
H2: Information has a positive effect on Trust
H3: Logistics has a positive effect on Trust
H4: Tailor-made Promotions have a positive effect on Trust
The effect of Trust on commitment:
H5: Trust has a positive effect on Commitment.

Commitment