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 Chapter INTRODUCTION 1.1 Research background 1.2 Problem statement .3 1.3 Research questions 1.4 Research objectives 1.5 Research Methodology and Scope .5 1.6 Structure of the research Chapter LITERATURE REVIEW .7 2.1 Introduction .7 2.2 High-technology attributes and their effects 2.2.1 High technology attributes 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 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 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 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 40 Figure 4.3: Results of model 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 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: S mma of C o bac ’s Alp as wit ew 35 Table 4.5: Correlation matrix 37 Table 4.6: Multiple Linear Regression: Model Summary 39 Table 4.7: Multiple Linear Regression: Model ANOVA 39 Table 4.8: Multiple Linear Regression: Model Coefficients 39 Table 4.9: Multiple Linear Regression: Model Summary 41 Table 4.10: Multiple Linear Regression: Model ANOVA 41 Table 4.11: Multiple Linear Regression: Model Coefficients 41 Table 5.1: The effects of sub-dimensions of Key Account Programs on Trust 45 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 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 Chapter 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, 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 61 APPENDIX V: Measurement scales reliability of adjusted model’s new variables Marketing and Sales Information Cronbach’s Alpha I1 I2 I5 I6 I7 Scale Statistics Product Information Cronbach’s Alpha 845 I3 I4 I8 Mean 12.17 62 APPENDIX V: Exploratory Factor Analysis (EFA) EFA running of independent variables Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Compone nt 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Extraction Method: Principal Component Analysis 63 Rotated Component Matrixa R4 R2 R3 R6 R5 R1 P3 P5 P6 P7 P2 P4 P1 L4 L5 L3 L1 L2 I8 I3 I4 I2 I6 I1 I5 I7 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 64 Component Matrixa I5 R1 R6 R4 P4 L4 I1 P2 I6 P5 L2 L5 R5 I3 P7 I2 R2 L3 I7 I4 P1 R3 P6 I8 L1 P3 Extraction Method: Principal Component Analysis a components extracted 65 Second EFA running of independent variables after removing unqualified variable P4 Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Total Variance Explained Initial Eigen Component 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Extraction Method: Principal Component Analysis 66 Rotated Component Matrixa R4 R2 R6 R3 R5 R1 P3 P5 P6 P7 P2 P1 L4 L5 L3 L1 L2 I2 I6 I1 I5 I7 I8 I3 I4 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 67 Component Matrixa I5 R1 R6 R4 I1 L4 I6 P5 P2 R5 L5 L2 R2 I2 I3 L3 P7 I7 I4 P1 R3 P6 I8 L1 P3 Extraction Method: Principal Component Analysis a components extracted EFA running of Trust KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity 68 Total Variance Explained Compo nent Extraction Method: Principal Component Analysis Compon T5 T4 T2 T3 T1 Extraction Method: Principal Component Analysis a components extracted EFA running of dependent variable – Commitment Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Compo nent Extraction Method: Principal Component Analysis 69 C2 C6 C1 C5 C3 C4 Extraction Method: Principal Component Analysis a components extracted 70 APPENDIX VI: Test of MLR assumptions VI.a: Test of linear relationship and heteroskedasticity VI.b: Test of normal distribution of residual parts 71 ...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. .. 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... (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 key/ strategic account management programs