Relationship Quality: What It Means in Indian Retail Context?

Relationship Quality: What It Means in Indian Retail Context?

Ekta Duggal (University of Delhi, Delhi, India) and Harsh V. Verma (University of Delhi, Delhi, India)
DOI: 10.4018/IJABIM.2017070102
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Abstract

With services becoming the impetus of growth in economies across the world, quality has emerged as one of the critical issues that need adequate attention. Customers have a larger role to play in defining the success of services as these are customer-oriented in nature. The complex nature of services makes it imperative to satisfy customers in the most competitive manner. This necessitates creation of bond with the customers. Relationship quality as a comprehensive construct aims at development of trust, commitment and satisfaction with the customers. The present study seeks to validate the relationship quality scale in the context of retail services in India. This would contribute to the upcoming retail sector in India by revealing the crucial parameters of relationship quality as it will assist retailers in achieving market success based on healthy customers' relationships.
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Background

Business organizations have been forced to embrace relationship orientation in response to environmental ambiguity and uncertainty (Day, 2000). Customers are now informed, sophisticated and unpredictable (Buttle, 1999; Gronross, 1996). Most services have been localized, protected and hence have become less competitive. But now services are liberalized and have opened up to foreign participation. In India, service sectors like health care, air transportation, banking, insurance, education, and telecommunications have moved on to become highly competitive. The incidence of competition makes it imperative for firms to shift focus on customer retention as customer attraction becomes costly and ineffective (Christopher et al., 1991; Lehtinen, 1996). It is for these reasons that relationship building has become a widely-adopted philosophy (Noble & Phillips, 2004).

The retail market in India is unique in many ways compared to the Western countries. The industry is dominated by unorganized sector players, which constitutes more than 92% of total retail. These players are present in the form of small, family-owned mom and pop outlets and corner stores. Out of about 14 million total outlets, only less than 5% are of size more than 500sq.ft. (KPMG, 2014). The high numbers of retail outlets are spread out in wide geographic area which operate at small scale and make products available in close proximity. The absence of municipally designated residential and business areas has let to mixed land use. Accordingly, people are able to fulfill their buying needs by moving short distances. This makes the Indian shopper different from the Western shopper in many ways including high shopping frequency, small buying size and unplanned shopping trips. The low opportunity cost of frequent shopping trips to neighborhood stores provide fertile ground for ties development that extend into the psycho-social realm much beyond business transactions like buying and selling.

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