Loyalty and Disloyalty in Logistics Outsourcing Relationships

Loyalty and Disloyalty in Logistics Outsourcing Relationships

Jari Juga (University of Oulu, Finland) and Jouni Juntunen (University of Oulu, Finland)
DOI: 10.4018/978-1-4666-2008-7.ch024
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Abstract

The goal is to identify factors that lead to continuity as well as changes in logistics outsourcing relationships. This may entail an intention to change the service provider or alter the scope of an outsourcing arrangement. Service performance and facilitating factors, notably good inter-firm relationships, play a key role in predicting outsourcing relationship continuity. By contrast, it is the failure in personal service performance that is the critical factor behind the buyer’s intention to switch the service provider. The buyer’s intention to extend the scope of outsourcing does not show a significant relationship with any of the antecedent factors. The study is based on survey data of 235 industrial companies in Finland. Multivariate methods including factor analysis and regression equations are used to test the relationships between the antecedent factors and the various aspects of loyalty or disloyalty in logistics outsourcing arrangements.
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Theoretical Background

Customer loyalty is a critical, yet elusive concept. It has an attitudinal and behavioural dimension (Dick & Basu, 1994) and involves different stages (Oliver, 1999) or commitment levels from retention to repurchase and referral (Michael, 2007). Loyal customers are less costly to the seller than acquiring new ones and also increase revenues through repeat sales and referrals (e.g. Reichheld et al., 2000). Besides sellers, however, loyalty may also involve advantages for customers through functional benefits such as time savings and convenience as well as social benefits such as good relationships with business partners (e.g. Reynolds & Beatty, 1999).

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