Editorial

Citation

Towers, N. (2010), "Editorial", International Journal of Retail & Distribution Management, Vol. 38 No. 9. https://doi.org/10.1108/ijrdm.2010.08938iaa.001

Editorial

Article Type: Editorial From: International Journal of Retail & Distribution Management, Volume 38, Issue 9

For this edition, we have four quite different papers that address different activities of governance mechanisms for franchise arrangements, the importance of local small retail outlets, the influence of distribution systems and customer loyalty and the role of trust and confidence/pessimism in influencing consumer attitudes and buying intentions.

The first contribution by Jacques Boulay considers how different governance mechanisms affect the level of franchisees’ compliance with their franchisor’s directives. The paper has three objectives. The first is to investigate how franchisors can use explicit contracts and develop relational norms as governance mechanisms to prevent their franchisees from deviating from the franchise system directives. The second objective is to show how information systems can allow control of franchisees at a distance. And finally, the third objective is to throw light on the ways in which these three control mechanisms can play alternatively or simultaneously in the management of franchise relationships. Overall, the results support an emphasis on contract and information systems in the management of the risks of “free riding” behaviour in franchise systems. The results indicate that formal control mechanisms are more efficient in the management of franchise systems; whereas, relational norms are less so. However, they do not reveal that all combinations of control mechanisms are more efficient in disciplining agents. Recommendations can be used by franchisors to implement an effective control strategy.

The second paper by J. Andres Coca-Stefaniak, Cathy Parker, Patricia Rees presents the results of an exploratory study into the importance of the local, as represented by small retail outlets, to the economy in Seville (Spain) and Perth (Scotland). The paper seeks first to understand how “localisation” impacts on the business practices and marketing strategy of small retailers in Spain and Scotland and second the results should help lessen the gap between the concepts of globalisation and localisation. In spite of the dominance of a few large players in the retail sector (the market share of the top ten European grocery retailers has been estimated by the Institute of Grocery Distribution at 28 per cent), it continues to be small and medium-sized enterprises (SME) that “deliver” in terms of employment and national market share in individual countries. The study suggests that place attractiveness, word-of-mouth customer-to-customer marketing, customer service beyond simple product advice, community embeddedness and informal but meaningful interpersonal relations between shop owner and customers are some of the key pillars of the “localisation” strategic marketing approach pursued by small retailers in Perth and Seville. This indicates a counterbalance to globalisation. The pursuit of a deliberate localisation approach by small retailers may be key to their sustainable competitiveness in the knowledge that these elements would not be easily replicated by larger or global retailers.

The third paper by Mei Su Chen, Gene C. Lai examines the influence of distribution systems and customer loyalty on firm performance using efficiency scores and profitability as the proxies for performance. The data-envelopment analysis approach is used to calculate efficiency scores from a sample from the Taiwanese life insurance industry. Their results suggest that a multiple distribution channel strategy performs worser than a single distribution channel strategy in terms of efficiency and profitability. They also find that agent turnover rate is negatively related to technical efficiency, cost efficiency and profitability. The evidence also suggests that insurers with higher customer loyalty perform better than insurers with lower customer loyalty which can assist insurers to make decisions on distribution channels and improve agent turnover rate and customer loyalty.

The fourth paper by Constantine Lymperopoulos, Ioannis E. Chaniotakis, Irini D. Rigopoulou analyses the role of “trust” and “confidence/pessimism” in influencing consumer attitudes and buying intentions with respect to retail brands and products. The paper presents a conceptual model of buying intentions regarding retail brands which then tested quantitatively by SME analysis using a sample of adult consumers that are decision makers in their households regarding purchases of detergent brands. The results show that the consumers’ degree of confidence/pessimism regarding their general economic situation and their trust in retail brands are directly influencing the perceived benefits and indirectly their attitudes the later having a direct impact on their purchase intentions. Their study provides novel insights into consumer behaviour with regard to detergent retail brands and in particular, the variable of “confidence/pessimism” is especially relevant in the context of the prevailing adverse economic conditions.

Professor Neil Towers