Evaluating the effect of cost related factors on relationship quality: An investigation of retailer-supplier relationship in Bangladesh

Abstract

Purpose – In today's competitive retail industry maintaining relationships with suppliers has become very important to modern day retailers. To develop and maintain long-term relationships with their suppliers, retailers need to identify and understand the key antecedents enhancing the quality of their relationships. The purpose of this paper is to evaluate the effect of the cost related factors on relationship quality in the retail industry. Design/methodology/approach – This study is exploratory in nature and involved factor and multiple regression analysis. Data were cross sectional in nature and the unit of analysis was individual retail companies in Bangladesh. Findings – Results derived from the exploratory factor analysis revealed a new factor named operational cost. The results of the regression analysis showed that termination cost became the strongest predictor influencing the quality of a retailer's relationship with its suppliers. Research limitations/implications – The characteristics of the three cost related factors from the study indicated that future research should focus on and incorporate other factors influencing relationship quality in retail settings. Practical implications – The results from the study identified a few key cost factors, based upon which the retailers can take necessary steps to develop effective relationship marketing strategies with their suppliers. Social implications – The findings from this research can guide retailers to enhance their relationship with their suppliers, thus contributing toward a more harmonious working environment within the B2B domain. Originality/value – The research is based on primary data collected from Bangladesh's retail industry.