Channel relationships from the perspectives of manufacturers and their connecting distributors in Indonesia

Abstract

Purpose – Paired channel relationship constructs are used to conjointly compare the perspectives of Indonesian manufacturers and their connecting distributors when engaging and relating across each shared marketing channel. The purpose of this paper is to hypothesize long-term orientation (LTO) and role-performance as joint drivers that positively influence dependence, satisfaction, and trust constructs for each manufacturer and distributor domain. Design/methodology/approach – A structural equation modelling-comparative model is developed, tested, and validated for the Indonesian manufacturing sector. The sample size is 140 pairs of mediumto- large-sized manufacturers and their connecting distributors. The respondent is individual who is responsible and knowledgeable in dealing with his/her company’s manufacturer or distributor. Findings – Both the manufacturer-distributor LTO and their role-performance jointly drive the outcomes of the shared marketing channel relationship, and both parties’ behaving similarly (except for the influence of their role-performance onto their partner’s satisfaction). Research limitations/implications – This study have not investigated possible two-way interactions between constructs across the channel. Combined, paired, manufacturer and distributor dataset questions can expose the connectivities relationships between the partners. The insignificant influence of role-performance on economic satisfaction within the manufacturer domain requires further research on the possible presence of mediating construct(s) between those constructs, and on the broadening of the definition of satisfaction. Past channel research revealed that trust interacts with satisfaction, yet this study does not find significant interactions between the outcomes constructs. Practical implications – In Indonesia each marketing channel’s manufacturer and distributor management team should jointly enhance both their shared long-term relationship, and their respective role-performance. This long-term view is implementable through long-term marketing channel contracts. Originality/value – This study contributes to marketing channel theory with the LTO and the role-performance of a channel partner jointly driving the other partner’s economic satisfaction, trust, and their dependence specifically within the Indonesian context. The benchmarking of a marketing channel’s performance within a trusting and satisfying channel relationship sets the framework for the development of future optimization studies (of at least the five connectivities constructs used herein).