1 11 th Annual IAABD Conference May 18-22, 2010 Economic and Social Satisfaction in Marketing Channels: The Use and Impact of Influence Strategies in a African Country Simon Sigué, Athabasca University, Canada Binta Abubakar, Morgan State University, USA

2 Contents Research goals Motivations Conceptual framework Hypotheses Method Findings Conclusions Limitations

3 Goals To identify the most frequently used influence strategies in an African channel To examine the impact of influence strategies on both economic and social satisfaction

Motivations 4 Channel satisfaction as a key determinant of channel efficiency Examining the claim that social and economic satisfaction should be treated as two different constructs (Geyskens et al. 1999) Extending channel literature to an African context

Conceptual framework 5 Supplier’s use of threats Supplier’s use of promises Supplier’s use of noncoercive influence strategies Economic satisfaction Social satisfaction

Conceptual framework Economic satisfaction: Positive affective response to economic rewards that flow from the relationship with a partner, such as sales, margins, rebates, … (Geyskens et al. 1999) Social satisfaction: Positive evaluation of the psychosocial aspects of a relationship with a partner. A satisfied partner sees the interactions with the other as gratifying, fulfilling, and easy (Geyskens and Steenkamp 2000). 6

Conceptual framework Threats: Influence strategies used when a source communicates to the target that it will apply negative sanctions should the target fail to perform desired actions (Frazier and Rody 1991) Promises: Influence strategies used when the source implies that it will provide the target with specific rewards or benefits contingent on the target’s compliance with the source’s desires. (Frazier and Rody 1991, Geyskens et al. 1999) 7

Conceptual framework Information exchange: Influence strategy whereby the source uses discussions with the target to try and alter the target’s general perception of how its business might be operated to be more profitable (Frazier and Summers 1984) Recommendations: Influence strategy whereby the source suggests a set of actions that could help the target in improving the performance of its business (Frazier and Summers 1984) 8 Non coercive influence strategies

Hypotheses H1: The principal supplier uses information exchange more frequently than recommendations, promises, and threats. H2: The principal supplier uses threats more frequently than recommendations and promises. H3: There is a positive relationship among the use of threats, promises, recommendations, and information exchange. 9 The use of influence strategies

Hypotheses H4: The use of threats negatively affects retailers’ economic and social satisfaction. H5: The use of promises should positively affect economic satisfaction and have a nonnegative effect on social satisfaction. H6: The use of either information exchange or recommendations positively affects both economic and social satisfaction. 10 Impact of influence strategies on satisfaction

Method Phase 1: Exploratory study In-depth interviews with 10 supplier’s sale managers and delivery personnel In-depth interviews with 30 drinking bar owners and operators (retailers) Phase 2: Drop-off survey Population: bar owners who buy directly their supplies from SABC and have been in the market for more than 6 months Sample size: 617 bar owners in Douala and Yaoundé Response rate: %. 222 fully and partially completed questionnaires collected, 217 contacts, but declined up front, and 178 questionnaires were not completed. 11

Scales and reliability analysis Number of itemsCronbach’s alpha Economic satisfaction Social satisfaction50.82 Threats70.79 Promises50.86 Information exchange Recommendations

Multicollinearity analysis Economic satisfactionSocial satisfaction ToleranceVIFCondition index ToleranceVIFCondition index Threats Promises Information exchange Recommend ations

Comparison of the use of influence strategies MeanStd. DeviationStd. Error Mean Threats – Promises3.60 a Threats – Information exchange a Threats – Recommendation 2.88 a Recommendations – Information exchange a Information exchange – Promises 6.29 a a: p < 0.001; b: p < 0.05 H1 and H2 are supported

Pearson Correlations ThreatsPromisesInformation exchange Recommen dations Threats1.00 Promises0.57 a 1.00 Information exchange 0.31 a 0.44 a 1.00 Recommendati ons 0.19 b 0.20 b 0.44 a a: p < 0.001; b: p < 0.05 H3 is supported

Multiple regression results Economic satisfaction Social satisfaction Standardized β Threats-0.15 c b Promises0.21 b Information exchange0.26 a 0.23 b Recommendations0.24 a 0.36 a Adjusted R Square F14.99 a a Observations a: p < 0.001; b: p < 0.05; c: p < 0.10 H4, H5, and H6 are supported

Conclusions The use of threats decreases both economic and social satisfaction The use of non coercive influence strategies increases both economic and social satisfaction The use of promises positively impacts on economic satisfaction, but has no impact on social satisfaction Information exchange is the most frequently used influence exchange Threats is the second most frequently used influence strategy There is a positive relationship between the four influence strategies: threats, promises, recommendations, and information exchanges 17

Limitations Convenience sample Coverage limited to two major cities 18