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A model of switching costs is applied to ad agency-client relationships using agency theory. Switching costs are comprised of set-up costs that create barriers to switching to new agencies and exit costs that are barriers to severing relationships with current agencies. Switching cost theory offers insights into why large clients can maintain agency relationships. A survey of American clients shows how client size is associated with set-up and exit costs. These relationships are explained through diversity and scope of services, the creative risk associated with major brands, and the need for more sophisticated monitoring, each acting as switching barriers, extending longevity. © Taylor & Francis Group, LLC.
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We develop a theory of advertising agency compensation, client evaluation and switching costs, with extensions to agency theory. When clients are exposed to high switching costs, they become more vulnerable to the risk of agency costs. In response, clients can select compensation and evaluation decisions that convey fairness, signal their commitment, and invite agency reciprocity. With high switching costs, outcome-based compensation and formal evaluation procedures are likely. High switching costs are associated with signifi'cant relationship investments, mature relationships, large clients, formal evaluation, and with clients that use their agencies as strategic partners. Clients surveyed in North America support the theory. © 2010 Taylor and Francis Group, LLC.
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Purpose - A first objective is to add insight into how constructs of ethnocentrism, xenocentrism and cosmopolitanism relate to each other. Knowledge of how these constructs overlap or work together in affecting consumer preferences will offer global marketers insights for designing appropriate marketing strategies. The second objective is to extend this knowledge by examining the correspondence of these three constructs to a nomological network of dispositional concepts pertinent for product positioning and market segmentation. The third objective is to empirically examine the extent to which the measures, construct structure and associative relationships are robust in different national research settings. The paper aims to discuss these issues. Design/methodology/approach - Surveying British and American consumers, this study examines and analyzes the correspondence of these identity-relevant constructs within a nomological net of pertinent concepts: consciousness-of-kind, global consumption orientation, materialism and natural environment concern. Findings - The hypothesized negative links between CET-XEN and CET-COS, and the predicted positive connection between XEN-COS were all confirmed on the latent factor results for the combined data set. The negative correlation between CET-XEN was of a considerably lower magnitude than that for CET-COS. Originality/value - To date, no research has used an identity theory framework and simultaneously examined in a cross-cultural context the interrelationships of consumer ethnocentrism consumer xenocentrism and cosmopolitanism - and their differentiating linkages to a multiplicity of consumer dispositions.
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Purpose: Problems of relationship quality and interfirm conflict in business-to-business settings are serious concerns that need to be addressed. Thus, the authors have engaged in an extensive review to promote an understanding of these complex issues. This article develops an integrated framework for analyzing wide-ranging relations between individual representatives and patterns of interfirm incompatibility for managerial control.Methodology/approach: The review involves numerous sources that include articles and monographs. A theoretical framework is constructed to integrate fragmented empirical data. In particular, social identity and commitment-trust theories are mobilized for this framework.Findings: The review of studies has a substantial consistency with the theoretical framework. The article outlines a causal chain from interpersonal agent dissimilarities to dysfunctional buyer-supplier relations, culminating in interfirm pathological conflict. Moderating factors in the causal chain are: agent identity differentiation (for interpersonal dissimilarity), supplier relations mismanagement (for buyer-supplier relationship quality), and interfirm opportunism (for interfirm pathological conflict). Buyer-supplier interfirm incompatibility mediates the causal link between interpersonal dissimilarity and buyer-supplier relationship quality. Identity differentiation, the validation of one's self-image, is introduced as a process that determines buyer-supplier agent interpersonal dissimilarity judgments. This framework uses a contextual perspective. It describes interactions between observations of micro-level phenomena of interpersonal dissimilarities and macro-level models of interfirm fit. From a managerial perspective, interpersonal relations between individual buyer and supplier agents may be further strengthened by such strategies as expanding the scope of the interpersonal relationship, relaxation of role responsibilities, and volunteering business-related contact referrals.Originality/value: A new theoretical framework has been devised to predict and explain relationship quality and interfirm pathological conflict in the business-to-business context. The framework contributes to the value of the knowledge base by serving as a means for building new diagnostic tools for assessment of interfirm behavioral issues affecting exchanges. New concepts are introduced to enhance current literature on business-to-business marketing. The framework provides concreteindicators that operationally define ideas and enable or improve measurement for empirical modeling.
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Despite the danger of franchisee non-compliance as a severe impediment to overall franchise operation and performance, there is currently minimal understanding of the key factors that lead to these behaviors. Using a foundation of relational exchange theory, we construct and test a model that demonstrates how two distinct forms of trust, based upon perceptions of franchisor integrity and franchisor competence, are critical to explaining the roles that relational conflict and satisfaction play in influencing franchisee compliance. Implications of these findings are then demonstrated to have compelling relevance to the effective management of franchise systems. (C) 2009 Elsevier Inc. All rights reserved.
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