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2 Environmental conditions – market turbulence and competitive intensity

2 Environmental conditions – market turbulence and competitive intensity

Tải bản đầy đủ - 72trang


2.3 Trust and manufacturer’s trust

2.3.1 Trust

Trust is appeared in most of relationship models (Wilson, 1995) and is a necessary

measurement of successful relationships (e.g, Mohr and Spekman, 1994; Morgan and Hunt,

1994). Given from this theory, the higher level of trust increases, the higher of long cooperation

between the participants is committed. Morgan and Hunt (1994) also defined trust as “the

perception of confidence in the exchange partner’s reliability and integrity” (p.23) , mean that a

firm expects their partners not only provide activities resulting in positive outcomes for the firm

but also, not perform any actions that harming to the firm outcomes ( Anderson & Narus, 1990).

2.3.2 Manufacturer’s trust

In supplier – manufacturer relationships, the manufacturer’s trust in supplier means the

manufacturer believes supplier can respond for their requirements and needs, satisfies for all

manufacturer’s wants; by supplier’s activities, provide the best services and products to the

manufacturer and perform as an useful partner in maximizing the value returns for manufacturer.

Given from this, a market – oriented supplier is likely to demonstrate to the manufacturer that

(1) the supplier will provide the best products and services, (2) the supplier is behaving in the

best interests of the manufacturer because the market orientation of the supplier creates

customer values and satisfies customer needs, and (3) the supplier is less likely to act

opportunistically for its own benefits (Anderson, Fornell, & Lehmann, 1994; Joshi & Randall,


2.4 Theoretical model and Hypotheses

Base on the literature review and the findings in the exploratory study, the conceptual

model was built, to understand the level of supplier’s market orientation affects on

manufacturer’s trust. The hypotheses were proposed from the empirical test to examine the

relationships between the independence variables and dependent variable.


2.4.1 Independent variables

The independent variables were those factors affecting the Manufacturer’s Trust. They

were selected from some last relevant researches in literature review, basically from Narver and

Slater (1990); and Jaworski and Kohli (1993). There were two factors as supplier’s market

orientation and environmental conditions.

Supplier orientation factor included three components as customer orientation, competitor

orientation and inter-functional coordination. Environmental conditions included two

components as market turbulence and competitive intensity. These five components were this

research’s independent variables.

2.4.2 Dependent variable

Manufacturer’s trust was the key dependent variable of this research. In this research,

the definition of manufacturer’s trust was developed by Morgan and Hunt (1994); Anderson and

Narus (1990).


2.4.3 Theoretical model and Hypotheses Theoretical model








of the

of effect

the effect

of supplier’s

of supplier’s

















trust Research hypotheses:

According to the literature stating that the manufacturer tends to develop relationships

with few but selective suppliers (Kalwani &Narayandas, 1995), respond with great trust to the

devoted supplier (Siguaw et al., 1998) while market-oriented supplier is purposed to serve for

the manufacturer’s needs. Therefore, the following hypotheses were proposed as supplier’s

market orientation directly proportional to manufacturer’s trust:

Hypothesis H1: Supplier’s customer orientation is positively related to the Manufacturer’s Trust

in the supplier.

Hypothesis H2: Supplier’s competitor orientation is positively related to the Manufacturer’s

Trust in the supplier.


Hypothesis H3: Supplier’s inter-functional coordination is positively related to the

Manufacturer’s Trust in the supplier.

In such a highly uncertain and competitive environment, the consumers ‘choices and

preferences changes rapidly ( Kohli & Jaworski, 1990), the supplier’s assistances are important

for manufacturer’s business strategies. By their high market turbulence and competitive

intensity, market-oriented supplier will reflect rapidly the fluctuation in consumer’s demands

and react quickly to the competitive environment and the competitors.

Hypothesis H4: Supplier’s market turbulence is positively related to the manufacturer’s trust in

the supplier.

Hypothesis H5: Supplier’s competitive intensity is positively related to the manufacturer’s trust

in the supplier.

2.5 Summary

This chapter summarizes the previous theories and research results of research models

which are reckoned basic theories and inheritability knowledge to support this study. Based on

literature review, we select and adjust the appropriate elements for the research - the supplier’s

market orientation factors in Ho Chi Minh City and some south province markets. Along with

the research, we also consider the dependence of manufacturer’s trust variable impacted by the

five independent variables concluding supplier’s customer orientation, supplier’s competitor

orientation, supplier’s inter-functional coordination, supplier market turbulence and supplier

competitive intensity. The theories and concepts are shown that the supplier’s market orientation

having the influence to the manufacturer’s trust. By passing the research method, the data

collection process and method of data analysis and through the research methodology of the next

chapter, the researcher will present all of these problems.



The methodology consists of four main stages: (1) questionnaires design, (2) pilot test, (3) data

collection, (4) hypothesis testing. Each stage of the methodology will be discussed briefly in this

section of this chapter. A more detailed discussion can be found in Chapter 3.

3.1 Research design

Through the previous relevant researches, the questionnaire was built then running the

pilot test for checking the efficiency and the meaning of the questions. The pilot test was

purposed to explore and define the relevant items and buiding a completed questionnaire. Then,

the main survey was published to respondents for surveying, data collection, analysis of

collected data as well as model measurement.

3.1.1 The pilot test

In the pilot test, the 30 questionnaire forms were sent to 30 head of enterprises and head

of departments for answering. After five days, the forms have been returned and from the

outcome of this pilot test, some small changes on the questionnaire form so as to synchronized

and fitted with the nature of respondents and made clear for the questions in forms. Appropriate

adjustment in measurement scale also was adjusted from five Likert scales to seven Likert scales

so as to make more choices on the answer for respondents and aligned with some previous

researches before going live with the main survey in Ho Chi Minh City and south provinces as

Long An, Dong Nai, Binh Duong.

3.1.2 Main survey

The main survey was a quantitative research which was conducted in Ho Chi Minh city,

Long An, Dong Nai and Binh Duong with convenient sampling; and the final questionnaires

were sent to Head of enterprises, Management Board, Head of Department, especially for


Marketing and Sales Department, in summary, the questionnaires were sent to the decision

makers who are leading the enterprises and giving the decisions. For each enterprise, we sent

only one questions form so as to get single informant. Sample size

In Multipe Linear Regression Analysis, we should ensure a sample size following the

below formula (Tabachnick & Fidell, 1996).

N > = 8M + 50

N: sample size

M: the number of independent variable of model

Base on as above study, the research has taken sample size was 150 samples. Research process

The research process was demonstrated in figure 3.1 as below:

Figure 3.1 Research process


3.2 Measurement

Measurement scale used in this study was multi-item seven point Likert scales, which

developed and validated by previous researches (including Narver and Slater (1990); Morgan

and Hunt (1994); Anderson and Narus (1990); Jaworski and Kohli (1993)…).

3.2.1 Measure of Customer Orientation

Customer orientation implies that a firm puts the customer’s interest first (Deshpande,

Farley, & Webster, 1993; Joshi & Randall, 2001). From a total quality perspective, all strategic

decisions a company makes are “customer-driven”. In other words, the company shows constant

sensitivity to emerging customer and market requirements (Evans and Dean, 2000). Knowing

the customer is basically a customer satisfaction measurement process (Player and Keys, 1999).

The best measures are customer-focused and goal-oriented (George and Weimerskiirch, 1998).

Six observed variables with a seven-point Likert from Narver & Slater (1990) and Gray et al

(1998) were primarily used to measure Customer orientation.

Table 3.1: Scale of Customer Orientation





We closely monitor and assess our level of commitment in

serving customer's needs

Our business strategies are driven by the goal of increasing

customer value

Our competitive advantage is based on understanding

customers' needs

Our business objectives are driven by customers


We frequently measure customer satisfaction

We pay close attention to after - sales service

Stand for







3.2.2 Measure of Competitor orientation

Competitor orientation is understood as the firm knows well about strengths and

weaknesses, capabilities and strategies of their key current and potential competitors (Narver

and Slater 1990) and the firm can being responsive to competitor’s activities (Balakrishnan


1996). Understanding well about competitors, it may allow the firm prevent and minimize the

adverse effects (e.g. Dickson 1996, p. 102 - 106).

Competitor orientation was measured on three observed variables, a seven-point Likert

scale developed by Narver & Slater, (1990) and Jaworski and Kohli (1993)

Table 3.2: Scale of Competitor orientation





We respond fastly to competitive actions that threaten


We target customers where we have an opportunity for

competitive advantage

Top Management often discuss competitor's strategies

Stand for




3.2.3 Measure of Inter-functional coordination

Measurement scales for perceived quality factor were developed by Narver & Slater,

(1990). The firm always requires inter-departmental coordination and sharing of information and

resources. Inter-departmental coordination was defined as the coordinated utilization of

company resources in creating superior value for target customers (Narver & Slater, 1990).

Four observed variables with a seven-point Likert from Narver & Slater (1990) were

used to measure inter-functional coordination as below table.

Table 3.3: Scale of Inter - functional coordination


Inter - functional



Information about customers if freely communicated

throughout our organization.

Business functions within are integrated to serve the

target market needs

In our organization, salespeople share information about

competitor information.

We share resources with other business units

Stand for





3.2.4 Measure of Environmental conditions.

Market turbulence is defined as “changes in the composition of consumers and their

preferences” (Kohli & Jaworski, 1990, p. 14). Competitive intensity is the degree of competition


that a firm faces. Great market turbulence helps to predict market accurately and from this,

along with market turbulence, a high competitive intensity would respond rapidly to

manufacturer’s needs from a market – oriented supplier. Market turbulence and competitive

intensity were measured by a seven – point Likert on three – item scale and four –item scale,

developed by Jaworski and Kohli (1993) then adjusted by the author for easy understanding with

Vietnamese respondents, including:

Table 3.4: Scale of Environmental conditions


Market turbulence




In our kind of business, customers' product preferences

change quite a bit over times

Our customers tent to look for new products all the time

Sometimes our customers are very price - sensitive, but on

other occasions, price is relatively unimportant

Competition in our industry is cutthroat

There are many " promotion wars" in our industry

Anything that one competitor can offer, others can match


Our competitors are relatively strong

Stand for








3.2.5 Measure of Trust

Trust was measured by five observed variables, developed by Morgan and Hunt (1994);

Anderson and Narus (1990), used a seven-point Likert, and then adjusted by the author for easy

understanding with Vietnamese respondents as follows:

Table 3.5: Scale of Trust




In our relationship, this manufacturer can be trusted at


In our relationship, this manufacturer can be counted

on to do what is right

In our relationship, this manufacturer keeps promises it

makes to our firms

In our relationship, this manufacturer has high integrity

Stand for






3.3 Summary

This chapter accomplished to present the research methods, the process of data collection,

the method of analysis and measurement scales that were proposed to apply in this dissertation.

With questionnaire and the pilot interview to some Head of enterprises in Ho Chi Minh city,

then a 300 official questionnaire forms were sent out for Head of enterprises, included President,

Chairman, Directors, Head of Marketing Department and Sales Department, called generally

were decision makers to answer for the questionnaires. Only one set has been sent to each

enterprise so as to avoid duplicate answer view. About 180 sets have been returned and after

verifying, 150 samples have been approved for test. The survey was processed in Ho Chi Minh

City, Long An, Dong Nai and Binh Duong provinces. Quantitative data were collected and used

as a source of primary data. Quantitative analysis was combined effectively and efficiently in

order to handle these collected data for the next chapters of research results.



The purpose of this chapter was to present findings which were collected from the actual

questionnaire survey. Besides, the researcher proposed an official assessment of measures and

also carried out the analysis to give the accurate answers for the research questions, hypotheses

testing in the chapter two.

4.1 Descriptive data analysis

The collection of data was set up based on the relationships between suppliermanufacturer in Vietnam. The firms were chosen from variety of industries which included









manufacturer. The researcher in here defined manufacturers were the enterprises that produced

the products because when the enterprises produced the products, the interrelation between

market oriented supplier and manufacturer were presented better then a manufacturer in service

category. So, in this research, we did not survey from service manufacturer such as financial or

banking enterprises.

Approaching to few head procurement directors and executive buyers in some famous

brand name and from personal relations, letters were sent to these directors buyers in each firm

for asking their cooperation. Each buyer was asked to provide the contact details of their key

suppliers who had doing business with manufacturers. About 65 buyers were involved in this

survey and assigned more than 300 their current suppliers to contact for surveying. Letter from

buyers, included questionnaire form were sent out to suppliers for introducing author to them so

as to prepare for survey.

A total of 300 set of questionnaires were sent to suppliers. On the first week after letter

sending out, there were about 45 forms in returns. During second week to the fourth one, 85 set

were in returns. From some calls directly to the respondents, around 180 set of questionnaires

were returned after one month (the returned questionnaire ratio reached 60%).

After checking, there were 30 respondents which were not met the requirements of the

study because of un-answered, missing information, similar answers or dishonest answers with

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2 Environmental conditions – market turbulence and competitive intensity

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