(Dis)loyalty in the German dairy industry:A supplier relationship management viewEmpirical evidence and management implications

During the last decades there have been many empirical and theoretical attempts toapproach the question of how to build and maintain stable, long‐term relationships (Hennig‐Thurau and Hansen, 2000; Andaleeb, 1996). In neoclassical analysis, one would typicallyargue that the decision to whom to deliver one’s products or from whom to buy them is onlybased on price. The perception that the homo oeconomicus is no appropriate idea of manfor the analysis of enduring business relationships, however, is not new (Heide, 1994).Today, it is widely accepted that behavioural aspects such as commitment and loyalty alsoplay an important role in economic exchanges.Agribusiness firms, however, are only slowly realizing what Morgan and Hunt (1994, p. 20)stated more than a decade ago: “To be an effective competitor (in the global economy)requires one to be a trusted cooperator (in one network).” Strategic partnerships oralliances, which traditionally are in the focus of channel marketing, are certainly notappropriate, since there is a multitude of farmer‐suppliers all delivering the same product.The situation thus is quite different in agribusiness compared to other industries.Nevertheless, based on recent developments and reports from Germany (AgraEurope, 2007;LZ, 2007) and other countries such as the USA (Zeuli and Bentancor, 2005) or Great Britain(MDC, 2005), the authors hypothesize that farmers’ loyalty to their customers will be ofincreased importance in the future.Thus, measures of supplier retention are needed to retain the suppliers and stabilize thesupply bases. In the channel literature, long‐term relationships are only analyzed in a dyadiccontext, focussed on partnerships between two parties (Stölzle, 1999). In agribusiness,however, processors have to deal with a high number of (small) suppliers, hindering theestablishment of personal relationships. Network approaches thus seem to be moreappropriate. In this study we try to combine knowledge from both research streams.This research therefore was aimed to shed light on