Brand Community Oriented Channel Coordination:
An Empirical Study on Chinese Tire Market

Abstract

Members of traditional tyre marketing channel aims to maximize profit for individual business, even at the cost of overall benefit of tyre marketing channel and tyre manufacturers, resulting in high channel cost. Practice focusing on channel relationship marketing has alleviated the tension among channel members. Yet profit diluted by disorderly competition in this industry has deteriorated channel performance. There is growing need to research on how to enhance channel performance and ensure benefit of channel members. Focus of related research is shifting from customers to relationship marketing, forming a trend in theoretical research on brand relationship. Branding is a fundamental element for competitive advantage and value creation for business today. Setting up a high-value brand in highly-competitive marketing environment has been the focus of marketers. Brand community research based on customer relationship also becomes the new hotspot in theoretical research on brand relationship.
Existing research on relationship marketing only takes channel relationship or customer relationship into account. Research on channel relationship seldom consider the influence of final consumers on channel performance while research on final consumers usually ignore the channel relationship, setting apart these two most significant players in relationship marketing rather than combine them together. In fact, channel and end user are interactive. Discontinuity in channel relationships will affect customer experience brought by the products or service to end user, while review and purchase on products or service by final consumers will influence the performance of channel members.
Considering the limitations of existing research, this article researched the potential mutual influence between channel relationship and customer relationship for the first time. Based on theory of channel relationship and customer relationship, including the manufacturers’ non-direct-profit relationship investment to end users by leveraging brand community, it proposes the industry brand community-oriented channel relationship model. Integrating these two factors in relationship marketing would bring new perspective and reference for related research.
Based on proposed research model, this article gains scale through reference to related research, qualitative analysis and pretest. Based on field research on retailers and end users in replacement market for truck and bus tyre industry in China, using statistical analysis such as CFA(Confirmatory factor analysis), structure equation modeling and regression equation, the findings of positive research on industry brand community-oriented channel relationship model proposed by this article are listed as below.
1) Not only channel relationship influences channel performance, brand community based on end user relationship also influences channel performance, which is consistent with the proposition of this article.
2) Theories regarding channel relationship marketing and customer relationship marketing are applicable to truck and bus tyre industry in China.
3) Non-direct-profit RSIs by manufacturers would indirectly influence channel performance through brand community integration
Based on literature review, model proposition and positive finding, the theoretical and practical contribution of this article includes the following aspects.
1) In the research of relationship marketing, not only the interactive influence of different B2B channel players shall be included, end users’ influence shall be considered as well. ‘Push’ strategy shall integrate with ‘pull’ strategy. Research on end users and channels could be integrated through brand community integration, which would be complimentary to existing research, also could be theoretical reference and practical guide to marketing practice.
2) This positive research proves that theories of relationship marketing is applicable to tyre industry in China. China’s market is unique and tyre industry has its own features compared to other industries. This research finds that trust and commitment of channel members and relationship investment by seller significantly influence the channel member performance. External environment has a moderating effect on channel member performance. Therefore, manufacturer shall pay attention to external environment, especially market diversity and changing environment, to adjust strategy accordingly. Manufacturer shall also communicate with agents and retailor to enhance trust and commitment. This article provides positive evidence and reference for relationship marketing theory.
3) This thesis contributes to clarify how manufactures’ non-direct-profit RSIs influence performance by retailor and other channel members. It is proved that although manufactures do not face consumers directly, its non-direct-profit RSIs will affect the end users’ trust and commitment to company and brand, and further influence their brand community identity, and ultimately channel members’ performance.
4) This research proposes comprehensive model on industry goods relationship marketing from theory, which is highly relevant for industry goods relationship marketing in China. Industry goods has its unique features. Manufacturer shall ensure channel member’s performance by outstanding channel relationship marketing, as well as form brand community integration through relationship investment on end user, to improve channel member’s performance and sales.

Research has shown that the “push strategy” and “pull strategy” could organically combined and this conclusion provides theoretical guide and practical suggestion for companies’ marketing.