Should Firms Encourage Salespeople to Promote House Brands in Customer Interaction? An Empirical Investigation of Financial Out-Comes and Customer Response
Schmalenbach Business Review, Vol. 64, October 2012, pp 331-363
33 Pages Posted: 2 Dec 2012
Date Written: 2012
Many retailers and service providers sell their house brands side by side with competing brands of other suppliers. Although many firms encourage their salespeople to favor in-house products when serving customers, investigators have failed to examine the effect this practice may have on customers. This study combines archival and survey data from the tourism sector to explore this research void. First, we analyzethe effect of salespeople’s intentions to promote house brands (IHB) on stores’ housebrand sales, a link previous studies have not explicitly tested. Second, drawing on attribution theory, we hypothesize that salespeople’s IHB will have a negative impact on customers’ perceptions of salesperson customer orientation and on customers’ store loyalty. We find that salespeople’s IHB positively influences stores’ house-brand sales and negatively influences both customer variables. Further analysis shows that the moderation effects of adaptive selling, sales empathy, and customer familiarity with the salesperson can mitigate IHB’s negative impact on customer response. These findings offer a new perspective in the discussion of the benefits and detriments of salespeople’s promotions of in-house products.
Keywords: Adaptive Selling, Empathy, Hierarchical Linear Modeling, House Brands, Personal Selling, Relationship Marketing, Store Loyalty
JEL Classification: M12, M31
Suggested Citation: Suggested Citation