Essay - An analysis of Waitrose’s ethical practice and its impact on customers’ and partners’ affective and normative commitment PDF

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An analysis of Waitrose’s ethical practice and its impact on customers’ and partners’ affective and normative commitment
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Waitrose is recognised as a leading supermarket in the United Kingdom, with a strong following of loyal customers. The purpose of this essay is to conside...

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An analysis of Waitrose’s ethical practice and its impact on customers’ and partners’ affective and normative commitment

Abstract Waitrose is recognised as a leading supermarket in the United Kingdom, with a strong following of loyal customers. The purpose of this essay is to consider how Waitrose’s ethical practice builds affective and normative commitment amongst customers and employees. The retail grocery industry is a highly competitive market, therefore it is becoming increasingly important for organisations to maintain successful long-term relationships with both customers (Sheth and Parvatiyar, 2002) and employees who act as part-time marketers (Crosby et al, 1990).

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1.0 Introduction In recent years, the nature of relationships between exchange partners has been the focus of a significant body of literature (Bansal et al., 2004; Fullerton, 2003; Garbarino and Johnson, 1999; Gruen et al., 2000: Harrison-Walker, 2001). Establishing, developing and maintaining a successful relationship with customers and staff is seen as a competitive advantage (Palmatier et al., 2006; Sheth and Parvatiyar, 2002). This essay considers the developing body of literature on relational mediators of relationship marketing (RM) and will focus specifically on the concept of affective and normative commitment created by Allen and Mayer (1990). The Key Mediating Variables (KMV) model developed by Morgan and Hunt (1994) will be applied to Waitrose in order to better understand customers’ and partners’ commitment to the supermarket. In addition, this paper will then go on to develop a conceptual model based on the academic theory that is explored in this essay.

2.0 Waitrose Waitrose is part of the John Lewis Partnership (JLP) and is seen as one of the most trusted companies in the UK. It prides itself on being different, and achieves this through combining the expertise and the high standard of service of a specialist food shop with the convenience of a supermarket (D&D, 2014). As part of the JLP, Waitrose’s ownership lies with its employees (otherwise known as partners). In 2013, staff received a 14% increase in bonuses from the prior year as a result of the increased profits JLP achieved (BBC News). This can be seen as one of the reasons why partners stay with Waitrose for around 8 years, which is twice as along as the industry average (Guardian, 2010; Bureau of Labor Statistics UK, 2014).

3.0 Commitment It is becoming increasingly essential for companies to invest time in customers and employees to build successful long-term relationships. Fullerton (2005) and O’Reilly and Chatman (1986) define commitment as a “psychological force” that acts as a link between key antecedents. The JLP (2014) is committed to “attracting, retaining and deepening relationships with customers”. Allen and Meyer (1990) found that there are different forms of commitment, and it’s important that the correct balance is reached as it can have a potential detrimental effect on companies marketing relationships (Fullerton, 2005).

3.1 Behavioural and Attitudinal Commitment Theory Allen and Meyer (1990) developed the Behavioural and Attitudinal Commitment theory, which features three key components of commitment within an organisation; affective, continuance and normative commitment. This study will examine consumers’ affective and normative commitment towards Waitrose. Affective

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commitment is based on the consumers ‘want’ to stay with a company and is defined by Allen and Meyer (1990) as an “emotional attachment to, identification with, and involvement in, the organisation”. This type of commitment exists when customers are able to relate to a relational partner, and is based on the presence of shared values and trust (Fullerton, 2003; Garbarino and Johnson, 1999; Morgan and Hunt, 1994). Normative commitment refers to the consumers’ sense of obligation to stay with the company (Fullerton, 2003; Morgan and Hunt, 1994). It’s argued that normative and affective commitment are very similar, however the difference lies in the consumers sense of obligation. This type of compulsory commitment can be seen to have a both a positive and negative affect on a relationship. When looking at Waitrose, we can see that customers and partners are more likely to develop affective commitment towards the brand because of the enhanced emotional relationship, developed from the similarities between the two parties. These similarities centre on a common interest in obtaining ethically sourced produce and respecting both the workers and environment in the process. In addition, consumers may feel a sense of normative commitment to the supermarket as they feel obligated to stay because of the company’s fair and ethical practices. These customers may be less financially stable and may consider a cheaper alternative, however they stay committed to Waitrose because of its upstanding behaviour. Essentially, Waitrose’s target audience are able to identify with the brand because of the similarities shared. More recently Sharma et al. (2006) examined Allen and Meyer’s (1990) Behavioural and Attitudinal Commitment theory and added two additional components. Value based commitment is based on the value consumers feel they are receiving, and locked in commitment is when a customer has signed into a fixed contract (Sharma et al., 2006). It’s argued that these additional components are too similar to the existing three components; value based commitment directly refers to affective commitment and locked in commitment is an aspect of normative commitment; the obligation to stay. As a result, Sharma et al. (2006) additional components have not received enough recognition and fail to be accepted by most practitioners.

4.0 Ethical Practice Webster (1999) defines ethics as “the discipline dealing with that which is good and bad and with moral duty and obligation”. According to Mintel reports (2014), the consumer is becoming increasingly interested in buying organic and environmentally friendly products and services (see Appendix 1). This is known as the development of ‘green’ consumers. Today, customers in the UK are three times more likely to buy ethically sourced goods and environmentally friendly products than they were two years ago (Butler, 2013) and employees are more inclined to work with an ethical company. Creyer et al. (1996) argues that any unethical behaviour from a firm will result in negative consumer responses, highlighting the importance of ethical and authentic practice.

4.1 Waitrose Ethical Practice

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Waitrose is committed to enforcing a fair and ethical business relationship with both its customers and partners. They’re able to build on the functional benefits that they offer such as discounts and free teas, coffees and newspapers to portray a brand personality that is honest and ethical. This is something that the consumers buy into and feel a part of with any product or service they purchase through Waitrose. Fairtrade Waitrose supports the Fairtrade Foundation in their efforts to help underpaid workers, and improve inadequate working conditions for suppliers (Badger, 2014). The leading supermarket supplies a number of Fairtrade produce that other supermarkets fail to include in their offering (Waitrose, 2014). Customers and partners are able to share these ethical values with Waitrose and develop an emotional connection with the brand. Customers and partners develop a normative commitment towards Waitrose because of their moral judgments. They are committed to Waitrose because they share similar values and ‘want’ to stay loyal to the brand. There is also an ‘obligation’ to continue the relationship because of the companies continued investment in fair and ethical behaviour. Sourcing produce responsibly is increasingly important to Waitrose for a number of reasons. It reflects the JLP culture and follows the brands core values – essentially what the company is known for. Waitrose customers are typically middle class families interested in purchasing ethically sourced produce, knowing how it was produced and where it was sourced is more important than just its price tag. Again, we can see these two key elements of commitment have come into play. Corporate Behaviour Waitrose partners have a low propensity to leave due to the values they share with the supermarket as partners; effectively reinforcing a ‘continuity culture’. Each year Waitrose divide profits between partners, setting them aside from traditional organisations where any profits would normally go directly to shareholders. Partners are also involved in important decisions relating to the company’s future, which can be seen as encouraging both normative and affective commitment towards the company because partners are invested and therefore are less likely to leave.

5.0 Key Mediating Variables (KMV) Model The Commitment-Trust theory created by Morgan and Hunt (1994) suggests there are five important precursors of commitment and trust in relationships. Morgan and Hunt (1994) argue trust and commitment are key mediators in RM, subsequently putting it at the center of the model. Sheth (2000) supports this theory, stating that both commitment and trust “have emerged as building blocks of a theory”. For the purpose of this report, Morgan and Hunt’s (1994) KMV model has been applied to Waitrose, in order to better understand the brands commitment building strategies. Please refer to Appendix 2.

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It is interesting to note that the KMV model has been heavily criticised by practitioners (Palmatier et al., 2006). Unlike Morgan and Hunt (1994) other researchers suggest RM is a multi-dimensional construct, which captures the different facets present in a relational exchange (Palmatier et al., 2006). Johnson et al. (1999) argue that “no single relational construct can fully define the overall depth of climate of a relationship”. It is argued that the model does not take into consideration the relationship of attracting new customers, and focuses too heavily on existing customers (Vivek, Beatty and Morgan, 2012).

6.0 Developed Model The below conceptual model considers the key relationship-building antecedents and combines elements of the KMV model with Palmatier et al. (2006) findings to make the model more relevant to Waitrose. The amended model focuses on trust as a driver of commitment, and looks at the key influences on trust in the JLP. In recent years, commitment as a key mediator of relationships has received a considerable amount of support in business-to-consumer (B2C) and business-to-business environments (B2B) (Bansal et al., 2004; Garbarino and Johnson, 1999). The model is therefore centred on commitment as a mediator, running in-line with recent studies (Morgan and Hunt, 1994; Fullerton, 2004). The below model suggests that there are four main antecedents that ensure commitment is retained; dependence on seller, communication, relationship termination costs and relationship benefits. As this paper focuses on affective and normative commitment, each antecedent has an (A) or (N) beside it, which refers to the type of commitment it achieves. Please refer to Appendix 3 for an in-depth explanation of this model and its components. Figure 1

Source: Authors own

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6.1 Limitations While the adapted conceptual model has been grounded in academic theory, it requires further research to test its validity. Furthermore, it’s important to note that this model was developed specifically for Waitrose/ JLP, and has not taken into consideration the different brand structures and ethical practices. It therefore assumes that commitment cannot be achieved without the presence of trust, however this is not the case for several companies such as Starbucks and Primark. Finally the above model takes into consideration a number of key antecedents but does not address the potential negative impacts of RM, if implemented poorly. 7.0 Conclusion Waitrose is a highly regarded supermarket with strong values that are enforced by the brand communications and the company’s part-time marketers (Crosby et al, 1990) and front line employees. Customers and partners value the relationship highly and thus commit themselves to a long-term relationship because they can trust in Waitrose’s reliable, honest and responsible nature. Ethical practice is key to Waitrose’s relationship with both customers and partners. Research on the impact of ethical practice suggests that without it, customers and staff would certainly feel a lack of authenticity, which directly impacts trust, and in turn fails to drive commitment. Waitrose customers and partners are able to relate to the supermarket through sharing the same ethical values, resulting in a strong affective commitment. The supermarket has a strong following of loyal ‘green’ customers that are able to connect with Waitrose on an emotional level. This emotional connection has been developed by the company’s RM approach, where further value is created for the customer than just the product or service alone (Gronroos, 1994). This can be seen as one of the reasons why customers and partners also develop a normative commitment towards the supermarket. It is evident that ethical practice is key to the success of Waitrose and it should continue to follow an ethical approach, in order to compete in the retail grocery market.

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