Model of Relationship Marketing Partnerships Between Batik SMEs and Batik Distributors in Central Java, Indonesia

Abstract

This article develops and tests the model for the determinants of satisfaction and loyalty. The aim of this study is to analyze: (1) the effect of confident on relationship quality, (2) the effect of confidence on mutual benefit, (3) the effect of mutual benefit on relationship quality, (4) the effect of relationship quality on satisfaction, (5) the effect of mutual benefit on satisfaction, (6) the effect of mutual benefit on loyalty, and (7) the effect of satisfaction on loyalty. This model was tested using data obtained from 131 batik dealers in Semarang, Indonesia. The hypotheses are tested using Partial Least Square (PLS), all supported by the results of the confirmation of confidence, mutual benefit, which are found to be the key drivers of relationship quality, satisfaction and loyalty. This study emphasizes the role of relationship quality and mutual benefit as mediation for the variables of confidence and loyalty. The implications of the findings in this research towards the application of relationship marketing are: First, effort should be made to increase the confidence between suppliers and dealers who help market the product. Second, to ensure a long-term partnership between the enterprising parties, the quality of relationship between suppliers and craftsmen or Small and Medium Enterprises (SMEs) should be enhanced, so that the satisfaction of craftsmen or SMEs will be the better. Third, Craftsmen or SMEs should be more transparent in determining the mutual benefit with suppliers to improve satisfaction so as to create a profitable partnership for both enterprising parties. Fourth, satisfaction of dealers with craftsmen or SMEs should be increased so that the craftsman or SMEs can provide and meet the required product requested by the dealers in a timely manner.