With the globalization of business, international manufacturing companies carry out their business activities such as procurement, production, sales and distribution based on logistics centers. In addition many multinational companies are trying to invest in and penetrate into Chinese market. With the growth of manufacturing companies conducting business in China, international transport companies are also expanding their business activities in the Chinese market.
In particular, freight forwarding companies make close relationships with customers of transport services and penetrate into Chinese markets with a differentiation strategy in order to satisfy their customers' service demands. However, a Chinese government policy which does not allowed foreign freight forwarders to invest directly in China has become an obstacle for the penetration of Korean freight forwarders. Accordingly, Korean forwarders planning to penetrate into Chinese markets are forming various cooperative relationship with Chinese freight forwarders.
Thus the objective of this research is to conduct an empirical analysis to examine how cooperative relationships such as joint ventures, management cooperation and agency contracts affect the business performances of Korean freight forwarders. In order to fulfill the research objective, this paper examined the roles of freight forwarders and business environment of Chinese markets. Also personnel interviews with forwarding companies in Korea were carried out to investigate cooperative relationships with partner companies in China.
Additionally, literature reviews have been conducted to examine the concepts of relationship marketing, the factors of relationship activities and qualities, and previous research on the relation between relationship activities and business performances. Based on the literature review this research developed a research model and formulated research hypotheses in order to analyse the casual relation between relationship activities and qualities, and the business performances of Korean freight forwarders.
The research hypotheses formulated in this research are as follows:
H1 : Relationship marketing activities between Korean freight forwarders and Chinese forwarders are positively related to the qualities of their relationships.
H2 : The relationship qualities between Korean freight forwarders and Chinese forwarders are positively related to the performances of their relationship marketing.
The data used to test the hypotheses were collected in a mail survey of Korean freight forwarders. Factor analysis and principal components analysis were performed in this study by using the Statistical Package for the Social Science (SPSS) 10.0. Also to test the casual relation between relationship activities and quality, and the business performances of Korean freight forwarders, Structural Equation Modeling(SEM) was utilized by using AMOS(V 4.01).
According to the results of the analysis of Structural Equation Modeling, relationship marketing activities between Korean freight forwarders and Chinese forwarders are positively related to the quality of their relationships. The result supports H1. In addition, the relationship qualities between Korean freight forwarders and Chinese forwarders are positively related to the performances of their relationship marketing. This result also supports H2.
These results indicated that relationship maintenance between Korean and Chinese forwarders through mutual communications and trust would positively affect their business performances. Accordingly, to enhance business performances Korean freight forwarders need to establish relationship marketing strategies in close cooperation with partner forwarders in China.
While this is a valuable finding in the context of relationship marketing of Korean freight forwarders, there are a number of limitations to this research and much more work must be done. This research limited itself to examining the freight forwarders in Korea. To improve validity of the research findings partner forwarders in China should be examined. However, this research contributes to the development of relationship marketing theory by applying it to the transport service industry.