Communal Consumer Relationships: An Alternative Path to Sustained Competitive Advantage

Demand-side strategy research has highlighted the consumer's role in competitive advantage, and has demonstrated the strategic importance of creating value for consumers. Like other strategy paradigms, though, demand-side strategy research assumes that consumers are perfectly responsive to changes in a firm's value relative to the competition. This assumption neither reflects existing knowledge of consumer psychology, however, nor explains how a firm can sustain a competitive advantage without consistently offering consumers value that is superior to the competition. We draw on the concepts of communal and exchange relationships from social psychology to argue that a competitive advantage can be sustained, in lieu of consistent value superiority, through development of a communal relationship with consumers. We explain how a communal relationship between the firm and consumer will manifest, and we identify three strategic actions through which firms build such relationships with consumers. The theory developed in this paper provides a framework for scholars to explain with greater nuance how firms sustain competitive advantage, and illuminates the importance of consumer behavior as a sociocognitive element of strategic management.