Buyer profiles: an empirical investigation of changing organizational requirements

Many authors have commented that the profile of the industrial buyer must change if purchasing is to adapt the increasingly dynamic and complex contexts in which firms operate. This exploratory, empirical study examined and compared the trait profiles of current top performers and of ‘ideal’ buyers for the future. This approach links buyer traits with perceived managerial satisfaction with role performance. Based on cluster analysis, we present a taxonomy of five ‘ideal’ types of buyer. We propose that future research should seek to match the identified trait clusters with a typology of purchasing contexts.     

To Be or Not to Be [Locked in]: An Investigation of Buyers' Commitments of Dedicated Investments to Support New Transactions

ABSTRACT

This study draws on two prominent theoretical frameworks, transaction cost analysis and social exchange, which serve as the basis for much of the empirical literature in relationship marketing to investigate the investment behavior of industrial buyers. Specifically, we examine the manner by which situational and contextual factors identified from those frameworks influence buyers' commitment of dedicated investments to support new transactions within ongoing exchange relationships. Our empirical results show that buyer dedicated investments are positively influenced by the extent of supplier dedicated investments, thus supporting the safeguarding rationale posed by transaction cost theory and the reciprocal nature of commitments derived from social exchange theory. Such investments are also positively influenced by the extent of past adaptations made within the pre-existing relationship, consistent with the generalized hostage explanation from the transaction cost literature and theories of the incremental development of relationships. These investments are also positively influenced by the size of the procurement but negatively influenced when a multisourcing purchasing strategy is being pursued, which are consistent with means to manage dependency. It was also found that buyer investments are not uniformly influenced by perceived environmental uncertainty related to supply and market sectors and technological conditions, suggesting that buyers respond to the risks associated with each of these environmental sectors in a distinctive manner.     

An Empirical Investigation of Components of Industrial Buyer Motivation

Motivation of industrial buyers has been virtually ignored in the marketing and purchasing literatures. This empirical void is surprising given the critical role organizational purchasers play in their firms. This paper reports the results of a study that explored the impact of individual and organizational characteristics on three expectancy model components of industrial buyers' motivation. Findings reveal that personal factors have a greater impact on buyer motivation than do organizational variables. Implications of the study are also offered.     

A Relationship Governance Perspective of Organizational Buyers' Supplier Choice Decisions

Although the transaction cost analysis (TCA) has long been used by marketing and management scholars to study organizational buyers' make-or-buy decisions, it sheds limited light on their choice behavior beyond the make-or-buy trade-off. In the meantime, many organizational purchase decisions are structured around which independent supplier to buy from, rather than a typical make-or-buy decision. This study extends existing research on TCA by applying this theoretical framework to explore why organizational buyers make purchases from among independent suppliers. The article posits that (1) two forms of relationship governance—buyer trust and market (i.e., the relative dependence between the buyer and supplier)—help explain the differences in buyer decision-making uncertainty involving independent suppliers, which further influences the buyers' propensity to purchase; and that (2) trust further influences the buyers' propensity to purchase due to its effect on customer perceived value. The empirical study based on organizational purchasing decisions lends support to the predictions of the relationship governance theory.     

Corporate social responsibility as cultural meaning management: a critique of the marketing of ‘ethical’ bottled water

To date, the primary focus of research in the field of corporate social responsibility (CSR) has been on the strategic implications of CSR for corporations and less on an evaluation of CSR from a wider political, economic and social perspective. In this paper, we aim to address this gap by critically engaging with marketing campaigns of so-called ‘ethical’ bottled water. We especially focus on a major CSR strategy of a range of different companies that promise to provide drinking water for (what they name as) ‘poor African people’ by way of Western consumers purchasing bottled water. Following Fairclough's approach, we unfold a three-step critical discourse analysis of the marketing campaigns of 10 such ‘ethical’ brands. Our results show that bottled water companies try to influence consumers' tastes through the management of the cultural meaning of bottled water, producing a more ‘ethical’ and ‘socially responsible’ perception of their products/brands. Theoretically, we base our analysis on McCracken's model of the cultural meaning of consumer goods, which, we argue, offers a critical perspective of the recent emergence of CSR and business ethics initiatives. We discuss how these marketing campaigns can be framed as historical struggles associated with neo-liberal ideology and hegemony. Our analysis demonstrates how such CSR strategies are part of a general process of the reproduction of capitalist modes of accumulation and legitimation through the usage of cultural categories.     

On the Effects of Dispositional and Situational Variables on the Motivation of Industrial Buyers

Using survey data from a sample of fleet purchasing managers, we explore the motivational process of industrial buyers. The results reveal direct and indirect links between self-esteem and both extrinsic and intrinsic motivation. The indirect effects of self-esteem on motivation come through industrial buyer responsiveness to leader behavior and formal authority. We explore the implications of integrating dispositional and situational factors in a single model of industrial buyer motivation, both for marketers who seek to better understand their customers and for purchasing managers.     

The Pareto rule for frequently purchased packaged goods: an empirical generalization

Many markets have historically been dominated by a small number of best-selling products. The Pareto principle, also known as the 80/20 rule, describes this common pattern of sales concentration. Several papers have provided empirical evidence to explain the Pareto rule, although with limited data. This article provides a comprehensive empirical investigation on the extent to which the Pareto rule holds for mass-produced and distributed brands in the consumer-packaged goods (CPG) industry. We used a rich consumer panel dataset from A.C. Nielsen with 6 years of purchase histories from over 100,000 households. Our analysis utilizes a large number of potential factors such as brand attributes, category attributes, and consumer purchase behavior to explain variation in the Pareto ratio at the brand level across products. Our main conclusion is that the Pareto principle generally holds across a wide variety of CPG categories with the mean Pareto ratio at the brand level across product categories of .73. Several variables related to consumer purchase behavior (e.g., purchase frequency and purchase expenditure) are found to be positively correlated with the Pareto ratio. In addition, niche brands are more likely to have a higher Pareto ratio. Finally, brand/category size, promotion variables, change-of-pace brands, and market competition variables are negatively correlated with the Pareto ratio.     

Prior knowledge and the effect of suggested frames of reference in advertising

This research builds on framing and anchoring and adjustment research and proposes suggested frames of reference as a means to influence buyer behavior. Theory and hypotheses are tested in an experiment of video camera purchases. The empirical results suggest that response to suggested frames of reference varies, depending on the buyer's prior category knowledge. Low-knowledge buyers are influenced by price frames. High-knowledge buyers are influenced by outcome frames. Positive frames are more influential than negative frames. © 1997 John Wiley & Sons, Inc.     

Brand user profiles seldom change and seldom differ

This study tests and extends the discovery that competing brand user profiles are broadly similar, specifically investigating the consistency of this pattern over time. Examining 700 brands in more than 60 consumer packaged goods categories, for more than 160 variables, the authors document not only that brand user profiles seldom differ but also that they seldom change much over 3 to 6 years. These findings have important implications for marketing theory and practice. For example, marketers need to focus mostly on who buys the category and what features they demand as opposed to thinking their brand buyers are very different to those of competitive brands. This paper extends the empirical results of prior brand profile findings, demonstrating their robustness and durability.     

An extended interpersonal influence model of organizational buyer behavior

Traditional views of buyer-seller dyads in organizational buyer behavior (OBB) research often focus on the dyad as a unit. This article considers the purchasing member of the dyad in the dual role of information source and decision influencer embedded in the buying center. The sales representative then is seen to approach the buying center through this liaison, who in many respects performs selling functions within the purchasing organization. A model operationalizing this approach and specific implications for further research are presented.     

How buyers frame problems: Revisited

This article investigates the following propositions: a useful approach for building an organizational‐buying–behavior taxonomy might begin with classifying how buyers frame purchasing problems followed by how such frames affect subsequent perceptions and actions in the decision process. Unlike previous taxonomies of buying situations, direct questioning of organizational buyers is used to learn: (1) whether or not they identify different categories of buying problems; (2) if they do, what dimensions they use when framing buying problems; and (3) how do such frames influence their choices of value‐added service alternatives offered by suppliers. To test the propositions empirically, supplier choices are modeled with the use of buying‐decision exercises. A key result of this study is that the buyers’ framing of problems affects their preferences for vendor designs of value‐added customer services. Most likely, the framing of buying problems by organizational buyers is layered and more complex than related taxonomies found in the marketing literature. © 2001 John Wiley & Sons, Inc.     

The time-harried shopper: Exploring the differences between maximizers and satisficers

Schwartz and his colleagues have proposed individual differences in consumer decision goals. Maximizers are those who always strive to make the best possible decision, whereas satisficers are those who are usually willing to settle for a “good enough” option. In this study, we explore the influence of the maximizing trait in situations where consumers have to make quick purchase decisions. The context for our empirical study is online gift purchases made under a time constraint. The results support our predictions that maximizers (vs. satisficers) engage in more prepurchase browsing behavior and also perceive more decision time pressure. Furthermore, these effects are moderated by the size of the available choice assortment. The results also show that maximizers are more likely to change their initial time-constrained choices if given the opportunity to do so. We discuss the implications of the research for the study of individual differences in consumer behavior and also for customizing retail sales and Internet marketing tactics based on buyer segmentation.     

Competition,Transparency, and Reciprocity: A Comparative Study of Auctions and Negotiations

The paper discusses experiments aimed at comparing multi-attribute reverse auctions and multi-bilateral negotiations for procuring goods with multiple attributes. Both exchange mechanisms involve a buyer purchasing from one of several sellers. Two types of negotiations are considered: verifiable and non-verifiable. They differ in the sellers’ knowledge of the current best offer on the table; in verifiable negotiations the best offer is automatically shown to every participant, which makes it similar to auctions. Online auctions and negotiation systems were used to study auction and negotiation processes, and the mechanisms’ efficiency. The results show that buyers did best using auctions, followed by non-verifiable and verifiable negotiations. We also looked into the differences between auctions and negotiations in terms of their duration, sellers’ and buyers’ involvement, and efficiency and conclude that the behavior of buyers and sellers cannot be explained solely on the grounds of traditional economics. It can, however, be explained on the grounds of social exchange theory and behavioral economics. In multi-bilateral negotiations competition and social behavior coexist. When transparency is introduced the social effect becomes stronger, weakening the impact of competition.     

Multimarket Contact and the Use of Power in Buyer–Supplier Relationships

Buyers and suppliers often have multiple business relationships with each other across different geographical and product markets, forming a potentially complex web of connections. What happens between the firms in one geographical or product market may influence their interactions in others. Prior research in strategic management has found that similar multimarket contact in horizontal relationships between competitors has important consequences for the firms’ use of market power. However, the consequences of multimarket contact in vertical buyer–supplier relationships remain unexplored. Building on resource‐advantage theory, this study proposes that multimarket contact between buyers and suppliers is linked to their respective propensity to use three types of mediated power in their relationships (i.e., reward, coercion, and legal legitimate) and that the effects of multimarket contact differ between buyers and suppliers. A vignette study with 143 purchasing managers and 137 business‐to‐business sales managers tests the developed hypotheses. The findings show that a higher level of multimarket contact encourages suppliers to use legal legitimate power to a greater extent and encourages buyers to use reward power to a greater extent but legal legitimate power to a lesser extent.     

Seller-Financing of Homes: A Consumer Economic Perspective

In recent years, the proportion of home purchases financed by lending institutions has declined and the use of alternative financing methods has increased. This paper examines the costs, risks and benefits associated with seller-financing, a popular alternative financing method. The topic is discussed from the perspectives of the buyer and the seller. An empirical analysis is also conducted of condominium sales in Hawaii to gauge the impact of seller-financing upon the housing market as well as its economic effects upon buyers and sellers. Overall, it is concluded that buyers are the primary beneficiaries of seller-financing.     

Empowering People in Modern Organizations for Improved Customer Service

ABSTRACT

Buyer perception of sellers can be arrayed on a perception spectrum ranging from exploitive to sacrificial. Satisfied buyers see their supplier at the midpoint on this continuum-not the best place for a supplier to be because customer commitment will be absent. Delighted, loyal buyers sec their supplier on the sacrificial end of the spectrum. Accordingly, effective relationship marketing programs are designed to move buyer perception of seller behavior to the sacrificial end of the Bxploitivc-Sacrificial continuum. The core ingredient in a marketing program designed to engender customer perception of sacrificial supplier behavior is an iron-clad extraordinary guarantee.     

Modeling advertising impact at campaign level: Empirical generalizations relative to long-term advertising profit contribution and its antecedents

Research on advertising effectiveness is focused on sales and provides few empirical generalizations on profitability and its antecedents. To fill this gap, we develop an econometric model to capture the impact of advertising at campaign level, using retail panel data coupled with TV audience tracking data. Our study involves 31 brands from six packaged goods categories observed weekly and nationally over 4 years and representing 264 TV campaigns. Although we confirm empirical generalizations on the capacity of advertising to increase sales, we establish a different picture for profitability. Only 11 % of campaigns make a positive contribution to profit. Advertising is more profitable for challengers and medium brands, whereas leaders and small brands (recent or established) have a lower profitability. Advertising intensity in the category and campaign carry-over emerge as the strongest (respectively) negative and positive drivers of profitability. The antecedents of carry-over are also analyzed and discussed.     

The delisting of products by retail buyers

The main aim of the research reported here is to identify any patterns in the delisting behaviour of retail buyers, where a delisted product is defined as one which is removed from sale by a retailer but which continues to be sold by other retailers. The influence of the retail buyer in the marketing of consumer products has become ever more significant. Much academic research into retail buying has aimed at identifying criteria that affect purchasing decisions but few generalizable findings have emerged due to the context‐specific nature of such decision making. In this research a specific context is chosen, that of the de‐selection or delisting of products, a topic that has received little attention to date.

The results of interviews with 125 buyers, working for large and small retailers, on their reasons for 290 examples of product delistings are reported. The influence of more detailed contextual variables such as the buyer's age, experience and qualification, the product type, and the source of the product are examined together with a number of reasons for delisting the product. Many of these contextual variables, particularly the size of the retail business and whether the buyer had experience of working in a retail outlet, correlated widely with the relative importance of decision variables. Buyers working for smaller retailers tended to delist because of low sales volumes. Nett profitability, the reason why products should be delisted, was rarely cited as a major criterion.

More detailed analysis of the data set using factor and cluster analysis revealed that delisting decisions could be categorized into two types, each defined by combinations of contextual and decision variables. The most important variables in distinguishing between the two types of decisions were the buyer's age and experience as a buyer (contextual variables) and the decision criteria of nett margin being too low or the selling price to the retailer being too high. Younger, less experienced buyers were more likely to delist products because of low nett margins and high buying prices. Older, more experienced buyers were likely to delist for reasons other than these. The implications for retailers and for their suppliers of both the major and minor findings from the study are discussed.     

Can Marketing Help in Tackling Food Waste?: Proposals in Developed Countries

One third of food destined for human consumption is wasted globally, and much of the food waste that comes from high-income or developed countries is caused by poor marketing practices, consumer behavior, and consumption patterns. The present study focuses on developed countries to propose some marketing actions that could help in reducing food waste. A comprehensive analysis was carried out for each marketing variable, to provide a snapshot of actions and proposals that are being developed. Our study highlights the relevance of marketing in contributing to reduce food waste, through the removal of “Buy one, get one free” sales promotions, clarifying date labeling, or raising food waste awareness campaigns. The main contribution of this study is the proposal of marketing actions that help in tacking food waste.     

The Impact of Cause-Related Marketing on Millennials’ Product Attitudes and Purchase Intentions

This study, using scenarios, examined the impact of two kinds of cause-related marketing (CRM) efforts (a traditional donation of a portion of sales to a related cause and a more strategic one-for-one donation of donating a product to a related cause when that product was purchased) on millennials’ (those born between 1982 and 2000) attitudes and purchase intentions for four different consumer product categories. The four different consumer product categories selected included a specialty good (laptop), a shopping good (hat), a convenience good (bottled water), and a service (food restaurant). Given the importance of social media to millennials, this research also examined the role of social media on CRM awareness. While millennials had relatively low awareness of CRM campaigns, there was a positive correlation between social media use and CRM awareness. Additionally, CRM efforts may not work for all products as there was no impact on attitude or purchase intention for the product category of laptops. Additionally, the positive attitudes created by marketers’ CRM efforts will not always translate to increased purchase intentions. The use of a strategic one-for-one CRM effort though had a greater impact, specifically for products that deal with needed fundamentals, such as food and water.