Tradeoffs in Supplier Attribute Ratings in Supplier Selection across Strategic versus Non-Strategic Purchases

ABSTRACT

Purpose: This research identifies a customer perspective that is often ignored, neglected, or undervalued in B-to-B sales – the nature of the product itself. The pivot point is whether the product/service desired is strategic (critical to the company’s mission) or non-strategic (not critical to the company’s mission).

Methodology/Approach: A conjoint analysis was conducted for both types of purchases (strategic and non-strategic), assessing the tradeoffs and espoused preferences of four key attributes involving both the supplier and the product across three performance levels – (1) stability of the supplier, (2) reliability, (3) competitive pricing and (4) product quality.

Findings: The results indicate that B-to-B customers do make tradeoffs between suppliers based on stability, reliability, pricing and product quality. The direction of the tradeoffs depends on whether the purchase is a strategic or non-strategic acquisition. The results suggest that suppliers would benefit from understanding the relationship of their products and services to the B-to-B customer’s mission when the supplier is deciding how to improve performance.

Research implications: Too often there is a disconnect between B-to-B salespeople and their customers resulting in suppliers failing to reach performance goals. The research focuses on the importance of B-to-B salespeople uncovering whether or not the customer considers the nature of the product being considered as strategic or non-strategic to their business. The research helps to explain some of the mixed findings in the supplier selection literature.

Practical implications: The research points to the fact that customers analyze and make decisions differently depending on the type of product. Additionally, the research highlights the importance to customers of understanding the potential legal and financial risk of suppliers. This is important in that traditionally suppliers tend to focus on product features and benefits in their selling efforts. These results indicate that they should spend significant time discussing factors that illustrate legal and financial risk reduction to the customer of dealing with their companies.

Originality/Value/Contribution: The study offers a new look at an age-old problem of enhancing sales performance through a new lens by considering the nature of the product (strategic versus non-strategic) through the perspective of the customer. The findings help to explain the mixed results of previous research. To date, the nature of the product and tradeoffs of attributes that customers are willing to make depending on that product classification have not been the focus, though the results suggest that understanding customer decision-making through this lens may enhance supplier success.     

Customer Satisfaction with Consumption Systems

ABSTRACT

Purpose: This research examines how satisfaction toward a product and its associated services offered together by a single provider jointly affects behavioral intentions toward the provider.

Design/methodology/approach: In this study, empirical tests were conducted using longitudinal data spanning 5 years from a multinational company that offers both products and associated services as part of a consumption system to their customers.

Findings: Results show a joint congruent effect of product and services satisfaction on behavioral intentions is linear and positive. It appears that offering great service cannot compensate for less-than-adequate satisfaction toward the product. The results further highlight decreasing customer sensitivity to improvements in both sources of satisfaction and imply that focusing on too high levels of one type of satisfaction for their customers can actually be counterproductive for firms.

Research Limitations: Our model was tested using the data obtained from a single firm. Future research could test this model with data from multiple firms in various different industries and establish broader generalizability to the findings.

Practical Implications: Findings provide managers with insights on how to allocate resources across product and service spaces and to manage product and services revenues over time. Results also indicate that customer behavioral intention ratings are more weighted on product quality over the service received by them. However, mere improvements in the product cannot provide the highest desired results and therefore quality improvements in the product need to be complemented by improvements in service quality.

Originality/Value: There is a rapid emergence of the phenomenon of manufacturers providing both products and services as an integrated consumption system to their customers. While the provision of both product and service subsystems by the same firm leads to certain synergies, there are obvious costs to the development of new service capabilities and coordination with existing product capabilities. Our research intends to address this issue.     

Customer Participation and Project Performance: The Mediating Role of Knowledge Sharing in the Chinese Telecommunication Service Industry

Purpose: Extant literature has devoted more attention to customer value co-creation and knowledge sharing, not only in business-to-customer (B2C) markets, but also in business-to-business (B2B) markets. This study explores and examines the antecedents and consequences of customer knowledge sharing in the context of B2B markets by applying the motivation-opportunity-ability (MOA) framework.

Methodology/Approach: This empirical study involves two structured surveys of project managers from both suppliers (n = 213) and customers (n = 312), which were conducted in the context of the Chinese telecommunication service industry. The conceptual model of this study was subsequently tested by developing Partial Least Squares (PLS) based structural equation models.

Findings: It was found that customer knowledge sharing is facilitated by four MOA factors: customer orientation, customer perceived benefits, customer socialization, and customer technological capability. It was determined that knowledge sharing has a direct and significant effect on project performance. Furthermore, the study revealed that such relationships vary across suppliers and customers.

Research Implications: This study extends the existing research stream of interfirm knowledge sharing by examining the antecedents and consequences of customer knowledge sharing from dual perspectives of customers and suppliers, and sheds light on the benefits of customer knowledge sharing. The dyadic perspective embodied in this design facilitates our understanding and management of knowledge sharing between organizations.

Originality/Value/Contribution: This article provides an important contribution to the existing literature of customer knowledge sharing by revealing how to effectively facilitate interorganizational knowledge sharing, particularly knowledge from customers to suppliers, and discovers conditions under which customers are more likely to exchange information, and share knowledge with their suppliers from the dyadic perspective.     

The Effects of Relationship Marketing on Share of Business: A Synthesis and Comparison of Models

ABSTRACT

Purpose: The article synthesizes the extensive empirical work on relationship marketing (RM) and compares the various conceptualizations to give a better understanding of the relational factors (i.e., characteristics of the business relationship) that improve a seller’s objective performance (i.e., share of business) in a business-to-business (B2B) services context. These conceptualizations, taken from the literature, link relational antecedents (i.e., communication, domain expertise, relational value, and mutual goals) to relational mediators (i.e., trust, satisfaction, commitment, relationship quality) to explore how they in turn affect a seller’s share of business.

Methodology/approach: All 4 models derived from the literature review were assessed using a dataset drawn from a survey of 948 client firm representatives of a Portuguese hotel chain in a B2B services context.

Findings: The best of the models in terms of model fit and prediction of share of business shows that only customer commitment directly drives a seller’s share of business, and simultaneous interrelated changes in customer trust and satisfaction, as well as customer perceptions of relational value, drive customer commitment, and so exert indirect effects on performance. The model that proposes that a seller’s performance is strengthened by simultaneous interrelated improvements in customer trust, satisfaction, and commitment (i.e., with these three mediators being conceptualized as a single, combined, higher-order mediator, termed relationship quality [RQ]) shows inferior fit. No combination of mediators (satisfaction, trust, or commitment) improves the seller’s objective performance over and above their individual effects (i.e., there are no synergistic effects).

Research implications: The literature review suggested four ways of modeling RM antecedents, mediators, and their effect on performance. Complex second-order constructs such as RQ lack explanatory power when predicting outcomes and mask the effects of individual relational mediators. Correct conceptualization is important, as conclusions vary drastically even with the same set of relational mediators and same dataset.

Practical implications: B2B service providers’ investments in RM will lead to improved share of business only if customer commitment is high or there is at least the potential to improve it. This requires an understanding of how valuable

the customer believes the relationship to be, and how the customer rates the relationship with the firm in terms of satisfaction and trust. A customer segmentation approach to relationship building and maintenance is advocated and detailed suggestions are put forward.

Originality/value/contribution: Apart from the work by Palmatier, the relationships between RM antecedents and mediators have not yet been examined simultaneously and findings are fragmented. The article provides a synthesis of this expansive literature. It contrasts different interplays between RM mediators, including their interrelationships as a higher-order construct, and explores possible synergy effects. Unlike previous work, this study focused on an objective measure of seller performance (i.e., share of business), whereas previous studies have tended to examine subjective measures, especially within the B2B context. Furthermore, four full models were assessed here, each of which included the antecedents to RM mediators and their links to objective performance.     

Service Business Development in Small- to Medium-Sized Equipment Manufacturers

Purpose: This article explores service business development by small- and medium-sized equipment manufacturers (SMEMs). It focuses on underlying dynamic and operational capabilities in service business development.

Design/Methodology/Approach: The research design is based on case study research with nine companies from Germany, Italy, Sweden, and Switzerland.

Findings: The findings are twofold. First, the authors elaborate the phases and capabilities necessary for service business development. Second, they argue that these phases and capabilities depend on sales channels (direct sales versus indirect sales through distributors) and customer structures (a limited number of strategic customers versus many end-customers). SMEMs selling directly to a limited number of strategic customers develop organizational capabilities through four phases: (1) consolidation of service offerings, (2) job enlargements in organizational functions, (3) job enlargement in the key account teams, and (4) orchestration of partners to widen the solutions offered to customers. SMEMs selling indirectly through distributors to many customers develop organizational capabilities through the following four phases: (1) rearranging collaboration with distributors, (2) enlarging the service competencies of distributors, (3) modifying distributors into subsidiaries, and (4) enlarging jobs in the sales function of the subsidiaries.

Research Limitations/Implications: The research limitations are due mainly to the intrinsic nature of qualitative research.

Practical Implications: Managers can obtain guidance for service business development from the phases and capabilities described in the paper.

Originality/Value: The study offers a comprehensive framework for assisting researchers in conceptualizing service business development and operationalizing capabilities. The results provide testable propositions that can be used to guide future research.     

The Transition from Product to Solution Selling: The Role and Organization of Employees Engaged in Current Business

ABSTRACT

Purpose: This research investigates how to manage and organize existing employees when launching a solution sales strategy, specifically addressing whether it is possible to migrate existing sales representatives active in product sales to solution sales, and whether it is possible to combine the roles.

Methodology/approach: A case-based approach was applied to a multinational firm, engaged in business-to-business sales that simultaneously launched a solution sales strategy in 17 countries. In-depth interviews with 29 managers and sales representatives were performed to inductively identify why some countries succeeded in the launch, while others did not.

Findings: Because of fundamental differences in approach between solution and product sales, those countries where the solutions and product businesses were separated performed better. The difference in required capabilities and mindset meant that migrating sales representatives from product to solution sales is problematic.

Research implications: This research offers evidence of differences in mindset and approach between different marketing and sales strategies, extending the conclusions to how these differences affect the possibility of migrating existing sales representatives when launching a new selling strategy. Whether to separate service and product sales has been debated. The present results indicate that separating the current product business from the new solution business facilitates the successful implementation of the new strategy. In the case company, the solutions represent a mixture of product and services, suggesting that the problem is not the difference between products and services, but rather different selling strategies and approaches that require different capabilities.

Practical implications: When launching a solution sales strategy, the solution business should be separated from the current product business at both the organizational and personnel levels. Solution sales necessitates a particular approach and capabilities, making it unadvisable to transfer sales representatives and managers to the new solution business based solely on previous product sales success. Instead, a new skill profile must be developed taking account of the requirements of a demand-driven solution strategy.

Originality/value/contribution: Consensus is lacking as to whether to separate product and service businesses. This article extends the debate to the field of solution

sales, demonstrating that separation is needed to succeed in launching a solution sales strategy. Furthermore, this research extends our knowledge of the difference in approaches between different selling strategies, covering the possibility of successfully migrating existing sales representatives to a different selling strategy.     

Purchasing Higher-Value,Higher-Price Offerings in Business Markets

Purpose: A conceptual framework is proposed and tested to better understand customers' purchase of higher-value, higher-price offerings in business markets. Ambiguity about superior value and consequences of obtaining superior value are the constructs in this framework. Ambiguity about superior value is meant to capture the concern and doubt that managers at customer firms have about whether their business will actually realize the cost savings or ability to earn incremental revenue and profits that suppliers claim for their offerings. Consequences of obtaining superior value refers to the outcomes that a customer manager anticipates or experiences in making a purchase decision for higher-value, higher-price offerings.

Methodology: Two operationalizations of each construct are studied in a pair of experiments with purchasing managers and plant maintenance managers.

Findings: Value evidence and incentive to change each receive significant support as mechanisms to reduce ambiguity about superior value. Notably, reference customers and pilot programs appear to be equally effective as value evidence in reducing ambiguity about superior value. In addition, the results provide strong empirical support that incentive to change operates as a threshold phenomenon, as predicted from social judgment theory. While no significant differences in purchase preferences are found for area of responsibility (purchasing versus plant maintenance managers), significant support is found for performance review and reward system as a manipulation of consequences of obtaining superior value.

Contribution: The conceptual framework and empirical results significantly contribute to our understanding of how suppliers in business markets can use monetary as well as nonmonetary means to persuade customers to purchase higher-value, yet higher-price offerings.     

One-to-One and One-to-Many Business Relationship Marketing: Toward a Theoretical Framework

ABSTRACT

Purpose. This work addresses mixed findings in relationship marketing literature regarding the importance of micro-level (interpersonal) relationships on firm outcome.

Methodology/Approach: The article leverages impression formation theory to advance a framework to understand one-to-one and one-to-many marketing relationships to better predict firm outcome.

Findings: The authors suggest that 5 framework moderators—the type and consistency of the encounters, relationship age, purchase frequency, relationship interruptions, and two customer side characteristics (i.e., need to evaluate [NTE] and need for cognitive closure [NFCC]”)—can qualify the relationship building process and impact the effectiveness of interpersonal and/or group relationships on firm outcome.

Practical Implications: The framework suggests that (1) highly consistent sales team behaviors reduce the risk of losing business in case of a sales team member leaving; (2) low frequency purchases are better suited for one-to-many selling relationships; (3) temporarily suspending relationships by individual salespeople is more harmful than suspending relationships by sales teams; (4) involving the customer in the acquisition process facilitates team selling; and (5) a positive first impression is more important for high (vs. low) NFCC and high NTE customers.

Originality/Value. The theoretical framework (1) distinguishes between individual-to-individual and individual-to-group relationships, (2) suggests a distinction between micro-level individual-to-individual and individual-to-group relationships and macro-level individual-to-firm relationships, (3) analyzes the impact of micro-level relationships under the influence of context-related and customer-related factors, and (4) provides managerially relevant guidelines for strategic sales planning.     

The Role of Business and Friendships on WeChat Business: An Emerging Business Model in China

ABSTRACT

WeChat business is an emerging way of doing business in China, which can be considered as a marriage between traditional e-business and social networking communications. In WeChat business, firms have developed customer relationships along two distinct ways: business relationships and friendships. However, research on the combination of business relationships and friendships is relatively nascent, and there are contradictory findings. In this study, we examine the effectiveness of the two relationship strategies using data from a field experiment through the WeChat platform by an apparel firm. Results from the field experiment suggest that development of friendships with new customers can help the strategy of developing business relationships; but developing friendships and business relationships with experienced customers negates each other. The study contributes to the literature on relationship marketing and role theory, and helps WeChat managers clarify how new social networking relationships with customers can be effectively leveraged.     

Trialogue on Facebook pages of grocery stores: Customer engagement or customer enragement?

Abstract

The pervasiveness of social media is compelling businesses to review their way of managing customer experiences. Businesses use social media to interact and engage with customers. Several studies have studied why businesses have adopted social media. However, there is a dearth of research as to why customers interact with businesses on social media in the grocery sector. This paper aims to explore how and why customers react to corporate messages on Facebook pages of Tesco and Walmart. Netnography approach was adopted to gain an insight into the various ways customers engage with the grocery stores on its Facebook pages. This study reveals that social media empower customers, influence the relationships customers have with grocery stores and generate customer engagement. Findings also show that the social customer is both a curse and a blessing to Tesco and Walmart when they create or destroy value for the business. This paper contributes to knowledge by (1) uncovering how customers react to corporate and customer posts on corporate Facebook pages; (2) showing how value can be created and destroyed; and (3) proposing a model illustrating how the main constructs of the study are interconnected: social media, relationship marketing, customer empowerment and customer engagement.     

A Triple Bottom Line Dominant Logic for Business Sustainability: Framework and Empirical Findings

ABSTRACT

Purpose: A limited number of studies have attempted to reveal the mechanism underlying integration amongst the economic, environmental, and social components of business sustainability (BS). BS refers to a company’s efforts to go beyond focusing only on profitability, also to manage its environmental, social, and broader economic impact on the marketplace and society as a whole. The research objective of this study is therefore to develop and test a framework of BS, based upon the triple bottom line (TBL) approach.

Methodology/approach: Companies with more than 100 employees were identified to take part in the study. Respondents included executives in charge of BS initiatives, such as chief sustainability officers, sustainable business managers, and CEOs. Ultimately, 261 companies agreed to participate. Questionnaires (and an accompanying letter with survey details and contact information on the researchers) were sent to the targeted key informant in the company. A total of 110 usable questionnaires were returned, generating a final response rate of 42.1%.

Findings: To assess the underlying pattern of dimensions and items of the BS framework, factor analyses were conducted. An initial factor analysis revealed 3 separate subframeworks of BS (economic, social, and environmental dimensions of the TBL-approach), all of which demonstrate satisfactory factor solutions. A second factor analysis iteration, containing all subframeworks of BS (i.e., 20 dimensions and 60 items) generated a total explained variance of 80%, although the factor loadings of 3 dimensions and their items merged with 3 other dimensions. The final factor solution generated a satisfactory 17-factor solution and explained 83% of the variance, indicating satisfactory convergent, discriminant, and nomological validity, as well as reliability of each dimension.

Research implications: The study proposes a BS framework and concludes that the measurement metrics of the BS framework, which were developed and tested, are valid and reliable. Suggestions for applications, research limitations, and further research are provided. The BS framework may be used by companies to assess and monitor their sustainable business practices in the marketplace and society. The framework provides managerial structure and guidance in terms of the dimensions to be taken into consideration and also the items for measuring each of the dimensions of the BS framework in the market and society. The study is not without its limitations and further work is needed to verify the validity and reliability of the empirical findings of the BS framework across contexts and over time. As it stands, the investigation provides a foundation for further research, offering opportunities for updates, amendments, and refinements. Originality/value/contribution: A principal contribution of this study is the empirically developed and tested BS framework. It is based on the elements of the TBL approach, consisting of dimensions and measurement items. The BS framework and its hierarchical layers provide a structured contribution that assesses and monitors the managerial implementation of sustainable business practices and sustainable business models. Furthermore, the structural properties of the BS framework, in relation to contextual variables, provide additional research opportunities for the future.     

Impact of Traditional Chinese Culture on Business-to-Business Relationship Marketing and Service Firm Performance

ABSTRACT

Purpose: This work addresses the mixed findings in relationship marketing studies regarding the importance of traditional culture-level (i.e., interpersonal) relationships on service firm outcomes.

Methodology/approach: This article leverages customer relationship marketing (CRM) theory to advance a framework for understanding the causal relationship between the Chinese cultural worldview and relationship marketing in order to better predict firm performance.

Findings: The author suggests that five major Chinese cultural characteristics—iren-qing, wa-pao, mianzi, chaxu-geju, and collectivism—can qualify the business-to-business (B-to-B) relationship building process and impact the effectiveness of interpersonal and/or group relationships on service firm outcomes.

Research implications: The study’s framework suggests that Chinese cultural characteristics, universal concepts manifest in the activities of Chinese society and organizations, have a positive effect on customer relationship marketing. Chinese culture characteristics can be used to generate excellent relationships with customers and thus create a consumer preference for certain companies and drive service marketing repurchase.

Originality/value/contribution: This study’s theoretical framework (a) distinguishes between Chinese cultural characteristic and relationship marketing relationships; (b) suggests that Chinese cultural characteristics and customer relationship marketing have a positive and substantial effect on service firm performance and that Chinese cultural characteristics are related to customer relationship marketing in their effect on service firm performance; and (c) provides managerially relevant guidelines for strategic sales planning.     

Formation of Reputation in Business Markets

ABSTRACT

Purpose: This study adopts a relational perspective on reputation. We investigate how relationship characteristics impact a customer’s judgment of supplier reputation. We include characteristics at both the interfirm and interpersonal levels, and we additionally link these characteristics to interfirm trust in order to explore similarities and differences between reputation and interfirm trust.

Methodology/approach: A survey was conducted among firms in the Norwegian offshore oil and gas industry. We assessed the measurement model and tested the hypotheses by applying LISREL.

Findings: The results show that the customer’s dependence on the supplier, common knowledge, and interpersonal trust are positively related to reputation, while opportunism is negatively related to reputation. Reputation is positively linked to interfirm trust, and both reputation and interfirm trust impact the customer’s satisfaction with the supplier.

Research implications: This study sheds light on the role of relational mechanisms in reputation formation. It suggests that reputation primarily consists of cognitive components, while interfirm trust consists of more affective components. Reputation is an important factor in developing interfirm trust.

Practical implications: This study underscores the importance of a firm’s core relationships to customers for developing its reputation. Managers need to carefully develop their relationships to customers in such a way that these relationships are consistent with and confirm the reputation they want to build.

Originality/value: The study supports the view that relational characteristics play important roles in the formation of reputation in business markets.     

Conceptualization and Integration of Marketing Intelligence: The Case of an Industrial Manufacturer

Purpose: The primary goal of this article was to conceptualize a systematic marketing intelligence process for industrial manufacturers because, up until now, such concepts have only been focused on consumer goods settings. Hence, this article investigates how marketing intelligence activities are developed and managed effectively in industrial markets.

Methodology/approach: The authors conducted a case study of Maschinenfabrik Reinhausen, a German based manufacturer of regulation technology for power transformers.

Findings: We found that a systematic marketing intelligence process should be based on the resource- and market-based view of strategy as well as on the market orientation construct. When implementing marketing intelligence, the integration of the sales force within the whole process is the crucial lever for an industrial company. The formalization of the process is necessary to ensure its continuity and acceptance; however, the varying intensity allows the necessary flexibility of the process.

Research implications: The constraints of the decisive process steps of marketing intelligence have to be further enhanced for industrial markets. It is important to find out how the integration of the sales force can best be designed to incorporate reward systems and motivation structures, and how to establish a corporate marketing-minded culture throughout the organization.

Practical implications: The important steps for a well implemented marketing intelligence process are a preparation phase, followed by the gathering, analysis, and dissemination of information. This article highlights the success factors for each process step. Above all, managerial and organizational commitment is necessary for the implementation of the whole process.

Originality/value/contribution: By focusing on the industrial manufacturing business, this study provides deep insights into a neglected area of research. Light needs to be shed on marketing intelligence in industrial markets, where the lack of traditional market research has to be compensated.     

Listen to the voice of the customer—First steps towards stakeholder democracy

Recently, calls have grown louder for more stakeholder democracy that is, letting stakeholders participate in the process of organizing, decision‐making, and governance in corporations, especially in the area of Corporate Social Responsibility (CSR) activities. Despite the relevance of the subject, the impact of customer involvement in CSR on their company‐related attitudes and behaviors still represents a major research void. The paper at hand develops a conceptual framework of consumer involvement in CSR based on the existing literature, theories of stakeholder democracy, and organizational boundaries as well as drawing from the qualitative focus group interviews (N = 24). The framework is tested on a large scale, two‐time point field‐experimental study (N = 3,397). More specifically, consumer reactions to three degrees of customer involvement (i.e., information, feedback, and dialogue) are tested in two different CSR domains (i.e., company‐internal business process vs. company‐external philanthropic CSR). Results indicate that the customer involvement in CSR has a more beneficial effect in terms of strengthening customer outcomes in CSR domains that directly affect external stakeholders of the company (i.e., philanthropic CSR) than in domains that mainly concern company‐internal stakeholders (i.e., business process CSR).     

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Purpose: Companies engage in business relationships for a variety of reasons, including specialization, product development, and building competitive networks. Research has demonstrated that mergers and acquisitions (M&As) may challenge ongoing business relationships. The purpose of this article is to investigate whether and how competition authorities consider business relationships when evaluating M&As.

Methodology: The article uses the documentation from 450 M&As reported to the Swedish competition authority to capture the way in which an authority evaluates M&As. The Swedish competition authority evaluation corresponds to other national and international evaluation procedures.

Findings: The findings indicate that the competition authorities neglect an important aspect of business life, namely companies forming business relationships. The competition authorities evaluate M&As on the basis of risk for price increases, and consequently disregard such issues as heterogeneity in demand and offerings, and values built into existing business relationships.

Originality/Value/Contribution: The article contributes to research on business relationships through exploring how a public authority deals with such relationships. It also contributes to research on mergers and acquisitions through examining how these activities are evaluated by competition authorities. Furthermore, the article contributes to competition research by reflecting on competition law concerning M&A regulations in relation to business relationships.     

Trends in Executive Education in Business Marketing

ABSTRACT

Business marketers in the 21st century are grappling with the harsh, tough demands of a consolidated customer base, rapid product and service commoditization, complex channel structures, and hyper-competition in a rapidly evolving, information-intensive global economy. Across the globe, firms concerned with developing managerial talent to respond to these trends are demanding and expecting changes in the executive education programs offered by business schools. We consider in this paper a number of recent trends and changes in customer expectations, program format, content development and delivery, and program marketing that we have observed in executive education in the field of business marketing.     

The Transformation of African Smallholders into Customer Value Creating Businesses: A Conceptual Framework

An increasing number of the 600 million African smallholders are becoming integrated into the supply chains of supermarkets, fast food chains, and exporters. This process gradually transforms the smallholders into profit-oriented businesses that can make important contributions to rural development and food security. This article brings this issue to the attention of the readership of the Journal of African Business. It connects distinct lines of literature on smallholders, business training, and customer value creation. More specifically, it argues that to equip smallholders with the understanding of how markets function and what customers value, trainings that address fundamental marketing concepts are required. The arguments are captured in a conceptual framework explaining the livelihood performance of rural African smallholders. Based on these arguments, the article formulates implications for development workers and suggests directions for African business research.     

Cross-Divisional Orientation: Antecedents and Effects on Cross-Selling Success

Purpose: To determine which company internal prerequisites must be in place and managed to realize a successful cross-selling strategy and to find answers on how to overcome cross-selling obstacles.

Methodology/approach: Qualitative and quantitative data from various industries provide insights into the implementation of a successful cross-selling strategy. Qualitative data serve to derive the hypotheses and constructs and design quantitative measures. Structural equation modeling with data from a management survey of an industrial glass manufacturer tests the proposed effects.

Findings: The cross-divisional orientation of a company affects the realization of cross-selling potential and the number of product divisions a salespersons sells. These factors then influence the salesperson's motivation and readiness to engage in cross-selling activities, which finally affect the company's overall cross-selling success. A salesperson's state of mind has the greatest impact on cross-selling success.

Research implications: Similar results might be expected for various other industries, which need to be tested. The findings could be enhanced by incorporating a wider range of customer characteristics into the analysis, as well as other mediating or moderating variables.

Practical implications: There is a clear need to enable cross-divisional acting and thinking among salespeople. Managers should foster cross-selling motivation and invest in specific training and recruitment to increase the dissemination of knowledge across divisions and reassure salespeople about offering various products.

Originality/value/contribution: This contribution to current practice clarifies why cross-selling often does not work and why it remains so challenging to realize. The combination of three sources of data—qualitative, objective, and quantitative—advances cross-selling research by considering internal obstacles to cross-selling and revealing ways to overcome them.     

Ignoring Your Best Customer?

Abstract

Many organizations devote considerable amounts of money and human resources to develop systems aimed at improving customer retention and profitability. The conventional wisdom is that if retaining the most profitable customers is a good way to increase profitability, then allocating resources to increase the satisfaction of those customers has to be a great objective. However, managers do not observe clear link between satisfaction, retention and profitability. The reason is that different customers have different preferences for convenience as well as different costs associated with switching service providers. These preference and cost heterogeneities have important implications for how companies should target their customer service efforts.

In this paper, we adopt a latent class model to examine the interrelationship amongsatisfaction, retention and profitability. Applying the model to a data of customer satisfaction, self-reported switching propensity, and profitability provided to us by a large Midwestern bank, we make normative statements about which customers are the most criticalones for the company to satisfy and how to satisfy them. The results of this research help to explain why managers have been frustrated by the apparent lack of actionable information present in customer satisfaction data and points to more intelligent ways to use this data.