Putting the 2007/2008 global food crisis in longer-term perspective: Trends in staple food affordability in urban Zambia and Kenya

Staple food prices in cities in eastern and southern Africa rose sharply between late 2007 and early 2009, leading to estimates of massive increases in food insecurity and hunger. However, in assessing the impacts of soaring food prices on urban consumers’ access to food it is important to consider food price changes relative to changes in per capita incomes. In this study, we use the case studies of Zambia and Kenya, where data are available on food prices, wage rates, incomes, and other indicators of urban purchasing power to answer two main questions: (i) how did staple food purchasing power at the height of the food price crisis compare to levels over the last 15 years? and (ii) did the food price crisis exacerbate an already declining trend in staple food purchasing power, or did it reverse a trend of stable or improving staple food affordability? Results indicate that staple food purchasing power in urban Zambia and Kenya improved markedly in the 10–12 years prior to the food price crisis. Most measures of bread and maize meal affordability at the start of the crisis in 2007 were at levels 1.0–4.3 times higher than in the mid-1990s. These gains for urban consumers were slashed but not completely reversed during the food crisis. Between 2007 and 2009, maize meal and bread were still more affordable in urban Zambia than all periods between 1994 and 2003. In urban Kenya, staple food purchasing power as of 2008/2009 was comparable to levels in 2000/2001–2004/2005 according to some indicators, while other measures suggest that the food price crisis reduced staple food purchasing power to levels lower than any other year in the period 1994/1995–2007/2008.     

What does it take to make the most of supplier relationships?

The supply context of companies has changed substantially during the past two decades because of outsourcing, globalisation and digitalisation, and through growing concern for sustainability and public procurement. These changes, combined with recognition of the potential benefits to be derived from more extensive involvement with suppliers, have made the task of purchasing and supply management broader and more complex. This paper's aim is to examine how the evolving supply context affects the scope of purchasing and supply management and what the consequences for management are. We argue that effective use of supplier relationships involves three main issues – interacting in supplier relationships, dealing with supply network interdependences and handling dynamic changes in the supply context. Coping with these matters requires: (i) conceptual tools that support monitoring and sense-making of what is on-going at the supply side of the firm; (ii) the individual and organisational skills and capabilities required to develop workable solutions; and (iii) organisational arrangements to support the development of these solutions.     

Why integrating purchasing with marketing is both inevitable and beneficial

The shift away from manufacturing in Western developed economies has resulted in economies in which service industries are dominant. Marketing itself has undergone a paradigmatic shift from a focus on the exchange of goods to the provision of capabilities. This paper examines the relationship between marketing and purchasing as a result of the shift from product- to capability-focused commerce. We suggest that the marketing and purchasing departments will become closer due to two major reasons. First, as marketers increasingly become solution-oriented rather than product-focused, they will need to source products and services from third-party vendors and will require deeper involvement of the purchasing department. Second, with the emergence of customer-centric marketing coupled with build-to-order manufacturing, marketing and purchasing will have to be better aligned to deliver solutions to customers. These new dimensions in the marketing–purchasing interaction will also lead to changes in the selection, training, and recruitment of marketers and purchasers as well as their roles in the supply chain. We elaborate on these changes likely to occur in business-to-business organizations and along with implications for managers.     

Barriers of purchasing departments' involvement in marketing service procurement

A considerable part of firms' marketing services are supplied by external providers, e.g. advertisement agencies, printing houses, trade fair exhibition builders. Although a large spend category, low involvement of purchasing departments prevails during the procurement decision process. This paper develops a conceptual model of purchasing departments' involvement in marketing service procurement along the dimensions “breadth along process” and “depth of integration”, thus contributing to the measurement of purchasing departments' involvement. Drawing on the findings of a case study, we further propose that the impact of purchasing departments' involvement on procurement success is moderated by procurement complexity, and the duration of the relationship between the purchasing and marketing employees. In addition, barriers to purchasing departments' involvement are conceptualized as lack of skills, lack of motivation, and lack of opportunity.     

Product type and the relative influence of buyers in commercial construction

Organizational purchasing is usually the product of collective decision making. While the seller's first contact with a prospective customer is with the purchasing agent, the purchasing agent is by no means the sole decision maker. The purpose of this study is to identify the relative influence of purchasing agents and other buyers in the commercial construction industry. Individual buyers and firms can also make use of the framework evolved to examine their own buying practices.     

The effects of purchasing proactivity on value creation and supply risk reduction in sourcing projects: Implications for marketers' capabilities

In many organizations, the role of purchasing is in a transition from a reactive order taker, into a proactive and internally integrated business partner. Building on a Resource-Based View and Capability-Based View, this study explores how purchasing professionals' involvement and proactive efforts in sourcing processes affect sourcing project outcomes, in terms of both value creation and supply risk reduction. The authors gathered data on 112 sourcing projects from a large, private financial services company with in-depth and structured interviews with key stakeholders. A structural model deploying the research hypotheses was analyzed using the Partial Least Squares technique. The results reveal that, driven by early involvement of and responsibility granted to the purchasing professional, purchasing proactivity enhances value creation and supply risk reduction sourcing outcomes. Specifically, proactivity mediates the effect of purchasing's involvement on value creation.This study empirically establishes the importance of purchasing proactivity, serving as critical capability of purchasing professionals. Following a dyadic logic, this impacts industrial marketers. More specifically, when purchasers build capabilities to show proactive behavior to enhance value creation and risk reduction, marketers need to develop capabilities to facilitate purchasers in their endeavors.     

Changes in industrial buying: Implications for industrial marketers

Some of the most dramatic changes in organizational buyer behavior have occurred and continue to occur in the industrial purchasing function. Purchasing is becoming less and less a lower-level staff function and more and more a top-level management position. This article examines some of the major changes in the purchasing function and the reasons for those changes. The article concludes by considering some of the major implications of these changes for the industrial marketer.     

A decision model for adopting an extended warranty under different maintenance policies

Numerous products are sold with a warranty period and the possibility of buying an extended warranty for a given additional cost. The buyer has then to decide to take the extended warranty or not when purchasing the product. We develop in this paper a mathematical model to study the opportunity provided by the extended warranty for the buyer as well as for the manufacturer. The total average cost incurred by each side during the product’s life cycle is expressed in order to determine the maximum extra cost the consumer should pay and the minimum price at which the manufacturer should sell the extended warranty. This is done under different options in terms of maintenance strategies adopted during the product’s lifecycle.     

Product profile analysis: A tool for industrial selling

The purpose of this article is to provide a step-by-step approach to how product profile Analysis (PPA) can be applied to industrial selling. Specifically, the sales representative can use PPA to help the prospective buyer identify the key criteria involved in the purchasing activity. The concentration on buyer-oriented criteria will aid in the development of the sales representative's role as a consultant to the client. The use of PPA will also help the buyer defend the purchasing decision that was made.     

The mediating role of key supplier relationship management practices on supply chain orientation—The organizational buying effectiveness link

The role of key supplier relationships and their link with purchasing performance are poorly recognized in current business-to-business marketing literature. Given the predominance of collaborative supply chain relationships, purchasing must be considered to be providing value, thereby implying its effective nature. This study introduces a conceptual model of the relationship between supply chain orientation (SCO) and key supplier relationship management (KSRM) with organizational buying effectiveness (OBE) as a measure of effective purchasing behavior. To extend the model's nomological network, we link OBE with firm profitability. We find that SCO and KSRM have a strong positive influence on OBE. Furthermore, KSRM is demonstrated to be a significant mediator in the SCO–OBE relationship. Finally, OBE significantly and positively influences firm profitability, suggesting that it adequately addresses the aspects of effective purchasing behavior. We also discuss theoretical and managerial implications as well as future research directions in light of the limitations of this study.     

Commitment in business-to-business relationships: The role of organizational and personal needs

This article examines commitment in business-to-business (B2B) relationships from the purchasing manager's perspective. It proposes that purchasing managers will form stronger bonds with suppliers who are better able to satisfy both the buying firm's organizational needs as well as the purchasing manager's personal needs. It also proposes that purchasing managers will be more influenced by personal rather than organizational need fulfillment. The results from a survey of purchasing managers support all hypotheses. The findings suggest that marketers will be able to develop stronger bonds with purchasing managers by offering benefit bundles that address both organizational and personal needs.     

A general model to compute activity-based waste disposal costs for health care products

ABSTRACT

Hospitals are large producers of solid waste, of which some is benign, some is extremely hazardous, and much is in between. The cost of segregating and disposing of products in these waste streams is high, and studies have shown there is considerable potential to reduce these costs while simultaneously decreasing environmental impact. In this article we develop an activity-based costing method that assigns waste disposal costs proportionally to each product. By providing disposal cost information at this level of aggregation it is possible to directly influence purchasing decisions, identify priority products for focused interventions, and determine the ratio of a product's purchasing cost to disposal cost. The method is tested on products with different purchasing costs, disposal costs, physical characteristics, and disposal processes.     

Purchasing professional services: A transaction cost view of the antecedents and consequences of purchasing formalization

Professional services represent an increasing share of expenditures in contemporary organizations. While these services are often of strategic importance, they are also perceived as being difficult to purchase and use, which creates challenges for the purchasing process. In order to address these challenges, organizations are increasingly engaging in systematic efforts to improve their ability to purchase professional services. These efforts focus on formalizing the purchasing process by introducing policies, guidelines, and other measures for the hiring of service suppliers. Based on a transaction cost economic framework, the current paper investigates the nature, antecedents and consequences of formalization initiatives in the purchasing of professional services. The results from a cross-sectional study of 76 large Swedish organizations show that the formalization of purchasing professional services takes two different forms: the formulation of policies and the establishment of preferred supplier agreements. The former is driven by company size, whereas the latter is driven by the frequency of purchase transactions. Only the establishment of policies, however, is found to be positively related to organizations' perceived ability to purchase professional services.     

Antecedents of functional integration during new product development: The purchasing–marketing link

In response to different economic and business trends, companies are becoming increasingly dependent on external resources and capabilities as they seek to cater for an ever more complex and challenging demand. Such dependence has led an important group of scholars to draw attention to the inevitable integration of the purchasing and marketing functions. We stress here the need for such integration during new product development, and seek the mechanisms that may promote purchasing–marketing integration. Accordingly, this study describes two essential components underlying the concept of purchasing–marketing integration, and tests the effect of different integration mechanisms gathered from the literature on these two components. The model is tested on a sample of 141 Spanish industrial companies. Our results show that each one of these integration mechanisms varies in its effectiveness in promoting each key component of purchasing–marketing integration. Taking these asymmetric effects into account is crucial for selecting the appropriate purchasing and marketing integration devices within companies.     

A model of industrial satisfaction/complaining behavior

A model of the purchaser's satisfaction with supplier response to a formal buyer complaint is developed and tested. The authors answer two important questions: (1) what variables affect the purchasing agent's satisfaction with a supplier's response to a complaint? and (2) how can the supplier respond so as to keep that customer in the future?     

The component procurement problem for the loss-averse manufacturer with spot purchase

This paper studies the purchasing behaviour of a loss-averse engineer-to-order manufacturer, who purchases a key component for his final product from a supplier under a single-wholesale-price contract with spot purchase opportunities, where both the product demand and the component spot price are uncertain. Through newsvendor type of models, we analyze several key issues, including the effects of the manufacturer's loss aversion, and the effects of demand and spot price uncertainties on the manufacturer's decision behaviour. We find that the purchasing behaviour of the loss-averse manufacturer differs from those of the risk-neutral and risk-averse ones. Specifically, we identify some sufficient conditions under which the loss-averse manufacturer may purchase a larger order quantity in advance when demand becomes more uncertain or when the price becomes more uncertain. We also discuss the two-wholesale-price contract and show that fixing the emergency supply price may lead to a smaller order quantity.     

Co-management of purchasing and marketing: Why,when and how?

This article discusses the theoretical and conceptual foundations for the co-management of purchasing and marketing and thereby provides some answers to the questions, why, when and how purchasing and marketing should be co-managed. It develops a conceptual framework distinguishing between internal and external co-management of purchasing and marketing. Improving value creation and value capture is identified as a necessary “pull factor” driving the co-management of purchasing and marketing. Based on resource dependence theory (RDT), we argue that dependence on critical resources is another important “push factor” for the emergence of external co-management. We present a RDT-based typology of co-management constellations showing that co-management is not a one-size-fits-all approach and summarize our findings in five propositions on the co-management of purchasing and marketing. In sum, we conceptualize co-management of marketing and purchasing as a bridging strategy that allows a focal firm to accommodate dependence on critical upstream and/or downstream resources and improves value creation within the supply chain.     

How manufacturers value purchase offerings: An exploratory study

The notion of value and the principles and methods that buyers use to discover which supplier offering has more value needs to drive all business marketing activity. However, the concept of value and how to measure it is somewhat vague. The authors present a simple way to think about value. The research reports an exploratory empirical study of how the valuation model fits the views of purchasing managers and how purchasing agents view value and use it to make decisions. In general, the model posited appears to fit the view of purchasing agents, however, there is some digression and further research is needed.     

An optimization approach to business buyer choice sets: How many suppliers should be included?

In many new or repeat purchasing situations, business buyers must decide how many suppliers to consider (a “choice set”) in determining which supplier(s) to actually buy from or contract with. This paper develops an optimization approach to determining the size of the choice set, taking into consideration buyer utility and search and evaluation costs. A theoretical model is developed for both one-time and repeat purchase situations. The model is estimated using empirical data received from bids received for procurement auctions. In these auctions, suppliers provide bids for steel pipe based on two product attributes (price and delivery time). Model sensitivity to small changes in parameters is also tested.     

Order allocation in a multiple-supplier environment

The objective of this article is to study the effects of an order allocation procedure in a supply chain. This supply chain consists of a company that can order products from multiple suppliers. At any time of an order, decisions have to be made by the company concerning the allocation of products to the suppliers and the respective order quantities, so that the total purchasing cost is minimized, while maintaining a specified service level. For this purpose, we have developed a solution algorithm and tested it to examine its effectiveness in terms of the service level and the company's total purchasing cost. The final section of the paper summarizes the conclusions of this study and suggests directions for future research.