Creating value in retail buyer–vendor relationships: A service-centered model

We present a “service-centered” model of retail buyer–vendor relationships, in which retail buyers' perceptions of a vendor's economic and social resources affect their assessments of relationship value and relationship outcomes. Economic resources offered at the organizational level of the vendor include brand equity and customer support activities (e.g., merchandising support and margin maintenance). Social resources offered at the individual level of the salesperson include special treatment and customer advocacy. Relationship outcomes include the buyer's intention to grow the business, and in the event of business termination, maintain the interpersonal relationship with the sales representative. Survey data from 532 retail buyers were collected and analyzed using structural equation modeling. The results show that relationship value mediates the effects of economic and social resources on relationship outcomes. However, the process by which this occurs varies.     

Buyer attractiveness as a catalyst for buyer–supplier relationshipdevelopment

The concept of buyer attractiveness has received increasing scholarly attention in the recent business marketing literature, yet empirical studies of the dynamics between buyer and supplier attractiveness and their implications for relationship development are scarce. The research framework presented in this study suggests that buyer attractiveness is connected, first, to supplier's experienced and expected business outcomes within the focal relationship, and second, to the leverage impact of the focal relationship on supplier's other relationships. A qualitative case study of two buyers and their key suppliers scrutinizes the dimensions of attractiveness associated with relationship development. The findings indicate that attractiveness and adaptations performed by the buyer and the supplier are interlinked in a mutually reinforcing or deteriorating manner, forming a mechanism that catalyzes relationship development. These findings and the resultant empirically grounded framework provide a conceptualization and enhanced understanding of the dynamics between attractiveness, adaptations and relationship development.     

How can business buyers attract sellers' resources?: Empirical evidence for preferred customer treatment from suppliers

This paper describes a study that investigates what makes a buyer attractive to a seller in a business-to-business buyer–seller relationship and encourages the seller to commit to and invest resources preferentially in the relationship. The study helps answer the question, “What is it that the buyer needs to do to create this attractiveness?” The perspective is somewhat unusual in the marketing literature for two reasons. Firstly, because it investigates how the supplier perspective of customer financial attractiveness affects the attitudes and actions of the supplier towards the buyer, rather than taking the buyer's perspective across the relationship. Secondly, the study has relationship attractiveness in terms of financial performance as an antecedent of its relationship constructs, whereas most relationship studies investigate performance as an outcome. The paper develops a model that proposes the seller's perception of customer financial attractiveness, seller satisfaction, and seller commitment as drivers of the seller's preferred customer treatment by allocation of resources to the relationship. The bases for the study's model are the resource-based view of the firm, the industrial marketing and purchasing (IMP) models, and related resource-focused theoretical streams. The study finds support for the model in the analysis of survey data.     

The double‐edged effect of knowledge acquisition: How contracts safeguard pre‐existing resources

Research summary : Acquiring knowledge on a partner's pre‐existing resources plays an important yet ambiguous role in collaborative relationships. We formally model how contracts trade off productive and destructive uses of knowledge in a buyer‐supplier relationship. We show that, when the buyer's pre‐existing resources are vulnerable to the revelation of sensitive knowledge, the supplier overinvests in knowledge acquisition as it expects to use the knowledge as a threat in price negotiations. A non‐renegotiable closed‐price contract prevents such overinvestment and reduces the supplier's ability to expropriate the buyer ex post. Our results extend to the cases of renegotiable closed‐price contracts, repeated interactions between a buyer and a supplier, and the use of nondisclosure policies. We draw theoretical, empirical, and managerial implications from our model. Managerial summary : This study yields new insights regarding the use of contract design in protecting pre‐existing, nonrelationship specific assets in buyer‐supplier arrangements. Anecdotal examples illustrate the “dark side” of these arrangements where opportunistic suppliers exploit knowledge of buyers' pre‐existing resources to seek rent and appropriate value. When a supplier is likely to act harmfully, a closed‐price contract that specifies the price of the supplier's component upfront may reduce the supplier's incentives to overinvest in acquiring and exploiting knowledge of the buyer's pre‐existing resources. As such, when a buyer's pre‐existing resources are highly valuable, and thus more vulnerable to use by the supplier outside of the arrangement, a non‐renegotiable closed‐price contract is more efficient. Additionally, limited disclosure policies and informal agreements based on repeated interactions complement indirect governance via price contracts. Copyright © 2015 John Wiley & Sons, Ltd.     

Securing business-to-business relationships: The impact of switching costs

While the relationship marketing literature acknowledges the importance of switching costs for increasing customer retention, little is known about its relevance in industrial markets. In particular, it is unclear whether switching costs, and associated dimensions, impact on behavioral outcomes of buyer–seller relationships in business-to-business (B2B) markets. In order to contribute to theory development in this important area, our research first explores the dimensions of switching costs for the B2B domain and also tests the relative impact of these dimensions on business customers' actual purchase behavior. Results suggest that switching costs in B2B settings are a multi-faceted construct, including (i) procedural, (ii) financial, and (iii) relational switching costs. Moreover, we find relational switching costs to be most important for securing B2B buyer–seller relationships since they impact a customer's (a) share-of-wallet, (b) cross-buying behavior, and (c) actual switching behavior. While procedural switching costs only influence share-of-wallet, financial switching costs solely impact customer's cross-buying behavior. These findings contribute to a better understanding on how to secure B2B buyer–seller relationships.     

Does buyers' financial slack promote or inhibit suppliers' circular economy performance?

Extant research examining the link between slack resources and performance offers few insights into how buyer firms' financial slack influences suppliers' circular economy (CE) performance. We collect secondary data from 290 buyer-supplier dyads of listed firms in China during 2006–2018 from CSMAR database. Using panel data analysis, we find a nonlinear (U-shaped) relationship between them. In addition, some relationship-specific contextual factors, i.e., buyer power and technology capability, have positive moderating effects, while buyer-supplier geographical distance has negative moderating effects on the main U-shaped relationship. Our study contributes to the literature on the slack-performance debate confirming the CE performance effect of financial slack in the business-to-business (B2B) relationship.     

Buyer (dis)satisfaction and process innovation: The case of information technology services provision

Studying buyer satisfaction within business services is important because if buyer expectations are not addressed, it can endanger the relationship. Dissatisfied buyers can remain silent or switch supplier without notice, damaging the supplier-buyer relationship. Therefore, suppliers often invest substantial effort in collecting feedback with an expectation that it will foster improvements and innovation in processes. However, using a mixed method sequential research design, we find that there is no direct association between the level of dissatisfaction and process innovation: this poses questions about redundancy of feedback collection. We find that there is a time lag between dissatisfaction identification and problem resolution. We also find that there is a cognitive gap between a supplier's interpretation of the buyer's expectations and the buyer's actual expectations. Further, existing processes that are improved repetitively using discontent feedback suffer from diminishing returns. Suppliers need to proactively seek solutions rather than reactively dealing with buyer problems.     

How buyer–seller relationship orientation affects adaptation of sales processes to the buying process

Adaptation in sales is common in business relationships. The purpose of this study is to understand how the buyer–seller relationship affects sellers' sales process adaptation to customers' buying processes. The results reveal how the buyer–seller relationship orientation affects sales process adaptation and its effects. The main sources of information in this qualitative inquiry are in-depth, semi-structured interviews with key informants representing a buyer–seller relationship. This study helps to shed light on how the buyer–seller relationship orientation affects sales process adaptation. The findings reveal that both the buyer and the seller have an impact on sales process adaptation. Extant research has recognized adaptation as a central aspect in relationships, while largely neglecting sales process adaptation. Thus, this study focuses on the effects of buyer–seller relationship orientation on sales process adaptation.     

Managing Seller–Buyer Relationships during New Product Development*

Ineffective relationship management with potential buyers during new product development (NPD) can be an important contributor to new product failure in technology‐based, industrial markets. However, empirical research on managing these relationships remains underdeveloped. This study addresses this deficiency by developing an empirically based taxonomy of relationship approaches used by sellers to develop technology‐based, industrial innovations, identifying situational characteristics that correlate with the choice of a particular relationship approach, and evaluating sellers' satisfaction with their relationship approach. The study's conceptual model is rooted in transaction cost analysis (TCA) and draws from extant literature on seller–buyer relationships during NPD. It was tested with data from 334 small to mid‐sized firms in a variety of technology‐based industrial markets. The results indicate that sellers use three basic relationship approaches during NPD: a bilateral approach, a buyer‐guided approach, and a seller‐guided approach. While the bilateral approach relies on a mutual exchange of information, the buyer‐guided and seller‐guided approaches do not. Juxtaposed with the high levels of satisfaction experienced by sellers in the sample, the study suggests that no one relationship approach is universally desirable. Therefore, managers may need to engage in a portfolio of relationship approaches with buyers during NPD; further, these approaches should correlate with buyer‐related (i.e., perceived buyer knowledge and prior relationship history) and innovation‐related (i.e., product customization and technological uncertainty) characteristics. Collectively, these results can help sellers optimize their relationships with buyers during NPD.     

The Determinants of Seller‐Buyer Interactions during New Product Development in Technology‐Based Industrial Markets

A growing body of literature indicates that the new product development (NPD) process in technology‐based, industrial markets is characterized by collaborative seller‐buyer relationships. Unfortunately, the extant literature is deficient in some significant ways. For example, there is no theoretical framework that explicates the content of these relationships. Also, there is little empirical research on the antecedents or consequences of these relationships. Therefore, managers seeking guidance on how to manage their NPD relationships have lacked appropriate insights. Not surprisingly, ineffective relationship management is a major contributor to new product failure in such settings. Against this background, this study develops and tests a model of seller‐buyer interactions during NPD. The model is based on the relationship marketing literature and is rooted in Transaction Cost Analysis (TCA). It was tested using data from 296 small to mid‐sized firms in a variety of technology‐based, industrial markets. It specifies product co‐development, education, and post‐installation product knowledge generation as three key behavioral dimensions that characterize seller‐buyer interactions during NPD. Our results indicate that the intensity with which these dimensions are undertaken vary with buyer‐related (i.e., perceived buyer knowledge and prior relationship history) and innovation‐related (i.e., product customization and innovation discontinuity) characteristics. For example, perceived buyer knowledge has a positive impact on product co‐development while innovation discontinuity has a positive impact on education. Further, we find that a seller's satisfaction with undertaking these behaviors is moderated by the technological uncertainty in the seller's industry. As a case in point, satisfaction with undertaking product co‐development is reduced when technological uncertainty is high. Collectively, the overall support we find for our model can help NPD managers optimize their relationships with buyers during NPD.