A Benchmark for B2B Use of E-Commerce

ABSTRACT

A telephone survey of 517 corporate executives in large and mixed-sized companies was used to determine the status of business-to-business (B2B) e-commerce. Findings included that only one-quarter of respondents used B2B e-commerce in their businesses, but 41% said that their companies planned to add e-commerce to their Websites. Of those who conducted e-commerce, 73% found it a profitable way to reach customers without cannibalizing traditional sales revenue. The timing of the survey, between periods of economic expansion, makes this a valuable benchmark for the adoption of e-commerce.     

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.     

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.     

A Taxonomy of Cause-Related Marketing Research: Current Findings and Future Research Directions

ABSTRACT

Cause-related marketing is an increasingly popular method of improving marketing relationships with customers, both for the sponsoring company and for the participating cause. This paper outlines the rewards and risks for the company and the cause as they consider this type of partnership, as well as the benefits and drawbacks for the customers asked to participate in these programs through the purchase of the sponsored product or service. Future directions for research are recommended in order to (1) expand the findings within this domain, and (2) to maximize sales results from cause-related marketing initiatives for businesses and causes.     

Sales Force Automation Systems and Sales Force Productivity

Abstract

Salespeople are in a unique position of being in very close proximity to customers and thus have the ability to create and maintain long-term relationships with them. Sales force automation systems (SFA) have the ability to help or hinder this relationship building process. This article looks at SFA and its impact on sales force productivity. Much of the current research in the area of SFA seems to focus on efficiency issues within the firm, with particular attention being paid to technology implementation and reasons for high SFA failure rates. The authors review past literature and identify potential areas for future research by creating and presenting a research agenda. Many of the future research areas lie in the realm of effectiveness of SFA rather than the efficiency side of SFA. Although efficiency is still of great importance to SFA researchers and practitioners, the customer or relationship focus of SFA effectiveness is also needed.     

A Snap Shot of E-Commerce by General Line Industrial Distributors

Abstract

Industrial distributors and manufacturers are constantly in search of methods to increase sales and market share. While e-commerce is not new, its adoption is growing and gaining a foothold in American business. Most attention in the e-commerce realm has been on business-to-consumer-type ventures (Amazon, eBay, etc.); however it is the purpose of this paper to examine how e-commerce is effecting business-to-business transactions, specifically in fields relating to industrial distributors and industrial manufacturers.     

Making value co-creation a reality – exploring the co-creative value processes in customer–salesperson interaction

Abstract

We examine how value co-creation is engendered in transactional and relational interaction in a professional business-to-consumer (B2C) service industry through exploratory interviews with six organisations’ sales personnel and their customers. A dyadic model and propositions conceptualise the process of value co-creation at the interpersonal level. It was found that the customer and salesperson take on very distinct roles in the co-creative interaction, which is driven by characteristics previously unidentified in the context of value co-creation, such as a commitment to achieving common goals, establishing equitable dialogue and sharing interests. Examination of the value dimensions co-created found that reciprocal value realisation is not limited to business-to-business (B2B) contexts, as the involved parties create mutual episode value in discrete transactions, and mutual episode and relationship value in relational exchanges.     

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.     

Obesity and compensatory consumption: Evidence from jewelry shopping

This article examines the link between obesity and compensatory consumption in the context of jewelry shopping. Study 1 finds that participants with higher body mass indices are willing to pay more for a jewelry item. Study 2 generalizes this finding by documenting that jewelry store sales are higher in places with greater obesity rates. Using Google Trends data, Study 3 shows that the search interest for jewelry stores increases with the obesity rate and that this relationship is mediated by people's dissatisfaction with their current weight as revealed by their search activity. Finally, supporting the self-discrepancy account, Study 4 shows that the use of self-related and discrepancy words together in jewelry-related tweets is more pronounced in places with greater obesity rates. These findings collectively help enhance the field's understanding of the consumption behavior of people who are part of a large stigmatized group.     

Building Bridges: The Company-Customer Relationship

ABSTRACT

With increasing emphasis on relationship selling, a bond is often formed between the salesperson and each customer. When a salesperson leaves to work for a competitor, customers may follow. Small companies are particularly vulnerable since they lack the resources necessary for many sales force retention strategies. The suggestion is made that such companies can implement “bridging strategies,” company-level relationship strategies designed to supplement the relationship between the sales rep and the customer, with the distinct objective of retaining customers following salesperson defection. Using the three levels of relationship marketing described by Berry and Parasuraman (1991), specific bridging strategies are identified and analyzed. The pharmaceutical industry is discussed as an example.     

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.     

Internet Engagement Process

Abstract

It is well established that attracting users to a commercial website is an essential prerequisite to e-commerce. However, research has also suggested that engaging them on the site, once they are there, is an important element of converting web surfers to buyers. This study investigates Internet experience and its effect on certain web features that could aid in making a website “sticky.” Features studied include searching, online shopping, online learning, chat rooms, and e-mailing. All of the features, with the exception of e-mail and chatting, demonstrated significant differences based on user experience. This implies that certain website features can be used to differentiate users in a predictive fashion.     

A statistical investigation of inventory shrinkage in a large retail chain

Abstract

In a large retail chain, we used statistical regression to relate shrinkage to explanatory variables such as staffing, security, store layout and catchment-area demographics. There were large measurement errors in the retailer's estimates of shrinkage, together with high correlations among the potential causal variables. These effects caused our models to give poor predictions of shrinkage for individual stores, but the models were highly statistically significant, which means that they can accurately forecast the average (and hence the aggregate) effects of policy changes affecting hundreds of stores. Factors associated with lower shrinkage included high turnover of stock, and high densities on the sales floor of staff, pay-points and customers. Our results suggest that crowding among staff and customers may be a more effective inhibitor of shrinkage than many traditional formal security precautions, such as CCTV and store detectives.     

Targeting direct marketing campaigns by neural networks

Abstract

Market-oriented companies increasingly aim at maximising the return of targeted direct marketing campaigns, rather than trying to reach customers and prospects indistinctly, according to a mass marketing approach. The profitability of direct marketing campaigns depends on a detailed definition of prospects and an accurate prediction of the response rate. This study shows how the use of Artificial Neural Networks (ANNs) can improve the effectiveness of direct mail marketing campaigns thanks to a better prediction of the response rate for subjects included in the target population according to factors that are believed to have an impact on their purchase intention. Results show the effectiveness of ANNs – in comparison with multiple regression analysis and logistic regression analysis – in identifying complex relationships among the data, and particularly in profiling customers and prospects and anticipating their behaviour.     

Timing is money: managing the floor in sales interaction at street-market stalls

Abstract

This article considers ‘pricing’, that is, offers and requests for the price of sales items, as a communicative practice deployed by vendors and customers during sales interaction on street markets. It examines the organisation of sales interaction by pursuing the question of how and when market participants, vendors and customers alike, embed offers and requests for price information within their interaction. The analysis suggests that pricing is deployed as a technique to manage the ‘floor’ and the interaction at the stall. For example, offers for items are being tailored to customers’ display of interest and commitment to particular items, and requests for price information are deployed in ways that challenge anticipated offers, that is, offers that are about to be made by a vendor. The data, field observation and video-recording have been gathered at market stalls in London and Berlin.     

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.     

Exploring the Role of Product Development Capability for Transforming Marketing Intelligence into Firm Performance

ABSTRACT

Purpose: This study examines the role of product development capability for transforming marketing intelligence activities into firm performance on industrial markets.

Methodology/Approach: The authors apply structural equation modeling to analyze survey data from 342 industrial manufacturing companies.

Findings: Results reveal that sales integration and holistic macroeconomic view are particularly important features of the marketing intelligence capability on industrial markets to gain additional insights in order to develop products successfully. Results also reveal that product development capability transforms the marketing intelligence activities into firm performance on industrial markets.

Research Implications: This study offers new insights on marketing theory by extending and concretizing the concept of market orientation to a broader concept of the marketing intelligence capability for industrial markets. Further, this research reveals that the product development capability serves as a mediator to business performance.

Practical Implications: This study’s systematic and tangible outline of the dimensions of marketing intelligence and its link to the product development capability helps firms to better understand how to capitalize on market orientation’s potential values.

Originality/Value/Contribution: This research (a) reveals the relevant dimensions of marketing intelligence on industrial markets and (b) shows how the product development capability tranforms marketing intelligence activities into firm performance on industrial markets.     

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.     

Investigating Aspects of Customer Satisfaction at the C-Store: The C-Store Product Mix and Image

ABSTRACT

A recent investigation into the convenience store (c-store) product mix called for further research into c-store customers' preferences for additional product offerings and non-c-store shoppers' reasons for not patronizing a c-store. This paper answers that call by investigating a cross-section of c-store customers to identify their perceptions of product offerings to expand the c-store's product mix and in turn increase customer satisfaction. In addition, this study explores c-store non-users' perceptions of the c-store image to understand why they do not patronize c-stores. Fourteen products were examined. Of the fourteen, only one was rated very likely to be purchased: postal services. The top three reasons provided for not patronizing a c-store were (1) inconvenient location, (2) high prices and (3) loyalty to other retailers. Suggestions for future research are provided.     

The Metrics of Relationships

Abstract

In the last two decades, it has been suggested that the marketing discipline is undergoing a paradigm shift from a transactional perspective to a relational perspective (Sheth & Parvatiyar, 2002). At the same time, there has been a call for the discipline to focus on accurate measurement of the outcome of marketing activities (Rust, Ambler, Carpenter, Kumar, & Srivastava, 2004). Extant research in this area has predominantly examined the sales and profitability of relationships through customer life time analysis or examined attitudinal measures such as satisfaction and loyalty. This paper attempts to combine both streams of research by examining the profitability, satisfaction and probability of switching associated with transactional customers, relationship customers (less than five years of relationship) and deep relationship customers (more than five years of relationship) in three business to business industries. The results demonstrate the transactional customers are most profitable followed by relationship and deep relationship customers. The probability of switching was in the reverse direction of profitability and there were no difference in satisfaction measures. Implications for research and practice and also derived in the paper.