The Internet and Its Relationship to Buyer Behavior Theory

ABSTRACT

The Internet is the newest, most-rapidly changing and fastest-growing buying medium existing today. Its markets are increasing in number and complexity, more nearly reflecting the population in general. A valuable academic model for Internet marketers to consider when developing a business plan is an early buyer behavior model developed by Phillip Kotler, his Input-Output Model. Internet marketers should investigate outside influences on the potential buyer (Kotler's Inputs), means of reaching the prospect effectively (channels), the buyer's frame of mind (processor), and the choices available (outputs). Current “e-tail” examples are given for each of the four components in Kotler's model. Consulting companies that can assist marketers in attracting buyers have found the following techniques helpful: developing or fine tuning Internet sites, developing site-partnering strategies and online focus groups, as well as providing programs that watch prospects as they peruse a site.     

The Impacts of Affective and Cognitive Social Conflict in Business-to-Business Buyer-Seller Relationships: A Comparison of New versus Ongoing Buyer-Seller Relationships

ABSTRACT

Purpose. The purpose of this paper is to report empirical research that examined the impact of conflict in two different buyer-seller situations, an ongoing relationship and a choice situation where the buyer had to choose between two or more alternative suppliers. Conflict was defined as social conflict and has two distinct types, affective and cognitive.

Methodology/Approach. The methodology used was two mail surveys to a random sample of purchasing association members who had buying responsibilities in their firms. In one survey respondents were asked to self-select a current buyer-seller relationship they had for a period of at least one year and to indicate the degree of perceived conflict they had with the key supplier representative as well as the amount of relationship loyalty they perceived they had with that supplier. The second survey randomly assigned respondents to evaluate either a supplier whom they gave business to in a choice situation or one they did not, thus establishing as the dependent variable the actual choice of whom they gave business to.

Findings. The findings are clear for affective types of conflict. When affective conflict is perceived as higher the chance of getting an order in a choice situation as well as the magnitude of the relationship loyalty perception is negatively related. Cognitive conflict is not as clear. In choice situations conflict was negatively related to choice, whereas in on going relationships there was no impact. There was no indication of cognitive conflict having a positive relationship.

Originality/Value/Contribution of the paper. This study is the first to examine perceptions of conflict with a significant other in a buyer-seller relationship to try to determine how those perceptions might relate to either buyer choice or loyalty. While the findings support the expected relationship between affective conflict and outcomes, the findings with regards to cognitive conflict suggest that this may be more complex then originally thought and further points out the difficulty in managing conflict across organizational boundaries.     

The delisting of products by retail buyers

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

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

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

The effect of buyer feedback scores on internet auction prices

One of the major roles of Internet intermediaries is to help build trust between buyers and sellers for efficient and safe transactions. The buyer feedback system started in online auctions as one of the trust‐building mechanisms on the Internet. As the buyer feedback system is becoming a standard trust‐building mechanism in other e‐commerce sites as well as in online auction, there is an increasing interest about the impact of the buyer feedback system. On the top of recent studies investigating the effects of buyer feedback scores on auction prices, we provide empirical validations using more sophisticated methods. In this study, we tested the relationship between buyer feedback scores and bidding prices using an empirical data set from a leading consumer‐to‐consumer (C2C) Internet auction site. Data analysis results show a strong empirical validation of previous studies. Negative feedback is a significant price discount factor in the final auction price on the C2C Internet auction market. The results also show that potential buyers are more sensitive to negative feedback when they are considering buying inherently risky products such as used or refurbished products.     

Customer Relationship Management in Electronic Markets

Abstract

Customer relationship management, or CRM, has found increased attention in both the academic and managerial worlds of marketing in recent years. While the Internet has greatly enabled the application of CRM in fostering loyal customers, the preliminary results on the effectiveness and efficiency of technology-based CRM has been far from discouraging. The authors identify various contentious issues behind the various key concepts of relationship management and identify several areas that deserve closer academic scrutiny and managerial inspection. The paper also comments on the extent to which Internet technology can bring about closer relationships with a firm's customers.     

Loyalty or lethargy? Keeping sellers committed,not entrenched

While business sellers frequently enjoy long-term relationships with their buyers, not every extended association is based on a genuine sense of customer loyalty. Many organizations remain in relationships with providers for too long; while the seller has stopped providing value, the buyer sticks to the routine. Building from empirical research and theory on buyer-seller relationships, this research extends our understanding of customer complacency and seller entrenchment and introduces the concept of customer lethargy. Synthesizing theory from multiple domains with exploratory interviews conducted with business customers, this article offers insight into the functioning of organizational buying centers, the evolution of business exchanges over time, and how some exchanges can be undermined by various forms of relational dysfunction. I define customer lethargy, explore its root causes and offer business buyers a strategy which aims to help them self-audit their loyalty, avoid complacency and lethargy, and keep sellers committed, not entrenched.     

Salespeople,Fairness, and Buyer Satisfaction: What about Emotions?

Purpose: Although most studies focus on rational decision-making in organizational buying, this research examines the satisfaction through the integration of fairness and emotion theories. It thus broadens knowledge about the formation of satisfaction in buyer–seller relationships, through an integration of justice and emotion theories.

Design/methodology/approach: A survey of 130 buyers was conducted. The test of the proposed model relied on structural equation modeling. To examine the mediating role of positive emotions, we followed the procedure proposed by Baron and Kenny (1986). That is, we compared the proposed framework against two competing models: a non-mediated model and a saturated model that featured all possible causal paths.

Findings: Results show that both distributive and procedural fairness have a positive impact on buyer’s satisfaction, following two different paths: a rational path with fairness acting directly on satisfaction; and an emotional path where emotions play a mediator role.

Research limitations/implications: Buyers evaluate satisfaction through an emotional lens. Business relationships are not completely rational, a consideration with importance for buying and customer relationship theory.

Practical implications: Sellers must pay attention to their customer policies from the perspective of their customers. In addition to guaranteeing a “fair” outcome, sellers must ensure that buyers are subject only to procedures that customers perceive to be fair. Indeed, since buyers in business relationships are not completely rational, business-to-business (B-to-B) experts should acknowledge the influence of emotions in their sales strategies.

Originality/value: The mediating impact of emotion in the fairness–satisfaction relationship has not been explored in buyer–seller settings previously. Deconstructing satisfaction with the decision process into its cognitive and affective elements, we examine the emotional dimension of B-to-B buying process.     

The impact of retail buyer innovativeness on suppliers’ adaptive selling in Japanese buyer–supplier relationships

Abstract

We investigate the critical role of retail buyer innovativeness in Japanese buyer–supplier relationships and explore its link to suppliers’ adaptive selling, cooperative relationships, and retail competitiveness. Further, we examine how process conflict between merchandizing and store divisions moderates the relationship between retail buyer innovativeness and suppliers’ adaptive selling. This study employs a structural equation model using survey data from 246 heads of merchandizing divisions at Japanese retail companies. Our findings highlight the importance of both mitigating process conflict and facilitating suppliers’ adaptive selling in order to improve Japanese retailers’ competitiveness, especially when buyers are highly innovative.     

Emergent Internet Technology Applications for Relationship Marketing

Abstract

In this paper we bring together the concepts of Relationship Marketing (RM) in the marketing literature and Customer Relationship Management (CRM) in Information Systems (IS) literature to identify and assess emergent Internet-based Information Technologies (IT) that add value for consumers. We focus on the customer's perspective by identifying the key benefits consumers seek when they enter into IT-mediated interactions with sellers. We review the IS-CRM literature and identify 8 critical IT categories that have the potential for changing how buyers and sellers establish and maintain relationships in the Internet era. Subsequently, we introduce a conceptual model, which considers the nature of the consumer's involvement with sellers through emergent Internet-based technologies in juxtaposition to potential technology-based benefits to consumers. We then discuss the implications of this proposed direction. Finally, we discuss a future research agenda, which considers the use of IT in relationship management.     

Relationship Value in Thai Business-to-Business Marketing

This study focuses on value in the business-to-business relationship among buyers and sellers. Relationship value has long been one of the key research areas in marketing for business to business. By examining from the perspective of the buyers, this research identifies how business buyers can use marketing benefits, product benefits, technical benefits, logistics benefits, financial benefits, risk-reduction benefits, information benefits, and strategic benefits to predict buyer–seller relationship. The study confirms significant relationships among marketing benefits, product benefits, and value in retailer–supplier relationship. The analysis from this study supports that benefit in a business-to-business relationship can be created if suppliers work on mutual benefits with customers. The results also confirm that Thai business customers will look for business partners who can provide risk reduction and marketing benefits for their business.     

Relationship Quality in Cross-Border Exchanges: A Temporal Perspective

Purpose: This article seeks to understand how relationship quality dimensions develop in cross-border relational exchanges and explores their determinants, including the role of cultural sensitivity, in each relationship phase. By mobilizing the multidimensional meta-concept of relationship quality and its forms, this research captures the evolution of relationship quality between French buyers and foreign sellers. The improved understanding of relationship quality’s dynamics under cultural sensitivity influences in turn offers a more accurate, active form of relationship management.

Methodology: Thirty-nine semistructured, in-depth interviews with business buyers located in France, representing a range of sectors, reveal the nature, transformations, and determinants of relationship quality. Qualitative methods are more appropriate to elucidate processes and the fundamental transformation of constructs over time. Because relationship quality is a property of a specific buyer–supplier, cross-border interaction, this multiphase study provides insights into the nature and the fundamental transformation of concepts.

Findings: The multiphase qualitative analysis shows that as relationships evolve, fundamental transformations take place in the components and antecedents of relationship quality. Cultural sensitivity has a key role during the most advanced relationship phases. The primacy of economic logic dominates the exploration phase; cognitive aspects receive the emphasis in the expansion phase; and relationship quality, in the maintenance phase, results from a combination of affective and emotional factors. As emotional ties deepen, relationship quality exceeds what might have been expected on the basis of the cognitive elements actually exchanged.

Originality: The key contributions of this article are the multiform conceptualization of the constituent elements of relationship quality and the phase-specific study of this meta-construct. The article argues and empirically supports how relationship quality is changing in the context of cross-border exchanges—French buyers with international sellers. The innovative study addresses simultaneously concepts that constitute relationship quality and its determinants, as well as revealing their importance in different relationship phases. Prior research does not consider

the differentiated standpoint on relationship quality forms within a temporal perspective. However, this study also is limited by the multisectoral nature of the sample and the monadic character of the research.     

When do B2B brands influence the decision making of organizational buyers? An examination of the relationship between purchase risk and brand sensitivity

The dominant perspective on organizational buying behavior suggests that buyers tend to rely on objective criteria when making product choice decisions and that the potential influence of subjective cues, such as brands, on buyer decision making decreases with increasing risk. An alternative perspective, confirmed in this study by in-depth interviews with various managers, suggests that brands serve as a risk-reduction heuristic, whereby the influence of brands on decision making increases as a function of risk. Building on risk and information processing theories, this research builds on these complementary perspectives to propose that risk and brand sensitivity relate in a U-shaped manner, where brand sensitivity is highest in relatively low- or high-risk situations. The results of scenario- and survey-based field studies—involving 206 and 180 members of buying centers, respectively—suggest that both perspectives have merit and support the proposed nonlinear relationship. Moreover, the findings reveal that the risk-brand sensitivity relationship is moderated by competitive intensity, such that the linear (negative) and quadratic (positive) effects are stronger when competitive intensity is low.     

Business-to-Business communication in a dynamic environment: A systematic adductive analysis referring to ramp-up management

ABSTRACT

The aim of this research note is to take stock of existing knowledge on the topic of Business-to-Business (B-to-B) communication and to conceptualize the exchange of information between buyers and suppliers in a dynamic environment. The dynamic business environment is referring to new product ramp-ups. Ramp-up, defined as the period between the completion of development and a stabile serial production, is of high importance for the success of manufacturing companies. During ramp-up, product specification, production machinery, and the number of finished products change over time. It is assumed that improved B-to-B communication is beneficial to achieve a high ramp-up performance. For the purpose of this research note a systematic review of the literature is used to analyze the status quo of existing communication concepts in ramp-up management. The article conducts a content analysis of a sample of 86 subject-relevant articles from academic journals. These preliminary findings suggest that, although B-to-B communication plays a central role in the management of (ramp-up) dynamics, the stock of knowledge in this peculiar area is limited to few specific findings. Communication is often mentioned as relevant, but further guidance on details, e.g. communication channels, roles, behavior, or communication content, is lacking. This research note identifies research gaps in the B-to-B communication literature regarding buyer-supplier communication in dynamic business situations and proposes several directions for future research. Managers should acknowledge that B-to-B communication is repeatedly mentioned in the literature as a source for improving competitiveness. Proper communication in buyer-supplier relationships becomes more important but also more challenging in dynamic business environments. This research note is addressing dynamic business environments and is focusing the role of B-to-B communication in production ramp-ups. Knowledge on the topic is consolidated, e.g. influence factors on communication, what provides a number of implications for practice and future research.     

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

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

Dependence concentration and fairness perceptions in asymmetric supplier–buyer relationships

The purpose of this research is to investigate how a supplier manages its relationships with multiple buyers in a market structure of imbalanced power to achieve market success. Drawing on resource dependence theory and social exchange theory, we argue that dependence concentration (the degree of revenue concentration of a supplier’s multiple buyers) and fairness perceptions (distributive and procedural fairness) work together to impact a supplier’s market performance. The authors develop a structural model and empirically test how dependence concentration and fairness perceptions impact supplier performance with survey responses from 92 suppliers in the food supply industry. The findings show that a balanced set of dependence relationships governed by fair business policies and procedures leads to strong and effective relationships; and effective relationships with multiple buyers, rather than with any specific buyer, impact sales and profit growth in a market structure of imbalanced power.     

MANAGING LOGISTICS OUTSOURCING RELATIONSHIPS: AN EMPIRICAL INVESTIGATION IN CHINA

While many companies outsource their logistics functions, creating a collaborative relationship with third‐party logistics service providers remains a challenge. The current study explores the effects of often overlooked human factors in this context. Data on buyer perspectives were collected in China. The analysis results suggest that buying firm's top management championship, supplier firm's designated employees, and the buyer‐seller personal relationships (i.e. Guanxi) at different levels, all have significant impacts on inter‐firm collaboration, which in turn enhances the buying firm's logistics performance.     

Buyer‐seller relationships: A conceptual model and empirical investigation

Increasing emphasis is being placed by marketing managers on the need to build long‐term relationships between themselves and their customers. Analysis of long‐term buyer‐seller relationships has drawn heavily on the literature of social psychology, especially in making comparisons with family relationships. It has been proposed that buyer‐seller relationships go through some form of life‐cycle, paralleling cyclical relationships in other areas of human activity. However, models of the evolutionary development of buyer‐seller relationships have remained largely theoretical, with little empirical validation of the life cycle concept, or analysis of the changing composition of a relationship as it progresses through a life cycle.

This paper provides cross‐sectional empirical evidence of the existence of a buyer‐seller relationship life cycle within the investment services sector. The elements that buyers perceive as being important in holding a relationship together are dependent on the duration to date of the relationship. In the early stages of development, selling pressure is perceived as being a dominant element in relationship development, giving way to judgements of ethical credibility and empathy as the relationship develops.

From this initial survey of investment services customers, a number of implications for relationship marketing strategies within the services sector are suggested.     

Case Study of Customer Relationship Management (CRM) in the On-Line Affluent Financial Services Market

ABSTRACT

In the current period of constrained economic conditions, this study initiates an analysis of customer relationship management (CRM) on the Web sites of financial service businesses. Customer relationship management is a critical differential that enables competitive edge for businesses focused on the affluent customer market. Though investment in marketing, sales and service innovation is limited under existing conditions, the analysis of the study on large financial businesses indicates that the businesses enable higher commerce, content and context, but lower and generally inadequate communication, community, connection and customization design on their Web sites. The analysis, conducted as an assignment by adult graduate students in an information systems course, contributes important insight into the competitive dynamics of customer relationship management for Web empowered financial service businesses striving to service the demanding affluent market. This study furnishes an expanded framework to research customer relationship management of financial service businesses competing in the paradigm of the Web.     

Boundary spanner turnover in professional services: Exploring the outcomes of client retention strategies

Abstract

Studies suggest that the termination of the interpersonal relationship between boundary spanners at buyer and seller firms can have a damaging effect on the inter organisational relationship. Few studies have addressed this issue in detail, but those that do, advise supplier firms to implement strategies such as service teams and boundary spanner rotation to lessen the negative effects of boundary spanner turnover. By creating multiple bonds between the two firms, dispersing client-specific knowledge widely throughout the supplier firm, and preventing the development of a close bond between buyer and seller boundary spanners, individual interpersonal relationships become less important. However, a review of relationship literature on trust, commitment, social bonds, and knowledge suggests the potential for negative outcomes from the implementation of the strategies. Using case studies and one-to-one interviews with design buyers and their agencies, this paper explores the outcomes of the two strategies, and the contexts in which these outcomes occur. Adopting a critical realist approach, findings are presented in the form of context–mechanism–outcome models. Agency size, agency culture, client experience, and boundary-spanner autonomy are amongst the contexts that influence the outcome of strategy implementation.     

Customer relationship management in retailing: A content analysis of retail trade journals

The purpose of this research was to increase knowledge and understanding of how retailers use business intelligence and data mining tools to implement customer relationship management (CRM) in retailing. Specific objectives were to (1) identify organization and infrastructure requirements for CRM effectiveness, (2) identify CRM objectives and goals of retail companies, (3) identify data mining tools utilized by retailers to perform CRM functions, and (4) identify CRM strategies used by retail companies. A keyword search within business databases using CRM and CRM identified publications with CRM content. Content analysis was used on articles (N=149) drawn from Stores, Chain Store Age, Harvard Business Review, and Retail Forward over a 5 year period (2000–2005). Selected articles were stored as text files in QDA Miner, a computerized qualitative analysis tool. Key organization/infrastructure needs emerged focusing on data structure, organizational systems, technology structure, and data accessibility. Retailers goals/objectives and strategies focused on marketing, customer service, understanding customers through data analysis and increasing acquisition and retention through customer loyalty programs. Data mining tools identified supported marketing and customer analysis efforts. Findings provide insight into the challenges retailers face as they implement a more customer-centric business strategy.