The drivers of customer attractiveness,supplier satisfaction and preferred customer status: A literature review

In this paper, we focus on the preferential treatment of buyers by their suppliers. As there is a lack of detailed information regarding the reasons that suppliers serve some buyers better than others, our research addresses a supplier's evaluation of customers and how this evaluation can be influenced by buyers. To give an overview of the drivers of preferential treatment by suppliers, the provided literature review covers three research fields that are considered crucial to this issue: (i) customer attractiveness, (ii) supplier satisfaction and (iii) preferred customer status. By integrating these research topics, we provide a state-of-the-art analysis and overview of the various drivers of preferential treatment, build a preliminary conceptual model and suggest several directions for future research. The identification of the drivers and the resulting conceptual framework can serve as a stepping stone for additional research in this new field.     

Becoming a preferred customer one step at a time

A preferred customer is a buying organization who receives better treatment than other customers from a supplier, in terms of product quality and availability, support in the sourcing process, delivery or/and prices. The decision to become a preferred customer implies a continuous commitment by the purchaser to a complex, expensive and often uncertain process. It is important to use a strategic approach, as well as appropriate tactics. Based on well-known models on the development of buyer-supplier relationship, on customer portfolio analysis and on the emergent literature in customer attractiveness and preferred customer status, we suggest four steps to become – and remain – a preferred customer: initial attraction, performance, engagement and sustainability. The process takes the perspective of a buyer willing to obtain the preferential status and focuses on the strategies and tactics that could influence the supplier's decision of granting this status. The proposed process considers that the supplier is continuously comparing the value offered by the customer to its expectations, and to the value offered by other customer relationships.     

Decomposing the effect of supplier development on relationship benefits: The role of relational capital

Buyers invest considerably in developing their suppliers, yet the performance effects of such investments are not universal. Drawing on social capital theory, this research investigates whether the relationship between supplier development and relationship benefits may be facilitated by the generation of relational capital. The authors examine mediating and moderating roles of relational capital in the relationship between two aspects of supplier development (capability development, supplier governance) and two dimensions of relationship benefits (supplier benefits, buyer benefits), using survey data collected from 185 suppliers of a large manufacturing firm. Investment in supplier development does not automatically result in benefits for the supplier or reciprocated benefits for the buyer. Rather, relational capital “bridges” supplier development and relationship benefits. Without relational capital, benefits from capability development do not accrue, and the impact of a supplier governance regime can be even detrimental. In conditions of high relational capital, capability development results in lower perceived buyer benefits. The results can help managers ensure that the benefits from their supplier development efforts fully materialize.     

Customer attractiveness,supplier satisfaction and preferred customer status: Introduction,definitions and an overarching framework

Industrial markets are frequently characterized by an oligopolistic market structure. As a result, suppliers may become highly selective with respect to decisions that involve collaborating with certain customers. Buying firms must therefore be more attractive than their rivals to obtain opportunities to collaborate with these selective suppliers. This apparently counterintuitive inversion of the classical marketing approach (that is, relationships that involve buyers competing for suppliers rather than the other way round) constitutes the foundation of the special issue that is introduced in this paper. In this paper, we present key terms and propose a model of preferred customership that uses a social exchange perspective to link customer attractiveness, supplier satisfaction and preferred customer status. The papers that contribute to this special issue are introduced within the context of this framework. Finally, this paper concludes with suggestions for future research directions.     

The development and diffusion of customer relationship management (CRM) intelligence in business-to-business environments

CRM data is among the most important and comprehensive information available to management in many organizations. This is particularly the case in business-to-business marketing, where the firm's extended working relationship with its customers is frequently crucial for the maintenance of a healthy business. However, in many instances management has treated CRM data as highly specific to its client relationships and has therefore neglected to analyze this information across market segments, customer categories, and customer–firm relationship forms in order to draw meaningful conclusions for driving business decisions.     

Towards an understanding of attraction in buyer–supplier relationships

This paper explores how firms are attracted to one another within buyer–supplier dyads. It draws attention to ways of managing in a relational mode as an alternative to managing in a controlling mode. This study argues that in order to improve value creation and value transfer in buyer–supplier relationships it is not enough to optimize and coordinate management and control systems. Following Dwyer et al. [Dwyer, R., Schurr, P.H. and Oh, S. (1987). Developing buyer–seller relationships. Journal of Marketing, 51: 11–27.], it argues that mutual attraction is important in developing relationships. It is also argued that this can be achieved through a range of perceptual approaches and actions, which enhance performance between the parties involved. A conceptual model of attraction is developed with theoretical underpinnings in social exchange theory. It proposes three behavioral constraints: expected value, trust, and dependence. These components of attraction interact to draw dyadic parties closer together or push them apart. Finally, implications for research and practice are discussed.     

Antecedents and consequences of opportunism in buyer–supplier relations: Research synthesis and new frontiers

Buyers and suppliers must concern themselves with opportunism, a phenomenon empirically established in exchange relationships. What causes firms to behave opportunistically? What are the consequences of firms' opportunistic behavior? To date, these antecedents and consequences have not been comprehensively synthesized. Herein, the opportunism phenomenon is revisited to expose research gaps and chart new directions that will enhance our understanding of buyer–supplier relationships. First, we provide a brief review of two critical theories of exchange that provide a theoretical foundation for opportunism. We next provide an overview of opportunism. Then each of the antecedents and consequences is discussed with emphasis on the contribution of each finding. Finally, and most importantly, several promising paths for further research are proposed.     

The integration between marketing and purchasing in the traceability process

This paper provides an overview of the implications of integrating marketing and purchasing offered by traceability. The research offers some evidence of the adoption of different traceability approaches by actors along the supply chain, illustrating the relevance of the traceability issue and how traceability can be exploited. The paper presents findings from a case analysis process of five actors in the fashion industry. This industry has experienced strong integration between industrial and retail functions and relevant changes in the organisation of production networks (global shift of production to new industrialized countries and emerging markets) which place emphasis on the traceability topic. Traceability emerges as a complex concept that concerns the sharing of information about the product and production processes along the supply chain in BTB networks up to the consumers in the final market. The issue analysed focuses on organising, with a discussion of two different uses of traceability: traceability as a tool for inter-organisational control and traceability as a tool for market power. The two approaches give rise to different implications at the individual company and business network levels. The traceability process has intraorganisational consequences in terms of contents, technologies and actors involved in its implementation. These consequences are different according to the role played by the process.     

Determinants of customer loyalty in the wireless telecommunications industry

This paper reports the results of research investigating the determinants of the propensity to switch wireless service providers. A model generated from the data rather than from a priori theory is presented, and it is found to uphold the strong relationship between customer satisfaction and customer loyalty exhibited in prior studies. In sharp contrast to the prevailing industry practice of ‘locking in’ customers by means of restrictive contracts, this research suggests that wireless service providers are better off improving customer satisfaction in order to minimize customer defection. This would imply shifting scarce resources to customer retention through improved service, saving costs of expensive customer acquisition campaigns. The paper also proposes two methodological innovations. First, the research employs the ‘Tetrad methodology’ as an exploratory technique prior to building a Structural Equation Model (SEM) making it possible to identify drivers of loyalty—direct or indirect—when it might not be known a priori what these drivers might be. Secondly, the paper proposes an approach to estimating moderator effects on the relationship between satisfaction and customer loyalty.     

The effects of customer and supplier involvement on competitive advantage: An empirical study in China

The focus of this paper is on the effects of customer and supplier involvement on competitive advantage in the firm. Using the resource-based view and knowledge-based view of the firm, hypotheses are developed concerning customer involvement, supplier involvement, and competitive advantage. Hierarchical multiple regressions are employed to test the hypothesized relationships. The data used was collected from 139 Chinese manufacturing firms across different industries. Each variable except control variables in the model is measured by a number of scale items. Both reliability and validity (content validity, convergent validity, and discriminate validity) are demonstrated. The results of the regression analysis show that (1) customer involvement has positive impact on product quality, delivery reliability, process flexibility, and customer service; and (2) supplier involvement leads to decreased cost. These findings are interpreted in the context of Chinese manufacturing setting and enhance the understanding of the roles of customer and supplier involvement in China's business environment.     

The roles of service encounters, service value, and job satisfaction in achieving customer satisfaction in business relationships

Along with variables like the service process, perceived service value and customer satisfaction, job satisfaction of service employees plays a vital role in customer evaluation of service result. However, there has been little in-depth research into the nature of this relation, in particular in the context of B2B relations. In the sphere of an organization providing financial intermediation services to the banking sector and on the basis of a literature review, hypotheses are developed which establish the mediator role of service value and the moderator role of job satisfaction of service employees when delimiting customer satisfaction. Reliability and validity analysis give satisfactory results and our conclusions establish firstly that service encounter directly and significantly affects perceived service value which is the final antecedent to customer satisfaction and secondly, that the level of employment satisfaction moderates its effect on service value.     

Understanding the role of marketing-purchasing collaboration in industrial markets: The case of Russia

This study aims to investigate the role of interfunctional collaboration between marketing and purchasing functions in industrial companies. Interfunctional collaboration is considered as a measure of the internal alignment and partnership between departments in the firm, which in turn contributes to the creation of sustainable advantages via improved external partnerships and facilitating demand chain integration. We test the impact of customer orientation as well as the interactions between departments (specifically marketing and purchasing) as collaboration antecedents, and analyze the direct impact of marketing-purchasing collaboration on business performance. The model is tested on a sample of 148 industrial companies in Russia with two key respondents in each firm, incorporating the purchasing as well as the marketing perspective. The results show that marketing-purchasing collaboration mediates the effects of interfunctional interaction as well as customer orientation on business performance. Alternative model testing shows that the direct effects of these antecedent constructs on performance are non-significant in the context of Russian industrial companies.     

Relationships in the purchasing of business to business professional services: The role of personal relationships

There has been a shift from transactional to relational exchange and relationship marketing both in the business to business and professional services contexts. This paper seeks to explore the manner in which personal relationships affect the process and outcomes of purchasing of professional business services. Specifically, it focuses on the role of the professional service providers as boundary spanners in the formation of personal relationships. These personal relationships constitute the underlying basis of long-term relationships between the purchasing and provider organizations in such complex service settings. The findings of this study demonstrate that the manner in which the boundary spanners cultivate relationships support the concept of relationship specific tasks. It extends this conception by use of the data to outline the chronological process over time Understanding the roles, function, and ultimately importance, of these relationships facilitates the identification and development of appropriate strategies to manage these relationships.     

The role of collective action in the marketing of underutilized plant species: Lessons from a case study on minor millets in South India

Underutilized plant species are generally defined by their unexploited economic potential, making them an appropriate focus for market development. This paper analyses the role of collective action in the process of market development for minor millets, an underutilized plant species, in the Kolli Hills of Tamil Nadu, India. Based on a series of focus group discussions, we analyze the role and involvement of self-help groups in the minor millet marketing chain recently set up by the M.S. Swaminathan Research Foundation. We then compare the role of collective action in this new market with the cases of marketing chains for cassava and organic pineapples, two cash crops with expanding production in the same area. Our analysis shows the critical role of collective action as a necessary but not sufficient condition for the successful commercialization of underutilized plant species for the benefit of the poor and the conservation of agro-biodiversity.     

Broadening the scope of the resource-based view in marketing: The contingency role of institutional factors

Drawing on the resource-based view (RBV) of the firm and institutional theory, the authors propose and test an integrated model in an industrial marketing context that expands the boundaries of the RBV to incorporate institutional factors pertaining to societal and political issues. The rationale for taking such an integrated approach stems from the knowledge that firm performance can be explained better by incorporating not only the inability of managers to take particular actions but also their reluctance or unwillingness to pursue those behaviors. The authors develop an integrated model that tests (1) the direct effect of marketing institutional factors on the development of marketing RBV factors and (2) the moderating role of marketing institutional factors on the performance effect of marketing RBV factors. The empirical results indicate general support for the hypotheses, and this research provides several implications for broadening the scope of the RBV in marketing by underscoring how fit between marketing resources and the context in which those resources are deployed affects firm performance.     

The role of institutional arbitrage in the search for product innovation: Firm level evidence from Norway

Evolutionary theorizing conceptualizes the discovery of new products as a successful outcome from searching for innovation in which firms combine new and old knowledge and resources. Prior research has shown that the propensity for discovering new products is greatest when firms cross a technological and/or organizational boundary in the search for new knowledge. In this paper, we add a new dimension to this literature: we examine whether, and to what extent, crossing a national boundary, as when firms use knowledge from network partners in foreign countries, influences the likelihood that firms will introduce new products into the market. Drawing on theorizing on institutional arbitrage in the literature on national innovation systems (NIS) and varieties of capitalism (VOC), we propose that companies that cross a national boundary in searching for innovation are significantly more likely to introduce new products. Detailed survey data on firms; data on their network partners, including their location; and regression analysis show that the use of knowledge from actors in foreign NIS has a positive influence on product innovation.