The impact of transactional and relational strategies in business markets: An agenda for inquiry

The impetus for the special issue of Industrial Marketing Management is the importance of understanding the implications of transactional and relational strategies in business-to-business contexts. The objective of the special issue is to integrate conceptual and empirical research in this area. We highlight research that extends current thinking in the area to ensure that this special issue serves an impetus for future research on this important topic.     

Capturing value creation in business relationships: A customer perspective

Collaborative relationships in business markets are of growing importance to customers and suppliers alike. Customers need to decide whether to invest in a new supplier relationship, to maintain and develop a valued relationship, or to divest from a low-value relationship. Suppliers, in turn, face growing commoditization of products and seek to differentiate themselves through relationships. The measurement of value creation in buyer-seller relationships is still in its infancy, and a sound understanding of how firms create and deliver value in business relationships is needed. Emerging studies investigate relationship value based on dimensions derived from theory and lack a managerial perspective. Therefore, the present research explored relationship value from a grounded theory perspective. In-depth interviews with purchasing managers identified eight value drivers in manufacturer-supplier relationships. Implications for the measurement of the concept are discussed, and directions for further research are suggested.     

Engineering New-Product Success: The New-Product Pricing Process at Emerson

Emerson Electric Co. is a diversified manufacturer with $14 billion in sales. The Emerson Price Improvement Team is an internal consulting group that serves the 60+ Emerson divisions. The team's mission is to help divisions achieve their financial and market objectives by providing pricing skills, tools, and project assistance that improve a division's pricing practices. This paper discusses an implementation of the Price Improvement Team's New Product Pricing Process at Fisher-Rosemount, a business unit of Emerson. Fisher-Rosemount is the world's leading supplier of process control systems, and measurement instrumentation. One of the eight Fisher-Rosemount divisions planned to introduce a new process sensor at a price of $2,650. After completing the New Product Pricing Process, Fisher-Rosemount increased the planned sensor price 19%, introducing it at a price of $3,150, resulting in a fifth-year operating profit improvement of $11 million. The New Product Pricing Process enabled the division to gain a detailed understanding of customer perceptions of product value; determine a key design specification for the new product; reduce cannibalization of its existing and highly profitable sensor by positioning the new product to optimize the total product portfolio; predict unit sales, revenue, and profitability for a range of market scenarios; and confidently set the right product price. Achieving optimal revenue and profitability, in a manner consistent with the company's business strategy, is a goal of the process. Equally important, the process ensures that customers receive fair value-based pricing while enabling the supplying company to maintain overall industry price equilibrium.     

Increasing Mail Survey Response Rates from an Industrial Population: A Cost-effectiveness Analysis of Four Follow-up Techniques

This article reports findings from a mail survey and field experiment that manipulated four follow-up techniques. Three hundred and twenty-eight non-respondents of a mail survey were systematically assigned (every fourth one) to four follow-up techniques: Original Replacement Follow-up (ORF); Photocopy Replacement Follow-up (PRF); Postcard Follow-up (PCF); and, Letter Follow-up (LTF). Findings indicate several statistically significant differences suggesting that there is a trade-off between the number of responses and cost per response.     

The impact of purchase situation on salesperson communication behaviors in business markets

This research addresses the impact of purchase situation on sales communication behaviors used by the salesperson in business markets. We hypothesize that different sets of sales communication behaviors will be needed and vary for different purchasing situations. Measures of a salesperson's communication behaviors were tested for different types of purchase situations. Differences were found in the persuasiveness of the salesperson's getting, giving, and using information, depending on the type of purchase situation. These findings help support the value of salesperson adaptability, providing an important variable on which to adapt.     

Plant location and place marketing: understanding the process from the business customer's perspective

In the past decade, there has been an increased interest in place marketing, especially as countries and locations have been spending more money to encourage firms to locate their offices and plant locations in the place marketer's area. In this paper, we examine the place marketing from the perspective of the marketer and that of the business customer, specifically in the area of communication and information distribution (in the era of the Internet). In literature, place marketing strategies vary from the very simple to the very sophisticated. Through examination of present marketing and communication practices of place marketers, we find that these strategies are unplanned or “seat of the pants.” We also find that the primary reason for the lack of deliberate and targeted strategies is a lack of understanding of customer decision-making processes. We suggest that only by understanding differences in business customer segments of the market can place marketers become more efficient and effective in winning plant placements. Using data from business customer decision-making processes, we attempt to close the knowledge gap.     

The interplay of task allocation patterns and governance mechanisms in industrial distribution channels

Task allocation involves the placement and performance of distribution subtasks among participants on an on-going basis in the channel. The authors offer an extended conceptualization of task allocation and examine its interplay in varying environmental conditions with shared decision making, pseudo-vertical integration, and dependence. They test the hypothesized relationships with three-stage least squares regression on a sample of farm equipment dealers. Results show that contractually based pseudo-vertical integration facilitates task allocation and, in turn, enlarged dealer task allocation patterns result in pseudo-vertical integration. Firm size has a significant influence on pseudo-vertical integration. In turbulent environments, dealers rely more heavily on shared decision making to allocate tasks than they do in stable environments. Although dependence increases pseudo-vertical integration, its effects on other factors are minimal. The results suggest that task allocation is an important construct that relates to several commonly observed channel characteristics.     

Sales training in Malaysia: High- vs. low-tech methods

This study examines initial high-tech sales training practices of firms in Malaysia. A review of initial sales training programs reveals that firms that engage in high-tech sales training practices report significantly greater levels of needs determination, objective setting, instructional methods, and training program content than their low-tech counterparts. Also, firms that employ high-tech training methods report teaching the “soft area” of salesmanship via computer and both groups place less emphasis on evaluating training programs. To better understand high-tech sales training, managers are provided with in-depth discussions and managerial implications of the study's findings.     

Innovativeness: Its antecedents and impact on business performance

In this study, we address three research questions: (1) Why are some industrial firms more innovative than others? (2) What effect does innovativeness has on business performance? (3) Does the linkage between innovativeness and business performance depend on the environmental context? Accordingly, we draw on various theoretical perspectives to develop hypotheses that propose market orientation, entrepreneurial orientation, and learning orientation as key antecedents to innovativeness, as well as a direct relationship between innovativeness and business performance. A model is devised and tested that examines these relationships in general and in the context of varying market turbulence. Findings confirm the validity of the model and afford various insights on the role of market turbulence in the proposed relationships. Lastly, implications are offered on the antecedents and consequences of organizational innovativeness.     

Exploring the characteristics of the market-driven firms and antecedents to sustained competitive advantage

During the last few decades, identifying and examining the characteristics of market-driven firms have been a dominant theme in strategic marketing research. It has been argued that market-driven firms are superior in their market sensing and customer linking capabilities, enabling market-driven firms to outperform their competitors. This paper reports the findings of a study that examines the role market-focused learning capability and marketing capability in innovation-based competitive strategy on sustainable competitive advantage. The findings indicate that entrepreneurship is an important factor in sustained competitive advantage (SCA) and while market-focused learning capability leads to higher degrees of innovation, marketing capability enables SCA.