Copy of an Integrated Model of Buyer Seller Relationships

8/2/2019 Copy of an Integrated Model of Buyer Seller Relationships

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Buyer Seller Relationships

Determinants

Trust

The willingness to rely on the ability, integrity, and motivation of thecompany to serve the needs of the consumers.

Value

The ability of a selling organisation to satisfy the needs of the

customer at a comparatively lower cost or higher benefit than

that offered by competitors and measured in monetary,

and psychological terms.


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An integral part of business to business operating strategies

Context of buyer seller relationships:

Trust and friendships supported by good quality products and services

Strategic relationships

Single source suppliers

Cost reductions

Two Models: Adversarial Model and Cooperative Model


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Cooperative model: both parties lower operating costs through betterinventory management and elimination of unnecessary tasks andprocedures

All suppliers are not appropriate partners for cooperative relationship

2 by 2 table categorize suppliers buyers for in depth relationships

Value addition

Low operating risks


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Empirical models of buyer-seller relationships:

The industrial marketing and purchasing (IMP) group emphasized on

interaction approach

Buyer seller Cooperation

Dyadic interaction

Environmental influence

List of variables by Wilson & Moller


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Commitment

The most common dependent variable

Discriminates stayers and leavers

The desire to continue the relationship and to work to ensure itscontinuance.

An enduring desire to maintain a valued relationship


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Trust

Fundamental relationship model building block

Critical variable

Cooperation

Similar or complementary coordinated actions taken by firms in

interdependent relationships to achieve mutual outcomes or singular

outcomes with expected reciprocation over time.

Interaction of cooperation and commitment results in cooperative

behaviour


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Mutual Goals

The degree to which partners share goals that can be accomplishedonly through joint action and the maintainance of the relationship.

Relationship continuance

Performance satisfaction

Mutuality of interest and stewardship behaviour

Interdependence and power

Power imbalance: ability of one partner to get the other partner to dosomething he or she would not normally do.


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Power imbalance directly related to degree of dependence of partners

Performance satisfaction

Critical Variable

High level satisfaction

Degree to which the business transaction meets the business

performance expectations of the partner.

Product specific performance and nonproduct attributes


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Structural bonds

The vector of forces that creates impediments to the termination of the

relationship.

Develop with Investments, adaptations and shared technology

Higher the structural bonding, Higher levels of commitment

Comparison level of the alternatives

The Quality of the outcome available from the best available

relationship partner


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Adaptation

When one party alters its processes or the items exchanged to

accommodate the other party.

Bond the Buyer and sellers

Early stages of relationship, develop trust

Mature stages, expand and solidify the relationship

Barriers to entry for competing suppliers


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Nonretrievable investments

Relationship specific commitment of resources that a partner invests inthe relationship.

Capital improvements, training and equipments

Shared technology

The degree to which one partner values the technology contributed bythe other partner to the relationship.

Product level technology to computer systems

Stronger relationship


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Parties commitment to the relationship

Social bonds

Investigate friendship, family and group interactions

Personal social bonds develop through subjective social interaction.

commitment

The degree of mutual personal friendship and liking shared by the

buyer and seller.


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Copy of an Integrated Model of Buyer Seller Relationships

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