the various research on customer and supplier relationship (part 1)

The Various Research On Customer and Supplier

Relationship (Part 1)

Gan Chun Chet (Mr.)MSc (UMIST) (UK), BSc (Hons) (UK)

The Various Research On Customer and Supplier Interaction

• Development Through Time – Parties work together, and as a result, both parties reduces the level of uncertainties, acquired more experience, closer to each other, more committed, adapt to each other.

• Source : [Ford] [1 – The Development of Buyer-Seller Relationship in Industrial Market – European Journal of Marketing, Vol 14, No. 5/6, 1980, pp 339-354]


• The paper examined the nature of buyer-seller relationships in industrial market by considering their development as a process through time.

• The product and process technology of the two companies are important factors in determining the nature of buyer and seller. Also the existing market structures and the availability of alternative buyers and sellers.

• The research analyze the development of buyer-seller relationship in 5 stages (Start 1 : Pre-relationship, Stage 2 : Early Stage, Stage 3 : Development Stage, Stage 4 : Long Term Stage, Stage 5 : Final Stage)


• Bonding and Commitment – Proposed a framework of buyer-seller relationship development process. Further commitment into the business, if needs are satisfied

• Source : [Wilson & Wummalaneni] [2 – Bonding and Commitment in Buyer-Seller Relationship : A Preliminary Conceptualisation – Industrial Marketing and Purchasing, Vol 1, No. 3, 1986, pp. 44 - 58]


• The paper proposed a framework of buyer-seller relationship suggesting that buyers and sellers interact with each other owing to the complementarity of their needs.

• The outcome of these interactions not only determine the affective responses of the participants (i.e. the level of satisfaction) but help them decide whether it is worth making any further investments into a relationship as well.


• Trust – Investigate the origin of trust. Corporate identity, image and reputation. A variable in the relationship. Its what the purchaser perceives about the supplier or what the supplier perceives about the customer

• Source : [Smeltzer] [3- The Meaning and Origin of Trust in Buyer-Supplier Relationship, International Journal of Purchasing and Material Management, Jan 1997, pp 40-48]


• Found that the perception of trust by both parties are corporate identity, image and reputation. The customer perceive the supplier by these three concepts. Similarly, the supplier perceive the customer by these three concepts. The above are the conditions upon which trust is based on.


• Power – The use of resources to influence the other party. A few of these examples are reward power, expertise power, information power, etc.

• Source : [Dahl] [4 – The Concept of Power, Behavioral Science, 1957, pp. 201 – 215]


• The use of resource to influence another party.

• Three type of influence : Reward power, expertise power, information power.


• Strategic Options – Identifies the strategic options that are available for companies in their interaction with others. 4 dimensions, in a 2 by 2 matrix - Capability, mutuality, particularity and consistency

• Source : [Ford, Hakansson, Johanson] [5- How do companies interact? Industrial Marketing and Purchasing, Vol. 1, No. 1, 1986, pp 26-41]


• The paper identifies a four by four matrix which illustrates the inter-relationships between different aspects of interaction. Particularity, inconsistency, capability and mutuality are the factors in the four by four matrix. The concept of Particularity and Inconsistency exist, Capability and Mutuality are strategic choice.

• Particularity is interaction in the terms of direction and uniqueness• Inconsistency – Ambiguity or lack of clarify in interaction• Capability – Financial, physical plant, technological or managerial• Mutuality – How much a company is prepared to give up its own

individual goals or intentions in order to increase a positive outcome of others.


• Influence Factor in Supplier Partnership – A model depicting factors that influence the partnership

• Source : [Stuart] [6 – Supplier Partnership : Influencing Factors and Strategic Benefits, Internation Journal of Purchasing and Material Management, Fall 1993]


• The paper model depicting factors that influence supplier partnership during a contract management period.

• Competitive pressure, importance of purchased inputs, purchasing capability has direct influence on the degree of partnership.

• Resulting in productivity (inventory reduction, cost reduction, reduced downtime, and scrap), as well as benefit of a more strategic nature (market share gains, speedy new product development, quality improvement, etc.)


• Uncertainty – Defined three categories of uncertainty : need uncertainty, market uncertainty and transaction uncertainty

• Source : [Hakansson] [7 – Influence Tactics in Buyer-Seller Processes, Industrial Marketing Management, Vol 4, No. 6, pp 319 – 332]


• Hakansson et al defined need uncertainty as being whether the customer is able to really know the exact product or service that is required from the supplier. Market uncertainty is to know whether knowledge in the market area is known and that the change involved offered by suppliers. Transaction uncertainty is being defined as the ability to purchase the product or service. This means that these uncertainties are realized throughout the purchase of product or service as defined. Uncertainties are in opposed to strengthening of a relationship. The uncertainties need to be reduced to ascertain the customer of its abilities.

the various research on customer and supplier relationship (part 1)

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