Introduction
In an era of increased business competition, it is essential for business firms to adopt efficiency in marketing and procurement. Some of the approaches that have been used by many companies to increase their levels of competitiveness are product improvement, better distribution systems, and enhanced customer service.
Most importantly, the development of effective long-term interaction with business suppliers has been cited as an effective approach toward gaining competitive advantage. Buyer-seller relationships are based on the cultivation and maintenance of trust, which could significantly reduce costs incurred in business transactions and help organizations to gain competitive advantage.
Many studies have focused on understanding the impacts of excellent buyer-seller relationships on business performance outcomes.
The need to study such impacts is because business establishments could incur significant losses if they do not understand their relationships with their suppliers. Strategic relationship marketing is essential in impacting clients’ perceptions of long-term business relationships. The article concentrated on achieving the following objectives:
- Examining critical factors that impact long-term relationships among Saudi Arabia’s sellers and buyers
- Assessing the structures of trust that positively affect relationships
- Determining perceptions of buyers based on establishing long-lasting relationships in business establishments
The industrial market in Saudi Arabia
Saudi Arabia is an important country, both in the Middle East and across the world due to its GDP, geographical size, and population. It generates most of its income from the sale of petroleum products. It is a major player in OPEC due to the production of petroleum. However, the government has been motivating investors in the private sector to be more active to prevent economic problems that could arise due to overdependence on oil.
Although there has been a focus on understanding buyer-seller relationships in the Kingdom of Saudi Arabia, the focus has been only on deciphering satisfaction and commitment to changing structures of industrial marketing. Thus, the impact of dependence and trust in the establishment of the relationship, incorporation of trust and dependence factors have been overlooked by several studies.
Conceptual framework
An effective framework was adopted to help understand the correlation between an established long-term relationship and trust. The model proposed that the following factors were important in determining the level of trust and quality of the relationship between a buyer and seller: environmental changes, seller’s perceptions, satisfaction about past trust, seller’s reputation, seller’s credibility, and seller’s benevolence.
It was noted that, since the mid-1980s, a directional shift was noted in businesses in Saudi Arabia. There has been a consensus among researchers that people have moved from marketing that was based on transactions to marketing that is focused on effective relationships. It has been established that the correlation between interdependence and trust could form an excellent platform on which long-term relationship is created and maintained.
For the buyer-seller relationship to be established and maintained, there is a need for business players to adopt effective communication strategies. It is worth noting that a seller could develop a business reputation that is focused on fairness by sacrificing and exhibiting a high level of concern for their business partners.
Buyers who realize that some sellers have an excellent reputation in business could develop long-lasting relationships with such sellers. Thus, the authors of the article hypothesized that long term seller-buyer relationships were positively impacted by how buyers perceived sellers based on reputation.
Methodology
A detailed survey was adopted to assess the factors that influenced buyers to develop excellent relationships with sellers. The instrument of data collection was based on the conceptual framework adopted in the study. In brief, the survey was characterized by three parts of questionnaires.
First, the survey adopted questions about regular suppliers, a period of doing business, and the volume of transactions. Second, the questions revolved around factors that influenced buyers to purchase from specific sellers. Third, the survey was focused on obtaining information about how companies and other respondents responded to the information based on the other two portions of the survey.
Data collection
Data were collected from the participating firms in the Eastern Province of the Kingdom of Saudi Arabia. Business establishments that were included in the study included both small and medium-sized firms. Although it was initially thought that the data collection methods could be faced by many challenges, effective sampling techniques ensured that the right data were collected from the targeted participants in the study.
Analysis
For the effective analysis of data, business organizations were categorized into different sectors such as manufacturing, electronics, and construction. Multiple regression analysis was utilized to do calculations with the aim of establishing the truth in terms of the adopted null hypothesis.
Results and discussion
The study found that long-lasting buyer-seller relationship positively correlates with the extent to which buyers and sellers depend on each other, trust each other, and satisfy each other in the process of doing business.
Thus, the results implied that buyers characterized by long-term perceptions of sellers could ensure the creation and maintenance of long-lasting relationships. However, the nature of relationships was also found to be determined by the type of strategies that different firms adopted.
Limitations and future implications
Two major limitations could be noted in the study. First, the sample size was not well supported by the multiple regression analysis that was used in the study. Second, the study was only limited to the eastern part of Saudi Arabia. Future studies could consider using longitudinal research approaches to learn more aspects of seller-buyer relationships in Saudi Arabia.