Purpose of the article
Understanding the factors that influence the relationship between the buyer and the seller is of great importance in developing and maintaining such a relationship. Previous research has identified these factors but the relative importance of the factors had not been determined empirically.
The article reports the research by Powers and Reagan, where the factors that have overall importance to a buyer-seller relationship are determined and the most important factors at different stages of the relationship are also determined.
Concepts employed in the research
The buyer-seller relationship considered in the research is a long-term non-contractual relationship and the stages analyzed are partner selection, defining purpose, setting relationship boundaries, creating relationship value and relationship maintenance. Partner selection is the first stage in the relationship and it involves the firm becoming aware of potential partners and ultimately selecting the appropriate one.
The defining purpose stage involves the parties defining the purpose of the relationship and clarifying their mutual goals. In the setting boundaries stage, the partners become increasing interdependent on each other’s resources and benefits.
The next stage is creating relationship value where the competitive advantage of either one or more of the partners is improved as a result of being in the relationship.
Finally, the relationship maintenance is the stage where the partners have probably acquired enough satisfaction such that they are willing to maintain the relationship.
From previous research, the following factors were determined to influence the relationship between a buyer and a seller: reputation, performance satisfaction, trust, social bonds (mutual friendship and liking between the buyer and seller), and mutual goals.
Others are power/interdependence, technology, non-retrievable investments, adaptation (where one partner adapts its processes to accommodate the other partner), commitment, structural bonds, cooperation, and comparison level of the alternative.
In this research, the researchers hypothesized that the influence of these factors may be of greatest importance at one or more of the buyer-seller relationship stages or the importance may be equal across all the stages. These hypotheses were tested against empirical data obtained from surveys mailed to purchasing managers.
Results
The results showed clear difference between the overall importance of the relationship factors with mutual goals being the most important and social bonds the least important. In the importance of the factors at different relationship stages, partner selection had mutual goals and adaptation being the most important.
In defining relationship purpose stage, cooperation was the most important factor and setting relationship boundaries had mutual goals and trust as the most important factors.
Adaptation was the most important factor in stage four (creating relationship value) and together with mutual goals, they were most important in relationship maintenance stage. In general, most relationship factors were found to be of importance during the later stages of the buyer-seller relationship.
Reasons for choosing this article
To develop a competitive advantage over other competitors, a firm must have a successful buyer-seller relationship. In doing this, the responsible manager must understand the factors that influence their company’s relationship with its partners. This article reviews these factors and therefore provides more information to managers engaged in developing and/or maintaining such a relationship.
Buyer-seller relationship is a complex issue and involves several stages. At the different stages, the partners involved have different sources of satisfaction and therefore it is important to understand these stages. The way partners derive satisfaction from every stage should also be considered.
Previous research had not provided conclusive information on this. On the other hand, the research work reported in this article determines the important factors in each stage of the relationship and on the overall buyer-seller relationship as well as providing empirical evidence to prove its hypotheses
Questions arising from the article
The researchers in this article had an objective of empirically proving that relationship factors have varying importance at the various stages of the buyer-seller relationship. However, the views represented are from a buyer point of view only.
Someone using the information may wonder, what about the point of view of the sellers? Therefore, before concluding on the importance of the factors, it is important to take into consideration the points of view of the two parties.
In most cases, firms are involved in buyer-seller relationship with other firms as well as non-corporate individuals like final consumers. The article is more inclined towards firm-firm relationship and mentions nothing about the relationship a firm may have with non-corporate bodies.
Conclusion
From a buyer point of view, the relationship with a seller is a stepwise process and different factors influence the relationship at the different stages. Managers should focus efforts on the most important factors depending on the stage of the relationship since focusing on all the factors has no enhancing results on the relationship.
Some factors have very low significance on the relationship and therefore require minimal consideration. The research reported in the article shows that more work is needed to fully understand the factors influencing buyer-seller relationship.