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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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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Buyer Seller Relationships
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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