Value-Based Differentiation in Business Relationships: Gaining and Sustaining Key Supplier Status

Abstract

Many business customers today consolidate their supply bases and implement preferred supplier programs. Consequently, vendors increasingly face the alternative of either gaining a key supplier status with their customers or being pushed into the role of a backup supplier. As product and price become less important differentiators, suppliers of routinely purchased products search for new ways to differentiate themselves in a buyer-seller relationship. This research investigates avenues for differentiation through value creation in business-to-business relationships. The results suggest that relationship benefits display a stronger potential for differentiation in key supplier relationships than cost considerations. The authors identify service support and personal interaction as core differentiators, followed by a supplier's know-how and its ability to improve a customer's time to market. Product quality and delivery performance, along with acquisition costs and operation costs, display a moderate potential to help a firm gain and maintain key supplier status. Finally, price shows the weakest potential for differentiation.

The coordination strategies of high-performing salespeople: internal working relationships that drive success

“…Depth interviews have been used effectively in the marketing literature, especially in the business-to-business context when limited research is available (Flint et al 2002;Madhavan and Grover 1998;Tuli et al 2007;Ulaga and Eggert 2006). The use of a single firm for data collection is consistent with an empirical research tradition examining intricate process phenomena (DeCarlo et al 1997;Dixon et al 2005;Dixon et al 2003;Houston et al 2001).…”

“…Given the limited literature on coordination of expertise, following Ulaga and Eggert (2006) in a two-phase study, we first conducted depth interviews with 60 salespeople at a Fortune-100 high-technology firm, using a grounded theory approach (Glaser and Strauss 1967), to gain managerial insights into the processes and strategies that salespeople use to coordinate expertise for both successful and unsuccessful customer engagements. Using this data, in Phase I we identify the processes involved in the coordination of expertise in the selling context and create a measure of the coordination of expertise.…”

Customer value from a customer perspective: a comprehensive review

“…For example, Cannon and Homburg (2001) identified three sources of value creation through cost reductions in business relationships: the core product, the sourcing process, and the customer firm's internal operations. Based on empirical results, Ulaga and Eggert (2006) demonstrated that this categorization of value sources is not limited to cost reductions but also applies to generic benefit dimensions.…”

“…The benefit dimension is often expanded to include process utility components, particularly aspects of the post-purchase phase (e. g., supply, maintenance, warranty) in order to take into account temporal components (see Lai 1995;Ravald and Grönroos 1996;Huber et al 2001;Chen and Dubinsky 2003;Eggert et al 2006). However, the pre-purchase phase can likewise significantly influence PCV, as, for example the empirical study of Chen and Dubinsky (2003) in the area of eBusiness shows.…”

“…The dynamics and complexity of the CV construct presents great methodical challenges to empirical research. A few approaches incorporate dynamic aspects by using, for example, a longitudinal approach (Beverland and Lockshin 2003) or by integrating the relationship life cycle as a dynamic element (Eggert et al 2006), but the large majority of concepts and empirical investigations provide only a snapshot of PCV or DCV.…”