Pricing, purchasing and product performance factors associated with the relational exchanges of different sized customers

Abstract

PurposeThe purpose of this research is to understand what pricing, purchasing, product defect and late deliveries factors are associated with the decisions of small, medium and large size customers to enter into closer customer‐supplier relationships with their suppliers.Dessign/methodology/approachThe study involves a survey of 372 professionals in the paper industry to investigate the linkage between pricing, purchasing efficiencies and reductions in product defects and later deliveries and relational exchanges across customers of different sizes and resources.FindingsThe results indicate that the pricing, purchasing, product defect and late delivery factors associated with relational supply chain exchanges are different for small, medium and large size customers.Research limitations/implicationsData were collected from individuals’ perspectives of the customer‐supplier relationships within customer organization only and involved the exchange of one type of product. Similar studies need to be conducted in other industries involving other types of product exchanges that capture both customer and supplier perspectives to verify these findings.Practical implicationsSupplier sales and marketing managers need to understand that different sized customers with different resources may have different performance objectives when entering into relational exchanges. These varying customer performance objectives should help supplier marketing managers to better segment their relational exchange customers and help them in assessing their ability to satisfy varying customer relational exchange performance goals.Originality/valueWhile the linkage between closer customer‐supplier relationships and pricing, purchasing, product delivery has been studied in prior research, this is one of the first studies to show that different customer performance factors are associated with different sizes of customers and their relational exchanges. This paper also suggests that further research grounded on a resource‐based theory (RBT) of the firm would be valuable in better understanding the factors associated with different customers' relational exchanges.