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style='font-size:18.0pt;line-height:150%'>Student number: 222757
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style='font-size:18.0pt;line-height:150%'>MA MARKETING
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INTRODUCTION
This report is the critical academic
literature review of the research topic for the final dissertation.
Home Furnishing and Customer Electronics Retailers: the nature of trust in
business-to-business relationship marketing
Superstore Holdings Private Limited as a Duty Manager in-charged of showroom business performance with
extra job profile of organising company road shows.
total of eight showrooms, re-known for the widest range of audio/visual home
entertainment products, home and kitchen appliances, telecommunication
equipment, IT products, as well as furniture and furnishings
style='mso-fareast-language:ZH-CN'>I was having a great interest and enjoy
working very much in retail industry due to its challenging seasonal business
activities. I am planning to go back to
graduation from
of
better advancement in my career. I
strongly believe my dissertation with research topic focusing on Singapore home
furnishing and customer electronics business markets would help me as a manager
position, to have a better understanding on the nature of trust in business
market relationship marketing, and improvements in relationship marketing
strategies in which I have to frequently dealing with different suppliers and
buyers for marketing and sales planning.
1) Understand
business-to-business markets
Bingham, Jr. &
Raffield III (1990) define business-to-business market as below:
marketing transaction takes place whenever a good or service is sold for any
use other than personal consumption, and all the activities involved in this
process make up business-to-business marketing.
private, end-users, or reseller, and so would wholesalers, retailers, and other
such resellers buying goods and services in the operation of business.
non-profit institutions such as universities and hospitals are also seen as
business customers (Haas, 1992). Eckles
(1990) states that business products fit into seven classifications: (1) raw
materials, (2) installations, (3) auxiliary equipment, (4) component parts, (5)
processed materials, (6) supplies and (7) industrial services.
furnishing and customer electronics retailer
(buyer) buy auxiliary equipments
such as televisions, furniture, and computers from suppliers (sellers)
the business environment where according to Eckels (1990) that the demand for
business goods is derived. It is
argued that the business demand is relatively inelastic because demand
is not likely to change significantly in the short run and tends to be more
volatile than consumer goods and services demand.
2) Identify
characteristics of buyer-seller relationship
environment bordering on a partnership where trust and respect for each other
prevails (Eckels, 1990). It is argued
that companies and relationships in the business markets are
interactions that are influenced by the long-term business process that bind
the firms together. Ford (2002)
also argues that it would not make sense of companies by looking at them in
isolation, but only in relation to each other.
The buyer-supplier relationship in
electronics business markets can be analysed based on the general
characteristics of buyer-seller relationships identified by Gadde &
Hakansson (1993) as below:
relationship depends on the number of people involved.
furnishing and customer electronics business markets involves buyers,
supplier’s salespeople, buyer’s and supplier’s marketing department with
extensive contacts to discuss and solve more or less advanced problem.
interface system lies in the fact that the ultimate actions may be controlled
by some individuals who do not involve in the original transaction.
planning, transportation, and inventory control people.
that could hole the ultimate authority over the dispensation of the
organisation’s finances.
should be seen in a time perspective that the investment which may involve
costs will be pay off in the long run.
Based on their arguments, the cost of
electronics business buyer-supplier relationship may involve
contact/information cots and adaptation costs especially during the beginning
stage. The costs will fall later when buyer
is getting to know the suppliers and their abilities and expertise through
marketing and sales promotion activities.
It is worthy to note that it is more effective to retain and maintain
existing relationships than to seek out new ones that may pose an obstacle to
implementing changes. Hence, buyers and
suppliers should note that day-to-day activities should remain at a relatively
high level to maintain a long-term relationship.
processes or the item exchanged to accommodate the other party (Gadde &
Hakansson, 1993). Ford (2002) discusses
that adaptation behaviour would vary over the life of the relationship.
develop trust, and in the mature state it will expand and solidify the
relationship. There are many types of
adaptations stated by Gadde & Hakansson (1993) such as technical,
administrative routines and knowledge-based adaptations.
electronics business markets should continuously increases their knowledge of
each other application of technology to give themselves an important
developmental boost. Besides,
administrative routines such as planning, supply and communications systems
need to be adapted by both parties for effective working relationship.
cited by Sheth & Parvatiyar (2000) argue that adaptation tend to bond the
buyer and seller in a tighter relationship and create barriers to entry for
competing suppliers.
dimensions and varies with the general state of the economy (Gadde &
Hankansson, 1993). The buyer-seller
relationship may be more important to the buyer than the seller, or vice
versa. For example, Sharp Corporation
viewed the relationship with SAFE was more important to SAFE and the
relationship was struggled and characterised as distrust and both try to avoid
vulnerability to other. In 2001, the
relationship was dissolved due to negative and strong form of reciprocity.
there is no best strategy in any individual case of imbalance power and dependence
relationship. However, the awareness of
the problem, regular and systematic discussions are the first step to learn and
handle the questions better, and to build trustworthy relationship.
cooperation
action and the maintenance of the relationship.
Conflict may arise if there is no goal and interest sharing.
for long-term relationships (Gadde & Hankansson, 1993).
& Valla (2003) that buyer-seller relationship is built up through human
effort and human contacts and in order for them to survive they must be under
continual development.
rather then formality
theory as business marketers placed greater emphasis on building long-term
relationship (Dwyer, Schurr, & Oh, 1987; Morgan & Hunt, 1994 cited by
Doney & Cannon, 1997). Ford et al
(2002) argue that trust should not be built in a relationship by making
promises, but only by fulfilling them.
He argued that it could be easy to destroy a buyer’s trust when the
seller demonstrates a lack of commitment to a relationship.
should make significant investments to develop and maintain customer
trust. They argue that for suppliers,
the value of such efforts is most apparent when high levels of buyer trust lead
to more favourable purchasing outcomes for the supplier.
time-consuming, and complex, its outcome in terms of forging strong
buyer-seller bonds and enhance loyalty could be critically important to
supplier firms.
3) Analyse
Relationship Marketing
directed towards establishing, developing and maintaining successful relational
exchanges (Morgan & Hunt, 1994).
Anderson (2001) suggests that organisations need to move away from the
traditional one-off transactional approach to a relationship marketing
perspective and this point supports the discussion in Hutt & Speh (2001)
that a business marketer may begin with a relationship from a supplier with
transactional exchange to a preferred supplier status with collaborative
exchange.
in which they share responsibilities and benefits, trust each other and are
engaged in some coordinated planning.
His view is supported by Sheth & Parvatiyar (2000) that relationship
must be mutual beneficial to both buyers and sellers in order to exist, and
adopting relationship marketing implies the acknowledgement that each partner
has a stake in the others activities. In
this way, both sides should think of ways to appropriately involve each other
in strategy formulation and implementation processes.
Schuppisser & Beldona (2002) states that the traditional relationship
marketing literature emphasis the benefits of keeping existing partners
satisfied. Their discussion supports the
views of Doyle (2000) that customers who stay with the supplier are assets of
increasing value – each year they tend to generate higher and higher net cash
flow. Besides, the rational factors that
influence stakeholder relationship discussed by Polonsky, Schuppisser &
Beldona (2001) clearly supports the key characteristics of buyer-seller
relationship as discussed earlier.
and developed in business markets.
firm and salesperson focusing on characteristics of the supplier firm, supplier
firm relationship, salesperson and salesperson relationship.
it encourages buyers and sellers to make investment into a relationship, to
resist taking advantage of alternative which provide short-term benefits, and
not to behave opportunistically with regard to the relationship (Morgan &
Hunt, 1994). It is argued that trust has
assumed a central role in the development of marketing theory as business
marketers placed greater emphasis on building long-term relationship (Dwyer,
Schurr & Oh, 1987; and Morgan & Hunt, 1994 cited by Doney & Cannon,
1997).
also the reputation, willingness to customize, confidential information sharing
of supplier firm, and length of relationship with supplier firm and salespeople
(Doney & Conoon, 1997). In general,
furnishing and customer electronics retailers build trust with supplier firms primarily
relying on supplier firm’s size and reputation.
It is worthy to note that the supplier firms’ willingness to make
idiosyncratic investments and share confidential information provided evidence
that they can be believed, they cared for the relationship and willing to make
sacrifices. These investments contribute
to forging strong buyer trust in the selling firm and they can be expected to
pay off the long run (Ford et al, 2002).
buying firm’s current supplier choice and future purchase intentions
who proves to be dishonest and unreliable could jeopardize a long-term
relationship between the buyer and seller but trusted salespeople helps to
preserve customer commitment during difficult times.
reduce customer firm’s costs in the long run that can be a source of
competitive advantage for supplier’s firm (Wathne, Biong & Heide,
2001). This can be done with emphasis on
the supplier flexibility, product/service quality and relationship-specific
adaptation stated by Cannon & Homburg (2001).
management programs, in which buyers are assigned a designated sales person who
acts as an intermediary between the buyer and supplier (Lovelock & Wright,
1999). As supplier’s salespeople plays
an important role in developing customer relationship value, the supplier firm
should recognize the potential vulnerability if the key contact person were to
leave, be transferred or promoted and thus be unable to serve the customer (Bendapudi
& Leone, 2002). Because turnover is
bound to occur, there should be efforts to capture the employees’ knowledge
about their customers to transfer this information to a replacement.
Homburg (2001) suggest that supplier firms should emphasize customer
satisfaction and note that the interpersonal trust engendered by salespeople
and transferred to the supplier firm plays a key role in developing and
maintaining enduring buyer-seller relationship.
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