Relationship buying: a new paradigm in business-to-business marketing

Abstract

The recent COVID-19 pandemic, and subsequent invasion of Ukraine by Russia, has demonstrated to the world the volatile and fragile nature of the global supply chain and how important its effective management is for the various economies of the world to survive and prosper. Supply chain management (SCM) refers to the handling of the entire production flow of goods and services, from the sourcing of a vendor, until the offering is in the hands of the final customer. SCM consists of three key business activities, namely, business processes, general management (the overseeing of the management functional areas), and even more importantly, logistics and its thirteen activities, of which procurement is the most relevant. The reason for the latter assertion is that as without the solicitation of inputs (material, components and so on), need-satisfying business and consumer goods and services cannot be produced. Organisations require a vast array of inputs to convert into offerings that are required by their customers, and the selection of the most appropriate vendors plays a vital role in satisfying the needs of business customer and consumers. As inputs vary considerably in terms of quality, price, and availability, it is crucial for the buying organisation to find suitable suppliers to satisfy their ever-changing requirements. This research study was undertaken to determine the key vendor selection criteria. Most people think that price and product quality represent the predominant selection standards, but the problem relates to what is a fair price for a good and what signifies good quality, because like beauty, it is in the eyes of the beholder? The objectives of the research and the eight hypotheses relating thereto, are concerned with determining the key vendor assessment criteria and whether there was a relationship between the criteria. For example, does service quality have a significant positive influence on access to personnel and exceeding customer expectations? An integral part of the study was the development of a conceptual model of the supplier preference factors (constructs), which linked each hypothesis and determined the relationship with one another. The research population comprised of small, medium, and large-sized organisations, within a myriad of business types and sectors. As there is no comprehensive list of organisations, a quantitative approach was used to garner the requisite data, the researcher over-estimated the number of businesses in South Africa, and, used Rayosoft’s sample size calculator to compute the required sample size, which was calculated on the basis of a confidence level of 95%, a margin of error of 5% and a response distribution of 50%, so a sample size measuring 385 respondents was needed. The researcher managed to secure the support of 445 respondents. A comprehensive questionnaire was designed, pilot-tested, and then distributed via numerous methodologies (2 100 questionnaires in number). On receipt of the completed questionnaires, the questionnaires were meticulously reviewed in order to certify that they were comprehensive and accurate prior to being numbered, coded, captured, and analysed by means of SPSS (version 25) software. Simple descriptive statistical techniques were applied to ascertain means, standard deviations, and frequencies in order to provide a simple overview of the findings. Thereafter, generalised liner modelling and structural equation modelling were utilising to determine the more complex relationships demographic and personal data and suppliers’ preference constructs. The research study revealed that service quality had a significant positive influence on access to personnel and exceeding expectations, and service quality had a significant favourable effect on environmental sustainability. Access to personnel and exceeding expectations was found to have a significant positive effect on culture, EE and AA, and environmental sustainability had a significant favourable influence on personal relationships. Personal relationships and gifts have a significant positive influence on relationship with salespeople and management, and culture, EE and AA had a significant positive effect on BEE status. Relationships with salespeople and management have a significant favourable influence on preference of suppliers’ salespeople, and finally, BEE status had a significant favourable influence on preference of suppliers’ salespeople.