Abstract
1. Introduction
2. Theory and research hypotheses
3. Methods
4. Results
5. Discussion
Acknowledgements
References
Abstract
This study examines whether the type of buyer relational strategy (competitive or cooperative strategy) moderates the relationship between supplier transaction specific investments (TSIs) and buyer commitment, and whether the type of buyer cost reduction strategy (purchase price-based strategy or total cost-based strategy) moderates the relationship between buyer commitment and supplier performance outcomes. Data were collected through a survey of purchasing managers at 248 buying firms in Korea. Results indicate that supplier TSIs positively affect supplier firm performance through buyer trust and commitment. The influence of supplier TSIs on buyer commitment depends on which relational strategy buyers use and the influence of buyer commitment on supplier firm performance depends on which buyer cost reduction strategy is used.
Introduction
Many suppliers in business-to-business markets actively engage in relationship marketing and attempt to maintain long-term and stable relationships with buyers (Anderson & Narus, 1990; Ebers & Thorsten, 2015; Kalwani & Narayandas, 1995; Morgan & Hunt, 1994; Ulaga & Eggert, 2006). Supplier’s transaction-specific investments (TSIs) are a critical factor driving its buyer’s long-term relationship orientation. TSIs are specialized assets that are difficult or expensive to transfer to other relationships, or investments that may lose value if redeployed to other buyers (Anderson & Narus, 1990). It is important that suppliers understand how their investments will affect their performce outcomes when they initiate transaction-specific investments. Buyers also have interest in the supplier’s investments because buyers will be influenced by the investments in aspects such as quality, cost, transaction volume, and production operation (Wind & Thomas, 2010). Accordingly, the outcomes of supplier’s transaction-specific investment should be understood from a bilateral perspective. Existing research, however, has focused on either the strategy of a buyer or a supplier. There are no studies about how the performance outcome of a supplier’s marketing investments is affected by buyer strategy. Moreover, the importance of using a bilateral perspective is even more when the strategies of the two parties are not fully aligned, which is not uncommon.