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

Wolfgang Ulaga and Andreas Eggert
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Wolfgang Ulaga: ESCP-EAP - ESCP-EAP - Ecole Supérieure de Commerce de Paris
Andreas Eggert: University of Paderborn

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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.

Keywords: relationship marketing; relationship value; buyer–seller relationships; partial least squares; formative measurements (search for similar items in EconPapers)
Date: 2006-01
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Citations: View citations in EconPapers (96)

Published in Journal of Marketing, 2006, Vol.70,n°1, pp.119-136. ⟨10.1509/jmkg.2006.70.1.119⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00482456

DOI: 10.1509/jmkg.2006.70.1.119

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