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NORTH- HOLLAND

Manufacturer Influence
versu Man ufa urer ct

Sdesperson Influence
over the Industrial
Distributor
James E. Zemanek, Jr.

This research attempts to distinguish empirically between domain of power than does the manufacturer in a channel con-
the potential influence of a manufacturer versus the manufac- taining an industrial distributor. 0 Elsevier Science Inc., 1997
turer’s salesperson over a distributor’s business in eight differ-
ent areas of potential influence: price, order quantity, product
line, advertising and sales promotion, customer service, inven- INTRODUCTION
tory, customer credit, and display. Data were collected from
We are shifting from a transaction orientation to a rela-
412 industrial distributors in a marketing channel. The author
tionship management orientation in industrial marketing.
conducted a factor analysis to find out if the salesperson does
Therefore, it becomes even more important to understand
have power over policy areas apart from that of the manufac-
the nature and quality of all channel interactions. The cur-
turer and found support for the belief that, compared with the
rent emphasis in industrial marketing channel research fo-
manufacturer, the manufacturer’s salesperson has a different
cuses on the relationship between organizations. This is
unfortunate, because the interpersonal relationship between
Address correspondence to James E. Zemanek, Jr., Department of Market-
an individual buyer and a particular salesperson is where
ing, East Carolina University, Greenville, NC 27858-4353. the real focus of the exchange relationship may be found

Industrial Marketing Management 26,59-66 (1997)


0 Elsevier Science Inc., 1997 0019.8501/97/$17.00
655 Avenue of the Americas, New York, NY 10010 PII SOOl9-8501(96)00109-5
Each member has power in an organization.
[l]. Furthermore, we can gain rich insight into personal sion of power lies in the other party’s dependence on the
selling strategy by examining the nature of the customer- relationship or its need to maintain the relationship to
salesperson relationship [2]. Therefore, it seems that the achieve desired goals. Most of the theory regarding
analysis of this interpersonal relationship [3,4] is a more power relationships is set in terms of an interpersonal re-
appropriate way to examine channel relations than the al- lationship. We must assume that an individual organiza-
ternate study of the customer-institution relationship. tion, like an individual, has a distinct personality and a
A large body of research furthers the understanding of set of needs and wants. Therefore, we can conceptualize
power relationships between organizations in industrial that a company interacting with another in a channel’s
distribution channels [5-121. However, Gaski [6] notes context is analogous to an interpersonal relationship [5].
that we have not fully met many research goals because of Channel-based power studies usually adopt the perspec-
an incomplete understanding of power sources. Most re- tive that power should be considered a multidimensional
search efforts have focused on manufacturers, distribu- concept limited in its application, rather than pervasive.
tors, and lately, customers as the primary sources of power In a given channel of distribution, one member may be
in a distribution channel. To date, the previous channels perceived as having power over certain policy areas but
and sales literature have failed to distinguish between not others.
manufacturer power and manufacturer’s .suZesperson power. Within an organization, each member of that organiza-
This research posits that the manufacturer’s salespeople tion has power over certain aspects of the organization’s
are much more than “boundary personnel.” Salespeople mode of operation because of that individual’s resources
represent their companies to customers and to society. and position. Therefore, power, rather than being the
Impressions made by these salespeople on their custom- property of the organization, is issue specific and shared
ers form the customer’s opinions about the firm and its among members of that organization, including the sales-
products. Therefore, the salesperson employed by the person. Given this perspective, saying that channel mem-
manufacturer could have power over areas that are sepa- ber “A” has power over channel member “B” is virtually
rate from that of the manufacturer. meaningless [ 161. The statement could be made mean-
This study contributes to the existing industrial mar- ingful by identifying certain areas of B’s behavior that A
keting literature by treating the manufacturer’s salesper- can influence [8]. Clearly if power is issue specific rather
son as a potential source of power over certain distributor than pervasive, then the sources of power over various
policy areas in the industrial channel of distribution. This policy areas should be considered issue specific as well [8].
notion is opposed to the previous industrial channels re-
search that has not examined the role of the manufacturer’s
salesperson. The hypothesis generated by this research and Distinct Salesperson Power
its foundation are discussed in the next section.
Without a base of influence the salesperson cannot ef-
fectively influence customers [ 131. McCall [ 141 reviewed
THEORETICAL DEVELOPMENT the use of influence bases in an organizational setting and
AND HYPOTHESIS concluded that “the relevance of a given power base, the
appropriateness of various tactics, and the likely impacts
Emerson [15] viewed power as the potential to influ-
of power use are intimately linked with each other and
ence. He proposed that the basis for one party’s posses-
the situation at hand” (p. 205). Research in this area is
important for three primary reasons: (1) anticipating and
negotiating for role and reward adjustments are essential
JAMES E. ZEMANEK, JR., is Assistant Professor of Marketing aspects of adaptive channel systems, (2) channel condi-
at East Carolina University. tions may restrict the type of communication between
members, and (3) channel member attitudes, morale, and

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Salespeople are potential sources of power.

performance are partially decided by the type and amount of American Supply & Machinery Manufacturers’ Associa-
influence applied in the exchange relationship [lo]. tion, Inc. and the Industrial Distribution Association, and
If a salesperson mediates the customer’s achievement 1,032 were sampled. Personalized letters and question-
of a goal and the goal is important to the customer, the naires were mailed to the purchasing agent, or the owner
higher the relative power of the salesperson [ 131. There- or president if no purchasing agent was listed, using
fore, we could measure the relative power in an industrial Dillman’s [19] “total design method.” The sample in-
sales interaction in terms of each party’s goals related to cluded distributors in Canada, the United States, and
the purchase decision and the degree to which each party Mexico.
can affect the other party’s ability to meet its goals [ 171. The mail survey resulted in a total response of 412 re-
If the goals are important to the customer, then the sales- turns out of 1,032 mail-outs, giving a response rate of
person will have more power [ 13, 171. In fact, the sales- 39.8%. Nonresponse bias was evaluated by comparing
person may have more power than the manufacturer over nonrespondents with respondents based on geographic
certain policy areas in selected industrial channels of dis- location and annual dollar sales of the distributorship.
tribution. The salesperson as a potential source of power Geographic observations, were pooled into five regions:
is one characteristic of the customer’s relationship with east, midwest, south, southwest, and west. Because some
the salesperson that stands out as not receiving adequate states had very few respondents, the pooling made it pos-
attention in marketing research, although it has received sible to calculate a valid test statistic. Annual dollar sales
considerable attention in social psychology [ 181 and or- were divided into eight groups ranging from under
ganizational behavior [ 141. $2,000,000 to over $50,000,000.
This research posits that the manufacturer’s salesper- The analysis of nonresponse bias across geographic re-
son can be more persuasive than the manufacturer in gions did not produce a significant chi-square statistic.
changing the behavior of the distributor in certain policy Therefore, there are no differences between the groups
areas, where the manufacturer means the general entity (x2 = 5.619, P = .140; P S .025 needed for significance).
apart from the salesperson. Considering this innovative When respondents were compared with nonrespondents,
approach, clearly the study of the manufacturer’s sales- according to annual sales volume and ignoring geo-
person as a subcomponent of power in the industrial graphic region, a significant chi-square statistic was
channel ought to be of interest to the marketing practitioner; found (x2 = 23.720, P = .0004; P d .025 needed for sig-
yet this area has received little attention. Furthermore, nificance), suggesting that there is a difference between
since the manufacturer’s salesperson has probably al- the two groups. This difference was isolated to distribu-
ways been a source of channel power over certain policy tors who average less than $2,000,000 a year in annual
areas to one degree or another, efforts should be directed sales. These distributors are usually one-manager opera-
toward describing and explaining the phenomenon. The tions, seldom exceeding 10 total employees. These dis-
hypothesis focused directly on this objective: tributors have the least amount of time to complete a sur-
vey and the lowest interest in the research conducted.
HI: The manufacturer’s salesperson has power over pol-
Therefore, this result was not deemed significant enough
icy areas unique and separate from that of the manu-
facturer in the industrial distribution channel. to warrant adjustments in the sample.

RESEARCH METHODOLOGY Operational Measures


The next section briefly describes the questionnaire
Data Collection Procedure items used to measure and test the constructs composing
Data were collected from general line distributors. The the hypothesis. The section begins with a discussion of
sample frame was the Joint Membership Directory of the the method used to help the respondents distinguish be-

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Proper training for salespeople is essential.

tween manufacturer power and salesperson power, and it in this study to measure the power of the manufacturer
ends with a description of the two variables used in the are as follows:
study. 1. If the manufacturer wanted you to raise the prices
Several statements were included in the questionnaire you charge for their products, what is the maximum
to ensure that the respondent distinguished between amount you would raise prices?
salesperson power and manufacturer power. The first in- 2. If the manufacturer wanted you to lower the prices
struction on the questionnaire requested that the respon- you charge for their products, what is the maximum
dent “think of a salesperson from any of your suppliers amount you would lower prices?
that you deal with on a regular basis.” The questionnaire 3. If the manufacturer wanted you to increase the guan-
then requested that the respondent write the actual name tity of their products you order, what is the maximum
of the salesperson in a space provided. A series of ques- amount you would increase order quantity?
tions followed that asked for responses concerning that 4. If the manufacturer wanted you to decrease the
particular salesperson. To obtain views on the actual quantity of their products you order, what is the max-
manufacturer, not the salesperson for the manufacturer, imum amount you would decrease order quantity?
part four of the questionnaire requested that the respon- 5. If the manufacturer wanted you to change the com-
dent “stop thinking about the salesperson referred to position of your product line, what is the maximum
above and concentrate on the supplier he/she works for amount you would change your product line?
and indicate the degree to which you cooperate with this 6. If the manufacturer wanted you to change the type of
supplier as a company.” advertising and sales promotion you do for their
MANUFACTURER POWER. Gaski and Nevin [20] devel- products, what is the maximum amount you would
oped the items representing the various facets of manu- change your advertising and sales promotion?
facturer power, where power is “the supplier’s ability to 7. If the manufacturer wanted you to change your cus-
get the dealer to do what he would not have done other- tomer service policy, what is the maximum amount
wise” (p. 135). Two lo-item, 5-point, Like&like scales you would change your customer service?
were developed from Gaski and Nevin’s scale to measure 8. If the manufacturer wanted you to change your in-
manufacturer power and manufacturer’s salesperson ventory procedures, what is the maximum amount
power. The scales measure the potential influence of a you would change your inventory procedures?
manufacturer/manufacturer’s salesperson over a distribu- 9. If the manufacturer wanted you to change your cus-
tor’s business in eight different areas of potential influ- tomer credit policy, what is the maximum amount
ence: price, order quantity, product line, advertising and you would change your customer credit?
sales promotion, customer service, inventory, customer 10. If the manufacturer wanted you to change the way
credit, and display. These scales measure the perception you display their products, what is the maximum
of the manufacturer/manufacturer’s salesperson power as amount you would change your display of their
reported by distributors. products?
Gaski and Nevin’s [20] study used face, content, and
SALESPERSONPOWER. The scale items used in this
discriminant validity measures. They achieved content
study to measure the power of the manufacturer’s sales-
validity by taking an internal inventory of items from the
person are as follows:
channel’s literature [21, 221 and modified it by ideas
from distributors. Gaski and Nevin [20] also asserted dis- 1. If the salesperson from (x) wanted you to raise the
criminant validity, as the correlations between constructs prices you charge for their products, what is the
measured in the study were never as high as the Cronbach’s maximum amount you would raise prices?
alpha coefficient (0.865) for power. The scale items used 2. If the salesperson from (x) wanted you to lower the

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Power is issue specific.

prices you charge for their products, what is the Scale Purification
maximum amount you would lower prices?
The first criterion used in deciding whether to delete
3. If the salesperson from (x) wanted you to increase
an item was the item’s corrected correlation between the
the quantity of their products you order, what is the
score on the item and the sum of scores on all of the other
maximum amount you would increase order quan-
items making up the scale. These corrected item-to-total
tity?
correlations were plotted in descending order for each di-
4. If the salesperson from (x) wanted you to decrease
mension. I plotted items with very low correlations in de-
the quantity of their products you order, what is the
scending order for salesperson power and manufacturer
maximum amount you would decrease order quan-
power. Items with very low correlations and/or those
tity?
whose correlations produced a sharp drop in the plotted
5. If the salesperson from (x) wanted you to change the
pattern were discarded. This procedure resulted in deletion
composition of your product line, what is the maxi-
of questions 1 and 2 from the manufacturer power scale
mum amount you would change your product line?
and questions 6, 9, and 10 from the salesperson power
6. If the salesperson from (x) wanted you to change the
scale, producing a total power scale consisting of 16 items.
type of advertising and sales promotion you do for
The second step in the purification process was to de-
their products, what is the maximum amount you tect and delete outliers. If outliers exist in the data, they
would change your advertising and sales promotion? can distort parameter estimation, invalidate test statistics,
7. If the salesperson from (x) wanted you to change and lead to incorrect statistical inference. A multivariate,
your customer service policy, what is the maximum multiple outlier technique developed by Hadi [23] was
amount you would change your customer service?
used for this research. The model subjected to the analy-
8. If the salesperson from (x) wanted you to change sis used manufacturer power as the dependent variable
your inventory procedures, what is the maximum and salesperson power as the independent variable. This
amount you would change your inventory proce- procedure resulted in the deletion of 15 observations.
dures? The third step in the purification process consisted of
9. If the salesperson from (x) wanted you to change examining the dimensionality of the 16-item scale by
your customer credit policy, what is the maximum factor analyzing the difference scores in the 16 items. I
amount you would change your customer credit? used a principal axis factoring procedure, [24] and the
10. If the salesperson from (x) wanted you to change the analysis was constrained a priori to two factors. The two-
way you display their products, what is the maximum factor solution was rotated orthogonally, but no clear fac-
amount you would change your display of their tor pattern emerged. Many items had high loadings on
products? both factors, implying that the factors may not be inde-
The means and standard deviations for the two variables pendent of one another. Therefore, the two-factor solu-
used in this study are presented in Table 1. tion was subjected to oblique rotation using the promax
rotation procedure in STATA to allow for intercorrela-
tions among the dimensions and to ease interpretation.
The oblique rotation provided a factor-loading matrix
TABLE 1
that was much easier to interpret. However, questions 3
Descriptive Statistics and 4 from the manufacturer power score had high load-
ings on both factors and were deleted from the scale.
Scale Mean SD
Then another factor analysis and oblique rotation were
Manufacturer power 9.12 2.80 conducted, which resulted in the deletion of questions 6
Salesperson power 13.07 3.53
and 9 from the manufacturer power measure and ques-

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tions 7 and 8 from the salesperson power measure. This tomer service policy, what is the maximum amount
procedure resulted in a 9-item total power measure. you would change your customer service?
8. If the manufacturer wanted you to change your in-
ventory procedures, what is the maximum amount
Evaluation of Reliability
you would change your inventory procedures?
The reliability of the variables was evaluated by calcu- 10. If the manufacturer wanted you to change the way
lating coefficient alpha. A coefficient alpha of 0.73 was you display their products, what is the maximum
found for the five items making up the measure of sales- amount you would change your display of their
person power and 0.70 for four items making up the mea- products?
sure of manufacturer power. These results suggest the
When the five questions making up the first factor were
presence of reasonable levels of internal consistency
factor analyzed separately, there was a clear loading on
among the items designed to represent the salesperson
only one factor. The same result was found for the four
power and manufacturer power.
questions making up the second factor.
The factor analysis and varimax rotation conducted
Hypothesis Testing clearly show that different questionnaire items make up
the domain of manufacturer’s sales-person power and
To test the hypothesis that the manufacturer’s sales-
different questionnaire items make up the domain of
person has power over policy areas that are unique and
manufacturer’s salesperson power. However, there is one
separate from that of the manufacturer power in an indus-
topic overlap that needs to be more closely examined.
trial distribution channel, the nine items making up the
Question five-dealing with the degree to which the dis-
total power scale were factor analyzed. When I rotated
tributor would change the composition of its product line
the two-factor solution orthogonally, using the varimax
if requested by the manufacturer or the salesperson-is
procedure in STATA, a clear factor pattern emerged (see
present in both scales. Therefore, the manufacturer and
Table 2). Salesperson power questions 1, 2, 3, 4, and 5
the salesperson draw power from the composition of the
make the first factor and manufacturer power questions
product line.
6,7, 8, and 10 make the second factor.
FACTOR1:
1. If the salesperson from (x) wanted you to raise the
IMPLICATIONS FOR MANAGERS
prices you charge for their products, what is the The first implication of this study pertains to the power
maximum amount you would raise prices? structure in the industrial channel of distribution. Each
2. If the salesperson from (x) wanted you to lower the member of an organization has power over certain as-
prices you charge for their products, what is the pects of the organization’s operating procedure because
maximum amount you would lower prices? of the individual’s skills and position. Therefore, power is
3. If the salesperson from (x) wanted you to increase shared between members of the organization, such as the
the quantity of their products you order, what is the
maximum amount you would increase order quan-
tity? TABLE 2
4. If the salesperson from (x) wanted you to decrease Factor Loadings (Varimax Rotation)
the quantity of their products you order, what is the
Rotated Factor Loadings
maximum amount you would decrease order quan-
tity? Variable 1 2
5. If the salesperson from (x) wanted you to change the
SPOW I -0.60258 0.07330
composition of your product line, what is the muxi- SPOW2 -0.57837 0.09090
mum amount you would change your product line? SPOW3 -0.59109 0.13487
FACTOR2: SPOW4 -0.52897 0.05959
SPOWS -0.59658 0.23194
6. If the manufacturer wanted you to change the com- MPOWS -0.3778 I 0.52183
position of your product line, what is the maximum MPOW7 -0.2101 I 0.62191
amount you would change your product line? MPOWR -0.26029 0.63468
MPOWlO -0.20724 0.50805
7. If the manufacturer wanted you to change your cus-

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salesperson. Channel members with more power can use the policy areas of requesting the industrial distributors
their power to obtain more successful transactions and to raise prices, lower prices, increase the order quantity,
greater total profitability [25]. This research benefits decrease the order quantity, and change the composition
management, because it examined the degree that the of their product line. The manufacturer’s domain of
manufacturer’s salesperson is responsible for the sales power consists of the ability to get the industrial distributors
interaction between the manufacturer and the industrial to change the composition of their product line, change
distributor. Typically the salesperson is the only contact their customer service policy, change their inventory pro-
between the manufacturer and the industrial distributor; cedures, and change the way the distributor displays the
to this customer the salesperson is the manufacturer. Be- manufacturer’s products. Therefore, the results generated
cause the salesperson plays a more important role in the from this research support the notion that the manufac-
sales interaction than was once assumed, the manufac- turer’s salesperson in an industrial distribution channel is
turer should be convinced to put more resources into the not a faceless entity; distributors attribute more power
proper training of their salespeople to ensure customer over certain policy areas to manufacturer’s salespeople.
satisfaction.
The sales manager can also develop selling strategies
from the results of this research that can suggest to the REFERENCES
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