Buyer Seller Relationship in B2B

INDUSTRIAL BUYER-SALES REP. INTERACTIONS

• Interaction between buying organization rep and selling organization
rep.
• When buyer and seller rep met the nature of their interactions
depend on their perceptions, behavior & roles.
• Buyers have two major perceptions of sales reps.
(i)  Stereotype – talkative, manipulative, excitable, easygoing,
competitive.
(ii) Reputation of sales rep’s company.
• Buyer Behavior towards sales rep depends on organizational needs /
objectives, buying centre interactions and personal needs.
• Buyers are not always rational / logical in buying decisions.
• Role / behavior of sales rep. depends on his personal needs, and
expectations of his boss, peers, customers.
 BUYER-SELLER DYADIC INTERACTION FRAMEWORK

• A Conceptual Framework by Dr. Sheth

• Two major factors have been identified as the basis of the buyer –seller
interactions or relationships.
• Content Information and Style in which that information is exchanged.
• The successful interaction between the buyer and the seller takes place
only when the buyer and seller are compatible in both content and style.
• The content of information (communication) includes product features,
prices, services as well as individual needs of the buyer and a seller.
• The style of interaction includes mannerisms and the format used by a
buyer and a seller in their communication or interaction.
• There are three styles of interaction
– Task oriented
– Interaction oriented (Social and personal interaction)
– Self-oriented (pre-occupied with ones self interest)
BUYER-SELLER DYADIC INTERACTION FRAMEWORK

C o m p a tib le S ty le In c o m p a t ib le S ty le

C o m p a t ib le Id e a l/S u c c e s s fu l In e ffic ie n t
C o n te n t T r a n s a c tio n T r a n s a c t io n

In c o m p a t ib le In e ffic ie n t No
C o n te n t T r a n s a c tio n T r a n s a c t io n

• A buyer and a seller interaction is called “Dyadic” – two persons’

interactions’, with above types of transactions.
• Content includes organizational and personal needs of a buyer and
a seller.
• Style includes manner and format of communication – task
oriented, self oriented, or social / personal oriented.
 Buyer Seller Relationship

• Buyer Seller Relationship :- Establish , Develop & Maintain the

meaningful
relationship with the customer.
• Types of Buyer – Seller
• Relationship Transactional
• Exchange Collaborative Exchange
 Managing Buyer Seller Relationship

• Typical Characteristics of Buyer Seller Relationship based on

Market Condition and Purchase Behavior

Transactional Exchange Collaborative Exchange

Availability of Alternative Many Alternative Few

Supply Market Dynamism Stable Volatile

Importance of Purchase Low High

Complexity of Purchase Low High

Information Exchange Low High

Operational Linkage Limited Extensive

 Transactional Relationship
 Focus
 Timely exchange of basic product at a competitive price
 One time only exchange and less loyalty to particular supplier
 Little interest to extent relationship
 Transactional relationship preferred when
 Availability of many suppliers
 Stable supply market
 Purchase decision not complex
 Purchase considered less important for achievement of firm’s
objectives
 Example: Stationery materials
 Transactional Relationship
 Advantages
 Relatively less purchasing time and effort required to establish
price
 Lower skill level of procurement personnel required
 Can react quickly to changing market/economic conditions
 Disadvantages
 Expediting and monitoring incoming quality
 Provision of minimum service by suppliers
 Supplier not motivated to invest time and energy for development of
buyer’s products
 Less effective performance by suppliers
 Value-added Exchange
 Focus
 Complete understanding of the present and future needs of
customers and meeting the needs better than competitors

 Groups made by the selling firm

 A: Most profit potential customers
 B: Between A and C
 C: Least profit potential customers
The focus in value added exchanges is on complete
understanding of the present and future needs of the
customers and meeting those needs better than competitors,
so as to obtain a maximum share of the customers business.
 Collaborative Relationship
 Focus
 Building a strong social, economic service and
technical ties between customer and supplier firm
 Purpose
 Increase value, lower total costs and achieve mutual benefits

 Joint problem solving and integration of processes of the

two companies
 Two important factors: Trust and Commitment
 Collaborative Relationships
 Advantages
 Long term contracts
 Reduction of risk for suppliers
 Reduction of total costs
 Improvement of process
 Improvement of products
 Increased investment in R&D
 Better focus on customer need
 Transactional vs Partnership
Short Term
Selection criteria: Lowest price
No. of suppliers: Many
Purchasing department’s
responsibility
Little sharing of information
No technology inflow
Minimal service provided
Little contribution to New
Product Development process
Less difficult to exit
Long Term
Selection criteria: Cost of
ownership
No. of suppliers: One or few
Cross functional teams and top
management involvement
Sharing of short term & long
term plans, risk & opportunity,
data
Inflow of technology takes place
Greatly improved service
provided
Highly involved in New Product
Development process
Difficult to exit