The Influence of Factors Determining Relationships between Organisations and Their Strategic Suppliers on the Frequency of Implementations of Purchasing Marketing Strategies

By Irsic, Matjaz | Management : Journal of Contemporary Management Issues, July 1, 2004 | Go to article overview

The Influence of Factors Determining Relationships between Organisations and Their Strategic Suppliers on the Frequency of Implementations of Purchasing Marketing Strategies


Irsic, Matjaz, Management : Journal of Contemporary Management Issues


The article deals with different factors determining relationships of large Slovenian organisations (with more than 500 employees) with their strategic suppliers and their influence on the frequency of implementations of purchasing marketing strategies. The factors dealt with are: the quality of the relationship between the organisation and its strategic supplier (supplier activities, attractiveness of supply for the organisation and the competitive position of the organisation on the supply market), bargaining power of the organisation with respect to the supplier (the organisation's risk orientation, its orientation towards cooperation and the size of its bargaining power) and the quantity of the relationship (the size of transactional assets). The research showed that large organisations in Slovenia are unlikely to develop such purchasing marketing strategies, characteristic of the so-called »relationship marketing« with their strategic suppliers (with whom they have a long-term business relationship). The influence of measured factors on the frequency of the implementation of individual purchasing marketing strategies exists, with a stronger impact of factors with short-term effects on the organisation; hence the surveyed organisations are still more oriented towards reaching short-term efficiency instead of long-term success.

1. INTRODUCTION

The starting point of the "new" paradigm of marketing in the 21st century is based on interactive connections among market players, taking into account the "dyadic" relationship between two organisations (Anderson, Hakansson, Johanson; 1994; Anderson and Weitz, 1989; Dwyer, Schurr and Oh, 1987; Gummesson, 1995; Low, 1995; Payne, 1995; Han, Wilson and Dant, 1993; Wathne, Heide, 2004; Bergen, Dutta, Walker, 1992; Cannon and Perreault, 1999; Iacobucci, 1996; Levy and Grewal, 2000).

This also holds true for purchasing marketing, where the use of developed marketing concepts on the supply markets places organisations in a more balanced position against the aggressive forms of sales marketing of potential and existing suppliers. The rearrangement of the exchange (bargaining) power among market players in such relationships, as well as the rearrangement of action parameters determining such market power, necessitate a redefinition and reshaping of basic strategic approaches of an organisation on the supply market.

The use of external purchasing resources based on a long-term, profound and active relationship with the supplier (the concept of "relationship marketing") challenges traditional market concepts regarding business activities of organisations on purchasing markets and classical approaches to the understanding of the distribution of action parameters determining the bargaining power of partners. Efficient and successful creation of purchasing marketing strategies in such circumstances necessitates a profound understanding of these relationships, the necessary conditions for their development, their advantages and disadvantages, as well as the effects of activities involved.

By connecting findings and statements expressed by numerous authors (Dwyer, Schurr, Oh, 1987; Gummesson, 1995; Morgan, Hunt, 1994; Payne, 1994; Low, 1996, Johnson and Selnes, 2004; Anderson and Narus, 1990; etc.) studying relationships, and by adding our own findings, it can be said that relationships - the basic postulate of the concept of "relationship marketing" - have the following determinants: cooperation and other forms of mutual interaction between at least two participants in a transactional process or between at least two networks (partner groups), mutual attainment of goals by all participants ("win-win" strategy), multiple and continuing exchange of value (products, activities, competencies, status, roles and significance), balancing mutual benefits and a tendency towards minimising business risk.

"relationship marketing" among different authors (Jackson 1985; Thorelli 1986; Dwyer, Schurr, Oh 1987; Christopher, Payne and Ballantyne, 1991; Morgan and Hunt 1994; Gummesson 1995; etc.

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