Essays on supplier responsiveness and buyer firm value - Nyenrode ...

H3: Buyer satisfaction positively influences buyer firm value more strongly
in The Netherlands than in the United States.
Idiosyncratic relational risk and supplier brand value. Some aspects of an
individual’s risk-taking behavior are influenced by their national culture. One
example of this is the popular cushion hypothesis (Weber & Hsee, 1999). Individual
investors take more risk if they feel that their collectivist society will take care of
them if things were to go wrong (Weber & Hsee, 1999). On the other hand, in
societies that are individualistic, investors will take less risk because no one is there to
bail them out in case things go wrong (Weber & Hsee, 1999). Indeed, national culture
does matter when individuals are making decisions with regards to risk (Weber &
Hsee, 1999). National culture also influences their risk preference. The Dutch shoe
manufacturer Van Bommel is a case in point. They offer a fifteen-year guarantee with
every high quality pair of shoes, yet they chose the slightly costlier option of
producing in the UK rather than in China or Portugal, because of quality concerns and
risk avoidance. Many other high quality manufacturers do produce in Portugal (Zara)
and China (Apple). But Van Bommel’s decision is a case of traditional
manufacturers’ concerns leading them to what they perceive to be a safe decision
(Dyson, personal communication, 2010).
As risk preferences vary across nations, it would follow in turn that customer’s
risk preference would influence their preference of channel partners. Some managers
may prefer riskier business partners because of the potential higher fluctuation in
profits. Others may want more stability in their earnings (Weber & Hsee, 1999).
Although much research exists on consumer branding and risk preference
(Erdem, Zhao, & Valenzuela, 2004; Mitchell, 1999), there is limited research in the
B2B branding domain on the relationship between B2B brands and risk. Our literature
search revealed limited evidence in the marketing literature available on risk-taking
behavior, buying centers, and brand preferences. However, we did find one B2B
branding text that dealt with the issue by Kotler and Pfoertsch (2006, p.9). They
indicate that B2B brand functionality is negatively related to customer risk. Therefore,
we expect:
H4: Idiosyncratic relational risk negatively influences supplier brand value in
the USA and The Netherlands.
Supplier brand value and buyer firm value. A supplier’s brand value is likely
to have a spillover effect on a buyer’s firm future value if they add unique value to the
buyer firm. For instance, Ghosh and John (2009) found that the supplier’s brand was
more likely to be preferred in the future when the supplier’s components added
unique value to the buyer’s brand. Such unique value has a financial dimension for
the buyer through increased marketplace performance. Intel is a stellar example of
such a strategy, and it has a spillover on any product it is a component of (Whitwell,
2005). Consider NutraSweet, whose patent ran out but is still able to charge a
premium for its brand because of the public confidence in NutraSweet. Consumers are
willing to pay more for products with NutraSweet logos or as an ingredient (Norris,
1992). Other examples of supplier brand which add value to the customers brand
include Dupont with nylon for clothes, Raython’s Lycra and Good Year tires on
Adidas shoe soles. Harvard Business School professor Jack Quelch describes it best in
a rhetorical question:
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