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

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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: 82
Why do we pay more for an orange with a Sunkist sticker? Because inspecting the outside of the orange doesn’t guarantee the quality of what’s inside. We need the assurance of the Sunkist brand. A variant on this theme is ingredient branding: putting the brand of an ingredient on the outside of a product to increase its appeal (Quelch, 2007, para 1). One thing that is common to all these brands is that they are global brands with their origins in the United States. They all sell well within The Netherlands. After a comprehensive literature search, we could find no evidence to suggest that a spillover effect of being associated with a suppliers’ brand value does not occur within The Netherlands. Therefore, we expect the following hypothesis: H5: Supplier brand value positively influences a buyer firm’s value in the USA and The Netherlands. 3.2 Methodology 3.2.1 Sample Description The data for this study were collected in The Netherlands and the United States in the year 2009. As is reflected by Table 3.2, both samples’ descriptive statistics are similar. The type of market from which data was collected in the USA had 49% of the firms catering to both industrial and consumer markets, whereas in The Netherlands the figure was 41.7%. Firms operating exclusively in industrial markets in the USA were 18.7%, whereas in The Netherlands the figure was 35.5%. Firms operating solely in consumer markets in the USA were 32.3%, and the figure for The Netherlands was 33.3%. We collected sample responses from industrial buyers in both countries. The average number of years of buying experience in the USA was 9.72 years, and strategic buying experience was 7.36 years, whereas in The Netherlands, the average buying experience was 7.56 years and strategic buying experience was 5.96 years. The percentage of respondents from upper management in the USA was 30.9%, and middle management was 53.1%, and 16% were firm employees, whereas in The Netherlands the percentage of respondents from upper management was 20.8%, and 55.2% were from middle management, and 24% were firm employees. The type of firm market offerings in the USA was 35.4% for servicebased, 23.1% for goods-based, and 41.5% for both goods and service-based market offering. In The Netherlands 46.9% was service-based market offering, 21.9% was goods-based and 31.2% for both goods and service-based market offering. 83
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ISBN 978-90-8980-055-8 © M. Abrahi
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Examination Committee Supervisor: P
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2.3 DEVELOPMENT OF THE CONCEPTUAL M
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5.1 RESEARCH FINDINGS 114 5.2 OVERA
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List of Tables Table 2.1 Representa
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PREFACE Oscar Wilde once said, “I
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Chapter 1 Introduction to the Thesi
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Figure 1.1 Mckinsey Survey Results
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1.4 Scope PhD thesis This thesis fo
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Netherlands. We used the maximum li
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2.1 Introduction A central tenant o
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only provide an assessment of the s
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Table 2.1 highlights several promin
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other hand, they later argue that m
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Therefore, there is a convergence i
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Page 121 and 122: Summary in English This dissertatio
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erkennen dat dit niet altijd een mo
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ij de vraag of cultureel risico voo
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Businessweek. (2012). S&P/BusinessW
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-industry-09012011.html Grewal, R.,
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Langerak, F. (2001). Effects of mar
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Quelch, J. (2007). How to brand an
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Verhoef, P. C., & Leeflang, P. S. H
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1. The name of the company where yo
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9.The supplier seems to have good i
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17. The supplier takes a very long
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25. If the supplier were to find ou
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33.Does your strategic supplier als
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41.To what degree do those specific
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Supplier Brand Value 51.How likely
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Appendix B Scatter Plot Diagrams fo
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