The document summarizes several research papers on customer and supplier relationships. It discusses stages in the development of relationships over time as parties work together and commit further. Trust is found to be based on perceptions of corporate identity, image and reputation. Power can influence others through rewards, expertise and information. A matrix identifies strategic options based on particularity, inconsistency, capability and mutuality. Finally, research defined three categories of uncertainty that can impact relationships.

1. The Various Research On
Customer and Supplier
Relationship (Part 1)
Gan Chun Chet (Mr.)
MSc (UMIST) (UK), BSc (Hons) (UK)

2. The Various Research On
Customer and Supplier Interaction
• Development Through Time – Parties work
together, and as a result, both parties reduces
the level of uncertainties, acquired more
experience, closer to each other, more
committed, adapt to each other.
• Source : [Ford] [1 – The Development of Buyer-
Seller Relationship in Industrial Market –
European Journal of Marketing, Vol 14, No. 5/6,
1980, pp 339-354]

3. The Various Research On
Customer and Supplier Interaction
• The paper examined the nature of buyer-seller
relationships in industrial market by considering their
development as a process through time.
• The product and process technology of the two
companies are important factors in determining the
nature of buyer and seller. Also the existing market
structures and the availability of alternative buyers and
sellers.
• The research analyze the development of buyer-seller
relationship in 5 stages (Start 1 : Pre-relationship, Stage
2 : Early Stage, Stage 3 : Development Stage, Stage 4 :
Long Term Stage, Stage 5 : Final Stage)

4. The Various Research On
Customer and Supplier Interaction
• Bonding and Commitment – Proposed a
framework of buyer-seller relationship
development process. Further commitment into
the business, if needs are satisfied
• Source : [Wilson & Wummalaneni] [2 – Bonding
and Commitment in Buyer-Seller Relationship :
A Preliminary Conceptualisation – Industrial
Marketing and Purchasing, Vol 1, No. 3, 1986,
pp. 44 - 58]

5. The Various Research On
Customer and Supplier Interaction
• The paper proposed a framework of buyer-seller
relationship suggesting that buyers and sellers interact
with each other owing to the complementarity of their
needs.
• The outcome of these interactions not only determine the
affective responses of the participants (i.e. the level of
satisfaction) but help them decide whether it is worth
making any further investments into a relationship as
well.

6. The Various Research On
Customer and Supplier Interaction
• Trust – Investigate the origin of trust. Corporate
identity, image and reputation. A variable in the
relationship. Its what the purchaser perceives
about the supplier or what the supplier perceives
about the customer
• Source : [Smeltzer] [3- The Meaning and Origin
of Trust in Buyer-Supplier Relationship,
International Journal of Purchasing and Material
Management, Jan 1997, pp 40-48]

7. The Various Research On
Customer and Supplier Interaction
• Found that the perception of trust by both parties are
corporate identity, image and reputation. The customer
perceive the supplier by these three concepts. Similarly,
the supplier perceive the customer by these three
concepts. The above are the conditions upon which
trust is based on.

8. The Various Research On
Customer and Supplier Interaction
• Power – The use of resources to influence the
other party. A few of these examples are reward
power, expertise power, information power, etc.
• Source : [Dahl] [4 – The Concept of Power,
Behavioral Science, 1957, pp. 201 – 215]

9. The Various Research On
Customer and Supplier Interaction
• The use of resource to influence another
party.
• Three type of influence : Reward power,
expertise power, information power.

10. The Various Research On
Customer and Supplier Interaction
• Strategic Options – Identifies the strategic
options that are available for companies in their
interaction with others. 4 dimensions, in a 2 by 2
matrix - Capability, mutuality, particularity and
consistency
• Source : [Ford, Hakansson, Johanson] [5- How
do companies interact? Industrial Marketing and
Purchasing, Vol. 1, No. 1, 1986, pp 26-41]

11. The Various Research On
Customer and Supplier Interaction
• The paper identifies a four by four matrix which illustrates the
inter-relationships between different aspects of interaction.
Particularity, inconsistency, capability and mutuality are the
factors in the four by four matrix. The concept of Particularity
and Inconsistency exist, Capability and Mutuality are strategic
choice.
• Particularity is interaction in the terms of direction and
uniqueness
• Inconsistency – Ambiguity or lack of clarify in interaction
• Capability – Financial, physical plant, technological or
managerial
• Mutuality – How much a company is prepared to give up its
own individual goals or intentions in order to increase a
positive outcome of others.

12. The Various Research On
Customer and Supplier Interaction
• Influence Factor in Supplier Partnership – A
model depicting factors that influence the
partnership
• Source : [Stuart] [6 – Supplier Partnership :
Influencing Factors and Strategic Benefits,
Internation Journal of Purchasing and Material
Management, Fall 1993]

13. The Various Research On
Customer and Supplier Interaction
• The paper model depicting factors that influence supplier
partnership during a contract management period.
• Competitive pressure, importance of purchased inputs,
purchasing capability has direct influence on the degree
of partnership.
• Resulting in productivity (inventory reduction, cost
reduction, reduced downtime, and scrap), as well as
benefit of a more strategic nature (market share gains,
speedy new product development, quality improvement,
etc.)

14. The Various Research On
Customer and Supplier Interaction
• Uncertainty – Defined three categories of
uncertainty : need uncertainty, market
uncertainty and transaction uncertainty
• Source : [Hakansson] [7 – Influence Tactics in
Buyer-Seller Processes, Industrial Marketing
Management, Vol 4, No. 6, pp 319 – 332]

15. The Various Research On
Customer and Supplier Interaction
• Hakansson et al defined need uncertainty as being
whether the customer is able to really know the exact
product or service that is required from the supplier.
Market uncertainty is to know whether knowledge in the
market area is known and that the change involved
offered by suppliers. Transaction uncertainty is being
defined as the ability to purchase the product or service.
This means that these uncertainties are realized
throughout the purchase of product or service as
defined. Uncertainties are in opposed to strengthening of
a relationship. The uncertainties need to be reduced to
ascertain the customer of its abilities.