The relationship between supplier development and firm performance: the mediating role of marketing process improvement

Abstract

PurposeThe purpose of this paper is to test the market‐based asset framework by examining the role of marketing process improvements in the relationship between a buyer firm's supplier‐related activities and its performance.Design/methodology/approachInterviews with executives who were involved in supplier development were conducted to learn more about supplier development and to help in the development of the survey constructs. A self‐report survey was then developed online to collect data for the study. In total, 338 executives responded and partial least squares (PLS) structural equation modeling was used to test the hypotheses developed in the study.FindingsMarketing process improvements were found to mediate the relationship between a firm's supplier development efforts and firm performance, thus providing empirical support for the market‐based asset framework. The study also found that a firm's supplier development activities can lead to improvements in its marketing processes.Originality/valueFor too long, a firm's supply chain has been seen as the primary domain of the supply chain and operations department, even though supply chain decisions and errors have a considerable impact on the ability of marketing professionals to perform. The findings in this study demonstrate the value of the relationship between a firm's supply chain and its marketing activities and as such makes the case for marketing executives to be more involved in supply chain activities.