Industrial Purchase Decisions Research Articles

Effects of country of origin and importers’ innovativeness in new product trials

PurposeThe purpose of this study is to seek to investigate whether and how country of origin (COO) cues – category-country image (CCI) and typicality – and importers’ domain-specific innovativeness (DSI) influence importers’ propensity to the trial new value and premium products. Moreover, it aims to understand whether and how the relationship between the COO effect and industrial purchase intentions is moderated by importers’ propensity to innovate (DSI).Design/methodology/approachInternational importers completed a quantitative online survey. Factor analysis was used to summarize the latent constructs into orthogonal scores. General linear modeling was applied to the scores to test the hypotheses.FindingsThe results indicate that importers’ propensity to trial value products is directly influenced by CCI and importers’ DSI. For premium products, typicality has a positive effect on their propensity to trial. Also, CCI and DSI have positive effects on the trial of value products, and the effect is more pronounced than for premium products. Importers’ DSI positively moderates CCI in premium product trials, while it negatively moderates typicality in value products.Practical implicationsThis research provides important managerial implications for practitioners seeking to increase foreign sales, strengthening importers’ product perceived value through COO cues. Exporters should distinguish between value and premium products and, in the selection of international channel partners, they must be attentive to importers’ personal characteristics, such as their propensity to innovate. Exporters selling value products should communicate CCI more clearly and, when targeting innovative importers, opt for atypical products instead of traditional ones. For premium products, which require more complex decisions, exporters should especially underscore product typicality and, with innovative importers, emphasize positive CCI.Originality/valueBy focusing on the two critical issues of product selection and price levels, this study’s original contribution is to emphasize that, for the same product category, in industrial purchasing decisions of value versus premium products, the COO effect can be different. It also highlights the importance of investigating the COO effect by concentrating on industrial buyers’ personal characteristics, here the DSI of importers, as moderating variables.

Country-of-origin effects on industrial purchase decision making: a systematic review of research

PurposeThis study aims to provide a contemporary, holistic and systematic review regarding the impact of country-of-origin on industrial purchase decision-making by ascertaining, synthesizing and evaluating theoretical, methodological and empirical dimensions of studies on the subject.Design/methodology/approachAfter the collection and refinement of 43 studies that appeared in marketing, business and management literatures during 1970-2017, systematic review was applied to discover the current situation and future research directions on the subject.FindingsThe vast majority of the existing studies obtained data from a single source even though industrial purchase decisions are mainly made by a large group of decision-makers. Moreover, the existing literature contains few over-studied theoretical perspectives while lacking integration of the subject with the more contemporary ones. Additionally, in the literature, combination of developing countries as source countries, and developed ones as target countries, is under-examined, and the differentiation between country-of-design and country-of-assembly is mainly avoided during operationalization. Finally, majority of the studies lack investigation of antecedents and mainly investigated few over-examined constructs as outcomes.Research limitations/implicationsThis study provides a conceptual synthesis of existing studies. A meta-analysis may be applied to empirical studies for providing a further detailed framework.Originality/valueThis study contributes to industrial marketing literature by providing a compiled and synthesized inventory of knowledge for scholars; deriving a comprehensive analysis of research designs, methodologies and findings addressed by researchers in the field; noticing various theoretical, methodological and other gaps to be examined; and providing future research directions.

The differential value of information in industrial purchasing decisions

PurposeThis research integrates recent work on customer information acquisition in services marketing and economics of information research with literature on industrial buying behavior for the purpose of proposing and empirically testing a model that explores information acquisition in industrial purchasing.Design/methodology/approachTo test the proposed model, an online survey was prepared using WebSurveyor and an introductory e‐mail with a link to the survey was sent to a sample of members of a professional organization of industrial purchasing managers.FindingsResults indicated a differential use of information sources across differing purchase situations. When purchasing situations were perceived to be easy to evaluate, there was a significantly greater use of impersonal information sources. In addition, we offer evidence that the use of both personal and impersonal information sources does, in fact, increase the perception of goal clarity with respect to the purchasing task among industrial purchasers.Originality/valueIf marketers can help provide key information – both personal and impersonal – to their customers, they are helping to clarify the purchasing task. These communication efforts can then contribute to that satisfying outcome which might ultimately enhance the relationship between the two parties.

Self‐protection vs opportunity seeking in business buying behavior: an experimental study

PurposeTheories on industrial buying behavior differ fundamentally with regard to motivation and direction of industrial purchasing decisions. This becomes extremely in the case of new institutional economics, highlighting administrative aspects, and market process theory, focusing on entrepreneurial aspects of buying decisions. This paper aims to challenge these approaches by setting up an experimental design. Decisions of sales and purchasing managers were investigated with respect to their motivation of self‐protection or opportunity seeking.Design/methodology/approachThe contribution is based on an experimental design. The design is based on a prospect theory scenario. Prospect theory states that successful economic agents show a stronger tendency towards self‐protection, whereas under‐performing economic agents are willing to bear greater risks in search for opportunities.FindingsThe results suggest that indeed out‐performers show a tendency to risk avoidance and under‐performers are willing to bear more risks. The most important implication is that new institutional economics‐based approaches to buying behavior are not universally valid. However, they apply to specific situations. In that respect the contribution shows a direction for the proper application of transaction cost‐based concepts.Practical implicationsManagers are advised to take the economic performance of their customer companies into account. Outperforming companies are more responsive to measures for self‐protection. Under‐performing customers may be more tolerant towards risk if it is compensated with the expectation of better opportunities.Originality/valueThe empirical research is new in so far as it is the first to apply a prospect theory framework to a business market environment. The results show clearly that the methodology, as originally applied in prospect theory, needs refinement when transferred to a business market context.

Plural Governance in Industrial Purchasing

This article examines the phenomenon of plural governance, a firm's simultaneous use of market contracting and vertical integration for the same basic transaction. The author studies two particular aspects of plural governance, namely the conditions that motivate firms to deploy plural governance and the manner in which one governance form influences the other when the two coexist in a joint structure. Drawing on agency theory and information economics, the author develops a set of research hypotheses and tests them empirically in the context of industrial purchasing decisions. The results suggest that the plural governance phenomenon can be understood from the perspective of solving information asymmetry problems between buyers and suppliers. The author discusses the implications of a “make and buy” approach to extant theory of interfirm governance, relationship management, and marketing strategy in business-to-business settings.

Plural Governance in Industrial Purchasing

Abstract This article examines the phenomenon of plural governance, a firm’s simultaneous use of market contracting and vertical integration for the same basic transaction. The author studies two particular aspects of plural governance, namely the conditions that motivate firms to deploy plural governance and the manner in which one governance form influences the other when the two coexist in a joint structure. Drawing on agency theory and information economics, the author develops a set of research hypotheses and tests them empirically in the context of industrial purchasing decisions. The results suggest that the plural governance phenomenon can be understood from the perspective of solving information asymmetry problems between buyers and suppliers. The author discusses the implications of a “make and buy” approach to extant theory of interfirm governance, relationship management, and marketing strategy in business-to-business settings.

An exploratory study of the Internet as an industrial communication tool: Examining buyers' perceptions

A thorough understanding of the impact of the Internet on industrial purchase decisions is of critical importance for industrial marketers seeking to incorporate the Internet in their overall communication strategy. Accordingly, this study examines (1) the degree to which purchasing professionals perceive the Internet as useful, (2) how purchasing professionals are using the Internet for communication activities, (3) how the Internet compares to other promotional tools in influencing buyers' purchase decisions, and (4) whether differences among buyers can be identified relative to the perceived influence of suppliers' websites. The results provide some practical implications for industrial marketers regarding the use of the Internet relative to other promotional tools.

Evaluation of foreign products by US international industrial buyers

Evaluates the perception of US industrial purchasers of products of industrialized countries and major Latin American nations. Shows that price is the only perceived strength of Latin American products while quality and delivery variables constitute the perceived core competency of products manufactured in advanced economies. Japan leads the world in perceived positive product attributes. Even industrial buyers who have never purchased from Latin America perceive the products of the region as technologically‐inferior and price‐superior compared to products made in advanced countries. Proposes that country‐of‐origin cue is still an important factor in industrial purchase decisions.

Measuring Physical Distribution Service Quality

The quality of the physical distribution service industrial purchasers receive from suppliers has been shown to be an important consideration in industrial purchasing decisions. To better understand the criteria used to assess physical distribution service quality, the authors examined the literature on physical distribution and service quality and conducted interviews with purchasing managers. Based on the results of the literature reviews and interviews, plus a two-step data-gathering process, a valid and reliable measurement instrument for perceptions of physical distribution service quality (PDSQ) was developed and refined.

Buyer and Seller Psychographics in Industrial Purchase Decisions

Explores the rationale and a method for psychographic segmentation of industrial marketers generally and in particular those performing the buying and selling functions. Discusses how buyers and sellers compare and what benefits might be obtained from a deeper understanding of each other′s personalities. Describes an empirical study in which industrial buyers and salespeople were segregated first into two groups and then into a four‐segment schema. Suggestions are given for real‐world applicability of the results of such investigations.

Which buying decisions are made by individuals and not by groups?

Much of the recent research pertaining to industrial purchasing has focused on the buying group rather than the individual purchasing agent as primarily responsible for vendor and product selection decisions. The present research was undertaken on the premise that in certain types of industrial purchase decisions (vendor selection in modified rebuy situations), the presence of certain mediating variables may indicate that the individual purchasing agent rather than a buying group may make the vendor selection decision. Based on data gathered from industrial buyers randomly selected from a national list and using the hypothetical scenario data-gathering technique, the major findings are that individual decisions seem to predominate in modified rebuy vendor selection decisions, that loyalty to existing suppliers seems to have an effect on the extent of individual decision making, and that the extent of joint and individual decision making appears to be related to the size of the firm.

The importance of price as a choice criterion for industrial purchasing decisions

The importance of price as a choice criterion for industrial purchasing decisions

Physical Distribution Service in Industrial Purchase Decisions

Physical Distribution Service in Industrial Purchase Decisions

Physical Distribution Service in Industrial Purchase Decisions

MANAGERS of physical distribution must make decisions involving trade-offs between the service they provide customers (physical distribution) and the costs of providing that service. The focus of distribution management and research activity has typically been on minimizing the cost of the distribution system;' generally, service levels have been predetermined and considered as constraints in the cost-

Functions performed in industrial purchasing decisions with implications for marketing strategy

Functions performed in industrial purchasing decisions with implications for marketing strategy

The effect of subjective factors on customer/supplier relations in industrial marketing

Principally concerned with the manner in which different types of personnel in the organisational structure approach purchasing decisions. States that the fact that industrial purchasing decisions are seldom made in a coldly logical fashion is becoming increasingly accepted. Examines some reasons why there is a considerable amount of stability in the relationships existing between industrial goods suppliers and their customers. Concludes it may take some time to build up a close relationship between supplier and customer – giving a supplier time to take defensive action if it is thought necessary.