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Very Small Enterprises as Professional Customers: A Qualitative Study
Thierry DelécoUe ISC Paris School of Management 22 boulevard du Fort de Vaux, 75017 Paris, France Tel: 33-1-4053-9999 Received: February 14,2011 E-mail: thierry.delecoUeigiscparis.com doi: 10.5539/ibr.v4n2p20

Accepted: February 26,2011

The author would like to thank the Academy of Marketing's 2009 Annual Conference reviewers and participants for their helpful comments on an early version of this work. i Abstract This paper discusses the findings of a qualitative study carried out in the French automotive, constmction, and hairdressing sectors concerning the relationship expectations and behaviors of very small enterprises (VSEs). While VSEs represent more than 90% of European enterprises, there has been little research on these business customers. By defming VSEs' characteristics and the role of relationship marketing in studying these targets, this research sheds light on the buying behavior of VSEs. The results of the qualitative study enable the development of a relationship marketing model for the VSEs in each sector, and an identification of the key components of relationships for this target (interpersonal, brand, and offer). The paper concludes with a cross-sectoral model emphasizing the necessity of improving our knowledge of the individual characteristics of VSE owners/managers as an area of future research. Keywords: Business-to-business, Customer relationship. Relationship marketing. Very small enterprises 1. Very small enterprises and marketing \ 1.1 Observation: there has been little marketing research on very small enterprises Small and medium enterprises (SMEs) are contrasted with large enterprises according to a criterion of size, e.g., the number of persons employed. For many years researchers and managers have treated the SME market segment as homogenous. However, there are key differences between a company with 15 employees and a company with 200 employees. In fact, a company with 200 employees (categorized as an SME) has much more in common with a large enterprise having 1 000 employees. Treating the SME market as a single homogenous unit tends to obscure a more segmented approach that leads to a new defmition of the market (Goff, Harding, Shah, and Singer., 1998). As competition rises in the medium and large enterprise market segments, very small enterprises (VSEs) [defined as having fewer than ten employees, and representing more than 90% of European companies - Note 1] are becoming strategic customers for major business-to-business companies, which implement relationship programs to retain these "new" customers. | ; In this context, relatively little marketing research has addressed small businesses. For example, only 22 papers published in peer-reviewed joumals dealing with the keywords "relationship marketing", "business-to-business", and "small business" were found on EBSCO in May 2008 - see Note 2 for details of the database consulted: 130 106 and 1 731 articles respectively were referenced under the "business-to-business" and "relationship marketing" keywords. < INSERT TABLE 1> Most of the references identified on EBSCO studied relationship marketing as a marketing practice employed by small and medium enterprises [SMEs] (Coviello, Winklhofer, and Hamilton. 2006, Goff et al. 1998, Hutman and Shaw 2003, Zontanos and Anderson 2004), examining for example the owner's attitude to the concepts of segmentation, targeting, and relationship marketing (Wright, Martin, and Stone, 2003) or the skills needed by the entrepreneurial small firm owner for effectively using the Intemet to manage its customer relationships (McGowan, Durkin, Allen, Dougan, and Nixon, 2001). Robert (1996) studied SMEs through inter-fnm cooperation as a condition of small-firm success, as in the activity-actors-resources concept used by the IMP Group (Hakansson and Snehota, 1995). Lastly, other researchers have studied small businesses in the banking industry (Colgate and Bodo 2005, Ennew 1996, Lam and Burton 2006, Madill, Feeney, Riding, and Haines, 2002), and have shown that relationships are important in explaining small business customers' behaviors. But no one has specifically studied VSEs as customers or their purchase of goods, e.g., automotive spare parts, shampoo, or constmction materials, rather than services such as banking.

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Relationship marketing is a useful researcb field in studying VSEs. Tbe lack of researcb in tbis area migbt suggest that VSEs are like other businesses and require a traditional business-to-business approacb, but an improved definition of VSEs illustrates tbe opposite. 1.2. VSEs 'unique characteristics Dexter (2002, Dexter and Beban, 1999) defines a VSE as a simple economic decision unit. In an effort to segment business markets, be argues tbat small business customers are emotional, unlike medium and large enterprises. Although the simplicity of the decision unit is real, tbe cbaracteristics of VSEs are more complex. VSEs can be defined via five criteria (Bentabet, Micbun, and Trouvé, 1999): dimensional (very limited number of persons working in tbe firm); management (centralized in the owner's hands); functional (tbe manager decides strategy, operators and employees are versatile); informative (a rieb but informal informational system, mainly oral, environmental, and team-dependent); and strategic (strategy is intuitive and rarely formalized). Tbis illustrates tbe centrality of tbe owner/manager in tbe VSEs functioning. Tbus VSEs are not simply "large businesses" in smaller form, and merit a specific business-to-business approacb. Tbe VSE Owner's centrality is tbe source of a certain confusion between tbe firm and tbe individual wbo runs it. Tbis confusion constitutes a cballenge for the marketer in targeting and serving tbese customers. Based on tbis definition of tbe VSE, this paper seeks to understand VSE relationsbip bebaviors witb tbeir suppliers tbrough four research questions and a qualitative study. 1. 2. 3. 4. What are tbe expectations of VSE owners/managers in terms of customer relationships? How do tbey perceive tbeir suppliers'ability to meet tbeir expectations? Wbat are tbe behavioral and relational consequences? What are tbe determinants of tbeir bebaviors?

2. Theoretical background: looking for a business-to-business model appropriate to VSEs Interestingly, from an bistorical point of view the fu-st business-to-business models were derived from business-to-consumer ones - for example Sbetb's 1973 model, derived from Howard and Sbetb's 1969 model. At tbat time, business-to-business decision models for buying were less complex than recent ones, wbicb make tbem somewhat more matched to VSE cbaracteristics, e.g., a single decision maker in cbarge. 2.1. From transactional models... Historically, business-to-business marketers bave studied excbanges between two or more firms from a transactional viewpoint. Among tbe most quoted models, we considered works by Robinson and Farris (1967), Ozane and Churchill (1971), Webster and Wind (1972), Sheth (1973), and Cboffray and Lilien (1978) in order to identify their strengths and weaknesses in gaining an understanding of VSEs' buying behaviors. For example, tbe BUYGRID model (Robinson and Faris, 1967) has been criticized because of the absence of any representation of a buying center However, in tbe VSE context tbe owner is the buyer and the buying center does not exist. This lack is then an advantage in studying VSEs. Tbe Sbetb (1973) model emphasizes the central role of tbe individual in tbe buying process and lists all tbe variables that may infiuence his/her buying bebavior However, the low status accorded to the organization (an exogenous variable) cannot fully resolve tbe confusion between the firm and its owner/manager. Among tbese works, conflict resolution (Webster and Wind, 1972) is of tbe utmost interest. VSEs as industrial buyers experience bigb uncertainty and try to minimize perceived risk. Tbeir owners/managers cannot know all of the supply possibilities, or all the consequences of their decisions. This early model implies a real buying strategy, and explains the importance of buying centers in organizations. If the infiuence of tbe buying center limits the ability of this model to explain VSEs' buying behaviors (such buying decisions are often simplistic, as we will see in tbe qualitative study), risk avoidance and buying strategies could take anotber form. 2.2. ... to relational models. Business-to-business marketing bas changed considerably since tbe mid 1960s and 1970s. Relationsbip marketing bas emerged, following tbe article by Dw7er, Schurr, and Ob (1987) and tbe IMP group's work, e.g., Hakansson 1982. A consensus has emerged regarding tbe key concepts of business-to-business relationsbip marketing: trust (Donney and Cannon 1997, Moorman, Zaltman, and Desphandc 1992, Morgan and Hunt 1994), commitment (Dwyer et al 1987, Morgan and Hunt 1994), satisfaction (Anderson and Sullivan 1993, Fomell 1992), and dependence (Emerson 1962). These concepts have been studied in both business-to-business and business-to-consumer researcb. Palmatier, Dant, Grewal, and Evans (2006) bave syntbesized tbe relationship-marketing studies publisbed in tbe marketing area; tbeir meta-analysis incorporates tbe customer, tbe

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supplier, the dyad, relationship mediators (satisfaction, tmst, commitment, etc.), moderators, and their consequences for the customer's behavior. This work could be used as a guide for studying VSE behavior. 3. Research Methodology ' Since this research focuses specifically on VSEs and their relationships with suppliers of goods (e.g. the purchase of shampoo, hairdryers, scissors, etc. by hairdressers or the purchase of aftermarket auto parts by auto repairers), the study was primarily qualitative in nature The lack of research dealing with VSEs as customers led us to conduct qualitative research in order to propose a conceptual framework (Glaser and Strauss, 1967), so as to better understand VSE behaviors and to guide further research. Our main aim is to uncover the views and experiences of VSE owners/managers, rather than to test an a priori model. Data were generated via in-depth qualitative interviews with 21 VSE owners/managers and nine suppliers or prescribers on the French market. Three sectors of activity were studied (automotive, construction, and hairdressing) in order to improve the study's validity. The interviews were semi-stmctured, based on an interview guide dealing with the VSE, its supplier(s), and the relationship; they lasted one hour on average. The interviews were studied by thematic analysis. In order to assess its reliability the qualitative material was double-coded (Miles and Huberman, 1994) by a second researcher and a marketing manager from a business-to-business firm. The inter-coder reliability almost reached the desirable range of 90% agreement, thereby allowing us to examine the cases where disagreements were observed. 4. Findings 4.1. A VSE relationship model The automotive (five dealers and five VSEs - two independents + three manufacturer affiliates), construction (four dealers or prescribers and six VSEs), and hairdressing (ten VSEs - five independents -i- five franchisees) sectors produced three different but concordant results. We focus only on the VSE data for this work. The dealers' and prescribers' materials were used to improve understanding during interpretation of the results. Seven main themes emerged from the automotive sector (listed in Appendix la), eleven themes from the constmction sector (Appendix lb), and seven themes from the hairdressing sector (Appendix lc), allowing us to construct three relationship models applicable to VSEs in these three sectors (Appendices 2a, 2b, and 2c respectively). The stmctures of the relationships are similar, but each sector displays characteristic elements. Some are due to the environment (e.g. legal in the constmction sector), or specific selling stmcture (three levels of suppliers are clearly identified in the construction sector); others rely on the brand attachment and business-to-consumer relationship concepts (Lacoeuilhe 2000). Qualitative analysis of these three areas enabled us to identify several factors affecting the customer/supplier relationship in the VSE business-to-business environment. Surprisingly, the hairdressers are the only respondents who mentioned their end customers' needs to explain some of their purchasing choices. Rather than the differences that may exist between the automotive, constmction, and hairdressing sectors, their commonalities are interesting because they provide an overview of the key elements of the customer/supplier relationships in this specific business-to-business environment. Many key variables such as satisfaction, tmst, and commitment (e.g., Donney and Cannon, 1997) are reflected in the comments of most interviewees. The concept of dependence is also apparent. This dependence may be real, e.g., contractual agreements between hairdressers and national brands, or created by the power of the brand (Mudambi, 2002). Here we can cite the example of the hairdressing sector where a great number of managers felt compelled to reference the market-leading brand, noting that the end customers expressed a real demand for it. 4.2. The key elements of the relationship It is important to note that interpersonal items, brand, and offer/supply are the key elements of the customer/supplier relationship. These elements are essential and appear both spontaneously and systematically in the interviewees' replies. However, their hierarchy is particularly volatile from sector to sector and from one individual to another. In addition, the psycho-sociological characteristics of each individual complicate the development of a typology. 4.2.1. Interpersonal I Interpersonal means all the human relationships which may develop between two individuals. Among the three key elements, it is the most difficult to assess because it is based on the emotional and irrational. Nevertheless, we must acknowledge the very important position accorded to interpersonal elements in the case of a direct sale, which will influence the choice of supplier, either positively (loyalty) or negatively (failure). For the supplier the stake is !' ISSN 1913-9004 |

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tberefore not only to be appreciated or not but also to express it in monetary terms: tbe cballenge for marketers is huge. 4.2.2. Brand As regards the brand, VSE owner/manager behaviors range between emotional and rational, wbicb may be seen as an illustration of tbe duality of tbe business-to-business/business-to-consumer relationsbips mentioned above. Managers consider tbe effect of brand to be a real guarantee, botb objectively and subjectively: An objective guarantee is the assurance of after-sales service; Subjective guarantee refers to tbe pledge of quality that branded products represent at two levels: for tbe professional wbo will use the branded item and for those who will resell it. It is interesting to note that wben tbese expectations are satisfied, tbis may lead some respondents to declare an unwavering loyalty to tbe brand selected—a declaration tbat may be sincere, but perbaps not altogether clear: tbe omission of tbe other key elements does not diminish tbeir importance. 4.2.3. Offer Of tbe tbree elements cited, offer concem is probably the most obvious in its content because it represents the most "professional" expectation. Offer may contain some surprises: The contents of tbe offer. Products and prices define tbe core elements of tbe offer and remain very important for VSE owners/managers. Relationsbip to products remains traditional: VSEs look for technical products, whose trademark is a guarantee of quality. If price is important, it is not only based on the product itself but on all tbe associated services (delivery, advice, availability, and so on). Tbe place of distribution supply. In tbe various sectors studied, tbe manufacturer operates alone or in tandem: eitber it distributes its own products, or it uses an indirect distribution cbannel. Tbe relationsbips witb tbe manufacturer or brand are very often marked by tbe relationsbips between tbe entrepreneur and tbe distributor (which arises as tbe guarantor of service quality and price negotiation). While it seems easy to identify tbe expectations directed towards tbe offers (wbicb are more concrete tban those related to tbe interpersonal and tbe brand), we must not stop at tbeir mere appearance, because here too affect plays a role and can easily lead to disappointment or reasoned loyalfy (Paavola, 2006). 4.3. Some individual determinants We bave noted above that tbere is an affective component in tbe relationships and in the way in wbicb our informants evaluate tbeir suppliers. Tbis is consistent witb tbe work of Dexter (1999), who describes VSEs as emotional economic decision units. Moreover, some individual determinants can explain certain differences among our respondents: age and gender are common issues, but certain determinants appear more differentiating. Tbe professional background of tbe owner/manager, the legal status of tbe firm (for example, it appears that people who have not chosen a limited liability status are more personally tied to their firm: "my company is my life"), or if tbey are rurming a family business. Tbe topics for ñirther research that we were able to derive fVom these individual determinants will be part of tbe following discussion. 5. Discussion and outlook for future researcb 5.7. Discussion This exploratory phase corresponds mainly to our initial researcb questions, because it allows us on tbe one hand to develop a list of relational expectations and on the other to compare tbem with tbe practices of suppliers in order to explore their impact on tbe quality of tbe relationsbip and tbe desire to maintain tbis relationsbip. The comparison of the main findings from this qualitative phase witb tbe work done by researchers in relationsbip marketing led to the development of an integrated model diagram (Figure 1 ) depicting the satisfaction of customers, its impact on the mediators of the relationship (Palmatier et al. 2006), and its ñiture consequences. Compared witb tbe literature on business-to-business and relationsbip marketing, tbe qualitative metbodology sbowed a number of points of agreement: Tbere are different levels of relationsbip analysis such as interpersonal, brand, and company (dealer and manufacturer) levels; Tbe brand attacbment identified as a business-to-consumer concept (Lacoeuilhe, 2000) bas been found particulariy applicable to tbe respondents in tbese tbree sectors. This commitment reflects a beuristic cboice tbat is

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the branded product for the managers interviewed;

I

The relationship path through relational variables such as satisfaction (a criterion necessary but not sufficient for precision), trust (in products, in people, in the company), and dependence is confirmed; Risk-reduction strategies (Webster and Wind, 1972): because the purchases of a single VSE do not weigh greatly in the commercial balances of most suppliers, the small business customer tends to identify one or two reliable suppliers through which it seeks to satisfy its entire commercial demand. Its aim is to offset its small purchasing power by maximizing its weight with these suppliers and be recognized as a "good" customer that the supplier should serve well; i The preferred mode of relationships. There seem to be as many relationships as customers interviewed: the relationship cannot be reduced to these variables and must incorporate the psychology of the consumers, i.e., the VSE owners/managers. Unlike larger models of business-to-business marketing, but not surprisingly in light of our analysis of the functioning of VSEs, the relationship and the choice of suppliers are decided on an individual basis. Collective decision-making and even less the existence of buying centers (Johnston and Bonoma, 1981) do not emerge from the transcribed conversations of the VSE representatives interviewed. If this conceptual framework seems rather simple compared to larger models of business-to-business marketing, its uniqueness lies in the relationship referents. The leader of a small company acts both as an individual and as an enterprise in a relationship with a commercial supplier. There is also the status of the brand, very close to the variables studied in business-to-consumer relationships (Lacoeuilhe, 2000) and whose importance in the decision process is high. Brand importance in the demand for goods seems a real issue, in contrast to research in the services area. One factor suggests that we should pursue research towards a better knowledge of the VSE owner/manager as an individual (following the work by File and Prince, 1996 on family businesses). An individual psychological dimension in the relationship appears at a second level of analysis of the qualitative data, and is of interest because it responds to a request and certain deficiencies identified during our literature review: the consumption behavior of VSE owners/managers can be explained in terms of elements relating to their personalities. Respondents displayed individual differences: In the place they give to the relationship in their choice of suppliers; In the attitude they have towards price negotiation; In the relationship they have with the brand (product, security, prestige, etc.); And also in the way they are projecting themselves within their companies. Some refer to their business in an impersonal way ("it [the firm] is not followed by manufacturers"), others in the first person ("it [my provider] looks to me"). 5.2. Limitations and avenue for fiiture research The path for future research involves an extended understanding of the individual behavior of the VSE owner/manager, aimed at testing the conceptual model proposed. To pursue this new research objective, authors interested in understanding VSEs' consumption behavior could fmd interesting subjects in current research on both entrepreneurship and business venturing. Researchers in these fields have suggested some promising concepts for studying the interaction between the firm and the individual who directs it. For example, Bruyat (2001) speaks of the dialogic relationship of the contractor with its project of value creation, and Torres (2003) mobilizes the concept of proximity derived from the Moles and Rohmer law of proxemics (1978). Research on venture capital is also looking more closely at the relationship between the company and its owners: including the owners' characteristics assessing both their personal and professional achievements - before deciding to invest in a project (Sahlman, 1990). If we are to be objective on the scope of this qualitative phase it is important to clarify its limitations. The first limitation of this study was the selection of respondents in Paris and its suburbs. The interviewees are not representative of all the VSEs in France (suppliers are more numerous and more easy to access near Paris than in other French regions). The external validity of the study is also compromised by its qualitative nature, and the small sample size of this investigation. However, we used three different sectors to compensate for the bias inherent in the study of a single business and only one type of customer/supplier relationship. Nevertheless, the cross-sectional analysis of the transcribed conversations allows us, from a more managerial viewpoint, to identify 30 marketing and sales levers that could be used by business-to-business companies to provide the relationship benefits that business customers look for.

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Anderson, E.W. & Sullivan, M. (1993). the Antecedents and Consequences of Customer Satisfaction for Firms, Marketing Science, 12, l25-\43. Bentabet, E., Michun, S. & Trouvé, R (1999). Gestion des hommes et formation dans les très petites entreprises, CEREQ (Centre d'Etude et de Recherche sur ¡es Qualifications). Etude n°72. Bmyat C. (2001). Créer ou ne pas créer ? Une modélisation du processus d'engagement dans un projet de création d'entreprise. Revue de l'Entrepreneuriat, 1, 1,25-42. Choffray, J.M. & Lilien, QL. (1978 B). Assessing Response to Industrial Marketing Strategy, Joumal of Marketing 42 (2). 20-31. 6 6/ J s. Colgate, M. & Bodo, L. (2005). Positive and Negative Consequences of a Relationship Manager Strategy: New Zealand Banks and Their Small Business Customers, Joumal of Business Research, 58, 2, 195-204. Coviello, N., Winklhofer, H. & Hamilton, K. (2006). Marketing Practices and Performance of Small Service Firms, Journal of Service Research, 9, 1, 38-58. Dexter, A. (2002). Egotists, Idealists and Corporate Animals: Segmenting Business Markets, Intemational Joumal of Market Research, 44, 1, 31 -51. Dexter, A. & Behan, G (1999). Small Business Consumers: the Emotional Economic Unit, Joumal of the Market Research Society, 41, 2, 171 -194. Donney, R M. & Cannon, J. R, (1997). An Examination of the Nature of Tmst in Buyer-Seller Relationships, Joumal of Marketing, 61, 35-51 Dwyer, F. R., Schurr, R H. & Oh, S. (1987). Developing Buyer-Seller Relationships, Journal of Marketing 51 2 11-27. «• . . Emerson, R. M. ( 1962). Power Dependence Relation, American Sociological Review, 27, 1, 31 -41. Ennew, C. T. & Binks, M. R. (1996). The Impact of Service Quality and Service Characteristics on Customer Retention: Small Business and their Banks in the UK, British Joumal of Management, 7, 3, 219-230. File, K. M. & Prince, R. A. (1996). A Psychographic Segmentation of Industrial Family Businesses, Indtistrial Marketing Management, 25, 223-234. Fomeil, C. (1992). A National Customer Satisfaction Barometer, the Swedish Experience, Joumal of Marketing 14 451-472. *' ' Glaser, B. G & Strauss, A. L. (1967). The Discovery of Grounded Theory: Strategies for Qualitative Research, The Sociology Press: Mill Valley CA, pp. 261 (fourth paperback printing, 2009). Goff, J., Harding, D., Shah, R. & Singer, M. (1998). A New Way to Reach Small Businesses, McKinsev Ouarterlv 1 3,172-176. Hakansson H. (1982). Intemational Marketing and Purchasing of Industrial Goods: An interaction Approach, Wiley, Chichester, 406p. Hakansson, H & Snehota I. (1995). Developing Relationships in Business Networks, Routledge, London, pp. 418 Howard, J. A. & Sheth J N. (1969). The Theory of Buyer Behavior, New-York: John Wiley & Sons. Hultman, C M & Shaw, E. (2003). The Interface Between Transactional And Relational Orientation In Small Service Firm's Marketing, Joumal of Marketing Theory & Practice, 11,1, 36-52. Johnston, W.J. & Bonoma, T.V. (1981). The buying center: stmcture and interaction pattems, Joumal of Marketing 45,3,143-156. *' Lacoeuilhe J. (2000). L'attachement à la Marque: Proposition d'une Échelle de Mesure, Recherches et Applications en Marketing, 15, 4, 61-77. Lam, R. & Burton, S. (2006). SME Banking Loyalty (And Disloyalty): A Qualitative Study in Hong Kong, Intemational Joumal of Bank Marketing, 24, 1, 37-52. Madill, J. J., Feeney, L, Riding, A, & Haines Jr., G H (2002). Determinants of SME Owners' Satisfaction with Their Banking Relationships: A Canadian Study, Intemational Journal of Bank Marketing, 20, 2, 86-99. McGowan, P, Durkin, M G, Allen, L, Dougan, C & Nixon, S (2001). Developing Competencies in The Entrepreneurial Small Firm For Use Of The Intemet In The Management Of Customer Relationships, Joumal of

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Keywords (Boolean research AND) "relationship marketing'" and "business-to-business" "relationship marketing" and "small business" "relationship marketing" and "business-to-business" and "small business" Number of references 404 22 22

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Arca for future research

VSr aiid owner/managcr characlerislics

Satisfaction

Trust

Commitment

Attachment

Dependence

Supplier charaeteri.stics

Figure 1. A theoretical model of VSE relationship expectations Appendix la. Automotive themes
Theme Relatiotiship elements Sub-theme Relationship described as a general atmosphere and specific elements o Meetings o Price 0 Interpersonal o Honesty o Professionalism o Tensions o Looking for geographic proximity o Service Quality o Recognition and respect o Loyalty (enthusiastic for Citroen affiliates) Relationships tend to deteriorate Quotas on aftermarket parts "Chasing time" (i.e.. losing a lot of time negotiating with their suppliers) Business size as a negotiation criteria Choice criteria Multi-platform products Professionalism Technique Customer orientation Selling cars Buying parts Business politics of manufacturer Little gifts Communication Supply chain Monitoring Unreachable sellers Recognition Business fear Affiliation is a costly obligation Widespread use of electronic diagnostic boxes European legislation

Negotiation / collaboration

Products Brands

Business

Management

Benefits, expectations, fear / development of business

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Appendix lb. Construction themes
Theme Suppliers Sub-theme Buying strategies and supplier portfolio Differences among suppliers , Ways of selling products Negotiation mode is questioned Personal selling remains efficient Dealer strategy in pull marketing (when the dealer attracts 1be consumer) Supplier choice criteria Interpersonal Dealers Commercial Negotiation strategies Dealer differentiation Consequences of interpersonal relationships Construction is a relational sector Relationships are business, business is relationships Relationships, an obligation Logistics Technical information Lack of professionalism Choice criteria Defmed by tenders vs. free choice Brand as a choice Innovation Brand, quality, price Technical products vs. basic products Need for quality Sign of quality Quality/price Brands are communicating with VSE's customers. Issuer Medium Message Need for technical information Lack of information about new products Payment terms Rate negotiations Loyalty programs Promotions, benefits of loyalty programs Satisfaction Service quality Supplier proximity (supplier adjustment) Price Monitoring Logistic

Relationships Loyalty and negotiation

Relational

1 • .

Criticisms of suppliers

-

Product

Brands

Information sources

Business

Consequences

Management

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Appendix le. Hairdressing sector themes
Theme Products in presence Choice criteria Sub-theme Hair Brands importance Product brands less importance Product Price Services Innovation Influence on choice criteria o Positive o Negative Moderated by independence vs. franchisee Drawbacks of actual relationships o Ideal relationships 0 Delivery 0 Assistance o Training o Advertising o Research for new product Brand image Brand as quality Brand as lever of renown and positioning for the hairdressing saloon Brand as training Brand as innovation Benefits Constraints Customer Orientation Demand for products/brands

Interpersonal relationships

Ideal relationships

Brands

The patent Relation with end consumer

Appendix 2a. VSE's relationship model in the automotive sector
Exchange object Nature (competilive spare parts vs. captive) Price Availability' Brand Information Nalurc (tccliiiicai. commercial, moniloring) Tools (tel., fax. web...) Frequency .Automobile VSF. characteristics Customer Orienlalion Procurement strategy '.'meaning Size (negotiation) Status ( aü'iliate vs. independent) Owner's need lor recounition

Relationship qualit)' (t) Atmosphère Ten.sions Commercial practice of supplier Discount Delivery frequency Loyalty programs (iifls/Travel

Satisfaction Trusl Commitment Dependence

- Relationship quality (t+I ) - Loyaltj' (real/experienced) - Inertia - Cooperation

Supplier characteristics Car dealer iv. parts wholesaler Employee turnover Employee professionali.sm Employee availability Physical aspect

Figure 2a. Variables at stake in the relationship marketing model of an automotive VSE

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Vol. 4, No. 2; April 2011

Appendix 2b. VSE's relationship model in the building-trade sector.
• Type of work (I*uhlic/ private tender) - Freely chosen products v.v. prescribed) Building-trade VSE chamcleristics Supplying strategy' Strateg> of product variation Procurement strategy Customer / supplier orientation Degree of innovation

Exchange object Brand Product (technic./basic.) - Price Advertising supports Formation??traininL' Information Nature (technical. commercial, monitoring) Tools (tel., fax. web...) Frequency Face to face or not

Satisfaction Trust Brand attachment

Relationship quality (1+1) Maintenance / Break Inertia (habit) Reasoned Loyalty

Relationship qualir» (t) Interpersonal Toward the brand Commercial practice of supplier Discount Payment terms Loyalty programs Gifts/ Travel

Legal constraints 1Ü years guarantee t ompliance with standards (DTU.UPEC.

Supplier characteristics (3 levels) Industrial vs. dealer v.\. individual Independent wholesaler vs. group Storage Strategy Structure of sales (Trading vs. new distribution formula) Professionalism of sellers Employee turnover Opening time

Figure 2b. Variables at stake in the relationship marketing model of a construction VSE Appendix 2c. VSE's relationship model in the hairdressing sector.
Consumer demand llairdressing saloon characteristics independent vs. francbisee Size Customer Willingness to negotiate Customer orientation Involvement in the profession

Exchange object Product Price Advertising supports Training? Brand Information Technical Relationship quality (t) Interpersonal Toward the brand Commercial practice of supplier Discount Loyalty programs Cjitts/ Travel Sattslaction Trust Brand attachment Dependence

. Relationship quality (t+ Ï ) • Loyalty ( real/experienced) . Inertia (habit)

Supplier characteristics Brand vs. Dealer Commercial characteristics Professional Open Physically attractive

Figure 2c. Variables at stake in the relationship marketing model of a hairdressing VSE

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