Quantitative
Sometimes when making purchases, its not about the price we pay but about whether or not we paid less than others who bought the same thing. People feel great after thinking they got a deal on a certain product/service and they will probably returnto that same supplier hoping for a similar deal. Conversely, if someone were to find out that they did not get the better deal, there is going to be some dissatisfaction with that supplier. This is the basis for the following study.
This study focuses on the relationship between buyers and their suppliers (Business to Business), and the perceptions of how the buyer thinks they are being treated by their supplier. The authors stress that it is not all about how an actual buyer is being treated but its how they think they are being treated in comparison to other buyers. This study was done by proposing five different hypotheses about the supplier buyer relationship. They are paraphrased as follows:
- H1: A buyer's satisfaction with a supplier is dependent on the economic benefit that they get
-H2: In a cooperative buyer system (many buyers working together to increase buying power), buyer's are less satisifed if they think that someone else is getting a better deal than they are.
-H3: The affects of H2 decrease over time.
-H4: If all buyers in a group are getting a below average deal from their supplier, any inconsistency in pricing from the supplier will have a larger negative effect on the buyer's satisfaction of the supplier.
-H5: If all buyers within a group are getting a below average deal from the supplier, then buyer satisfaction with the supplier will be lower.
The data was compliled by contacting one supplier and accessing a portion of their customer database (3,646 of 12,000 total). From there they contacted the representatives of each firm and mailed questionnaires out. They ended up with just over 1,300 usable surveys to compile their data.
Based on their data, the authors were able to support hypotheses 1 through 4. This means that buyers were satisfied when they recieve economic benefits from their suppliers. At the same time, buyer satisfaction will decrease if they know that price discrimination exists, regardless of beginning level of satisfaction with the supplier. Hypothesis 5 was the only one that was not supported, which means that if there is no price discrimination within a buyer's group then overall satisfaction will remain constant.
Manager Implications
What this study proves is that price discrimination has a negative effect on buyers who know what others are paying for the same product/service. To make sure that buyers are satisfied, a supplier can do one of two things; they either need to make it so buyers do not know what others paid for the product (almost impossible) or have no price discrimination among buyers. In a B2B case, it makes buyers responsible for their own profits by making them compete against each other on resale price.
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