Assessing customer orientation in the context of buyer/supplier relationships using judgmental modelling

Retail buying is a particular form of industrial buying, one characterised by buying for the purposes of reselling to the ultimate customer, rather than for use. Retail buyers have a complex role. They are responsible for meeting the requirements of their target customers and they also have to manage relationships with suppliers in order to obtain the best terms and conditions. Modem retailing is also characterised by a high degree of concentration and centralisation of the buying function. Buyers can operate autonomously or within a buying group. Those selling or marketing to commercial buyers need to understand the needs of the buyer in order to be effective. They need to understand the buyers' businesses and how to develop relationships with them. A mediator in the development of a customer relationship is customer orientation. A customer orientation is a central factor in being market orientated, but despite the importance of customer and market orientation there has been little research into how well suppliers understand their customers in a commercial context. In the research reported here retail buyers of textile products were personally interviewed with the aid of decision analysis software to identify, the significance of criteria they use in a defined buying situation. The same methodology was repeated with suppliers to identify how well suppliers understood the decision making of buyers in their market. The decision-making process was modelled using a compensatory approach, assuming six decision criteria in a choice of sourcing options. These criteria were partly selected from a pilot conducted with eight retailers in the UK and partly from the literature review and in particular the works of Nilsson and Host [Nilsson J, Host V. Reseller assortment decision criteria. Aarhus: Aarhus University Press, 1987] and Weber et al. [Weber CA, Current JR, Benton WC, Vendor selection criteria and methods. Eur J Oper Res 199 1;50(1):2- 18]. The study found that while buyers were able to understand the relative importance of decision-making criteria adequately, they underestimated the importance of certain criteria. The results demonstrate the potential for judgmental modelling in the appraisal of customer orientation, (C) 2002 Elsevier Science Inc. All rights reserved.