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Value-Based Differentiation in Business Relationships: Gaining and Sustaining Key Supplier Status

Author

Listed:
  • Wolfgang Ulaga

    (ESCP-EAP - ESCP-EAP - Ecole Supérieure de Commerce de Paris)

  • Andreas Eggert

    (University of Paderborn)

Abstract

Many business customers today consolidate their supply bases and implement preferred supplier programs. Consequently, vendors increasingly face the alternative of either gaining a key supplier status with their customers or being pushed into the role of a backup supplier. As product and price become less important differentiators, suppliers of routinely purchased products search for new ways to differentiate themselves in a buyer–seller relationship. This research investigates avenues for differentiation through value creation in business-to-business relationships. The results suggest that relationship benefits display a stronger potential for differentiation in key supplier relationships than cost considerations. The authors identify service support and personal interaction as core differentiators, followed by a supplier's know-how and its ability to improve a customer's time to market. Product quality and delivery performance, along with acquisition costs and operation costs, display a moderate potential to help a firm gain and maintain key supplier status. Finally, price shows the weakest potential for differentiation.

Suggested Citation

  • Wolfgang Ulaga & Andreas Eggert, 2006. "Value-Based Differentiation in Business Relationships: Gaining and Sustaining Key Supplier Status," Post-Print hal-00482456, HAL.
    • Handle: RePEc:hal:journl:hal-00482456
    DOI: 10.1509/jmkg.2006.70.1.119
    as

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