CHANGING TRENDS IN BUYER- SELLER RELATIONSHIP


By
Monika Bhatt
PGDM
Lecturer Marketing
Institute of Management Education
Sahibabad, Ghaziabad (U.P.) 201 005
E-mail : imesbd@del3.vsnl.net.in / monosharma4@yahoo.com
 


The relationship of buyer and seller started putting its firm foot in mid eighties. Let us first see how, when and by whom the emphasis was given in this area-
 

By whom

When

How

Levit

1983

Emphasized on the importance of  "relationship management between the seller and buyer."

Hart

1988

Need for guarantees to satisfy customers.

Kasper & Lemmink

1989

Comparison of perception of customers with that of managers of service.

Kyj

1989

Emphasized on customer service as a competitive weapon.

Kevin

1989

Company needs to become a service leader.

Cohen & Lee

1990

Emphasized on after sales service and spare parts distribution. (Industrial Marketing)


Many researchers have given a holistic approach by addressing buyer seller relationship as customer satisfying process. Like Cardozo (1965) conceptualized customer satisfaction in several ways but the most important among them are Expectation Vs Performance ratios, pleasure or displeasure and the evaluation of the benefits of consumption. According to Howard and Sheth (1969) satisfaction is the buyer's cognitive state by which he/she is rewarded adequately or inadequately. As the time passed by Day (1984) said satisfaction is a post choice evaluative judgement concerning a specific purchase selection. According to Oliver (1981). The expectation performance interaction is the summary of psychological state which can be evaluated when the emotion surrounding the disconfirmed expectations is coupled with the customers prior feelings about his/her consumption experience. Desatnick (1992) explained satisfaction as the degree of happiness a customer experiences with a companies product/service, with results from the interaction and inter- relationship of all the people within that company. Kotler (1994) has also highlighted this expectation- performance interaction concept by defining customer satisfaction as the level of a persons felt state resulting from comparing a products perceived performance or outcome in violation to his/her own expectations. Thereafter many degrees of customer satisfaction have been explained by many eminent personalities, which is the combination of above explanations.

Now- a- day's companies are also considering customer satisfaction as the key profit areas for the company. Then should the companies try to steal clients away from competitors? To some extent 'Yes' specifically when markets are tight and new prospects are few and far between, many organizations are incorporating a dangerous and difficult business strategy that is going after their competitors customer base. Another area can be, to satisfy the existing customers as it is easy to satisfy and win their loyalty and this ensures higher profits through steady revenue inflows. This helps the companies in lowering the costs but marketers are so much interested in tapping the competitor customers that they lose their hold in maintaining a healthy relation with existing customers. Infact the average length of relationship between the marketer and satisfied customers is more, resulting in higher revenue, lower costs and increased profits.

Moreover, satisfied customers provide publicity to the business through referrals and positive WOM. Studies in the past show that 100 satisfied customers generate 25 new customers every year. Considering the repurchases and referrals- the lifetime revenue generating potential of a satisfied customer are phenomenal.

The Companies now have to give a thought to the word ' CREDIBILITY' to connect with the customer. This means they have to provide 'Value beyond Expectations'. In my opinion, companies must first motivate their own people in every department to believe in the innovation (in any form) or the existing product. This means the passionate attunement of employees towards the company's processes and also the products. In other words the success of any product in the market is dependent on the employees (around 60%) when they embrace the product // innovation, believes in it and owns it as a viable proposition. Mind it the 'own people' in the organizations are all those who make the product, who communicate about it in the market and also those who helps in making the product available to the consumer (like middlemen etc.). Let us consider the case of the 50 year- old chocolate giant "Cadbury India" who faced the biggest PR crisis last year. 'Worm Infested' Cadburys were found in 8 retail outlets in Mumbai from where the problem erupted. This resulted in decline of sales by 4% in the month of October and sales dropped by 10%. The Company was loosing the credibility amongst the consumers and they had to win back their confidence. The company has now launched their flagship brand Cadbury Dairy Milk (CDM) in a new 'purity sealed' pack that is double wrapped for maximum protection. For this the company has spent nearly Rs.12 to 15 crore on importing machinery for its latest double sealed packaging. To make this known to masses the company has signed Amitabh Bachchan, as Brand Endorser for two years. This means Company had to go that extra mile to retain the existing customers in this situation.

Another area in customer satisfaction is to renovate the old product (existing product). With the proliferation of the product day by day, an old product can acquire fatigue in the eyes of the customers. This is the time when significant value addition is required in the product.
 


Old Product -----------------------> Renovation Process -----------------------> New Product
|
Rational & Functional
added value
 


It is seen that renovated product will grow at 10-15% in the market and hence strengthens the marketer- customer bond.

Yet another aspect which connects organization to the end-user understands the customers subconscious mind. To enter this private area the marketer has to understand two major areas -

  • Psychological area- This means the consumers personal mindset at any particular time as compared to individuals present living context. The consumer's inner and micro perception help the people in the organization to understand the sensitivity to the end- user. This in turn helps people in the organization to understand consumer and deliver what is required by them. Hence satisfaction level increases.
  • Sociological area- Society comprises of people and they are exposed to different messages and influences depending on their social class. He/She filter the information and absorb part of it to store, rest gets diluted. Person will always purchase the product on the basis of stored information and also to some extent on the basis of product related factors in the historical aspect, which definitely affect their attitude and behaviour.

Hence there are various ways and theories, which tells how the buyer- seller relationship can be maintained.
 


Monika Bhatt
PGDM
Lecturer Marketing
Institute of Management Education
Sahibabad, Ghaziabad (U.P.) 201 005
E-mail : imesbd@del3.vsnl.net.in / monosharma4@yahoo.com

Changing Trends in Buyer Seller Relationship
 

Source : E-mail February 4, 2004

 

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