Value added elements according to buyer companies in a B2B context.
| Autor | Battaglia, Daniel |
| Cargo | Business-to-business - Report |
Introduction
Value adding may be associated with the perception of value and the development of relationships between buyers and sellers/vendors (Aspara & Tikkanen, 2013; Biggemann & Buttle, 2012; Hansen, Beitelspacher, & Deitz, 2013). This relationship, over the business cycle, has been cited as the essential element to buyer satisfaction (Hansen et al, 2013). It is desirable, however, that buyer/supplier interactions in a business-to-business (B2B) context be considered over the long term (Lindgreen, 2012). The mutual dependency of suppliers and buyers has been increasing (Nordin & Kowalkowski, 2010) due to the technological complexity and the level of specialisation to mutually add value (Jacob & Ulaga, 2008).
Studies conducted in B2B contexts seek to understand the manner and dynamics of relationships as an opportunity to enhance the companies' competitiveness and improve the process of value creation (Corsaro, Ramos, Henneberg, & Naude, 2012; Moller, 2013; Vargo & Lusch, 2011). In terms of opportunity, Cassia and Magno (2015) highlight that emerging countries are generating a wide range of opportunities for B2B relationships. The authors mention that scientific studies on this context (B2B) should be reinforced since most of the research focuses mainly on business-to-consumer industries. Therefore, becoming familiar with the sales processes developed by the customer-driven supplier companies may represent an opportunity to add value (Singh & Koshy, 2011). Research conducted from the perspective of supplier companies seeks to better understand how those companies develop, perceive and deliver value to meet the needs of customers and markets (Mele, 2011; Smals & Smits, 2012).
There are studies focused on buyer companies analysing how value is perceived by those companies (Lindgreen, Hingley, Grant, & Morgan, 2012). The same authors propose three phases associated with the value adding process: analysis, creation and delivery of value. In addition, the manner in which the buyer companies located in a developing country perceive value addition is questioned (Singh & Koshy, 2011). Emerging countries play a significant role in the world economy (Samake & Yang, 2014). The fact that most of the research on how buyer companies perceive value has been conducted in developed countries, where cultural aspects regarding the perception of value may differ from those found in emerging countries, should not be overlooked (Flint, Blocker, & Boutin, 2011; Hulten, 2012; Smals & Smits, 2012; Sullivan, Peterson, & Krishnan, 2012).
This paper analyses how buyer companies perceive the value added to products and services offered by their suppliers and identifies the predominant elements that affect the purchasing decisions and establishment of relationships between companies in a B2B context. A multiple case study was conducted in four companies in each of the following industries: furniture, metal-mechanics and food. The companies are located in southern Brazil and provide a variety of products (e.g., aluminum doors, gear motor reducers, frozen food, furniture for homes, business and hotels).
In academic terms, this research intends to organise a framework of value-adding elements in a B2B context built from the investigated literature. In managerial terms, the purpose is to indicate to suppliers possible aspects to be considered by the purchasing companies in order to guide the suppliers' actions for leveraging the value adding process.
Next, the theoretical background regarding the value added in B2B relationships is presented. Thereafter, the research methodology, findings, analyses, and conclusions are presented.
Theoretical Framework
The B2B context
Research on B2B contexts have been linked to market strategies and are characterised as such when a corporate customer seeks a product or service from a supplier company (Chen, 2013). In this context, identifying potential suppliers expressing quality and trust is a challenge for organisations (Chen, 2013; Quintens, Pauwels, & Matthyssens, 2006).
Business interactions may begin with simple transactions and evolve into the interdependence between a buyer and seller, attaining loyalty-based relationships according to the performance of the products and services offered (Williams, Khan, Ashill, & Naumann, 2011). Industrial markets may move from dependence on one of the market forces to a situation where strategic alliances are formed between the companies (Roberts & Merrilees, 2007; Williams et al., 2011).
Most industrial buyers incur additional administrative costs and become more dependent on the supplier to achieve a higher degree of competitiveness and incremental improvements in products and services. The buyer, in turn, benefits from the quality, reliability and additional services with increased relationship prospects and long-term partnerships (Roberts & Merrilees, 2007; Williams et al., 2011). Also, in the perspective of a buyer-seller context, the value creation process can consider the offer of superior customer value, the core competencies of companies, and development of relationships (Ulaga, 2001).
Besides that, Ulaga (2003) comments that the development of relationships is an important way to add value along the partner network and cannot be ignored. In general, corporate customers require that suppliers take actions that will enable them to add value to the products they sell, to establish partnerships, and to build strategic alliances (Doom, 2008; Williams et al., 2011). However, this approach is limited because the main traditional aspects focus predominantly on goods-dominant logic and the conceptualization of a value creation process is mostly based on the final consumer (Vargo & Lusch, 2011). For these reasons, it is important to better understand the process of value adding through a business marketing point-of-view.
Business marketing and value adding
Offering new products and services that suitably meet market demands, as well as transforming businesses and providing new ways of competing in the global markets, are the primary strategies of organisations (Lubik, Lim, Platts, & Minshall, 2013). In this regard, the dynamic of business competitiveness may represent improvements perceived by the buyers (Ghosh, Gupta, Datta, & Mukerjee, 2010) and is an opportunity to create value for partner firms in a buyer-seller context (Walter, Ritter, & Gemunden, 2001). Organisational competitiveness, in turn, provides the advantage for new business processes and access to new markets through differentiated products and services (Hsieh & Tidd, 2012).
Understanding the opportunities and the characteristics that are important to creating value in a B2B context may contribute to leveraging the competitiveness of companies. By considering the dynamics of the business environment, value may be characterised both as economic benefits as well as commercial, technical and service benefits that a customer receives in exchange for the economic value paid (Brady, Davies, & Gann, 2005). Value adding may represent the combinations of products and services added that generate exclusive benefits for the buyers (Brady et al., 2005).
Adding value may be understood as a process comprising three phases: analysis, creation and delivery of value (Lindgreen et al., 2012). That the relationships developed over these phases may contribute to improving the understanding of this process in an industrial environment is noteworthy (Corsaro & Snehota, 2010). Adding value to manufactured products presents a viable strategy for enhancing companies' competitiveness (Lindgreen et al., 2012). Next, the value adding constructs and their respective elements are presented according to the literature investigated.
Analysis and value creation
The term creation of value and the expression value creation process are utilised from the customer's perspective because the customers are viewed as receivers of value from the resources they have obtained (Flint et al., 2011). The value may be conceived in terms of consequences of the cost-benefit that occurs in the relationships between the parties involved (Corsaro & Snehota, 2010; Pinnington & Scanlon, 2009). The analysis and the creation of value represent companies' ability to mobilise, coordinate and develop their products/services in such a way as to exceed the requisites delivered to buyers (Lindgreen et al., 2012).
When negotiating the supply of raw materials, suppliers often become involved in extensive personal interaction with customers, actively influencing the value process in place (Gronroos, 2011). To capture aspects capable of generating value, companies establish engineering and development departments to identify product features that render them competitive and desirable to customers (Aho & Uden, 2013; Lindgreen et al., 2012). Another strategy is to develop families of products offering variety and product customisation (Sudarsan, Fenves, Sriram, & Wang, 2005). Such a strategy enables companies to better diversify the products they offer and to develop mechanisms to capture the features that add value to customers (Matthyssens, Vandenbempt, & Goubau, 2009). Capturing value remains a long-term strategy for these companies. Suppliers seek new ways to identify value in their industries to further develop their products (Aspara & Tikkanen, 2013; Matthyssens et al., 2009).
When companies establish marketing strategies for their products/services, they often plan value creation using a long-term view (Danese, 2013). Partnering with other companies becomes relevant to enhance the ability to respond to and meet customer expectations (Gunasekaran, Lai, & Cheng, 2008). IT (Information Technology) provides support to and facilitates the integration of companies. In addition, IT resources may contribute to the development of coordination and leverage the participation in problem-solving activities (Sheu, Yen, & Chae, 2006) by optimising...
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