Sourcing strategy: the impact of costs on relationship outcomes

Abstract

Posits that relationship marketing is often suggested as being the best approach to dealing with suppliers and customers. However, there may be situations where the costs or goals of the parties involved do not require or justify incurring the costs of building a relationship. Presents an empirical analysis of some of the costs that may affect perceptions of a relationship. The independent variables analysed include switching costs, buyer investments, seller investments, and the product’s basis of competitive advantage. The dependent variables include perceptions of the relationship’s value, its expected longevity, and the likelihood of future relationships. Indicates that there are market conditions where the cost of building a relationship may not be worth the investment costs.