Iyer, Lakshmi

Salam, A.

Srikantan, Raj

English

AIS Electronic Library (AISeL)

Association for Information SystemsAIS Electronic Library (AISeL)AMCIS 2001 Proceedings Americas Conference on Information Systems(AMCIS)December 2001Relationship Marketing and B2B E-Commerce:Redefining the Traditional Buyer-SellerRelationship in the Dynamic B2B E-MarketplaceEnvironmentA. SalamUniversity of North Carolina at GreensboroLakshmi IyerUniversity of North Carolina at GreensboroRaj SrikantanUniversity of North Carolina at GreensboroFollow this and additional works at: http://aisel.aisnet.org/amcis2001This material is brought to you by the Americas Conference on Information Systems (AMCIS) at AIS Electronic Library (AISeL). It has been acceptedfor inclusion in AMCIS 2001 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contactelibrary@aisnet.org.Recommended CitationSalam, A.; Iyer, Lakshmi; and Srikantan, Raj, "Relationship Marketing and B2B E-Commerce: Redefining the Traditional Buyer-SellerRelationship in the Dynamic B2B E-Marketplace Environment" (2001). AMCIS 2001 Proceedings. 173.http://aisel.aisnet.org/amcis2001/173892 2001  Seventh Americas Conference on Information SystemsRELATIONSHIP MARKETING AND  B2B E-COMMERCE:REDEFINING THE TRADITIONAL BUYER- SELLERRELATIONSHIP IN THE  DYNAMIC B2BE-MARKETPLACE ENVIRONMENTA. F. SalamBryan School of Businessand EconomicsUniversity of North Carolinaat Greensboroamsalam@uncg.eduLakshmi IyerBryan School of Businessand EconomicsUniversity of North Carolinaat Greensborolsiyer@uncg.eduRaj SrikantanBryan School of Businessand EconomicsUniversity of North Carolinaat Greensborothyag_srik@hotmail.comAbstractThe purpose of this research-in-progress paper is to develop and subsequently test a research modelinvestigating the buyer-seller relationship in the B2B e-marketplace. Even though there has been much focusin the nature and interaction of participants in the B2B marketplace, little systematic research has beenconducted to understand the broad relational mechanism that underlies exchanges among participants in theB2B e-marketplace.Keywords:  B2B marketplace, relationship marketing, electronic commerce, trust, commitmentIntroductionAnecdotal literature and  previous research (Kaplan and Sawhney, 1999) have correctly recognized the varied nature of the B2Be-marketplace. But little systematic research has been conducted to understand the role of relational exchange mechanism thattranspires in the background determining the behavior of participants in the B2B e-marketplace. It is our contention that productspecialization, commitment, trust, co-operation, performance satisfaction and relation enabling technology play a significant rolein determining how participants act in the B2B e-marketplace.Theoretical FrameworkSeveral variables have been found in past research in relationship marketing, relational exchange and E-commerce to havesignificant influence in determining the behavior of participants in relational exchange. CommitmentPast research in marketing have recognized the importance of commitment in buyer-seller relationships. (Anderson, Lodish, andWeitz 1987; Anderson and Weitz 1990; Jackson 1985; Dwyer, Schurr, and Oh 1987; Moorman, Zaltman, and Deshpande 1992).Commitment is an important variable in discriminating between ‘stayers and leavers” (Mummalaneni 1987). Hardwick and Ford(1998) point out that commitment assumes that the relationship will bring future value or benefits to the partners. There is littledoubt that commitment is a critical variable in measuring the future of a relationship in B2B e-Marketplace.  Han and Wilson(1993) report that technology contributes to increasing the commitment to the relationship. Systematic sourcing involvesnegotiated contracts with qualified suppliers. Because the contracts tend to be long term, the buyers and sellers often develop closerelationships. In spot sourcing, the buyer's goal is to fulfill an immediate need at the lowest possible cost. Commodity trading suchas for  oil, steel, and energy exemplifies this approach. Spot transactions rarely involve a long-term relationship with the supplier;Salam et al./Relationship Marketing and B2B E-Commerce2001  Seventh Americas Conference on Information Systems 893in fact, buyers on the spot market often don't know whom they're buying from (Kaplan and Sawhney 2000)  Hence from thisperspective, we propose that there seems to be commitment that  is more dynamic and performance dependent between the buyerand seller in the B2B  e-Marketplace.TrustMost definitions of trust involve a belief that one relationship partner will act in the  best interests of the other partner. Despitethe benefits to buyers, sellers and brokers, the public e-Marketplaces formed by Fortune 500 buying consortiums have notachieved the participation and success expected by participants. Success or failure is not technology related but rather dependenton participant expectations and reactions. For competing entities to relinquish control and to come together to build a largerpurchasing entity requires extensive compromise. Desire to keep proprietary information private and to demonstrate loyalty tocertain suppliers are slowing the growth of some online exchanges (Information week, 2000). In order to create a virtual enterpriseand streamline entire value chains of all participants, companies creating or participating in these public e-Marketplaces must nowtrust their competitors with a significant amount of proprietary information. Cultural transformation of this magnitude will nottranspire overnight (EC Cubed Inc, 2000). For example, with entire enterprise resource planning (ERP) systems interfaced to theWeb, anyone- even competitors-can gain access to sensitive information such as inventory levels or product availability data.Looking at “shareable but sensitive information” from a “we’re in this together” perspective, it is easy to see that trust is afundamental requirement (Ecommerce Times, 2000). For example, BMG labels and distribution partners worried aboutconfidentiality and use of information from the site, and they wanted to keep pricing and ordering details from competitors. BMGCentral requires that users sign legally binding agreements not to misuse information from the site (PC Week, 1999).  Hence wepropose that trust will influence co-operation and  commitment, which in turn will determine the buyer-seller relationship in theB2B  e-market place. CooperationCooperation has been defined as similar or complementary coordinated actions taken by firms in interdependent relationship toachieve mutual outcomes or singular outcomes with expected reciprocation over time (Anderson and Narus 1990).  The interactionof cooperation and commitment results in cooperative behavior allowing the partnership to work ensuring that both parties receivethe benefits from the relationship. Many industry leaders are also predicting that the nature of the relationship will change as B2Be-Market places mature. As organizations move online, information will become available immediately thereby  forcingrelationships between businesses and their partners, distributors and customers to evolve based on performance rather than solelyon loyalty and past relationship. Hence,  co-operation between  the buyer and seller will come to depend more on performancerather than past relationship (EC Cubed Inc, 2000).  The degree of co-operation in the B2B  e-marketplace will depend largelyon the type of market as well.Vertical markets will demand more co-operation compared to the Horizontal markets because of the nature of the products tradedin these markets. The  vertical electronic hubs are characterized by domain-specific content and domain-specific relationship.Consider an electronic hub like SciQuest that mediates between buyers and sellers in the laboratory and scientific equipmentmarketplace. The founders of these electronic marketplaces had extensive industry experience and relationship with key buyersand suppliers (Kaplan and Sawhney, 1999). So the cooperation will be different based on the type of market (vertical vs.horizontal) and  the type of transactions that transpire in these marketplaces. Hence, we propose that the co-operation in the B2Be-marketplace will depend on the trust and that co-operation, in turn, will determine the buyer-seller relationship in the electronicmarket place. Performance SatisfactionPerformance Satisfaction is a critical variable in business relationship.  Especially, e-Marketplace makes information availableimmediately, forcing relationships between businesses and their partners, distributors and customers to evolve based onperformance rather than solely on loyalty and past relationships. Partners, especially sellers, must deliver high-level satisfactionon the basic elements of the business transaction. Buyers need to satisfy their partner’s business needs or they risk becomingmarginalized.  Performance satisfaction is the degree to which the business transaction meets the business performanceexpectation of the partner. Performance satisfaction includes both product specific performance and non-product attributes(Wilson, 1995). With the increase in the complexity of the buyer –seller relationship we propose performance satisfaction willdetermine cooperation and  commitment. And the impact of performance satisfaction on the buyer-seller relationship will bemediated by product specialization. Electronic Commerce894 2001  Seventh Americas Conference on Information SystemsSciQuestChemdexeSteelPaperExchange.comProduct SpecializationLOW HIGHComplexityofRelationshipHIGHLOWFigure 1.  Complexity of Relationship and ProductSpecialization in B2B E-MarketplaceTrustRelationEnablingTechnologyBuyer-SellerRelationshipin theB2BE-MarketplaceCommitmentCooperationProductSpecializationPerformanceSatisfactionFigure 2.  Preliminary Research Model of Buyer-SellerRelationship in the B2B E-MarketplaceRelation Enabling TechnologyRelation enabling technology means the specificity of technology investments that allows business partners to enable and enhanceexisting relationships. It may range from product level technology investments to the linking of computer and communicationssystems. The creating of shared technology using CRM software has been found to strain a relationship in the early stages of thedevelopment of the technology in the e-Marketplace but inevitably it contributes to a stronger relationship when the technologyis up and working (Vlosky and Wilson 1994). Without the ability to easily exchange valuable relation and performance  specificinformation contained in disparate systems owned by different business partners (along the e-supply chain), the value of therelationship is lost. So we propose that relation enabling  technology will add value to the buyer-seller relationship in this dynamicelectronic business environment by enhancing cooperation, commitment and performance satisfaction. Product SpecializationProduct specialization is a mediating construct inrelational exchange. Nature of the product traded in theelectronic market place is important in determining thebuyer-seller relationship. As we know vertical marketshave an industry focus and the products are morespecialized. The relationship here is generally more longterm between the buyer and seller based on the type oftransaction taking place.  The complexity of therelationship increases with product specialization. Usuallyvertical markets start out by automating and hosting theprocurement process for a specific vertical, and thensupplement their offerings with industry-specific content(Kaplan and Sawhney 1999). In horizontal markets, theproduct is generally more commodity type and is dealtmore across different industries. The commodity e-markets help maintain relationship between the buyer andsellers, making it easy for them to conduct businesswithout negotiating contracts or otherwise hashing out theterms of relationship.Proposed  Research ModelBased on the discussion above, we propose apreliminary research model (See Figure 2). Each of thearrows indicate a proposition and correspondingrelationship among the constructs.Conclusion In the next phase of the research, the proposed modelwill be enhanced  and a pilot study will be conducted totest the developed instrument prior to large scale datacollection to test the research model.ReferencesAvailable upon request.

Relationship Marketing and B2B E-Commerce: Redefining the Traditional Buyer-Seller Relationship in the Dynamic B2B E-Marketplace Environment

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Relationship Marketing and B2B E-Commerce: Redefining the Traditional Buyer-Seller Relationship in the Dynamic B2B E-Marketplace Environment

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