Preferential Customer Treatment by Suppliers

Due to an increased competitive condition in high-skilled supply markets, buying firms increasingly find themselves competing with their rivals for the best suppliers available in a certain field. Due to the scarcity of such suppliers, the latter may not dedicate their resources equally to all customers and become highly selective. As a consequence, buying firms start to recognize that it is essential for future success to secure their key suppliers' benevolence, as suppliers tend to...
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Due to an increased competitive condition in high-skilled supply markets, buying firms increasingly find themselves competing with their rivals for the best suppliers available in a certain field. Due to the scarcity of such suppliers, the latter may not dedicate their resources equally to all customers and become highly selective. As a consequence, buying firms start to recognize that it is essential for future success to secure their key suppliers' benevolence, as suppliers tend to grant their favourite customers a more preferential treatment than they concede to other customers. The research in this thesis is aimed at contributing to and expanding the academic knowledge on preferential customer treatment by suppliers. More specifically, it explores the benefits of preferential customer treatment by suppliers. Motivated by its relevance in practice, special emphasis is put on investigating the antecedents of preferential customer treatment and how suppliers' behaviour can be influenced by buying firms in a beneficial way. On a theoretical level, we deduce customer attractiveness, supplier satisfaction and preferred customer status as determinants of a suppliers' decision-making behaviour regarding the reward of preferential treatment to selected customers. On a more operational level, we identify the drivers of these determinants and show how customer attractiveness, supplier satisfaction and preferred customer status can be fostered by buyers. Through the quantitative and qualitative research performed throughout this dissertation, we researched deeper into the factors influencing supplier behaviour, and were able to unveil valuable results both for practice as well as for theory. This thesis provides a fruitful ground for further research and offers guidelines for buying firms on how to secure preferential treatment by suppliers and to create supply side-induced competitive advantages.