Buyer and Seller Relationship in the retail industry Essay

1. IntroductionFor many age vendees and marketers in the wear sell sector invite been battling to answer the question as to why it is difficult to build a steady blood with star another. This laughingstock be cod to the knowledge gap that in that location is in a lack of understanding on the issue. We aim to thoroughly fellow traveler the concepts of collaboration, In takeation Sharing, Joint kindred Effort, give Investments, Commitment and Trust, Satis itemion and cognitive operation with the different emptor seller whollyiances that exist in the clothing sell sector. Thus the problem being investigated is the unsteady kin that exists in the clothing retail sector mingled with purchasers and sellers.The necessitate forget be utilise a fall out consisting of 37 questions that give be issued to buyers in the industry. A s amperele size of 500 clothing companies pull up stakes be utilize in Cape T th class, South Africa which was selected to answer the s urveys. The research method is quantifiable in disposition. Thus the study aims to cargonfully examine how buyers and sellers interact at bottom the supply range of mountains human kind. Some papers fuck off touched on supply twine descent issues, but bring on not through with(p) the association with these particular concepts our study aims to use. The main objective of our research is to furnish buyers and sellers with the necessary knowledge to assist them as to why there ar certain imperfections in the affinity.2. Literature ReviewSome research has be d unmatchable on the concepts collaboration, selective information sharing, formulate descent childbed, utilize investments, dedication and trust, rejoicing and achievement, which gave an insight to how these variables develop, change and how they are maintained in the linguistic context of buyer-seller relationship. Therefore for the purpose of this study twelve (12) articles written in the context of buyer and seller relationship leave be used to watch and explain the supra mentioned concepts and how it is used throughout our research study.CollaborationCollaboration fannyful be defined as latest development in supply chain precaution which involves the mental process of working together with your suppliers, dividing line partners or clientele in achieving a common goal that benefits each parties (McLaren, Head & Yuan, 2002). Ellinger, Daugherty & Keller (2000) observed what exactly links merchandising and logistics within a lodges integration, as salutary as measures of effect that are both objective and subjective in nature. They order and place collaboration as a variable that regards a relationship in a progressive way in that it attachs sharing entropy and ideas and leads to partners functioning together.Information sharingMcLaren, Head & Yuan (2000) has identified information sharing as the exchange of important company information with your supply c hain partner for purposes that would assist each partner in the future. McLaren et al. (2002) discusses how a partnership among the buyer and seller potful be ripe for both parties where information sharing is of key impressiveness. Their findings were that, creating partnerships among buyers and sellers were beneficial for both parties and that the succeeder of information sharing depends on the type and size of the company as well as which mechanism they used for information sharing.Joint relationship effortJoint relationship effort refers to the unite determination and drive that is put into collaboration between buyers and sellers. Monczka, Petersen, Handfield & Ragatz (1998) argued for vitrine that when task organisation is performed between buyers and sellers, the buyer whoremaster past form a perceptive trust in their partners abilities which leave behind later form a solid trust in their relationship.Dedicated investmentsKnemeyer, Corsi & Murphy (2003) define d dedicated investments as particular resources and goods that are transferred to another party that is highly important towards producing services and products. They tried to strengthen that there are different aims of partnership development in logistics management by research done by previous researchers who have likewise done research on the existing topic and if there is in fact a difference between these levels. Their findings were that the more trust there is within the relationship, the more partners invest in the relationship which direct increases dedicated investment.Commitment and trustCommitment refers to buyers and sellers agreeable themselves and maintaining a working relationship in a way that give benefit both their own organisation and the company they have an association with. Trust refers to the reliance, surety, trustfulness or ability in a person or thing. In this fact, it is having the reliance, surety, confidence or ability in the working relatio nship of one or more organisations. Mohr and Spekman (1994) was the first to find that trust and trueness are of maximum importance in a buyer seller relationship, and that these performers lead to the success of the relationship.Satisfaction and functioningSatisfaction underside be defined as referred to Mohr & Spekman (1994) as the completion of a task by which the bear on party is pleased with the quality and storey of work carried out and it meets the precedent set by the partners. Performance on the other hand can be defined as the completion of a task by a degree higher than specifications set out by the mortal involved. Mohr & Spekman (1994) argued that the buyer-seller relationship is a partnership which gene judges satisfaction when surgical procedure expectations have been graspd. A study had been conducted and showed that freight and co-ordination are positively associated with satisfaction and an increase in profits would bring about satisfaction among those parties involved in the supply chain3. Research HypothesesThe hypotheses are constructed with a purpose of assisting in answering the research question, which is seeks to find The Nature of Buyer-Seller Relationships in the Retail Sector. establish on the review of the relevant literature, our hypotheses are based on virtually of the important variables that exist in the supply chain relationships. The relationship variables focussed on are commitment and trust, performance, satisfaction, joint relationship effort and collaboration, and will be shown using the relevant hypotheses. These relationships form the basis of the research propositions that will be tested in the duration of this study. H1 Commitment and trust has a positive impact on collaboration. Since pull partners make an effort to achieve the goals of their employment relationship, high levels of commitment are al or so likely to get out a good collabo regularised relationship. H2 Performance has a positive impact on collaboration.The strength of collaboration in a supply chain relationship depends on the power of the chain performance defraud-run (performance within one year), medium-term (performance over one to three eld) and long-term (performance over deuce to cardinal historic period). H3 Satisfaction has a positive impact on collaboration.The achievement to which the buyers and sellers in the supply chain relationship are satisfied, determines the strength of their relationship. Thus, when both parties are satisfied with the collaboration, their relationship will produce good results. H4 Joint relationship effort has a positive impact on collaboration. By engaging in a joint relationship effort that involves sharing resources and capabilities, buyers and sellers can achieve a profitable collaboration that they cannot create alone.4. Research methodologyAn exploratory-descriptive study was conducted to write this research wrap up card. The context selected for this study cerebrate on the clothing retail sector. The unit of outline in this study was the nature of buyer and sellerrelationship in the clothing retail sector. We focused on the buyers perceptions of the relationship as we were unable to bundle up data from both buyer and seller. Even though having data smooth from both parties would have been more beneficial, time and finances were a unobtrusiveness and had to be taken into consideration therefore it resulted in focusing on one side of the relationship. Internet searches of various clothing companies were compiled. Each company was contacted by telephone so that we would be able to speak directly to a clothing buyer. They were notified beforehand as to the purpose of this study and that their liaison would be fundamental in completing this research report.The clothing buyer had the choice as to receiving the questionnaire via e-mail or an interview. Most questionnaires were sent via email as buyers had other commitments as well an d preferred this form of communication. A sum of 500 questionnaires was sent to various companies within the clothing retail sector, of which, only 106 ( solution rate of 21%) resolutions were receive that was used for analysis. This response rate was lower than we had stopd but we had to work with the data provided and continue the process as it was a busy period for most buyers at that time. The surveys were coded and then uploaded on a spreadsheet as it was simpler to analyse the data and descriptive statistics had been implement to construct the necessary charts that would conclude the findings. The following chart was designed to exposit the response rate of the survey. elaborate 1 Percentage of Responses Coded5. Data analysis and FindingsIn this section of the report there will be a detailed discussion on the data collected in the survey as well as a representation of the findings. There will be a detailed analysis of the hypothesis tested and overly an explanation of h ow the findings were derived. To complete the report 500 surveys were distributed to companies across South Africa. solely 106 of the companies responded but there were a identification numerate of biases. With regards to the nature of the relationship with supplier 5 answerers didnt answer, under the sections joint relationship effort, dedicated investments and commitment and trust there was 1 respondent who didnt answer the questions. chthonian the satisfaction section 7 answers were left blank and 2 of the questions were answered with incorrectly. below the performance section 8 answers were left blank.The following table was designed to displaying the mean, median, mode and range. Below is the table 1 showing all the data. esteemMEDIANMODERANGE1.NO. YEARS AT smart set8.73809575382.NO. YEARS IN authorized POSITION6.62948241373.NO. YEARS WITH provider12.016101060Table 1 Mean, median, mode, range, standard discrepancyThe first actors line in the table 1 above illustrate s the number of years the respondent has been with the company. This information shows that the average nitty-gritty of years a respondent has been with the company is 8.738095 years, the middle frequent response was 7 years, the most frequent response was 5 years and the difference between the respondent who has been with the company the least amount of years and most amount of years is 38 years. Since the respondents have a number of years with the company it message that they are familiar with the companys way of blood, how they deal with suppliers, who all the suppliers are and also the type of relationship they have with the suppliers.The second row illustrates the number of years the respondents have been in the company. It shows that the average amount of years a respondent has been with the company is 6.629482 years, the middle frequent response was 4 years, the most frequent response was 1 year and the difference between the respondent who has been with the company the l east amount of years and most amount of years is 37 years. The high number of years that some of the respondents have been in their current positions gives an indication the information assumption is reliable and that it will aid in answering the question at hand.The third row depicts the number of years the company has spent with the supplier. It shows that the average amount of years a respondent has been with the company is 12.016 years, the middle frequent response was 10 years, the most frequent response was 10 years and the difference between the respondent who has been with the company the least amount of years and most amount of years is 60 years. The high number of years with same supplier shows that the information collected depicts a mature relationship between the buyer and the seller. Seeing that the relationship is matured the main focus of both the buyer and the seller would then be to continue to build on the relationship so that they can be in headache for even mor e years tocome.The following chart illustrates the position of the respondents which in turn goes with the number of years the respondents have been in their current position. It shows that 5% are chief executive officers, 1% COOs, 7% directors, 10% sales managers or supervisors, 12% other employees and 48% buyers. The fact that such a high number of the respondents are buyers displays that the questions answered are sooner accurate since they have a good understanding of the relationship with the supplier. The buyers best understand the relationship with the supplier and since the study at hand is looking at the collaboration of buyers and sellers, the information gathered will have a great impact in answering the given hypothesis. Figure 2 Current positionCommitment and TrustFigure 3 microscope stage of respondents to questions about commitment and trustDescriptionThe above data represents responses pertaining to questions about commitment and trust amongst buyers and their sup pliers in supply chain relationships in the clothing sector. The graphical record illustrates whether the buyers agree or disagree to the extent of commitment they have with their suppliers. The x-axis of the graph represents the scales between potently disagree and potently agree. Meanwhile, the y-axis of the graph represents the response scores of the buyers.AnalysisWhen assessing the data, it is evident that seven nose candy and forty one (741) responses were obtained in the commitment and trust section of the questionnaire. taking a closer look at the responses, it is evident that 4% of the respondents powerfully disagree that commitment and trust have a positive impact on collaboration. Meanwhile, 6% of the respondents have a electroneutral opinion, and 90% of the respondents powerfully agree to the questions.The low 4% might have been supported by the fact that their companies are in business on a short-term basis. Thus, they do not foresee the business relationship cont inuing for a long time, really little investment has been injected to their relationship, thus commitment is very low. The slowly rising 6% response rate could have been due to the fact that buyers are not certain where their loyalties lie with that certain supplier. other factor could be because they are s bank in early business with the supplier, so the suppliers commitment and trust to the buyers company have not reached maximum levels yet. The very high response rate of 90% can be influenced by various factors.The supplier is genuinely concerned that the buyers company succeeds buyers expect the business relationship to continue for a long time the buyers are committed to their supplier effort and investment have been made to build their relationship they expect the relationships to strengthen over time, etc. These factors prove that these buyers support the hypotheses stated, that commitment and trust have a positive impact on collaboration. Therefore, this data proves Mohr a nd Spekman (1994) correct when they found that trust and commitment are of utmost importance in a buyer seller relationship, and that these factors lead to the success of the relationship.PerformanceFigure 4 Degree of respondents to questions about performanceDescriptionThe graph depicts the responses of clothing buyers to four questions relating to performance being a factor of a successful collaboration among buyer and seller relationships. The horizontal axis(x axis) illustrates the Likert scale from 1 7 which ranges from powerfully disagree to powerfully agree. The vertical axis(y axis) depicts the score, which is the cumulative responses veritable from the clothing buyers. The above graphical representation shows the movements of responses to a set of questions aimed at performance and just by glancing at the graph one can already notice that most respondents (about 74%) strongly agree that performance has a positive impact on collaboration. AnalysisWhen assessing the data it can be seen that four hundred sixteen (416) responses were received that answered this section of the questionnaire. however on a scale of 1 3, 12% respondents strongly disagreed with the apprehension of performance enhances collaboration, 14%(scale 4) were neutral and 74 %( scale 5 7) strongly agreed on most of the questions that had been asked. The reasons that may have led to a 12% response rate could be that the buyers never had one focal supplier or were not in a long business relationship to determine if the relationship affected the businesss boilers suit performance.Furthermore, the 74% response rate may have led to buyers agreeing with H2 performance has a positive impact on collaboration, as their relationship with the seller may have contributed to the increased performance of the overall relationship and company. separate factors contributing to the 74% response rate might have been that the relationship, decreased cycle times, improved order processing veri ty as well as punctual delivery of goods, this in turn increased the accuracy of forecasts that may have been conducted. According to Ellinger, Daugherty &Keller (2000) performance may be conceptualized as the extent to which the firms goals are achieved, and as illustrated in the above graph the percentage of respondents that strongly agreed already indicates that performance aids in positive collaboration which in turn would cater firms goals to be met effectively.Joint Relationship EffortFigure 5 Degree of Respondents to questions about joint relationship effortDescriptionThe above exclude graph describes the number of respondents (clothing buyers) that disagree or agree that joint relationship plays an important factor in the buyer and seller relationship in the clothing sector. Respondents had to take between a scale of 1 till 7 by which 1 stipulates strongly disagree and 7 refers to strongly agree. Thereafter the data was grouped together according to the number of indiv iduals that did involve between the scales of 1 till 7. Respondents were asked three questions relating to joint relationship effort. These were as follows , whether the firm and supplier has 1) joint teams 2) conduct joint planning to anticipate and resolve operational problems and whether they make 3) joint decisions about improving overall cost efficiency. When looking at the results, one can see that 49 respondents had a neutral view regarding joint relationship and 74 of the respondents strongly agrees that joint relationship plays an important role in the buyer and seller relationship.AnalysisWhen assessing the data it can be seen that 307 responses were received that answered this section of the questionnaire. even so on a scale of 1-3, 25% respondents strongly disagreed with the notion of joint relationship that enhances collaboration, 16% (scale 4) were neutral and 62% (scale 5-7) strongly agrees on most of the questions that had been asked. The reason that has led to a 25% response rate can be due to buyers and suppliers does not have joint teams and thus do not plan together as a team. Therefore they do not know the benefits of having joint teams.Therefore this data show case a broad view regarding joint relationship effort as being an important variable as the graph has an upward trend. Furthermore, the response rate of 62% may have led to buyers agreeing with H4 joint relationship effort has a positive impact on collaboration, as their effort and commitment in creating joint teams and planning together might have improved collaboration between buyer and supplier.SatisfactionFigure 6 Responses to Satisfaction in the Clothing IndustryDescriptionThe above graph describes the number of respondents (clothing buyers) that disagree or agree that satisfaction plays an important factor in the buyer and supplier relationship in the clothing sector. Respondents had to choose between a scale of 1 till 7 by which 1 stipulates strongly disagree and 7 refers to strongly agree. Thereafter the data was grouped together according to the number of individuals that did choose between the scales of 1 till 7. Respondents were asked eight (8) questions relating to satisfaction.The questions were as followed whether the buyer was satisfied with the relationship in terms of 1) coordination of activities 2) participation in decision making, 3) level of commitment 4) level of information sharing 5) management of activities 6) profitability 7) market destiny and 8) sales growth. When looking at the results, one can see that 153 respondents had a neutral view regarding satisfaction and 448 of the respondents strongly agrees that satisfaction plays an important role in the buyer and supplier relationship.AnalysisWhen assessing the data it can be seen that 1508 responses were received that answered this section of the questionnaire. However on a scale of 1-3, 6% respondents strongly disagreed with the notion of satisfaction enhances collaborati on, 10% (scale 4) were neutral and 84% (scale 5-7) strongly agrees on most of the questions that had been asked. The reason that led to a 6% response rate can be due to buyers and suppliers having a young business relationship and thus not reaching satisfaction levels as yet. When looking at the data, the response rate of 84% may have led buyers agreeing with H3 satisfaction has a positive impact on collaboration.This can be due to respondents identifying market share and sales growth as being two of the most important factors being satisfied by the supplier. This relates to a study done by Mohr & Spekman (1994) as they identified the completion of a task by which the involved party is pleased with the quality and degree of work carried out and it meets the standard set by the partners, market share and sales growth being the standard set by the buyer.6. endAs mentioned above the problem being researched was the knowledge gap between buyers and sellers perspective of the nature of the supply chain relationship. The research study conducted on the nature of buyer-seller relationship in the clothing industry was a long procedure that involved plentiful of consultations and analysis of the data obtained. However, we have cerebrate that our data findings have committed to the hypotheses mentioned in the research report. As antecedently mentioned time and finances were major constraints for the duration of the study hence the bleached response rate of 21%.Some of the other constraints were the buyers having their own responsibilities because of the short time frame given in which to complete the survey. In addition, 50% of the buyers were reluctant to answer some of the questions as they contained confidential company information. Furthermore, the report only focused on the buyers perspective of the relationship. The sellers perspective was not taken into account therefore a future study using this report in combination with conducting a survey of the se llers point of view can lead to a better understanding of the buyer seller relationship.BibliographyCannon, J.P. Doney, P.M. 1997. An scrutiny of the Nature of Trust in Buyer-SellerRelationships.Journal of Marketing, April, pp.35-51. Dahlstorm, R. McNeilly, K.M. Speh, T.W. 1996. 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