Effects of Supplier Reliability and Benevolence in Business Marketing

Abstract

The authors address the important issue of how supplier behavior in terms of reliability and benevolence creates positive and negative affect, influences customer satisfaction, and subsequently behavioral intentions to be loyal to the supplier. Recent research suggests that affective responses are important, but has mainly focused on products' performance in consumer markets. The authors extend past research by examining affective and cognitive responses to suppliers' performance in an industrial context. In a study of 150 established buyer–seller relationships in the industrial telecommunication market, they found that customers' affective responses to supplier reliability were different from their responses to supplier benevolence. Low supplier reliability was found to create negative affect, while high supplier benevolence created positive affect. Supplier reliability showed a strong positive effect on satisfaction with the supplier, which subsequently increased loyalty. Supplier benevolence appeared to have no direct effect on overall satisfaction, but was found to influence customer loyalty indirectly through positive affect. Thus, both cognitive and affective processes mediate the effects of supplier reliability and supplier benevolence on loyalty.