Cust. Need. and Solut.

(2015) 2:193–208
DOI 10.1007/s40547-015-0040-5

PERSPECTIVES

Business-to-Business Buying: Challenges and Opportunities

Rajdeep Grewal & Gary L. Lilien & Sundar Bharadwaj & Pranav Jindal &
Ujwal Kayande & Robert F. Lusch & Murali Mantrala & Robert W. Palmatier &
Aric Rindfleisch & Lisa K. Scheer & Robert Spekman & Shrihari Sridhar

Published online: 7 March 2015

# Springer Science+Business Media New York 2015

Abstract In this article, we lay out the challenges and research assessed January 2015) statistics, business-to-business (B2B)
opportunities associated with business-to-business (B2B) buy- transactions account for $10.7 trillion, or nearly 42 %, of total
ing. These challenges and opportunities reflect four aspects of U.S. revenues. Because the United States accounts for roughly
B2B buying that the Institute for the Study of Business Markets 22 % of the global economy (http://en.wikipedia.org/wiki/
(ISBM: www.isbm.org) has identified through a Delphi-like pro- World_Development_Indicators, 1 July 2014), global B2B
cess: (1) the changing landscape of B2B buying, (2) the increas- buying reasonably is expected to approach $50 trillion in
ing sophistication of sellers, (3) the impact of technological transactions (i.e., $10.7 trillion/.22). Understanding these
changes, and (4) the increasing importance and growth of emerg- transactions—including the forces that drive them and how
ing markets. For each of these four areas, we identify the relevant changes in the environment affect them—is essential to the
background, key issues, and pertinent research agendas. organizations that participate in this enormous global
marketplace.
Keywords B2B buying . Sophistication of sellers . In addition, B2B buying behaviors differ substantially from
Technological changes . Emerging markets consumer buying behaviors, in several ways. First, B2B buy-
ing entails satisfying derived demand. Organizations purchase
products to meet the needs of their buyers. Impulse-buying is
rare; clearly stated, objective criteria, such as meeting produc-
1 Introduction: Emerging Challenges for B2B Buying tion needs and schedules at a minimum cost, usually drive the
choice process. Second, because more than one person is in-
According to the most recently published U.S. Department of volved in the purchase decision process, purchasing managers
Commerce (2010; http://www.census.gov/econ/estats/2010, rarely make a buying decision independent of the influence of

R. Grewal (*) : P. Jindal M. Mantrala : L. K. Scheer

Kenan-Flagler Business School, University of North Carolina, Robert J. Trulaske, Sr. College of Business, University of Missouri,
Chapel Hill, NC, USA Columbia, MO, USA
e-mail: grewalr@unc.edu

G. L. Lilien : S. Sridhar R. W. Palmatier

Smeal College of Business, Pennsylvania State University, Foster School of Business, University of Washington, Seattle, WA,
University Park, PA, USA USA

S. Bharadwaj
Terry College of Business, University of Georgia, Athens, GA, USA
A. Rindfleisch
College of Business, University of Illinois at Urbana-Champaign,
U. Kayande
Champaign, IL, USA
Melbourne Business School, University of Melbourne,
Melbourne, Australia

R. F. Lusch R. Spekman
Eller College of Management, University of Arizona, Tucson, AZ, Darden School of Business, University of Virginia, Virginia, VA,
USA USA
194 Cust. Need. and Solut. (2015) 2:193–208

Table 1 Evolution of B2B buying research (Source: [31], p. 373)

Relationship Relationships Relationship models and network Integrative relationship Network models with
and dyadic Hutt and Reingen [23] models Cannon and incomplete data,
network marketing Turnbull and Valla [63] Perreault [10] Iacobucci multiplexity, dynamics
models concept and Ostrom [24] Van den Bulte and
Bonoma and Wuyts [66]
Johnston [8]
Bargaining Economic/ Multi-issue/ Behavioral economic models Process models of Agenda strategies with
models equilibrium multi-agent Raiffa [43], Neslin and negotiations buying teams Patton and
models—two models Greenhalgh [39] Balakrishnan and Balakrishnan [41]
party/single issue Keeney and Eliashberg [6]
Nash [38] Raiffa [29]
System and Arrow’s Large system Operational and group choice Large system model Extension of buying
group impossibility models Sheth models Choffray and Lilien [12], expansion Johnston center—across firm
choice theorem Arrow [55], Webster Corfman and Gupta [14], et al. functions and
models [4] Buygrid and Wind Steckel [59], Rao and Steckel [44], [28] Spekman and across the supply
framework [67] Wilson et al. [69] Gronhaug [57] chain Johnston and
Robinson et al. Chandler, [27]
[47]
Timeline 1960s and earlier 1970s 1980s 1990s 2000 and later
(rough)

other stakeholders, whether within the buying organization or the Institute for the Study of Business Markets (ISBM; www.
external to it (e.g., consultants, supplier firms, other firms in isbm.org) has identified four aspects that are of great concern
the industry). The group that makes the purchasing decision in to practitioners and offer the potential for fruitful academic
turn is embedded in a network of individual and organization- study:
al relationships. Third, because of the high dollar volume,
number of stakeholders involved, and often complex, techni- 1. The changing landscape of B2B buying
cal nature of the offerings under consideration, the B2B pur- 2. Increasing seller sophistication
chasing process usually takes substantial time and may in- 3. The impact of technological changes
volve extensive bargaining and negotiations. The extended 4. Increasing importance and growth of emerging markets
B2B purchasing process (which can take months or years)
and its interactive nature (involving multiple members of both The ISBM hosted a mini-conference in Orlando, Florida, in
the buying and selling organizations) make it difficult to spec- February 2014, to bring together leading B2B scholars who
ify the functional relationships between the marketing efforts could exchange ideas in each of these domains and develop a
of a supplier and the responses by a buyer. Fourth, because research agenda for B2B buying. What follows are perspec-
B2B buyers are more interested in satisfying their total need tives on each of these four important domains. We provide
than in buying any specific product, the offering can be com- some background, identify key issues, and propose an associ-
plex and include training, technical support, financing, deliv- ated research agenda for each case. We hope in turn that this
ery terms, and so forth, such that neither the buyer nor the article focuses attention on and leads to further research in
seller can easily determine which offer is best for the buyer. these important domains.
In Table 1, we trace some major trends in B2B buying
models, which reveal that many foundational models, devel-
oped three or four decades ago, are static and focused on a
2 The Changing Landscape of B2B Buying2
North American or European institutional structure. However,
environmental forces emanating from technological advances
Centralization of buying at a global level has enhanced selling
and globalization are affecting the nature of B2B buying and
firms’ focus on global key account management practices.
challenging the validity of these models, along with their un-
Enhanced buyer knowledge, power, and discretion shift the
derlying assumptions.
balance of power away from sellers; the most important
Accordingly, Wiersema’s [68] B2B agenda cites the need
buyers (in terms of growth, volume, or otherwise) are often
to focus on B2B buying as one of the three top domains of
the most sophisticated and demanding, and the composition of
concern for B2B marketers.1 Through a Delphi-like process,
the buying organization also seems to be changing, to include
1 2
The other two domains are B2B innovation and B2B customer This section was primarily developed by Lisa K. Scheer and Robert F.
analytics. Lusch.
Cust. Need. and Solut. (2015) 2:193–208 195

a broader representation and weight of non-procurement func- These processes are contemporaneous rather than sequen-
tions. Yet no clear picture has emerged regarding what is driv- tial, with activities ongoing in each phase. Buying activities
ing such changes or, in turn, how these changes might affect continue while other processes progress, and changes occur
buying processes. only when a new buying decision has been confirmed. Data
are gathered and key metrics examined constantly to evaluate
current buying activities. Sales proposals are examined, and
2.1 BuyGrid Dimensions: Revisited and Adapted buyer employees or hired consultants continually scan the
environment for emerging opportunities. The degree to which
For nearly five decades, the BuyGrid model ([47]; see Fig. 1) buyer resources are invested in each process changes with the
has proven useful for understanding B2B buying, yet more varying internal or external factors. For example, regulations
recent macro-trends have significantly altered the B2B buying force buyers to document their buying activities more fully,
process [71], at an accelerating rate of change. First, political investigate suppliers more extensively, and reevaluate profit-
initiatives and regulations such as the U.N. Global Compact able current buying relationships using new criteria. Buyers’
on Child Labor, U.S. legislative provisions regarding interna- ability to compare prices instantaneously prompts them to
tional accounting standards (i.e., the Dodd–Frank Act), and seek ways to squeeze supply chain costs. Globalization also
the EU’s REACH (Registration, Evaluation, Authorization, introduces proposals from new suppliers, generating more ex-
and Restriction of Chemicals) and RoHS (Restriction of Haz- tensive strategic reassessments. When buyers and sellers gath-
ardous Substances) standards for hazardous substances pose er extensive data, it alters their priorities and the nature of their
new, costly challenges that require buyers to carefully vet, negotiations. Developments in automation, the Internet, and
document, and monitor global networks of suppliers, to an information technologies also enable fully mechanized buying
unprecedented degree. Second, the evolution of information systems and face-to-face collaboration across vast distances.
and communication technologies has major implications for In addition, BuyGrid’s buying center concept highlights the
B2B buying [33]. Sharing information previously demanded importance of relevant buyer personnel. By building on this
costly, time-consuming efforts; now it can be transmitted at concept, we can glean insights from identifying the constella-
minimal costs and instantaneously, without geographic or tion of buying participants involved in each buying process,
temporal bounds. New technologies enable electronic market- including buyer personnel, individuals and organizations ex-
places, data interchanges, and rich interactive collaborations ternal to the buyer (e.g., current and prospective suppliers,
among distant entities. Soon, physical objects embedded with auditors, regulators), and inanimate entities and systems that
digital processors will interface in the BInternet of Things^ too perform activities formerly undertaken by people. The parties
( s e e h t t p : / / s t o r e . e l s e v i e r. c o m / p r o d u c t . j s p ? i s b n = who confirm the buying decision and set the parameters for
9780124076846). These and other substantive business buying arrangements often differ from those who implement
environment changes call for a revisitation and update to the the buying activities. Analysts evaluate buying activities and
BuyGrid. pass their conclusions on to managers, who reassess the buy-
The BuyGrid’s sequential buying process indicates a com- ing decision. Within negotiated parameters, buyer systems
prehensive series of decision-making stages (Bbuyphases^). may communicate directly with supplier systems,
Modern B2B buying instead comprises four ongoing process- implementing buying tasks without human involvement.
es: implementation, evaluation, reassessment, and confirma- The persons engaged in evaluation, reassessment, and deci-
tion. Implementation encompasses all actions undertaken to sion making; the system design teams responsible for estab-
acquire and receive goods and services directly, within the lishing mechanized buying systems; and the parties that im-
parameters of the current buying decision. Evaluation entails plement the buying activities are geographically located ac-
examining the conformance, effectiveness, and efficiency of cording to various criteria and come together only as needed
all buying activities implemented within the parameters of the and often virtually, using telepresence technologies.
deal, such as rating seller performance or tracking acquisition Despite the endurance of the BuyGrid classification of buy-
cost metrics. Reassessment is scrutiny of the foundations on ing situations as new tasks, modified rebuys, and straight
which current B2B buying decisions are based, including con- rebuys, the weaknesses of this model have long been noted
clusions drawn from the evaluation of current buying activi- (e.g., [70]). In an environment in which technologies create a
ties; changes to the buyer’s internal capabilities, needs, or global marketplace, it is more useful to consider the consis-
priorities; and external factors, such as emerging opportunities tency versus degree of divergence in the buying elements that
and threats, offers from potential suppliers, or evolving market constitute the characteristics of the buy. These buying ele-
or regulatory demands. This strategic reassessment then leads ments arise from four factors: (1) the goods and/or services
to confirmation of the buyer’s decision, whether as a renewal acquired, (2) the terms of trade, (3) the selling firm, and (4) the
or minor modification of the existing buying decision or else buying firm. The buyer can seek to acquire the same products,
the investigation, negotiation, and specification of a new one. similar products (e.g., new ancillary services, customized
196 Cust. Need. and Solut. (2015) 2:193–208

2.2 Modes of B2B Buying: Toward a New BuyGrid

As buyer–seller interdependence increases, the nature of the

buying relationships becomes more critical. In Table 2, we
summarize three B2B buying modes that vary in the relation-
ships between buyer and seller, the locus and nature of the
buying decisions and their implementation, and other
purchase-related factors.

2.2.1 Routinized Exchange Relationships

When acquired goods and services are consistent and predict-

able, routinized exchange relationships (RERs) are likely. In
RERs, buying activities involve repetitive, routine interactions
between authorized entities. The implementers enact standard
ordering, receiving, and replenishment procedures within
Fig. 1 The BuyGrid model
established parameters that have been devised by others,
who confirm the buying decision and delineate the domain
version of current product), or very different products (e.g., of authorized rebuying activities. Buying in RERs may be
co-production, service solution vs. goods purchase) than pre- undertaken by individual boundary spanners representing the
viously bought. The terms of trade also might be identical, buyer and the seller, but increasingly, these routine activities
vary slightly in several aspects (e.g., price, delivery location, are conducted by automated systems. In either case, RERs
payment policy), vary greatly in one aspect, or differ on all arise if the buyer and seller have a significant degree of inter-
terms. The buyer can deal with the same seller in exactly the dependence; the establishment of the RER buying system fur-
same way, the same seller through a different interface (e.g., ther increases this interdependence, particularly when it in-
new salesperson, electronic system), a new business unit of cludes systems integration.
the same seller, a new seller through the same interface (e.g., Many decisions are necessary before implementing a
follow a salesperson to a new company, same electronic mar- networked electronic buying system though, including the
ketplace but a new seller), or a new seller through a new specific goods and services to be acquired, the initial seller
interface. The buying firm may change the personnel involved partner(s) involved, specifications for authorizing additional
in the buying process, its buying interface, its corporate poli- partners, procedures for adding new products, which algo-
cies, and so on. rithms can implement buying activities, the parameters within
When considering the myriad buying elements, identical which automated buying operates, which factors trigger hu-
rebuys likely occur only through the implementation of pre- man intervention, and schedules for periodic human oversight.
viously negotiated and confirmed buying arrangements. On For ordering and some fulfillment activities (e.g., automated
the flipside, seldom does a buyer experience a completely distribution centers), machines, systems, and algorithms per-
new buying situation, with no consistency in the buying ele- form the tasks, supported by a human technical staff that mon-
ments. Thus, the most pertinent focus for our attention is an- itors ongoing processes, investigates exceptions, and exercises
alyzing (1) which buying elements are constant or in flux, (2) limited decision-making authority, within established param-
the degree of change in the inconstant elements, and (3) eters. At an extreme, RERs involve human representatives
whether the changes are sought specifically by the buyer or only in system creation, routine maintenance, and investiga-
seller, imposed by external parties, or occur naturally due to tion of exceptions or performance outliers beyond established
obsolescence or attrition. boundaries. As more physical goods gain Bsmart^ capabilities,
Although it is helpful to reconsider the BuyGrid’s dimen- the viability of RERs should increase for a wider variety of
sions as ongoing and possibly evolving buying processes, purchasing contexts.
including both human and inanimate buying participants, oth-
er elements also merit attention: increasing globalization, gov- 2.2.2 Organic Buying Relationships
ernment intervention in markets, value chain disruption, tech-
nological advances, and informed, empowered, demanding Some B2B buying contexts are not amenable to routinization,
downstream buyers. All of these elements promote greater so at the other end of the spectrum are organic buying rela-
interdependence between buyer and seller firms [71], suggest- tionships (OBRs), which require ongoing human involve-
ing the need to consider the diverse interorganizational rela- ment, interpersonal interactions, and adjustments between
tionships through which B2B buying occurs. buyer and seller firms. Examples of OBRs include integrated
Cust. Need. and Solut. (2015) 2:193–208 197

Table 2 Modes of B2B buying

Routinized exchange Transactional buying Organic buying relationships

relationships (RERs) operations (TBOs) (OBRs)

Buying Buying decision Strategic partner selection Tactical selection of vendor Strategic partner selection
processes confirmation and setting parameters for and negotiating terms of and selection of initial
operations deal buyer representatives
Buying activities Minimal or no variation in Range from no to extensive Extensive evolution in
implementation buying elements variation in buying buying elements and
elements buyer representatives as
needed
Buying activities evaluation Parties usually differ from Evaluation occurs Ongoing evaluation by buyer
entity implementing periodically by different representatives and
buying party oversight managers
Buying decision High relationship-specific Determination if extant Despite high relationship-
reassessment assets and conditions reveal specific assets, uncertainty
interdependence motivate increasing criticality of of goal achievement may
modifying than replacing focal product or specific require pursuit of other
RER supplier options
Locus of Locus of purchasing Centralized: complex Centralized for high-volume Centralized for corporate-
participants Decisions decisions regarding products, local for low- level supply partnerships;
resources to be acquired, volume products: spot local for regional supply
authorized sources, and markets, auction relationships: solutions,
parameters of standard purchases, simple product co-development, key
buying procedures or supply bids, ad hoc supplier-customer
automated processes buying activities, etc. partnerships, etc.
Locus of purchasing activities Centralized: enact buying Centralized for high-volume Multiple supplier–buyer
and implementation activities within products; local for other boundary spanner
established parameters; products: direct buying, interface points: ongoing
monitor ongoing reception of acquired activities to enact
processes, investigate resources for inventory or solutions, fulfill contracts,
exceptions. limited use, and evaluation of co-create value for
number of supplier–buyer acquisition cost and downstream customers,
interface points supplier etc.
Buy characteristics Complexity High Low to moderate Moderate to High
Novelty Low Moderate High
Importance High Low Moderate to high
Uncertainty Low Low to moderate Moderate to high
Time pressure Moderate to high Low Low to moderate

solutions (e.g., paying for miles of use rather than buying exist, but the development and implementation of an OBR
tires), buyer–supplier product codevelopment, and key ac- tends to increase both the buyer’s and the seller’s dependence
count relationships that enable the buyer to achieve custom- on its counterpart [30].
ized goods, enhanced services, more consistent supply, or cost For centralized buying decisions, advisory teams
savings through operational integration. Negotiations with so- representing diverse functions reassess buying decisions, con-
lutions providers likely remain centralized, because of the far- sider external and internal factors, and devise recommenda-
reaching organizational changes required to pursue solutions tions; final decision-making authority still typically resides
rather than simply buy goods. Codevelopment projects with with a single individual or small executive group. The imple-
critical suppliers often are centralized; codevelopment with a mentation of confirmed buying decisions unfolds over time,
niche supplier or that focuses on smaller-scale, market- requiring ongoing interpersonal contacts through numerous
specific innovations may be located regionally though. To interfaces between buyer and seller (e.g., buying and sales
customize goods and services for empowered, demanding, agents, distribution, and traffic managers). Managers of
evolving local markets, distributed buying that is located clos- boundary spanners evaluate the ongoing buying activities
er to these markets can lead to better detection of emerging and adjust the implementation plan. When buying deci-
trends and enhance capacities to secure authentic, reliable sions are decentralized to local levels, individuals often
supply sources. Prior buyer–seller interdependence might participate in multiple buying processes. For example,
198 Cust. Need. and Solut. (2015) 2:193–208

the party who makes buying decisions may differ from 2.3 Toward a Research Agenda
those who implement buying activities, but the same man-
ager likely evaluates current buying, reassesses the buying Various research possibilities arise from the four dimensions
decision, and confirms the current relationship or selects a of buying: implementation, evaluation, reassessment, and
replacement supplier. In some cases, this manager, and confirmation. In particular, we need descriptive research to
other boundary spanners, also implements the buying describe and understand the current state of buying, as sum-
activities. marized in the following potential research questions:

& Are there circumstances in which the four buying process-

2.2.3 Transactional Buying Operations es are not contemporaneous? What subactivities and enti-
ties are involved in each process?
Finally, buying may occur through transactional buying oper- & Are they decentralized physically but integrated virtually?
ations (TBOs), defined as one-time agreements that impose & Will charting the cast of characters—animate and inani-
neither obligation nor expectation on buyers and sellers to mate—involved in each buying process, across different
engage in future business. Examples include spot mar- contexts, reveal interesting differences or patterns?
kets, auctions, bids for specified goods or services, and & Can developing visual representations of the buying ele-
other ad hoc buyer–seller interactions. In contrast with ments’ consistency or variation reveal prototypical config-
the other modes, TBOs have a short time horizon: De- urations in which specific sets of elements tend to covary?
cisions are confirmed; components and aspects of the & When and where do we find these modes of B2B buying?
deal are finalized quickly, and fulfillment is completed & What market, macro-environmental, selling firm, and
shortly thereafter. Demand is unpredictable, or products buying firm factors are associated with each mode?
are relatively unimportant, so the tangible and intangible & Are there other modes?
investments required to create and operate a RER would & Can research offer support for the implicit conjectures and
not be warranted. The goods and services are not com- theorizing presented in Table 2, or will it uncover other
plex, novel, or important enough to justify organization- ways in which the modes are similar or differ?
al and personal investments to create, cultivate, and nur-
ture an OBR. Transactional buying tends to be central- Beyond descriptive assessments, B2B analytics research
ized for high-volume buys but local for low-volume, could model the performance implications of deploying dif-
low-cost buys. In TBOs, a single person may perform ferent modes of buying and the associated types of relation-
all buying processes, as long as performance metrics ships, of centralized versus decentralized buying decisions,
meet acceptable standards. Evaluation, reassessment, and of centralized versus decentralized buying activities. Sim-
and confirmation by a supervisor likely occur only on ulations might estimate the value-added contributions of dif-
a periodic schedule. ferent types of buying relationships, such as RERs or OBRs
In such TBOs, buyer–seller interdependence is low, and compared with TBOs.
investments in an RER or OBR cannot be justified by the In addition, empirical modeling or survey research should
importance of a product or the criticality of the partner. These consider whether unexamined contextual factors alter the ef-
TBOs also may occur in conditions of high interdependence fectiveness or efficiency exhibited by different buying partic-
asymmetry; the more dependent party may prefer an RER or ipants and in different modes of B2B buying. For example,
OBR, but its less dependent counterpart has the power to insist
on operating at a transactional level and thus can continually & What factors indicate that an automated RER will perform
scan for alternatives. We anticipate that, over time, a smaller better than a human-implemented RER?
share of buying will be conducted through these TBOs. As & In which conditions does local buying outperform central-
Internet competition grows, buyers and sellers increasingly ized buying activities?
seek to form RERs and OBRs to achieve competitive advan- & What performance indicators should inform comparisons of
tages that they could not obtain through transactional buying. the strengths and weaknesses of different buying modes?
This shift bodes a more strategic role for B2B buying, because
both RERs and OBRs are inherently longer-term decisions, As the strategic importance of buying and buying rela-
involving non-recoverable, relationship-specific investments. tionships increase, research attention to these and many
Furthermore, both RERs and OBRs highlight the need to in- other issues will offer significant potential to inform prac-
tegrate the structure and organization of the buying decision tice. Because B2B buying is an inviting area, in need of
strategically with its implementation. That is, a full accounting theory development and creative research, we hope this
of buying must include the difficulties and costs associated discussion prompts moves toward either a BuyGrid 2.0
with this implementation. or some other relevant framework.
Cust. Need. and Solut. (2015) 2:193–208 199

3 Increasing Sophistication of Sellers: The Trend toward 3.1.3 Survival of the Smartest
Solutions3
Both these pressures, together with a trend among buyers to
With few exceptions, B2B suppliers confront increasing buyer outsource their noncore activities, provide opportunities for
power, as more buyers source on a global scale and actively suppliers that understand how to cocreate value with buyers,
seek to reduce their supply base [51]. As a result, for many because they can differentiate themselves from competitors.
suppliers, a small subset of large buyers accounts for a dispro- Such Bsmartness^ is evident in Dow Corning’s decision to
portionate share of sales, such that these buyers constitute create the Xiameter brand to serve price-sensitive buyers, so
critical strategic assets for the suppliers. Viewing buyers as that its flagship BDow Corning^ brand could target buyers
strategic assets leads to the immediate consequence that sup- seeking solutions that cocreated value.
pliers must adopt a new mindset when dealing with key
buyers. In addition to seeking a more collaborative relation- 3.2 Ability-Based Trends
ship, suppliers increasingly are expected to cocreate value
with and for buyers, such that they move beyond standard cost 3.2.1 Increasing Network Thinking Capabilities
and quality improvements and seek to provide unique collab-
orative solutions. However, many traditional suppliers are not Rather than an internal focus, sellers now pursue cocreation,
well positioned to address the solution- and cocreation-related such that both the buyer and seller are responsible for bringing
challenges that require managing buyers as strategic assets new technologies to market. Such elaborate collaboration re-
[51]. Using Merton’s [37] motivation–ability framework, we quires new skills (e.g., relationship building) of the seller.
therefore attempt to identify and classify the trends that are Because buyer–seller relationships involve multiple contacts
moving sellers away from a product-centric view and toward a between firms (e.g., sales reps and purchasing managers, sales
more collaborative, relational view of customer solutions. managers and buyer financial officers, engineers in the two
firms), network thinking becomes more prominent; in addi-
tion to interfirm buyer–seller networks, networks within both
3.1 Motivation-Based Trends buyer and seller firms affect each specific relationship.

3.1.1 Global Competition 3.2.2 Increasing Buyer Knowledge

Competition on a worldwide level forces movements toward Advances in customer relationship management systems and
commoditization. For example, the commoditization of the other methods for obtaining deeper customer knowledge grant
personal computer (PC) industry was a major driver of IBM’s B2B firms greater ability to build collaborative relationships
decision to sell its PC business to Lenovo. Commoditization with key buyers. Such relationships go beyond the purchasing
trends in general stem from two related factors: First, buyers department, to include other functions and levels within the
seek to source products from the lowest cost suppliers, which buying organization, and thus lead to increasingly sticky con-
frequently are located in emerging markets, to reduce their nections. Buyers seek knowledge-based value from their sup-
purchasing costs. Second, many suppliers have failed to dif- pliers, who thus must drive interfirm relationship value.
ferentiate their products, so buyers focus on price, which re-
duces the supplier margins. 3.2.3 Improved Segmentation Skills

As segmentation skills improve (e.g., need-based segmenta-

3.1.2 Fiscal Pressures tion with Xiameter by Dow Corning), suppliers can better
differentiate solution-seeking buyers from price-seeking ones.
These pressures on margins also require suppliers to manage Suppliers must enhance their skills and ability to serve the
their portfolios of buyers better. Successful suppliers tend to segments they decide to target. For solution-seeking buyers,
focus on profitable and avoid unprofitable buyers. With this relationship-building skills are critical. For price-seeking
focus on profitable buyers, suppliers work to help buyers im- buyers, an analytics-based approach is needed, and skills with
prove their financial performance. That is, buyers seek sup- managing big data are paramount.
pliers not for their brand name or market share but for the
supplier’s ability to work closely with them to create win– 3.3 Research on B2B Solutions
win situations.
Three research streams have dominated prior literature on
3
This section was primarily developed by Sundar Bharadwaj and Robert B2B solutions. First, some studies seek to distinguish between
Spekman. product–service bundles [49, 53] and true solutions that tend
200 Cust. Need. and Solut. (2015) 2:193–208

to distinguish products and services [62, 64]. These latter cus- higher organizational level and involve stakeholders of more
tomer solutions typically involve outcome-based, contractual diverse functional backgrounds, with potentially conflicting
agreements that ensure specific performance achievements requirements. Therefore, fruitful research could investigate:
(e.g., number of miles instead of truck tires sold, tons of iron
ore excavated instead of earth-moving equipment bought, & How does the buying process differ between products and
flight hours instead of jet engines leased). solutions?
Second, environmental and firm-level factors might moti- & How does the selling process differ between products and
vate the adoption of services. For example, Reinartz and solutions?
Ulaga [45] note that firms suffering declining equipment sales & How does the interaction between the buying team and
increasingly focus on equipment installation and maintenance selling team differ between products and solutions?
contracts, such that their revenues from service contracts can & What is the role of branding in solutions selling? Do firms
far exceed their previous equipment sales. Other studies sim- use a single brand approach or adopt a cobranded/
ilarly document performance improvements due to such ingredient branding approach?
service-focused strategies (e.g., [16, 17]).
Third, research has attempted to identify ability-related fac- Because buyers may choose to acquire a complete solution
tors and the moderating conditions that determine their effica- from a single supplier or pursue it from multiple suppliers, to
cy. For example, Tuli et al. [62] develop propositions about leverage best-of-breed sets of components from each supplier,
supplier processes and buyer characteristics that may relate to and suppliers similarly may provide the complete solution or
customer solution effectiveness. Using a theory-in-use meth- collaborate with other suppliers to create a solution, some
odology, Ulaga and Reinartz [64] identify the resources and other research questions include the following:
capabilities necessary for the successful delivery of customer
solutions. However, a shift to solutions does not automatically & When should sellers collaborate in solution selling? What
result in improved profitability or firm value [17]. Some sup- role should they play in the sale?
pliers of standalone products have transitioned successfully to & In which circumstances (products, markets, levels of sophis-
customer solutions strategies, but many firms continue to tication) are buyers better off constructing solutions from
struggle to offer profitable solutions [26, 58]. Two common multiple sellers versus purchasing from a single supplier?
internal roadblocks hinder the successful implementation of & What impact does partnering in solutions selling have on
customer solution strategies: (1) the concern that such offer- sellers’ innovation?
ings expose firms to higher levels of risk and (2) fear of the
loss of profits from their core goods [68, 72]. Finally, insufficient empirical research explores the outcomes
of a solution strategy, which provides an opportunity for research
3.4 Toward a Research Agenda on metrics of solutions effectiveness and organizational adapta-
tions to solutions. Some research questions include:
Further research should provide a systematic validation and
extension of the factors that prior research has identified as & What are the performance outcomes of solution selling at
related to the increasing sophistication of sellers and solutions the offering, buyer, and selling firm levels?
selling. Some key research questions include: & What organizational changes, at the buying firm and sell-
ing firm level, are needed to accommodate solutions
& What are the antecedents of a solutions strategy, along the selling?
dimensions of organizational structure, relational assets, & How do these changes and performance metrics shift over
and contracting ability? time?
& Which ability-related factors, strategies, and tactics are
needed to develop the markets for customer solutions
and ultimately sell to target segments effectively?
& As suppliers cooperate more to bring unique solutions to
4 The Impact of Technology on B2B Buying Behavior4
their buyers, who owns the buyer?
In this section, we focus on the impact of changing technology
Beyond motivation and ability-related aspects, research on
on B2B buying behavior. A classic view of decision stages
moderating conditions and outcomes should prove fertile. The
from the industrial goods buying process (e.g., [47, 67])
B2B buying process for customer solutions often differs sub-
broadly encompasses three phases: information gathering
stantially from that for product selling. For example, the great-
er complexity and higher perceived risk associated with solu- 4
This section was primarily developed by Sundar Bharadwaj, Pranav
tion selling means that these decisions often take place at a Jindal, Murali Mantrala, Aric Rindfleisch, and Shrihari Sridhar.
Cust. Need. and Solut. (2015) 2:193–208 201

(for need identification, establishing specifications, searching engaging sales interactions, (5) increased B2B buying center
for alternatives, and setting purchase and usage criteria), prod- sizes, and (6) increasing uses of analytics.
uct evaluation/negotiation (setting budgets, evaluation of al- To provide a conceptual framework for this discussion, we
ternatives, negotiating with suppliers), and purchase/usage. employ the classic BuyGrid model (Fig. 1). Although we have
This process reflects the concept of Bcreeping commitment,^ proposed a new BuyGrid framework (Table 2), to understand
such that decision making involves a sequence of incremental the changing landscape of B2B buying, the simpler, classic
choices, each of which eliminates some alternatives from fur- BuyGrid model is sufficient. Accordingly, in this section, we
ther consideration [47]. But even 25 years ago, Wind and focus on the buying process (or buyphases) outlined at the
Thomas [70] speculated that the classic buying process would outset of this section as a key reference point.
be affected by developments in information technology. At
that time, Wind and Thomas [70] had more questions than
4.1 Impact of Technological Trends on B2B Buying
answers and could hardly foresee the accelerated technologi-
and Selling
cal developments and diffusion brought about in the next two
decades. In particular, we note two forms of emerging digital
In Table 3, we detail how the six key trends associated with the
technologies with disruptive effects on the classic industrial
emergence of DIT and DMT affect the three broad stages
buying phases: digital information technologies (DIT) and
(information gathering, evaluation/negotiation, and purchase/
digital manufacturing technologies (DMT).
usage) of the buying process.
With DIT, we refer to the integration of telecommunica-
tions (e.g., smartphones, wireless technology), computer sys-
tems (e.g., software, audio-visual systems), and data that en- 4.1.1 Information Gathering
able firms to access, store, transmit, and manipulate informa-
tion pertinent to their daily business operations. Examples of The emergence of social buying has led to the formation of
DIT include Internet-enabled technologies such as social me- two segments of B2B buyers: traditional ones and social
dia, cloud computing, the Internet of things, smart mobility, buyers, who rely extensively on social media and online com-
and big data that help users access, curate, manipulate, and munities (e.g., IT Knowledge Exchange) during the purchase
transmit information in real time, thereby improving firms’ process. Solution provider websites provide a primary source
business process productivity. For DMT, we focus on the of information for buyers during the early stages of their buy-
technologies themselves, such as digital design software, dig- ing process, and search engines have become a gateway to
ital scanners, and 3D printers. These technologies enable firms B2B content discovery. More than 70 % of buyers begin their
to design, manufacture, and acquire objects independently, business purchases with research on Google [50].
rather than buying them from an external supplier. Thus, auto With advances in DIT, the B2B buying and selling process
manufacturers such as Ford use 3D printing to rapidly proto- also has become more buyer-driven than in the past. That is,
type light automotive components that can increase fuel econ- B2B buyers invite B2B salespeople to engage at the buyers’
omy and get them more quickly to market [13]. General Elec- discretion, and they might choose to engage with salespeople
tric uses 3D printers to manufacture parts for its turbines [15]. at any stage of the buying process. Advances in digital and
Both DIT and DMT are enabled by the spread and power of information technologies also enable B2B buyers to use data
the Internet, which has dramatically altered the nature of B2B analytics and streamline their purchasing, in tune with antici-
buying by allowing firms to acquire rich, detailed product infor- pated demand for their products. Buyers turn to online sources
mation from manufacturers, fellow buyers, or third-party re- to research seller offerings and obtain product quality evalua-
viewers. This information may include elements of a product’s tions, which reduces their dependence on face-to-face events
design, including its actual design files, which can be such as trade shows [35]. For the seller, recent industry sur-
downloaded, printed, and even modified by buyers with access veys indicate that 60 % of the buying process in a complex
to DIT [3, 32]. According to Anderson [3], new technologies sale is complete before prospects even are willing to engage
thus have the potential to usher in a new industrial revolution. with a live salesperson (Marketing Leadership Council [36]).
Despite their potential role as game changers, the impact of DIT Moreover, increased information asymmetry favors B2B
and DMT on B2B buying behavior has received relatively little buyers; in one recent survey, 77 % of B2B buyers indicated
scholarly attention—even as B2B marketing strategies, struc- they would not talk to a sales rep until they had conducted
tures, and tactics are all likely to be radically altered by the their own independent research, facilitated by DIT (2012 De-
emergence of these new technologies. To illustrate these probable mand Gen Report).5
effects, we discuss six B2B-related trends that DIT and DMT are 5
http://www.demandgenreport.com/industry-topics/industry-news/
likely to shape in the near future: (1) the growth of social buying
1786-demand-gen-report-unveils-third-annual-b2b-buying-survey-
and online communities, (2) desires for solution provider showing-preferences-built-prior-to-sales-engagement.html#.VM-
websites, (3) buyer-driven seller interventions, (4) desires for HKGfwvIW assessed November 2014.
202 Cust. Need. and Solut. (2015) 2:193–208

The increased volume of product-related information avail- sellers include websites (e.g., Visa’s Business Network, which
able online also leads technology-enabled B2B buyers to ex- targets small business customers) that enable customers to
pect more from sales reps. Thus, sales reps must move beyond share ideas and respond to industry-specific queries. For Visa,
content provision to offer potential buyers new perspectives the community features content but also generates useful leads
on their market and creative solutions to their problems. High- [46]. Sellers such as Cisco and IBM leverage Twitter,
quality sales interactions are especially important when buyers Facebook, and YouTube to target social buyers and test and
face high-stakes decisions; B2B sales organizations that pro- launch their new products.
vide insightful solutions (rather than product information) are Yet the rise of DMT also creates a new set of evaluation
more highly valued. challenges, because B2B firms interested in leveraging the
In response, some B2B selling firms are hiring cloud-based power of this new technology will gain options to rely on
predictive analytics providers (e.g., Lattice, Mintigo) to collate (internal) digital tools to design and craft their own compo-
internal data sources (e.g., marketing automation data) and nents, rather than buying them from external suppliers.
external information (public data about companies’ financial
performance, company events, executive changes, social me- 4.1.3 Purchase/Usage
dia activity, press releases, job postings, patents) to identify
new leads. Firms also use these data to generate model-driven Online communities affect the B2B buying and selling pro-
conversion rates, according to existing client Blook-alike^ cess, as a form of both DIT and DMT. That is, these commu-
traits. For example, new building lease signings or specific nities represent sources of valuable information, and they also
job postings might signal the expansion of potential customers provide access to digital designs that can be downloaded or
into new markets, suggesting new opportunities for supplier modified for direct manufacturing. The digital design sharing
firms. Other analytics enable sellers to monitor buyers’ brows- site Thingiverse contains more than 500,000 designs, accessi-
ing behaviors on websites, which then help them understand ble for free, that users can manufacture with a desktop 3D
the level of the buyer’s readiness to purchase and transform printer. These designs provide a foundation for (potential)
cold sales calls to warm sales transactions, lowering their cost buyers to avoid the buying process entirely, or else enter into
of sales. a distinct process in which they have their designs made to
The growth and diffusion of DMT is likely to have a trans- order by a 3D manufacturing house such as Shapeways,
formative effect on how B2B buyers use this information too. Ponoko, or Amazon.com.
Digital manufacturing technologies such as 3D printers allow Analytics also will play an important role in how DMT
firms to transform their ideas into objects [3]. Thus, informa- affects the purchase and usage stage of the buying process.
tion is the product. For example, UPS recently announced that The Internet of things can produce digitally manufactured
it had installed 3D printers in hundreds of its retail stores, as products that feature rich sets of analytics, such as the time
part of its small business solution initiative. Using these and place of manufacture, the identity of the machines used in
printers, small firms can create (or download) digital files their manufacturing, or their specific tolerances [32]. More-
and print them for a variety of business-related uses, such as over, the Internet of things enables increased connectivity
prototypes, replacement parts, or even small batch among devices, creating new opportunities for firms to mon-
manufacturing. itor and deliver services remotely and across the globe. Cisco
offers building management services to large business clients
4.1.2 Evaluation/Negotiation from remote locations at significantly lower costs; DuPont
promises smart crop monitoring using RFID devices included
The impact of DIT and DMT on the second step has been in seed packs.
notable as well. First, advances in DIT allow more stake- Sellers also have begun to exploit DIT, such as in online
holders to participate in buying decisions. According to a re- forums, panels, blogs, webinars, and online demonstrations to
cent survey, the number of people involved in a large technol- share best practices and encourage cross-customer learning.
ogy purchase increased from five in 2010 to seven in 2012 Such actions enable them to enhance not only usage but also
[18]. In response, sellers develop more multiperson teams to customer satisfaction, with significantly lower investments. A
evaluate the heterogeneous information and resource require- related implication is the increase in the ratio of inside-to-
ments [35]. With the growth of analytic tools available to B2B outside sales forces [35].
buyers, marketing processes also are becoming more industri-
alized, which enables the provision of rapid, agile insights to 4.2 Toward a Research Agenda
buyers at the decision point.
Second, growing online communities provide buyers with In contrast with the substantial attention devoted to DIT and
a treasure trove of information, such as user reviews, that can DMT in popular publications, such as The Economist, The
help them evaluate lists of potential vendors. The responses by New York Times, or Wired [2, 60, 65], scholarly research on
Cust. Need. and Solut. (2015) 2:193–208 203

Table 3 Impacts of changing trends on BuyGrid dimensions

Trend Buyphases Buying center Buying situation

Growth of social buyers Buyers have more access to Data on competitive offerings Ambiguous
information from multiple sources is available to buyers
Solution provider Buyers have more access to Data on competitive offerings The purchase/usage process
websites information from multiple sources is available to buyers becomes more efficient,
but it is not clear whether
buyers buy more or at
more profitable prices
Buyer-driven seller Buyers’ information gathering needs are Transfer of power to buyer Ambiguous
interventions more accessible, but buyers may not learn about side
sellers’ offerings in full, due to their selective
contact with sellers
Desire for engaging sales Ambiguous Buyers seek more Ambiguous
interactions differentiated
seller information when
evaluating products
Increase in B2B buying Buyer need identification occurs in an Ambiguous Buying quantity increases,
center size organization-wide fashion, with more diverse while prices may drop
needs identified through a large set of
stakeholders

these technological trends is sparse [35]. Literature in & How does DMT alter the nature and type of information
digital and information technology domains largely fo- acquired by B2B firms?
cuses on macro-level studies of the development and
functioning of B2B e-commerce (e.g., [52]), organiza- Evaluation/Negotiation
tional participation [20], governance issues in B2B
markets [19], or open product sourcing [34]. Little re- & What is the optimal B2B sales organization structure, in
search investigates how DIT influences B2B buyer be- the face of technology-induced changes in B2B buying
havior within buying organizations or the related im- behavior?
plications for B2B sellers and sales organizations. & How will the ratio and role of inside-to-outside sales
Likewise, we find little academic research that con- forces change due to DIT?
siders the business implications of DMT, though a no- & What new competencies are required by B2B selling or-
table exception is Berman’s [7] overview of 3D print- ganizations? Does the sales force need more analytical
ing technology and its potential marketing implications. skills? Are persuasive skills less relevant?
This paucity of extant research leaves considerable op- & What implications do technology-induced changes in
portunities for marketing scholars to investigate the ef- B2B buying behavior have for the organization, staffing,
fects of advances in both DIT and DMT on B2B buy- training, deployment, and compensation of sales
ing behavior. In line with the structure of this section, organizations?
we divide our recommendations into the three stages of
the buying process: Buying/Usage

Information Gathering & How are advances in DMT changing the nature of B2B
buying? Which types of firms are using this emerging
& Are B2B buying centers changing in size, composition, or technology to make products rather than buying from a
complexity due to the influence of advancing DMT and supplier?
DIT? Which buying center roles are increasing or decreas- & How are B2B buyer–seller interactions changing due to
ing in importance, and why? How do these changes vary advances in technology? Are new technologies making
by the type of product, purchase, or buyer–seller exchange interactions more transactional, consultative, or
relationship? collaborative?
& Do technology-enabled interactions change the nature of & Is the nature of products being sold changing, from
marketing–sales relationships in B2B markets? Are mar- goods to services? How does the buying and selling
keting departments more important, as enablers of market- process for B2B services differ from that for B2B
ing communications content? products?
204 Cust. Need. and Solut. (2015) 2:193–208

5 The Growth of Emerging Markets6 56]). Considering these significant differences between the
two types of markets and the recognition that most growth
The growth of emerging markets such as China and India has in the global economy in the near future will come from de-
dramatically reshaped the global marketplace, including pri- rived demand from emerging market consumers, a key ques-
mary demand, trade flows, and business practice. Although tion that arises is how these differences influence extant
we know that accounting for the environmental context in models of B2B buying behavior.
which business transactions are embedded is critical to under-
standing B2B buying behavior, academic research and mana- 5.2 Emerging Versus Developed Market B2B Buying
gerial best practices that largely reside in developed markets Behavior Research
often get directly and inappropriately applied to emerging
markets. Well-established literature on the standardization A 2012 McKinsey study, comparing the growth rates of firms
versus adaptation of marketing strategies suggests that B2B headquartered in emerging and developed markets, showed
buying frameworks developed in what Henrich et al. [22] call that firms in emerging markets have a 13 % growth rate ad-
the WEIRD nations (Western, Educated, Industrialized, Rich, vantage on average [5]. Only 3.4 % of that advantage can be
and Democratic), when used with little adaptation or recogni- attributed to the smaller size of emerging market firms com-
tion of the economic, cultural, and regulatory differences be- pared with developed market firms. Thus, there is something
tween markets, lead to mixed results [11, 40, 56]. Thus, we about the behaviors of emerging market firms that enables
need research to understand when extant B2B buying behav- them to grow faster. The same study suggested three possible
ior frameworks can be extended to emerging markets and, causes:
even more important, when and how they should be adapted.
1. Higher reinvestment rate, such that emerging market
firms reinvest more income into their businesses and
5.1 Differentiating Emerging from Developed Markets pay lower dividends than developed market firms.
2. Agile asset reallocation, such that emerging market firms
Emerging markets are market economies that are large in reallocate resources to higher growth rate areas more dy-
terms of their population size, are rapidly growing, and have namically than do developed market firms.
a low per capita income. The International Monetary Fund’s 3. Growth-oriented business models, such that emerging
[25] World Economic Outlook estimated, on the basis of the market firms tend to select lower cost, faster growing,
2011 International Comparison program survey by the World larger markets, whereas developed market firms appear
Bank that emerging market economies account for about 56 % to select higher margin, smaller, more mature markets.
of the share of the world’s gross domestic product (GDP) at
purchasing power parity. In contrast, in 1990, emerging mar- Various conceptual articles also explicate the differences
kets accounted for only one-third of the world’s GDP. Brazil, between emerging and developed markets, as well as what
Russia, India, and China (the BRIC nations) are generally those differences might imply for research in marketing and
recognized as the largest emerging markets; they account for in other business disciplines (e.g., [9, 56]). In one of the few
40 % of the world’s population. In the past decade, their com- articles dealing directly with B2B buying, Gu et al. [21] note
bined GDP (at purchasing power parity) grew at an annual rate the impact of network ties in China, and specifically the
of 6 %–12 %, compared with a combined GDP growth rate for guanxi system, on firm performance. Being part of an infor-
the G77 of −3 % to 3 %. These differences largely refer to mal guanxi network provides a market access advantage to
consumer markets, but a critical distinguishing trait of emerg- members, though it also implies obligations that can hinder
ing markets is that government spending as a percentage of performance. The informal, noncontractual nature of the rela-
GDP, on average, is lower than that in developed markets [61]. tionships in these emerging markets implies a different model
Yet, because other B2B buyers in emerging markets are small- of B2B buying behavior that depends more on personal net-
er and fragmented, governments remain, on a relative scale, works, trust, and obligation than on formal, contractual agree-
the largest non-consumer buyers, which have important im- ments. Sheng et al. [54], studying business and political ties in
plications for B2B sellers. China, also show that business ties have stronger effects than
Size and growth rates are the most prominent differences political ties on firm performance, but all the effects depend on
between emerging and developed markets, but many other the institutional and market environments. Economics re-
differences also might influence interfirm behavior. In Table 4, search reinforces the notion that institutional differences are
we identify some critical points of distinction (drawn from [9, key drivers of economic growth variances across countries
6 [1].
This section was primarily written by Ujwal Kayande, Robert W.
Palmatier, and Sundar Bharadwaj. Prendergast et al. [42] examine B2B buying in the context
7
Canada, France, Germany, Italy, Japan, the UK, and the United States of advertising agency–client relationships in China and
Cust. Need. and Solut. (2015) 2:193–208 205

Table 4 Key differences between emerging and developed markets

Specific characteristic Emerging markets Developed markets

Aggregate-level Population Larger populations, estimated at 40 %–60 % of the Smaller population, estimated at
market differences global population 15 % of the global population
Economic growth rate (GDP at Fast (6 %–12 % per annum since 2000) Slow or negative (−3 to 3 % per
purchasing power parity) annum since 2000)
Heterogeneity of population Large income disparity, very heterogeneous in income, Relatively homogenous population
education, individual buying behavior
Individual consumer Price sensitivity Relatively high Relatively low
differences Brand importance Very high for higher income segments, but intense Relatively less brand importance
unbranded competition at lower end disparity across consumers
Social norms Collectivist purchasing behavior, but wide variation Individualistic purchasing behavior
across population in level of influence
Age Relatively younger consumers Aging population
Institutional Legal system Evolving, opaque, slow legal system Stable, transparent, fast legal system
environment Political environment Volatile, not always democratic Stable, democratic
differences
Hard infrastructure Poor hard infrastructure (transport, roads, connectivity, Well-developed hard infrastructure
banking, etc.)
Business context Business to business Large number of informal business relationships Relatively formal contractual
differences relationships relationships
Business to government Largest buyers are often government-owned Dispersed set of B2B buyers
relationships enterprises
Business and political ties Strong influence of ties on ability to transact business Weaker influence of ties on ability to
transact business
Labor, raw materials, and energy Relatively low Relatively high
costs

conclude that extant B2B buying models do a poor job at best indirect impacts on B2B buying through derived de-
explaining B2B buying in emerging markets. In a meta-anal- mand. The latter two differences instead could fundamentally
ysis, based on countries representing 82 % of global GDP, change extant models of B2B buying, due to four elements:
Samaha et al. [48] find that relationship marketing is more (1) the relative size and nature of government versus business
effective outside the United States than inside: The relation- buying, (2) underdeveloped legal systems, (3) the noncontrac-
ship effect on performance Bis 17 %, 15 %, 38 %, and 55 % tual, extensive webs of business relationships and their influ-
more effective in Brazil, Russia, India, and China^ than in the ence over the firm’s ability to perform, and (4) the influence of
United States^ (p. 21). This study and others like it demon- business and political ties. The potential business risks created
strate substantial differences in the efficacy of relationship by these differences for developed market B2B firms are ex-
marketing between emerging and developed markets. Ignor- acerbated by the relatively volatile political environments in
ing these differences can lead firms to make poor marketing many emerging markets.
decisions. For example, in the retail industry, many successful
retailers from developed markets have exited or significantly 5.3 Toward a Research Agenda
scaled back their operations in China, due to their failure to
transplant their developed market channel strategy into emerg- To develop an agenda for future research in this area, we
ing markets [40]. classify B2B buying relationships into categories, according
What is clear from this discussion is that the extant models to where each partner in the relationship is located, as we show
built in developed markets do not necessarily describe B2B in Table 5.
buying behavior in emerging markets. The important question In Cell 1, informal relationships dominate, because firms
to ask thus is, which differences between emerging and devel- located in emerging markets buy from firms also located in the
oped markets (Table 4) have the potential to fundamentally same or a different emerging market. Although some country-
alter B2B buying behavior models, and which merely affect specific research describes how business is conducted in
the scale of activities within extant models? Of the broad emerging markets, as we cited previously, little research in-
differences on four levels—aggregate market, individual con- vestigates how emerging market firms buy from firms located
sumer, institutional environment, and business context—the in other emerging markets. Considering the high volume of
first two are perhaps more relevant to consumer markets, with trade flows across emerging markets (e.g., China and
206 Cust. Need. and Solut. (2015) 2:193–208

Table 5 Research needs on organizational buying behavior within and Finally, Cell 4 involves relationship transitions, or firms in
across markets
developed markets that sell to firms in emerging markets. It is
Selling Buying firms in likely to draw the most interest among both researchers and
firms in selling organizations in developed countries. Some key re-
Emerging markets Developed markets search questions are as follows:
Emerging Informal-relationships Brand–cost transition
markets dominant & How should developed market sellers adapt their sales
Within a market How do/should emerging processes to address emerging market buyers in different
market firms sell? geographies and industries?
Across markets How do/should developed & Can developed market firms learn to form relationships
market firms buy?
that drive business success in emerging markets? Are
Developed Relationship transition Contractual-relationships
structures from developed markets, such as global account
markets dominant
management, appropriate for emerging markets?
How do/should developed Extant research knowledge
market firms sell? & Should firms partner with government-owned enterprises
How do/should emerging that are fiscally constrained? More generally, considering
market firms buy? the notable role of governments in emerging markets,
what is the best way to understand and address their role
in different emerging markets?
& Should B2B firms in developed markets form public–pri-
Indonesia are among India’s largest trading partners), this vate partnerships in emerging markets? If so, how?
question underlies an important category for further research & What are the drivers of demand in different emerging mar-
into B2B buying behavior: kets and various sectors within those markets?

& How do firms in emerging markets buy from other firms

in emerging markets, including their own?
6 Conclusion
Cell 2 contains brand–cost transitions, or firms in emerging
markets that sell in developed markets. Whereas emerging Our goal with this article has been to provide new perspectives
market firms traditionally built their businesses on cost advan- and an extended research agenda for each of the four main
tages (e.g., labor cost arbitrage), as wages increase in these areas of B2B buying. Each of these areas offers great potential
markets, such advantages are disappearing. In turn, the chal- for academic research and invokes high practitioner interest—
lenge for firms in emerging markets is to adopt higher margin excellent recommendations indeed for research. But there is
strategies and deliver higher value product offerings. Some little low-hanging fruit here. The B2B buying cycles are
emerging market firms have successfully addressed this chal- lengthy; samples are small, and much of the research we have
lenge, such as Embraer, Huawei, and Tata. Related research called for will need to be conducted in multiple, far-reaching
questions include: geographies. However, the rewards for taking on these re-
search challenges promise to be rich, and we hope many re-
& How can firms in emerging markets adapt to B2B buying searchers respond to these calls.
practices in developed countries?
& What factors facilitate successful navigation up the value
chain for selling firms in emerging markets?
& How can firms in developed markets change their B2B
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