The Role of Relationship Quality in the Stratification of Vendors as Perceived by Customers

Abstract

Companies implement preferred supplier programs to reduce their vendor relationships to a reasonable few. Consequently, vendors who do not effectively manage their customer-based relationships are strong candidates for deletion from a customer’s list of long-term suppliers. The emergence of preferred supplier programs suggests that businesses are beginning to formally recognize and reward differences between their qualified vendors. Vendor stratification is proposed as a framework for understanding the evolution of preferred vendor programs. With the growing interest in relationship marketing, a study was conducted to empirically examine the extent to which businesses use relationship quality perceptions to differentiate their qualified vendors. The findings support the notion that relationship quality is a higher-order construct that can be used as a basis for developing vendor stratification systems. The article concludes with a discussion of the managerial and research implications of the study findings.