Relationship Value in the Hardwood Lumber Industry in U.S.

Abstract

This study explores the influence of relationship value in buyer’s decision making in the hardwood lumber industry in the U.S. Results indicate that purchase decisions of hardwood lumber buyers are very sensitive to product quality, relationship with buyer-supplier, overall service and price (presented in order of importance). The dimension of relationship is ranked before overall service and price but it is ranked after that product quality. This sequence indicates that relationship with supplier is important only after quality product standards have been achieved. Customer loyalty and commitment can be achieved in this price driven commodity industry. Customer loyalty and commitment are consequence of higher customer satisfaction, which in this study depends on the overall relationship value, dimension that is supported by: supplier know-how, product quality, personal interaction with supplier, and delivery performance/service. Suppliers in the hardwood lumber industry can use these findings to reinforce their relational marketing strategies. At the same time, managers need to pay more close attention and invest on these four attributes/variables to improve their buyer’s overall perception of value in their relationship. The information obtained in this study is useful at the time of assigning scarce resource in marketing programs to improve buyer’s perception.

A combination of high standards in the delivery of product quality, overall service, relationship value and supplier performance result in a higher satisfaction and loyalty in business relationships with the supplier. Overall increase in perceived relationship value will most likely help improve the hardwood lumber buyer’s satisfaction with the supplier.