The purchasing orientation of small company owners

Abstract

Purpose

The literature holds few contributions regarding purchasing practices of small companies, despite the impressive size of this customer segment. Hence, this paper seeks to identify the purchasing orientation of small company owners.

Design/methodology/approach

The study applies an interpretive qualitative case based approach. Small company owners describe their purchasing practices in a language void of theoretical concepts and by the continuous use of examples. Some practices are more or less unconscious. Interpretation is needed in order to discover patterns across the cases.

Findings

Small company owners down‐prioritize purchasing and spend few resources on developing their purchasing capabilities. They emphasize operational security from suppliers – covering quality and delivery as well as service and problem‐solving capabilities. Price is a minor issue. They are extremely loyal customers, who rarely meet suppliers, but still manage to maintain trusting relationships with them. Reliability from suppliers is essential.

Research limitations/implications

This research concerned manufacturing firms. Earlier contributions as well as this study indicate that studies of small company purchasing in other sectors (trade for instance) could produce different findings.

Practical implications

Companies selling to small companies should build service capabilities in their sales organization. The investigated small customers emphasize operational security, problem‐solving, informal attitudes, reliability, and they are highly loyal. Selling companies capable of mastering this behavior can expect a higher profit and enjoy close, long lasting customer relationships with these customers.

Originality/value

The paper identifies the small manufacturing company as a distinct customer segment, with characteristics that differ from the large company. The identification of small company owner purchasing orientation helps sales professionals understand this segment and provides a basis for optimizing selling behavior, organization etc.

Citation

Ellegaard, C. (2009), "The purchasing orientation of small company owners", Journal of Business & Industrial Marketing, Vol. 24 No. 3/4, pp. 291-300. https://doi.org/10.1108/08858620910939831