This research examines whether suppliers' capabilities impact OEM customers' dependence on the supplier and thereby generate customer loyalty. Using a sample of purchasing managers focusing on a single key component supplier, we examine three supplier capabilities, two dependence dimensions, and three aspects of customer loyalty. Core offering capability increases the customer firm's benefit-based dependence. Operations capability has a more comprehensive effect, enhancing both benefit-based and cost-based dependence. Benefit-based dependence leads to relational loyalty and, through its effect on relational loyalty, to insensitivity to competitive offerings and future purchase expansion. Cost-based dependence motivates insensitivity to competitive offerings, but does not affect relational loyalty or purchase expansion. The supplier's communication capability is associated with relational loyalty, but this effect does not flow through the customer firm's dependence. The divergent pattern of antecedents and effects of benefit-based dependence and cost-based dependence may explain the inconsistent and insignificant research findings in previous research on dependence. Our results suggest that adopting a bidimensional model of dependence more fully captures the theoretical domain of dependence, thereby permitting researchers to better examine its role in supply chain, channel, and marketing relationships.Keywords Business to business relationships . Loyalty . Dependence . Supplier-buyer relationships . Marketing capabilitiesThe May 2007 issue of Inside Supply Management noted that the reviving manufacturing sector brings great opportunities for industrial suppliers, but also has motivated OEM customers to consolidate their supply bases. As manufacturers reduce their suppliers, "highly reliable service, repeated process or product innovations, manufacturing flexibility, responsiveness to market trends, and short product development cycles" become increasingly critical that organizational resources and capabilities constitute an important source of sustainable competitive advantage.We pursue Srivastava et al.'s (1998) suggestion that capabilities' impact on performance outcomes may be mediated by market-based assets, examining customer loyalty and dependence. We do not assert that capabilities' performance effects are fully mediated by customer loyalty, but loyalty is both an indicator of effective deployment and

Although firms spend more than $26 billion annually on sales contests, no empirical research has investigated the effects of contests on individual customers. While some short-term firm effects of contests have been documented, the impact on long-term customer value has remained a matter of speculation. This research investigates the long-term customer impact of sales contests, by applying the customer value framework. We add to previous research that has used customer value of marketing programs by employing the acquired, retained, and addon framework to segment customers based on their purchase history. We develop hypotheses drawing on theories in the buyer behavior, customer loyalty, and sales management domains. By disaggregating the overall customer value into initial and subsequent components, we demonstrate a greater long-term value per customer in the retained customer cohort and lower short-term and longterm value per customer among the two other cohorts (acquired and add-on customers). There is no adverse impact on other drivers of customer value such as customer churn and purchase frequency. While our study focuses on individual customer effects, we note the significantly higher volume of customers during the contest leads to a positive aggregate-level assessment. We conclude by discussing the implications of our findings for managers and researchers.

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