Decision making of retail buyers: perspectives from China and India

Abstract

PurposeBuying decisions are often viewed as random and therefore not generalizable. Additionally, retail buying is typically conducted by individuals and is impacted by cultural considerations. The aim of this paper is to identify critical incidents from China and India, and use theoretical concepts from buyer‐supplier literature to explain the outcome success or failure.Design/methodology/approachThe paper uses the critical incident technique to capture retail buying decisions that resulted in either successful or unsuccessful outcomes. The authors analyze and match each critical incident with theoretical evidence to explain the result.FindingsA total of ten critical incidents were described by ten senior retail‐buying executives in China and India. Critical incidents were classified under four retailing categories: assortment planning, product promotion, sourcing issues, and supply chain issues, and analyzed under four theoretical themes: opportunism, trust, long‐term orientation and power‐dependence.Practical implicationsOrganized retailing is a new phenomenon in China and India. This study bears implications for the training of future retail buyers in both emerging economies, and emphasizes the integration of scientific, modern methods of decision‐making with the cultural values of the local country.Originality/valueThis study is unique because it relies on the voice of the retail buyer to explain real‐world decision making with theoretical evidence from buyer‐supplier literature. Methodologically, this paper is unique as it reports on the first study using critical incident interview techniques to study professional retail‐buying practices.

The Impact of Outcome-Based Control for Retail Buyers on Organizational Performance

“…Accordingly, by sufficiently understanding the diverse tasks and behavior styles in negotiations conducted by buyers, retailers can attempt to implement the optimal method for managing buyers that enable them to improve ultimate organizational performance. On the basis of this reasoning, we investigate the impact of buyers’ management control systems on supplier relationship management and retailers’ organizational performance, which represents an issue unaddressed in previous studies of retail buying (Hansen and Skytte, 1998; Manjeshwar et al, 2013; Skytte and Bove, 2004), relationship management (Dwyer et al, 1987; Morgan and Hunt, 1994; Ploetner and Ehret, 2006; Srinivasan and Srivastava, 2012; Wiley et al, 2005), or management control systems in sales and marketing (Anderson and Oliver, 1987; Baldauf et al, 2005; Darmon and Martin, 2011; Evans et al, 2007; Jaworski, 1988).…”

Retail Buyer Control Systems: Implications of Buyer Behavior Strategies for Performance

“…First, we suggest a theoretical model of retail buyer control systems that encourages further investigation in the field. Generally, there have been limited advances in developing a generalizable model of retail buyer behavior (Manjeshwar et al, 2013). This indicates that retail buyers’ decision-making is individual, subjective, and intuitive based largely on their own experiences (Insch et al, 2011; Johansson, 2001), along with their unique, complex roles compared to industrial buyers.…”

“…Understanding retail buyers' behavior and decision-making process have been long-standing goals in retail strategy (Manjeshwar et al, 2013). Retail buyers play a pivotal role as gatekeepers for consumers (Sternquist, 1994), which largely determine a firm's sales and profitability.…”

“…However, the knowledge of retail buying still remains obscure at best. Despite significant advances in our understanding of retail buyers’ behavioral characteristics and decision-making, previous studies largely focus on the buying process (Hansen and Skytte, 1998; Johansson, 2001; Sternquist and Chen, 2006) or, investigate a specific part of the buying process, such as buying criteria and/or individual characteristics (da Silva et al, 2002), basis of information and judgment (Insch et al, 2011), supplier relationship management (Munnukka and Järvi, 2015), and cultural/national differences (Johansson and Burt, 2004; Manjeshwar et al, 2013; Skytte and Bove, 2004). Yet there is a lack of research into how to control retail buyers from the standpoint of management control.…”

Measuring Purchase‐decision involvement

“…Nowadays, increasing competition is forcing businesses to pay more attention on customer satisfaction providing strong customer services (Vukasovic, 2010;Manjeshwar et al, 2013;McCutcheon et al, 2013). Increased competition has also increased marketing activities.…”