Marketing Strategy and Competitive Positioning pdf ebook

Understanding the reality of customer loyalty
Much of the attraction of SAM lies in the promise that collaborative relationships with key 
customers will enhance the retention of that business – that is, strategic accounts will recip-
rocate by offering loyalty to their long-term strategic suppliers. This promise is intuitively 
attractive, but in reality may not always be fulfilled.
Figure 14.14 
Buyer and seller 
relationship 
strategies
Conflict and risk –
the customer wants more
than the supplier is
prepared to give
Frustration –
the customer does not 
want the relationship 
offered by the
supplier
Low
Low
High
High
Supplier relationship requirements from customer
Customer
relationship
requirements
from supplier
Strategic
match
DEALING WITH DOMINANT CUSTOMERS

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CHAPTER 14 STRATEGIC CUSTOMER MANAGEMENT AND THE STRATEGIC SALES ORGANISATION
Consider the long-term textile and clothing suppliers who believed their relationship 
with Marks & Spencer was secure, only to discover that when their customer was under 
pressure, purchasing transferred to cheaper off-shore sources. Examine the US situation 
for clothing manufacturers for whom Walmart is a ‘key account’ – Walmart is now among 
the largest purchasers of Chinese products at incredibly low prices, which matters to them 
more than long-term relationships with domestic suppliers. Alternatively, view the Dell 
Inc. situation – a company renowned for its strategic account strategy, acting almost as 
an outsourced IT department for major customers. Dell Inc. does not extend the same 
philosophy to its suppliers – a company remains a Dell supplier only as long as it has better 
technology than the rest.
Recent research suggests that while relational exchanges between suppliers and cus-
tomers frequently benefit customers in performance improvements, generally the cus-
tomers concerned do not reward suppliers with a higher share of their expenditure or 
long-term contractual commitments (Fink et al., 2007). The mutual benefit and long-term 
relationship building implicit in strategic account management approaches may have been 
exaggerated.
If SAM is seen as a model of collaboration that has many similarities with strategic 
alliances (both involve agreement for partnership and joint decision making, with no 
transfer of ownership), then it is perhaps worth considering the evidence that the majority 
of strategic alliances fail, and in the view of many executives do not deliver the benefits 
they promised. The success of alliances seems to depend on conditions of mutuality 
and symmetry between partners. Those conditions do not appear to exist in many SAM 
situations.