Customer-Supplier

Relationship
BY
Gourav verma
Ankur verma

Introduction
The relationship between customer and
supplier may be present at a variety of
levels and in various composition; they
may be secondary in nature, but may also
lie somewhere in the transitional area
between
secondary
and
primary
relationship. A variety of supplemental
classification have been created to further
clarify the difference between the parties
involved in customer-supplier relationship.

Pyramid of Relationship

Whether or not a transaction has already

been completed: from prospect to customer.
If a long-term orientation is present which
extends further than that one transaction:
from customer to client.
To what degree the relationship is felt by
both parties: from supporter to ambassador
to partner.
To what degree both parties take an active
position
in
the
relationship:
from
ambassador to partner.

Profile of close and weak Customer-Supplier

Relationship
Lacking/weak
Relationship

Close Relationship

Concrete agreements have

been made regarding
reciprocation.

There are few agreements

concerning reciprocation.

Agreements have a shortterm horizon.

Of the few agreements that

do exist, many have a long
term horizon.

Initiative for interaction is

taken primarily by one party

The initiative for interaction is

distributed evenly among the
parties.

A limited number of topics are A multitude of topics are

raised for discussion.
raised for discussion.

Bales interaction process analysis

In 1950, Bales had already

developed
an
observation
method to analyse interaction in
small group which could also be
applied to the interactions
between customer and supplier,
Bales identifies a number of
categories into which interaction
may be divided.

The Relationship Life Cycle

During the exploratory phase, the

customer sees the promises made during
communication fulfilled for the first time.
The first introduction make an important
impression on the relationship.
The growth phase(three months to two
year) is characterized by a sharp rise in
the number of purchases. Customer would
like to get to know the suppliers products
and services. The advantage of the
suppliers offering are now discovered.

The saturation phase(usually after more then

two year) is characterized by the highest
number of purchase from supplier and the
highest
degree
of
commitment.
The
relationship has taken shape.
The decline phase begins as soon as the
number of transaction starts to drop. Customer
may enter the decline phase at any time: after
the exploratory, growth or saturation phase.
Customer
who
have
terminated
the
relationship after the saturation phase usually
no longer have a need of the products.