What Drives B2B Customers to Pay Higher Prices to their Suppliers?
(A2019-9509)

AUTHORS

Despina Karayanni, University of Patras; Spiros Gounaris, Universtiy of Strathclyde; Christine Georgi, University of Patras

KEYWORDS

Willingness-to-Pay-More; B2B; Marketing-Orientation

ABSTRACT

Customer’s willingness to pay is a central issue in marketing because it allows the seller’s pricing strategy to better align with what the market can bear and thus improve profit margins. However, the idiosyncratic characteristics are a few elements of the buying behavior of the B2B customer that the extant literature has missed out when trying to model the determinants of the buyer to pay a higher price to the supplier. Mindful of this important gap in the pertinent literature, we develop a theoretical framework with the aim to produce a more insightful and holistic view of the precipitating circumstances that explain the customer’s readiness to pay the supplier a higher price. We test this framework against data collected from 272 companies (27.2% response rate), using appropriate analysis techniques. Results show that specific endogenous (buyer related) and exogenous (market related) factors do really explain if the customer would be willing to pay the supplier a better price.