Why do SMEs switch suppliers?
Journal of Business & Industrial Marketing
ISSN: 0885-8624
Article publication date: 18 November 2021
Issue publication date: 23 May 2022
Abstract
Purpose
Combining a conceptual framework with empirical evidence, this study aims to offer insights into why small and medium-sized enterprises (SMEs) in the business-to-business beauty sector switch suppliers, due to pricing considerations.
Design/methodology/approach
Data gathered from 475 telephone surveys of Spanish hairdressers provide the input for discrete choice models for testing the proposed hypotheses.
Findings
The SMEs that change suppliers tend to be sensitive to promotions, express less satisfaction with a current supplier’s offerings and serve fewer customers who buy professional products for their in-home use. If SMEs are satisfied with the supplier’s services though, they are less likely to change and more prone to negotiate with that supplier.
Research limitations/implications
This study does not address why dissatisfied SMEs might remain with their current suppliers. Further research might replicate this study using additional pricing data from suppliers.
Practical implications
Suppliers in business-to-business (B2B) sectors can leverage these findings to allocate their marketing budgets optimally and establish service strategies that will enable them to retain buyers and reduce their switching risk.
Originality/value
As an extension of extant literature, this study specifies switching drivers for SMEs in the B2B beauty sector. The findings should apply throughout this worldwide service sector, as well as to similar markets such as health, beauty and personal care and well-being services.
Keywords
Acknowledgements
This research was partially supported by the Spanish Ministerio de Ciencia e Innovación, Grant ECO2017‐82107‐R and Grant PID2020‐113469GB‐I00 (Mercedes Martos‐Partal) and Grant ECO‐2015‐70349‐P (José María Labeaga).
Citation
López-Jáuregui, A., Martos-Partal, M. and Labeaga, J.M. (2022), "Why do SMEs switch suppliers?", Journal of Business & Industrial Marketing, Vol. 37 No. 7, pp. 1463-1474. https://doi.org/10.1108/JBIM-05-2020-0238
Publisher
:Emerald Publishing Limited
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