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LECTURE 5
Supplier preferencing and market management mix
Supplier preferencing is a model developed by Steele and Brian (1996) which gives an idea to
purchaser on how the supplier’s organization perceives him. The model has account
attractiveness on the y axis and relative value of business on the x axis
Account attractiveness
Factors making the purchasing organization Factors making the purchasing organization
attractive unattractive
Consistency of demand patterns Late payers
Business expansion opportunities Insistence on long payment terms
Financial soundness Short term contracts
Ethical behaviour Changing delivery schedules frequently
Good publicity Bureaucratic
High volume of purchases Being arrogant
Paying on time Being unreasonably demanding
Long term contracts Decision making unit being complex
Guaranteed payments Changing procurement policies
frequently
Benefit of association to the supplier Onerous terms and conditions
Relative value of business
Though large accounts are more attractive, sales organizations should recognize however that
size of revenue isn’t everything and they may generate a profit figure from a small customer
equal to that generated by a large customer who uses aggression negotiation techniques
Buyers should make an assessment of the size of their business relative to the total business of
the supplier.
Page 1 of 4
LECTURE 5
Supplier preferencing and market management mix
Supplier preferencing is a model developed by Steele and Brian (1996) which gives an idea to
purchaser on how the supplier’s organization perceives him. The model has account
attractiveness on the y axis and relative value of business on the x axis
Account attractiveness
Factors making the purchasing organization Factors making the purchasing organization
attractive unattractive
Consistency of demand patterns Late payers
Business expansion opportunities Insistence on long payment terms
Financial soundness Short term contracts
Ethical behaviour Changing delivery schedules frequently
Good publicity Bureaucratic
High volume of purchases Being arrogant
Paying on time Being unreasonably demanding
Long term contracts Decision making unit being complex
Guaranteed payments Changing procurement policies
frequently
Benefit of association to the supplier Onerous terms and conditions
Relative value of business
Though large accounts are more attractive, sales organizations should recognize however that
size of revenue isn’t everything and they may generate a profit figure from a small customer
equal to that generated by a large customer who uses aggression negotiation techniques
Buyers should make an assessment of the size of their business relative to the total business of
the supplier.
Page 1 of 4
