Fostering Client–Agency Relationships:
A Business Buying Behavior Perspective
J. David Lichtenthal
ZICKLINSCHOOL OF BUSINESS–BARUCHCOLLEGE THECITYUNIVERSITY OFNEWYORK
David Shani
KEANUNIVERSITYAccount acquisition and retention is an ongoing problem facing advertising subsided (Ducoffe and Smith, 1994). Creative consultancies have developed, complementing conventional agencies, while
agencies. Literature in this area has focused on the criteria used in agency
the emergence of media independents reflects the breakdown
selection, the factors fostering continuity, and the forces prompting the
of the agency-commission system (Michell, 1984). Therefore,
break-up of client–agency relationships. However, this classic industrial
the agency’s role as a business service provider demands they
service relationship has not been examined from a business-to-business
must optimally ease the communication between the
adver-buying behavior perspective. A study was conducted with top agency
tiser and agency personnel (Cook, 1989; Tauber, 1986). In
account acquisition personnel. This study found strong support for the
addition, the selling side of agency–client relations has
wit-notion that business buying behavior models can be applied to client–
nessed the creation of positions within agencies that are solely
agency relationships. Furthermore, they may be applied to
business-to-responsible for soliciting new accounts (New York Times, 1990).
business service transactions as well. Many forces considered unique to
Understanding the forces influencing buying behavior for
business buying behavior were prevalent for the selection of agency services
advertising agency services is even more important for
foster-according to sales personnel involved in cultivating new business. The
ing and stabilizing the traditional client–agency relationship.
findings suggest that agencies need to emphasize nonspecific campaign
Historically, the study of this buyer–seller relationship had
forces effecting agency selection. Moreover, the study also points to the
focused predominantly on the target markets of the programs
importance of identifying the effect of internal organizational forces and
themselves and had not been viewed in a business-to-business
the roles buying center members play, side by side with campaign-specific
context. Agencies could incorporate dominant current
prac-factors. Directions for future research are noted and managerial
implica-tices to reflect the fact that clients are likely subject to a myriad
tions for business-to-business new account acquisition and selling are also
of forces affecting organizational buying behavior (Johnston
provided. J BUSN RES2000. 49.213–228. 2000 Elsevier Science Inc.
and Lewin, 1994, 1993; Hutt and Speh, 1998).
All rights reserved.
While researchers have focused on issues relating to agency selection and loyalty in client–agency relationships, they have primarily done so by studying specific organizational or indi-vidual level factors. However, many factors likely influence
A
cquiring and maintaining accounts for advertisingagen-the client–agency relationship. For example, client industry cies has always been important (Aaker, Batra, and
norms and practices and the various roles within client firms Myers, 1996; Russell and Lane, 1996; Wackman,
are instances of factors that are neither organizational nor Salmon, and Salmon, 1987) and crucial to the survival of
individual. What we need is a more comprehensive set of agencies (Beard, 1996; Michell and Sanders, 1995; Michell,
factors that also includes a broader range and variety of envi-Cataquet, and Hague, 1992). The wave of mergers and
acquisi-ronmental and social forces affecting client–agency relations. tions has placed the structure of the advertising industry in
Closer inspection of client–agency relationships shows that a flux and the competitive intensity faced by agencies has not
these are a subset of the organizational buying context. The factors affecting client–agency relations resemble those forces affecting organizational buying behavior (OBB). In the
organi-Address correspondence to Dr. J. David Lichtenthal, Associate Professor of
Marketing, Zicklin School of Business, Baruch College, The City University of zational buying behavior literature there is a dominant and New York, Department of Marketing, 17 Lexington Avenue, New York, NY
10010. Tel: (212) 802-6516. pervasive framework to study the dynamics propelling OBB.
Journal of Business Research 49, 213–228 (2000)
2000 Elsevier Science Inc. All rights reserved. ISSN 0148-2963/00/$–see front matter
In this study, we attempt to provide a richer representation ties of creative teams. Clients view creativity as a more struc-tured process compared with agencies which stressed sponta-of the various forces affecting client–agency relations by
applying a broader and more diverse range of factors likely neity. Successful relationships treat differences in creativity as a matter for positive action prompting the emergence of an affecting the marketing effort for this business service.
The organization of the article is as follows. First, a review account planning function. of the literature on client–agency relations is summarized and
the links to forces affecting business buying behavior is noted.
Loyalty in Client–Agency Relationships
Subsequently, the Webster and Wind (1972a,b) (hereinafter Michell and Sanders (1995) tested a 7-factor 57-item model WW) organizational buying framework was used to identify for predicting account loyalty among advertisers. Regarding a comprehensive list of forces that might affect client–agency overall reasons for agency loyalty, clients ranked actual ac-relationships. An exploratory study was conducted that exam- count characteristics well ahead of the other six dimensions ined the relevance of this list. Implications for future research for remaining loyal. However, items with the highest mean and managing client–agency relations are presented. scores are associated with the general process involving suppli-ers and interpsuppli-ersonal characteristics such as mutual trust, high caliber personnel, and mutual professional competence. They
Literature on Advertising
reaffirm the findings of Michell, Cataquet and Hague (1992)
Client–Agency Relationships
that relate loyalty to campaigns that generate sales, compatiblewith client objectives and the agency’s closeness to their busi-Research in the area of client–agency relations can be classified
ness. The cause of breakups is the absence of these three into three categories: (1) the criteria used by clients in agency
broad aspects. Furthermore, Michell, Cataquet, and Hague selection; (2) the factors fostering continuity of client–agency
(1992) concluded that a prevailing set of variables exists which relations and; (3) the forces prompting the break-up of client–
are responsible for the breakup in agency relationships. These agency relationships. In brief, much of the research has
fo-factors appear consistently over time and between the United cused on how agencies and clients come together, stay together
States and United Kingdom. Termination is a process rather or break up.
than a single decision and that the formal break is related to specific incidents.
Criteria Used in Agency Selection
Agency change could be predicted from a comparison of Cagley (1986) found that perceptions of advertisers and
agen-switchers and non-agen-switchers (Henke, 1995). Compared with cies were equivalent on 14 of 25 selection criteria studied.
non-switchers, primary decision makers who would change Based on attribute mean importance, both groups agreed that
agencies expressed less satisfaction with agency media skills agency personnel should have account responsibility. In
addi-and the size of their account (i.e., energy addi-and attention given) tion, both sides see agency business and management skills
compared with other accounts. Less importance was placed as important attributes. Agency personnel gave more
impor-on creative skills and the agencies’ ability to win awards. tance to “relationship” related attributes than did advertisers.
Creative aspects are important to winning the business and Advertisers, on the other hand, gave less importance to
mar-diminish over time. It appears that agencies overestimate the keting related services supplied by agencies. Self-selection
importance of their creative ability and achievements as the exists, on both sides of this dyad, pointing to the need for
relationship progresses. Thus, there is a need to focus more mutual learning and understanding the other’s viewpoint.
on understanding the unique needs of the client as an “individ-Cagley and Roberts (1984) derived 25 attitudinal
state-ual.” Buchanan and Michell (1991) used linear logistic regres-ments from discussions with agency personnel and published
sion model to measure the association between observable literature. Four factors emerged: market analysis (i.e.,
re-structural factors (i.e., account size-age, past switching behav-search, creativity, media selection); operational scale (i.e., size
ior, agency and client size, product class) in a client–agency of accounts, ability to buy media); interpersonal relations (i.e.,
relationship and the risk of failure (i.e., log-odds of a breakup). compatibility of personnel); veracity (i.e., strength of
recom-Based on more than 1,000 relationships in the United King-mendations and objection to override client ideas). Industrial
dom, they found that larger accounts are more stable even if advertisers feel a stronger need for sales promotion ideas and
due to shared association. In addition, new accounts may be capability.
less prone to failure while a higher incidence of prior switching Perceptions of creativity are a source conflict in client–
behavior is positively related to subsequent switching behav-agency relations, among the top managements of the 50 largest
ior. Organizational factors are the more important structural advertising agencies and advertisers (Michell, 1984). Both
factors for determining relationship stability. sides agreed on the primary importance of the client–agency
Clients and agencies do try to match up with similar part-relationship. However, the differences in the remaining four
ners as to client, size, agency size, and account size (Michell, categories studied was pronounced. The clients saw
“creativ-1988). Major clients remain loyal to larger agencies, in part ity” as an interorganizational and a process phenomenon while
rein-215
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vigorate the account. Major accounts are comparatively more the top 100 advertisers and the account executives who man-age the accounts. The research goal was to detect sources of loyal despite account size preferring continuity. However,
there has been a polarization in client choice of agency type dysfunctional behavior and learn the extent to which each side is in concord with the other’s shortcomings. The main (Michell, 1984). The largest agencies maintain their net
posi-tion through adaptaposi-tion of services provided. Movement has factors derived from specific contributory areas include: per-sonnel turnover at the agency, assistance given to the agency been away from agencies with higher marketing reputations
toward agencies with higher creative reputations. A clear trend by the advertiser, client organization effectiveness with its advertising activities, and degree of agreement (on both sides) exists toward the use of media consultants. Three declining
sectors are medium and small size agencies and in-house about the agency’s role. An inverse relationship exists between high turnover at the agency and their effectiveness in handling direct accounts. Small agencies have declined at a faster rate.
Doyle, Corstjens, and Michell (1980) study the matched the account. The client must monitor the quantity and quality of assistance it is offering its agency and its own effectiveness in views of companies that switched with those of their former
agency. They identify different perceptions of the reasons for advertising decision making. Agency and advertiser personnel agree on the role the agency is to play in the client’s marketing the breakdown. The primary reason for the account move,
from the agencies’ perspective, is changes in client policy plan. Both sides must present what they expect to put into the business relationship to reduce conflict.
while from the client’s perspective, dissatisfaction with agency
performance is foremost. Furthermore, the breakdown is a In summary, we can observe that past research on client– agency relationships suggests factors that resemble those forces process of creeping disengagement preceded by clear signs of
vulnerability. affecting OBB. Specifically, some criteria used in agency
selec-tion can be classified as mainly individual level factors resem-bling the more micro-forces affecting OBB. Factors such as
Forces Prompting Break-up
mutual learning and perceptual incongruence are used and
of Client–Agency Relationships
are present in WW. Among the factors affecting loyalty in Murphy and Maynard (1996) explored cognitive conflict
be-client–agency relations are interpersonal characteristics such tween agencies and clients comparing decision profiles
regard-as mutual trust and professional competence (Michel and ing hypothetical campaigns in five areas. While substantially
Sanders, 1995). As well, organizational characteristics such in overall agreement with their clients, agency rankings on
as size noted by Buchanan and Michel (1991) and Michel the five decision areas did show some discrepancies. Agency
(1988) plus changes in client policy (Doyle, Corstijens, Mi-professionals agreed with clients on the importance of
mes-chell, 1980). Some of the forces prompting the break-up of sage/creativity and then budget. Media planning was third,
client–agency relationships are similar to those forces affecting while strikingly they gave less weight to market research and
OBB. In particular, Murphy and Maynard (1996) and Hotz the client/agency relationship. These latter discrepancies were
et al. (1982) emphasized the effects of organizational factors not surprising, as it is expected that clients will worry about
with the interaction of individual factors. This interaction is product development and agencies worry about relationships.
suggested by WW. Beard (1996) called attention to the influ-While using pooled data from both groups could obscure
ence of group forces in the form of role ambiguity and its individual differences, cognitive disagreement appears to be
impact on sustaining client satisfaction. In the background, ruled out as a source of conflict. The results, according to
these research streams makes the tacit assumption of an OBB the authors, point to interpersonal factors and organizational
context. deficiencies that might cause both groups to perceive poor
communication and misunderstanding. Agencies and clients
think alike but often believe they do not.
The Business Buying
Effects of client representative role ambiguity could be
Behavior Perspective
found along several dimensions. For task-interactive serviceslike agency use, a positive relationship exists between experi- Prior literature on agency–client relations has not looked at enced role ambiguity and the client’s job tension-anxiety and the broad forces affecting organizational buying dynamics of perceptions of conflict in agency relations (Beard, 1996). An clients and the implications for agency marketing effort. Zei-inverse relationship exists between role ambiguity and the thaml, Varadarajan, and Zeithaml (1988) suggest research on client representatives’ tenure/experience, time working with the contextual relevance of buyer behavior variables holds the an agency, and client satisfaction with the agency. Client role potential for major contribution to the execution of marketing ambiguity has significant impact on four relationship conse- strategy.
Webster and Wind (1972 a,b). These frameworks have shaped of these articles did not directly cite WW, it apparently acts as a “background gestalt” for selecting and developing mea-our understanding of organizational buying behavior since
sures for research on OBB. Furthermore, the incidence of the 1960s (Hutt and Speh, 1998; Wilson, Lichtenthal, and
citation, for the WW framework in the Social Science Citation Rethans, 1986; Johnston, 1981). A brief overview of each is
Index (SSCI) for the first 20 years after its publication (i.e., provided.
a census from 1972–1991), reveals that the Webster and Wind Robinson, Faris, and Wind (1967) developed a process
(1972b) article was cited 37 times. Researchers relied on WW model known as the BUYGRID framework from descriptions
in selecting variables in empirical work eight times (22%). In of three purchase situations. The BUY CLASSES element (i.e.,
the remainder, WW was used to discuss buying center roles straight rebuy, modified rebuy, new task) has guided research
11 times (30%), to refer to comprehensive models seven times that helped empirically derive the classification of business
(19%), to refer to the process of OBB four times (11%), to buying situations altering the duration of the organizational
note the complexity of OBB twice (5%), to discuss the need buying process. The BUY PHASES element has guided
re-for certainty and risk reduction twice (5%), and re-for other searchers who have empirically derived variations on the total
purposes (8%). The WW framework is widely recognized as number of stages and their order in the buying process
(Lich-a set the forces (Lich-active on the buyer’s side th(Lich-at could be used tenthal, 1988; Johnston, 1981).
for developing a characterization of business buying behavior. Sheth (1973) developed an organizational level framework
In the study described below, the WW framework with its on the process of organizational buying based on case studies
distinct subdivision of four sets of forces into E,O,G,I, is and literature reviews. Three elements emerged: a
psychologi-applied to the client–agency context. It will become apparent cal world of the decision maker, the conditions that precipitate
that this framework enriches our understanding of this buyer– joint decision making and the process of conflict resolution.
seller relationship as well. The variables and their linkages are suggested including
situa-tional factors. Choffray and Lilien (1977), drawing on the
conceptual work of Sheth (1973) and Webster and Wind
Methodology
(1972a), develop an empirical model. They focus on the links
Developing Measures of the Forces
between characteristics of the organization’s buying center
and three major stages in the organizational buying process. To identify a set of forces likely to be active in affecting They developed an operational model of OBB that explicitly buying behavior for services, appropriate measures must be addresses the output of group decision making by giving a developed. Hambrick (1984) suggested the use of an existing conceptual framework, measures and methodology for pre- framework to guide in the derivation of measures for collecting
dictive purposes. data. For example, Bunn (1993a) developed a taxonomy of
The most comprehensive and influential framework is that buying patterns and situations consisting of six prototypical proposed by Webster and Wind (1972 a,b). Using case studies buying decision approaches based on numerically derived and literature reviews, WW heuristically derived a structure patterns similar to previous classification schemes with some of the set of four forces influencing OBB (Appendix A). modifications.
Their original conceptualization of the forces shaping OBB In this study, the chapters on environmental, organiza-is described as a general theory of OBB. Four classes of forces tional, group, and individual forces (Webster and Wind, are seen to act in OBB: environment (E), organization (O), 1972b, pp. 40–117) were studied to derive the content of the group (G), and individual (I). A limitation of their approach, items for the instrument. A list of statements was developed as with most complex models, is that relationships among to capture as many distinct aspects of each force as possible. these forces and operationalization procedures were not well Following Bailey (1994) and Hunt (1983), the statements specified. WW proposed that environmental forces external were made to be mutually exclusive and collectively exhaus-to the firm provide a subtle and pervasive context in which tive. These statements are listed in Table 1.
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Table 1. Rank and Mean Frequency of Each Item by Major Class
Rank Overall Mean
Class Within Rank (n597)
Individual (I)
I14: Client experience with an agency influences its chances to be selected in future 1 1 6.40
I20: The expertise of agency personnel affects agency selection 2 2 6.30
I19: The trustworthiness of agency personnel affects agency selection 3 3 6.13
I11: A favorable predisposition makes a client more receptive to marketing 4 4 6.05
communication from agency
I06: Agency selection is based on the agency’s ability to develop programs that 5 5 5.97
meet the client’s needs
I16: By obtaining more information about the agency, client personnel reduce risk 6 6 5.96
in agency selection
I13: A favorable predisposition helps a client to remember more marketing 7 7 5.89
communication from the agency
I01: Client personnel involved have a constant need to be reassured 8 8 5.56
I15: An ongoing client-agency relationship leads to habitual reselection of that 9 27 4.76
agency
I10: Risk reduction motivates clients more so than other factors to prefer one 10 37 4.50
agency over another
I03: Client personnel are confident individuals 11 39 4.45
I12: Client personnel “hear what they want to hear” regardless of marketing 12 42 4.32
communication from the agency
I05: In selecting an agency, client personnel, regardless of what they believe, act 13 49 4.20
based on company expectations
I18: Client personnel change campaign objectives in order to reduce their 14 51 4.07
individual professional risk
I09: Personal recognition motivates clients more so than other factors to prefer one 15 53 4.04
agency over another
I08: Personal advancement motivates clients more so than other factors to prefer 16 56 3.89
one agency over another
I07: In selecting an agency, client personnel regardless of company expectations act 17 57 3.85
based on their own beliefs
I21: In order to reduce risk in agency selection, client personnel are loyal to an 18 58 3.69
agency
I04: Personnel involved in agency selection formulate their preference independent 19 60 3.56
of each other
I17: In order to minimize their risk in agency selection client personnel reduce 20 64 3.34
their personal involvement
I02: Client personnel involved are able to tolerate ambiguity 21 70 2.42
Group (G)
G03: There is a person who controls the flow of agency related information to other 1 10 5.54
client personnel
G08: The opinion of the main negotiator for the client tends to align the 2 14 5.22
expectations of others involved
G04: The person who initiated the process for agency selection can be easily 3 18 5.05
identified
G13: Among client personnel involved one individual has ultimate decision 4 22 4.97
authority to select an agency
G02: There is a person who sets the requirements of the campaign 5 26 4.76
G01: There is an individual who negotiates the requirements of the campaign 6 31 4.68
G07: Internal bargaining is used by client personnel to resolve conflicts in selecting 7 36 4.53
agencies
G11: There is an individual who negotiates but does not set the financial terms for 8 40 4.40
the client
G06: Once the agency is selected, there is one person in the client firm who acts as 9 46 4.28
liaison
G09: All those involved at the client firm, simultaneously listen to an agency 10 48 4.24
presentation
G12: There is an individual who sets but does not negotiate the financial terms for 11 52 4.06
the client
G10: There is an individual who develops a list of qualified agencies but does not 12 67 3.07
participate in negotiation
G05: People involved in agency selection have roughly equal status in the formal 13 69 2.70
organizational hierarchy
Table 1. continued
Rank Overall Mean
Class Within Rank (n597)
Organizational (O)
O16: Personnel involved from client departments are concerned with different aspects 1 9 5.54
of the agency’s offering
O01: The client’s corporate marketing goals affect agency selection 2 11 5.40
O15: Those involved in agency selection are more loyal to their own department’s 3 15 5.21
preferences
O14: The selection of an agency is centralized rather than decentralized in the client 4 16 5.15
firm
O02: The client’s campaign objectives influence agency selection 5 17 5.11
O20: Client personnel involved engage in extensive information search about 6 19 5.04
agencies
O22: The search for agencies is based on past experience with the process 7 20 5.01
O07: Formal authority is used by client personnel to resolve internal conflicts 8 23 4.97
concerning agency selection
O08: The formal authority of those involved varies over the process of agency 9 24 4.87
selection
O23: More than one agency is used in order to reduce uncertainty in agency 10 28 4.76
selection
O09: Informal authority of those involved varies over the process of agency selection 11 29 4.71
O06: Coordination among client personnel involved is achieved through effective 12 30 4.70
communication
O17: More than one person at the client firm has formal authority to decide on 13 34 4.60
agency selection
O19: More than one agency is used in order to reduce the client’s risk 14 35 4.56
O14: Most client personnel involved are well informed about the issues concerning 15 38 4.46
agency selection
O12: The interaction pattern among agency selection personnel is influenced by the 16 45 4.28
procedures and paperwork followed
O03: Client personnel use persuasion rather than authority to advance their 17 50 4.19
preference for an agency
O11: Financial rewards based on formal evaluation of client personnel affects agency 18 55 3.96
preference
O10: Non-financial rewards based on formal evaluation of client personnel affects 19 59 3.63
agency preference
O05: Client personnel involved have latitude to deviate from company rules 20 61 3.49
concerning agency selection
O21: Client personnel change campaign objectives during the agency selection 21 63 3.37
process
O18: A client’s conflicting goals are resolved in the process of agency selection 22 65 3.24
O13: Manipulating client organizational factors is more effective than direct 23 66 3.24
persuasion of their personnel Environmental (E)
E10: Competitive intensity in client industry affects the extent of agency services 1 12 5.34
used
E08: General availability of capital affects the extent of agency services used 2 13 5.27
E15: Client industry business practices and norms affect the extent of agency services 3 21 5.00
used
E04: Changes in client industry technology affect the extent of agency services used 4 25 4.79
E09: Level of optimism or pessimism affects the extent of agency services used 5 32 4.65
E11: Expectations of price changes for agency services affects the extent of agency 6 33 4.62
services used
E05: Changes in client industry technology affect the way clients select an agency 7 41 4.32
E01: A client’s preference for an agency is influenced by its proximity 8 43 4.31
E12: Govt economic activities affecting the client industry influence the extent of 9 44 4.31
agency services used
E13: Govt regulatory activities affecting the client industry influence the extent of 10 47 4.24
agency services used
E06: U.S. economic growth rate affects the extent of agency services used 11 54 4.00
E14: Client industry trade associations affect the extent of agency services used 12 62 3.46
E07: U.S. unemployment rate affects the extent of agency services used 13 68 2.91
E03: Client firm’s ecological concerns affect agency selection 13 71 2.42
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also be deemed not as important by some respondents. To over, choosing a new advertising agency is a high involvement minimize the halo effect of continuously evaluating items from (new task) decision for the organizational buyer (Webster, one major OBB force and to guide respondents to give careful 1990). The process of choosing an agency involves many and equal consideration to all the forces two steps were taken: individuals over a substantial period of time increasing the (1) the poles of the scales were alternated throughout the likelihood of the maximum number of forces being active and instrument; and (2) the items were systematically rotated. experienced by sales representatives. Therefore, the senior These two steps help ensure that sales executives would give sales personnel of such agencies likely accumulate knowledge their assessments on a set of measures that is a proxy for the and experience on the buying behavior of various organiza-entire WW framework without signaling its broad content or tions. Campbell (1955) proved that knowledgeable people,
structure. when answering well-designed questionnaires within their
Senior sales personnel from the top 50 agencies in the area of expertise, provide quality data. More recently, Weitz, Eastern United States were selected fromAdweek Agency Direc- Sujan, and Sujan (1986) stress salesperson knowledge with tory.Thirty-nine of the fifty firms initially contacted by phone an ability to process buyer information as a determinant of agreed to participate. Eleven refused citing reasons of confi- selling success.
dentiality. Each agency that agreed accepted 10 questionnaires Senior sales personnel, like account supervisors, are typi-with postage-paid return envelopes and circulated these to cally responsible for convincing the potential client to select their sales executives responsible for new account develop- one agency over another, while account executives are respon-ment. To foster participation, guaranteed anonymity was sible for servicing and satisfying the client once on board. It promised and respondents were not required to identify them- is the account supervisor’s job to know and understand the selves or their firm. A total of 101 usable surveys were re- needs and requirements that shaped the clients’ selection of the turned, yielding a response rate of 25.8% based on the number agency. They must understand their clients’ buying behavior.
of surveys distributed. When respondents are asked about specific purchases they
have participated in, it may restrict the ability to generalize the results (Kohli, 1989; Silk and Kalwani, 1982 in Bunn
Selecting Key Informants
1993a). Therefore, sales executives were asked to recall theirTo ascertain the active forces affecting OBB for business ser- most recent selling experiences rather than a decision instance. vices, it is important to use respondents who may have knowl- Data was collected from sales supervisory personnel believed edge about business buying behavior in a broad range of to possess experience and knowledge about a variety of organi-business markets (Silk and Kalwani, 1982; Bunn, 1993; Kohli, zations using agencies’ services.
1989). According to Bunn (1993a) early research relied on the use of key informants from the buying side (i.e., purchasing
managers’ reports of their own behavior and the behavior of
Data Analysis
others involved), and it evolved to include informants fromThe data was analyzed in several steps. First, the sample was the selling side (i.e., sales representatives and sales managers).
examined to assess respondent profile and experience. Second, Earlier, Moss (1979) had reported three case studies wherein
all 72 items were examined to establish the extent of occur-industrial sales personnel were effectively used as a source of
rence of the OBB forces. The pattern of groupings within each in-depth marketing intelligence about buyers.
of the four main classes was explored as well. Finally, the Researchers have not used reports on industrial buying
derived framework was examined using all 72 items and com-behavior from sales executives frequently, and these reports
pared with the proposed structure of the WW framework. should be considered valid sources of information about OBB.
The pattern of groupings among the four main classes was As an observer external to the buying firm, sales personnel
also examined. should be able to see the broader set of forces affecting the
OBB process (Anderson, Chu, and Weitz, 1987). Furthermore,
Respondent Profile and Experience
organizational buyers have been shown to hold perceptual
The confidence that can be placed in the results is in part views skewed to favor their own importance and functional
contingent upon the characteristics of the respondents as key positions in the organization (Silk and Kalwani, 1982). In
informants. An examination of the respondent’s job title, sales effect, organizational actors are unable to “step out of” their
experience, and their industry exposure as shown by their context and location within the firm to obtain a view including
account activity was conducted. more macro forces. Furthermore, “snowballing techniques”
As a group they have considerable experience. On average, For all 60 items surviving there were at least 97 least usable cases (except one item with 91) even after listwise deletion. the respondents have been in the advertising business 11.15
years (n 5 96), with their current agency 5.21 years (n 5 A 2.0 or higher on a semantic scale suggests that the force is somewhat active. A 3.5 is theoretically the number at which 98), and in their current positions 3.56 years (n597).
The external validity of the framework that emerges is the respondent group finds this force more active than not. The full range of the 1–7 scale was used for every item included partly contingent upon the respondent’s breadth of experience
in converting prospective consumers of agency services to in the analysis. These procedures were used to lower the likelihood of spurious factors or items remaining or being clients. In an open-ended format, the respondents reported
the three industries or firms with which they most frequently developed.
Table 2 shows the results from the four separate factor did business. While information concerning each agency’s
clients is publicly available, the experience of individual sales analyses conducted on each of the set of items from main forces (i.e., E,O,G,I).
executives could vary. The responses showed that 65
indus-tries were represented at the level of detailed industry (4-digit For each of the major four categories, the table shows (1) the framework proposed by WW; (2) the derived structure SIC code), 53 at the industry group level (3-digit SIC code),
and 30 at the major group level (2-digit SIC code). The distri- based on the factor analyses; (3) the cumulative variance for an force; (4) the extent to which the numerically derived bution was flat, with no one industry predominant. Overall,
the respondent group is well qualified as key informants, given structure corresponds to the WW framework; and (5) a sum-mary of findings for each force. A discussion of the main their organizational positions, years of experience and breadth
of industry exposure. findings follows.
In the environmental class, EF1 and EF2 correspond to the technological and economic subclasses as specified in
Main Classes of Forces Affecting OBB
WW. EF3 is a hybrid of legal and political subclasses. EF4 is The respondents were required to assess the extent to which
a hybrid of cultural and economic (industry) conditions. The the specified OBB items from the WW framework are affecting
physical environment does not appear to be active probably their clients’ buying behavior. Table 1 contains the summary
because of the study’s urban location. In the organizational of the means of the 72 items. Each item was scored on a scale
class, the eight factors derived use all the items from the of 1 (never) to 7 (always). Items were considered significantly
organizational class as suggested by WW. In the group class, active for characterizing buying behavior, if they ranked above
six factors are derived. Four correspond to four of the five a cut-off level across all respondents of above 3.5. Of the 72
original buying center roles. There was some role fracturing items derived, 60 (83.3%) have a mean extent of occurrence
(i.e., hybrid roles). Respondents indicated that the number of greater than 3.5. Respondents found these items to be more
people typically involved from the client firm during the buy-active than not in their clients’ buying behavior.
ing process averages 5.45, with a standard deviation of 1.878 In their chapters devoted to the four main forces, Webster
(n5 95). Other studies also empirically establish that OBB and Wind, (1972b, p. 40–107) emphasized the interaction
is a multi-person phenomenon (Silk and Kalwani, 1982; Mori-within each class. Factor analysis is preferred to cluster analysis
arty and Bateson, 1982). One factor corresponds to a negotia-in this situation because, from a theoretical standponegotia-int, WW
tion role and one to the manifestation of lateral relationships. already contains loosely specified classes and plausible
group-In the individual class all seven factors derived correspond ings (Stewart, 1981). Because cluster analysis is a theoretically
to the individual subclasses as specified by WW. Five were unbounded numerically driven procedure, it is less
appro-hybrid. priate. Exploratory factor analysis allows any patterns (i.e.,
on an intra-class and inter-class basis) to emerge within the
Underlying Structure of the Forces Effecting OBB
theoretical bounds of the WW framework.
Similar to Moncrief’s (1986) use of factor analysis to de- The research purpose is to investigate the general structure of the framework that emerges, and to explore the nature of velop a sales position taxonomy, the following procedures
were used for all factor analyses performed in this study: the interactions among the OBB classes. First, it was to be determined if there is a distinction between the external and (1) consideration was given to any factor initially extracted
(principle components method) with an eigen-value greater internal classes. Webster and Wind (1972b, p. 40) noted that “Environmental influences are subtle and pervasive. They are than 1.0; (2) all those factors were subject to varimax rotation;
(3) items included had a loading of 0.40 or greater. This cut- hard to identify and describe, and they provide the context within which organizational, group, and individual factors in off level was chosen based on a visual examination of all
loadings that revealed a significant drop in the loadings below turn exert their influence.” Therefore, the items that represent the environment, which is external to the buying organization, 0.40; (4) any item with cross-loading of 0.40 or higher on
more than one factor was deleted; (5) as mentioned previously, should group together, while the organizational, group, and individual items should exhibit a higher degree of interaction. items with a mean extent of occurrence of 3.5 or below were
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Table 2. Factor Analyses on Main Forces
Environmental (E) Organizational (O) Group (G) Individual (I)
Original WW Cultural Goals and Tasks Gatekeeper, User, Buyer, Decider, Personality
Framework Influencer
Economic Structure (communication, status, Tactics of Lateral Relationship Role Set authority, rewards, workflow)
Legal Technology Social negotiations Motivation Physical People Performance of Buying Committee Learning Process
Political Interaction with Environment
Technology Preference Structure
Decision Rules
Empirically Derived EF1 Technology effects the OF1 Authority of those involved varies GF1 Negotiator sets financial terms and IF1 Process-results of learning about Structure extent and way agency and is used to resolve conflict selects vendors the agency
services are used
EF2 Economic conditions vis- OF2 Marketing and campaign goals GF2 Liaison-flow of information IF2 Confidence in agency a-vis monetary policy and
anticipated price changes
EF3 Legal and political forces OF3 Communication and information GF3 Determines requirements IF3 Self-aggrandizement government - regulatory search
ativity
EF4 Business practices and OF4 Risk-uncertainty reduction GF4 Opinion leader-ultimate authority IF4 Risk reduction competitive intensity through multiple sourcing
OF5 Different people decide about GF5 People involved are of equal IF5 Independent thinking about agency different aspects of offering status and they bargain selection
OF6 Selection process is centralized GF6 Initator role IF6 Straight rebuy tendency
OF7 Participants are loyal to their IF7 Insecurity and selective perception department’s preferences than those
of other departments
OF9 Financial rewards based on personal evaluation effects selection
Cumulative variance 55.5% 58.1% 56.2% 60.0%
Degree of EF1 and EF2 corresponds to OF1 corresponds to authority structure GF1 is the buyer’s role IF1 is hybrid from learning and correspondence economic and technological preference structure
forces
EF4 is a hybrid of culture and OF2 & OF6 constitutes goals and GF2 is the gatekeeper’s role IF2 is a hybrid of personality, economic forces tasks motivation and preference classes The physical environment OF3 corresponds to communication and GF3 is hybrid of de facto decider and IF3 is a hybrid of motivation and
taxon is not active workflow structure buying center listening to presentation perceived risk classes
OF4 corresponds to behavioral theory GF4 corresponds to social negotiation IF4 is constituted from the motivation
of the firm class
OF5 & OF7 constitutes the buying GF5 corresponds to lateral relationships IF5 is a hybrid of personality and role
center as a group set
OF9 corresponds to reward structure GF6 is a role splintered from the user IF6 is a hybrid of role expectations and class learning classes
IF7 is constituted from personality
organizational and individual classes should interact with each other to a higher degree than they do with the group class: “. . . individual and organizational goals combine in a unique way to determine a frame of reference or a point of view that guides each individual and determines their interpretation of the behavior of other members of the buying center” (Webster and Wind, 1972b, p. 80). Therefore, for pairwise interactions of O,G,I class items the O-I combination should exhibit the highest degree of interaction.
FACTOR ANALYSIS OF ALL ITEMS SIMULTANEOUSLY. To ex-plore the pattern of groupings among all the major classes, an exploratory factor analysis on all 72 items simultaneously was performed. A total of 65 items forming 25 factors survived the procedure outlined earlier (Table 3).
There are three pure environmental factors. F1 represents the macro and the industry environment. F7 captures the effect of the technological environment, and F23 reflects the geographic proximity of the agency. These environmental fac-tors are meaningful and not contaminated with items from the other three major classes. The remaining factors consist of a mix of items from the other three classes. Therefore, the WW hypothesized broad distinction between E and O,G,I emerged from the data.
An Item Separation Index (ISI) was developed specifically for detecting mutual exclusivity of classificational schemes. A basic requirement for good classification schemes is mutual exclusivity (Bailey, 1994; Hunt, 1983). The ISI is a relative measure of the mutual exclusivity of the various classes (i.e., the four sets of OBB forces). The index ranges in value between 0 and 100. A high value of the ISI suggests that the items belonging to a particular class load together and do not to interact with other classes. A low value of the ISI suggests that the items from one class interact with items from another; therefore, the classes are not mutually exclusive. This index is sensitive in that even one contaminating item in a factor will show interaction. In addition, only nearly pure factors will drive the index to high values.
The ISI was calculated as follows: (1) the “pure factors” were identified (i.e., those consisting exclusively of E or O or G or I items); (2) for each of the major classes, the number of items in the pure factors were summed; (3) for each of the four forces, the number of the items from step 2 were divided by the total number of items that survived the screening for that main class (i.e., E,O,G, or I, respectively); (4) that number was multiplied by 100. The resulting percentage and summary of the interaction among the items for the analysis of E,O,G and I is given in Table 4.
The environment class has an ISI value of 80, while the values for the organization, group and individual force factors are 35, 44, and 62, respectively. The high ISI value for the environmental force factors indicates that E items group to-gether to create a relatively pure class. The lower ISI values for the other three forces suggests that items from those classes
Table
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Table 3. Factor Analysis for All Forces (E, O, G, I)
F1 8.1% E6 0.75 F13 2.5% 011 0.66
E12 0.74 E15 0.50
E7 0.68 G2 0.49
E13 0.68 E14 0.47
E3 0.52
E10 0.43
E11 0.41
F14 2.4% 02 0.78
O1 0.50
F2 6.4% I20 0.74
I16 0.70
I14 0.57 0.43 f12
F3 5.7% I8 0.78 F15 2.3% G7 0.74
I9 0.57 I18 0.60
O13 0.54
F4 4.8% I7 0.85 F16 2.2% G11 0.82
I4 0.59 G12 0.55
O21 20.40 O6 20.43
F5 4.4% I3 0.77 F17 2.0% G3 0.85
O4 0.52 G6 0.50
I12 20.44
O22 0.41
F18 1.9% E2 0.81
F6 4.0% O9 0.84 O10 0.47
O8 0.76
F19 1.8% G9 0.79
F7 3.7% E5 0.79
E4 0.78 F20 1.7% G1 0.78
O14 0.63
F8 3.3% I17 0.82
I1 0.43 F21 1.6% I1 0.86
G1 0.43
I21 0.40 F22 1.5% O19 0.87
F9 3.0% I6 0.61 F23 1.5% E1 0.75
O20 0.55 O1 0.44
I5 0.45 0.40 f12
F24 1.4% E8 0.73
F10 3.0% O17 0.68 I19 0.45
G13 20.62
O7 20.60 F25 1.4% G4 0.84
G5 0.47 O5 20.41
F11 2.9% I15 0.67
O15 0.65
F12 2.5% I13 0.87
I11 0.52 0.42 f2
cluding the items that constitute the environmental class. G as proposed in the WW framework. However, an interaction Nineteen factors and 41 associated items survived the screen- clearly exists. Further insight can be gained into the pattern ing procedure for all O,G,I items. These additional ISI values of interaction by looking at all pairwise interactions of O, G for O,G,I are 53, 45, 33, respectively. These low ISI numbers and I classes.
indicate that these classes are not mutually exclusive.
PAIR-WISE FACTOR ANALYSIS. To explore patterns of interac-The ISI values do not provide a clear indication of the
tion among O, G, and I, factor analyses were performed on pattern of interaction. An examination of the factor analysis
all pair-wise combinations of the items that constitute these revealed that of the 19 factors, 10 were “pure” (i.e., these
three classes (i.e., G and O, G and I, O and I). Table 4 shows were items from only one of the three remaining classes) and
their ISI values under G O, G I, and O I. For G-O, the ISI nine were mixed [i.e., three (0,I), two (I,G), two (G,O), and
values for G and O are 94 and 88, respectively. Of a total of one (G,O,I) hybrid factor]. Thus, O,G,I simultaneously
Table 4. Item Separation Index Summary by Class
Factor Analysis E O G I O G I O G G I O I
Original Variables into the Analysis 15 23 13 21 23 13 21 23 13 13 21 23 21
Variables after Elimination 10 14 9 16 15 11 15 17 8 10 15 19 19
Pure Factors 3 3 3 6 5 3 3 8 4 4 3 4 3
Variables in Pure Factors 8 5 4 10 8 5 5 16 7 6 9 7 8
Separation Index (%) 80 35 44 62 53 45 33 94 88 60 60 39 40
consist exclusively of group items, and one is hybrid. These lieved to affect business-to-business buying behavior. Because high ISI values indicate a high degree of separation. This the range of forces was broad, measures had to be taken on finding mirrors WW’s proposed structure of mutually exclu- a organizational level rather than on a individual level. As sive for these two main forces. For G-I, the ISI of 60 for G well, using the WW framework results in using an item base and 60 for I suggests a higher degree of interaction compared that may be lacking some content for each of the four forces. to G and O. Of the 10 factors that emerged, four consist Further conceptualization on these forces are needed. This exclusively of individual items, three consist exclusively of study was conducted among the top 50 advertising agencies group items, and the remaining three are mixed. For O-I, the in a major metropolitan area. The sample was based on the ISI values for O and I are 38 and 40, respectively. This indicates perceptions of buying behavior experienced by sales personnel the strongest interaction among the three pairs of classes. Of of the largest 50 advertising agencies. This may limit the a total of 14 factors, three consist of pure individual items, generalizability of the findings and suggest the need for re-four consist exclusively of organizational items, and eight are search on other services as well as additional populations. from both. The low ISI values suggest the highest interaction
among these two. This lack of mutual exclusivity supports
Discussion and Implications
the relationship proposed in the WW framework.
Contextual knowledge possessed by sales representatives has
Interlude
been shown to facilitate the personal selling effort by enablingsales personnel to accurately categorize buyers and situations, Most of the OBB items (60 out of 72) extracted from the WW
based on past experience. Prior research efforts have addressed text were found to influence the buying decision for agency
recovered contextual knowledge through the use of self-report selection. That respondents were able to comprehend and
data and its value in the personal selling effort (Weitz, 1981, report that the WW framework, as represented through the
1978). The present study took a different approach by present-72 items occurs with relatively high frequency, leads to three
ing to sales personnel a well-developed list of possible contex-important conclusions. First, the status of WW’s framework
tual knowledge items derived from a widely accepted and is holistically affirmed. Furthermore, this study establishes the
intuitively appealing theoretical model of OBB. To the extent applicability of WW to industrial service transactions. Second,
that the general model captures organizational buying forces it appears that qualified “external observers” in a business
faced by sales personnel on a day-to-day basis some conver-buying transaction possessed more depth and breadth of
gence between their experience and the model should be knowledge about OBB than is generally believed. Third, by
realized. describing the WW forces in language reflecting the key
infor-Respondents were most likely not familiar with the WW mant’s particular industry, it is possible to access this
knowl-general model by name or content. Therefore, the model as edge. These are encouraging indications for future research.
represented through a set of items was nominally transparent. Some of the problems raised in conducting empirical research
That respondents were able to comprehend and experience concerning OBB at a more macro level can be overcome.
most of these 72 items with relatively high frequency means The analysis also establishes that the pattern of groupings
a theoretical model of OBB can be used as a proxy for industrial essentially conforms to the structure of the WW framework.
sales personnel contextual knowledge. Furthermore, it is pos-As WW suggested, these forces are conceptually distinct while
sible to access this unique industrial contextual knowledge their impact on OBB in vivo is somewhat interactive. To date,
through the use of a theoretical model. The results of their those interrelationships were broadly specified but have never
assessments suggests that contextual knowledge unique to been empirically tested in toto. The results point to the
distinc-OBB exists and is accessible and could be made available to tion between forces external and internal to the buying
organi-train inexperienced sales personnel. zation. The environmental class did not interact with the other
Advertising agencies are marketers of business-to-business internal forces. Furthermore, a higher degree of interaction
services. Knowing the forces that affect the buying behavior was found among O and I classes to the virtual exclusion of
of potential of new clients and their relative occurrence should E and G.
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firms they serve. The forces used in this study are from four client personnel play in agency selection endures from pro-gram to propro-gram for one client as well as across different broad categories: environmental, organizational, group, and
individual (psychological) found to affect organizations when clients. In particular, there are three roles likely to be carried out by up to three individuals. There is a person who controls they buy. Fewer than 10 of those items are concerned with
the more traditional target market factor programming. The the information client personnel receive from the agency. There is a main negotiator who acts as an opinion leader results indicate that most items (83%) were seen as active by
the respondents. By focusing on the top 20 most prevalent effecting the preferences of others involved. Finally, there is one person who initiated the selection process for any given forces in Table 1 one can conclude that for the four broad
classes, the grand order for frequency of occurrence is: I, O, campaign. The business marketing implication of these find-ings suggests that for an agency communication to be more G, and E. Several important detailed observations can be
made with implications for more effective new service business effective, it should take two steps. First, identify the individu-als involved and the particular role(s) they play with each acquisition.
campaign. Second, develop and target specific communication to these individuals based on these buying center roles
(Lich-The Importance of
tenthal, 1988; Bonoma 1982).
Individual Psychological Factors
The eight factors that are most prevalent in the business buying
The Role of Environmental Factors
behavior of clients belongs to the broad category of individual
Environmental forces represent those factors external to the (psychological) forces (Table 1). This suggests that agencies
client firm as a business buyer that affect their buying behavior should devote additional effort toward fostering a relationship
for agency services. Although these forces are of least influence predicated on trust and displayed expertise while reducing
overall (Table 1), client industry competitive intensity and client risk. This underscores the importance of recognizing
capital availability can not be ignored as an influence in agency and addressing the personal characteristics and needs of the
selection. individuals who are involved in the agency selection process
In summary, this study supports the notion that an OBB while pursuing traditional selling tactics based on program
framework can be applied to client–agency relationships. The and campaign characteristics.
client–agency relationship can be seen from a business-to-Clearly the high occurrence of these items highlights the
business service perspective. Many forces unique to business relatively high frequency of prevalence of the individual
cate-buying behavior were prevalent for the selection of agency gory items when compared to the other contextual knowledge
services according to sales personnel involved in cultivating categories. This finding concerning contextual knowledge
sug-new business. The findings suggest that agencies need to gests that organizational buying needs to be viewed from a
emphasize nonspecific campaign forces effecting agency selec-psychological and social selec-psychological perspective much like
tion. Moreover, the study also points to the importance of consumer behavior models.
identifying the effect of internal organizational forces and the roles buying center members play, side by side with campaign
The Importance of Client Internal
specific factors.
Organizational Structure and Goals
Doyle, Corstjens, and Michell (1980) suggest six client holding The authors appreciate the support and partial funding for this research
provided by the Institute for the Study of Business Markets at the Pennsylvania
strategies including vigilance to signals of vulnerability and
State University.
tactical adaptation to client organizational change. In this study, most prevalent organizational forces consist of a mix
between goals and objectives of the client’s campaign and the
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