Article Presentation by: Henry G. Lam Communication Media Preferences in B2B Transactions: An Examination of The Purchase Process (Journal of Personal Selling & Sales Management, Vol. XXV, No. 3 Summer 2005, pp. 283-294 by Cynthia Rodriguez Cano, James S. Boles, and Cynthia J. Bean) Article Presentation by: Henry G. Lam MBA655 B2B Marketing Date: 6 Dec. 2008

Agenda Summary of the Article Research Objectives Theories being applied The Purchase Process Communication Media being studied Research Methodology & Measures Research Findings A real business case: “A serious intention to purchase a 3G-CDMA2000 Network by CSL in 2002” Research Limitations Some questions for class discussion

1. Summary of the Article The study examines the complexity of information interchange and buyers’ and sellers’ communication preferences for various media types during each stage of the purchase process. Findings reveal that, overall, buyers and sellers prefer face-to-face and telephone communications over other media types. For certain aspects of sales process, computer-mediated communications (CMC), such as e-mail, serve an important role as a low-cost medium. Whereas in other phases of the sales process, richer communication media are preferred by both buyers and sellers.

1. Summary of the Article (Con’t) One reason for the high level of interest in enhancing the communication process is the flood of communications that threatens to overwhelm business people  Information Overload !!!! It has been documented that managers receive an average of 190 messages per day (52 telephone calls, 30 emails, 22 voice mails, 18 pieces of interoffice correspondence, 18 letters, and 15 faxes (Associated Press 1998). Thus, buyers and salespeople alike seek more efficient and effective communication methods. This study examines communication media preferences and choices of B2B exchanges.

2. Research Objectives Are communication media preferences of buyers and sellers across the eight phases of the purchase process different? What communication media (in terms of richness and social influences) are relied on most heavily during each phase of the purchase process? Are buyers’ and sellers’ media choices aligned across the different phases of the purchase process? How do buyers and sellers rank their communication choices during each phase of the purchase process?

3. Theories applied Information Richness Theory (IRT: Daft and Lengel 1984) or sometimes called Media Richness Theory: "the ability of information to change understanding within a time interval". Communications that can overcome different frames of reference and clarify ambiguous issues to promote understanding in a timely manner are considered more rich. Communications that take a longer time to convey understanding are less rich. Social Influence Theory (Schmitz and fulk 1995; Webster and Trevino 1995)

4. The Purchase Process Phase 1: Anticipate or recognize a problem and general solution. Phase 2: Define the product types needed. Phase 3: Develop specifications (characteristics) of the product needed. Phase 4: Search for qualified suppliers. Phase 5: Acquire and analyze proposals. Phase 6: Evaluate proposals and select suppliers. Phase 7: Place and receive an order. Phase 8: Evaluate performance of product and supplier.

5. Communication Media being studied Face-to-Face Telephone Email Written Fax Extranet Communications Other

6. Research Methodology & Measures MBA students enrolled in a large southern university gathered the data for this study. Each student was required to administer a survey to at least one purchase agent and one salesperson engaged in B2B sales. The research is based on a wide cross-section of companies engaged in B2B exchanges. The final data analyzed for this study included responses of 131 buyers and 141 salespersons.

6. Research Methodology & Measures (Con’t) Respondents were asked to consider a specific major sale (purchase) and complete an 8 x 7 matrix (8 stages of purchase process by 7 communication choices) representing media preferences (email, telephone, face-to-face, written, fax, extranet, and other) for each phase of the purchase process. Participants were asked to rank their communication media choices for each phase as first choice (1), second choice (2), etc…

7. Research Findings Both buyers and sellers reported some preferences for “other” communication media (media other than face-to-face, telephone, email, fax, written, and extranet), no more than 17 buyers (13%) and 10 sellers (7%) selected “other” communication for any one phase of the purchase process. “other” category was not considered in the analysis as it gave little insight in the study.

7. Research Findings (Con’t) Phase 1: Anticipation and Recognition of a problem and General Solution: (1) face-to-face, (2) telephone, (3) email, (4) written, (5) fax, (6) extranet. Phase 2: Define Product Type Needed: (1) face-to-face, (2) written, (3) email, (4) telephone, (5) fax, (6) extranet. Phase 3: Develop Specifications: (1) face-to-face, (2) telephone, (3) written, (4) email, (5) fax, (6) extranet. Phase 4: Search for Qualified Suppliers: (1) telephone, (2) email, (3) face-to-face, (4) fax, (5) extranet, (6) written.

7. Research Findings (Con’t) Phase 5: Acquire and Analyze Proposals: (1) face-to-face, (2) written, (3) email, (4) telephone, (5) fax, (6) extranet. Phase 6: Evaluate Proposals and Select Supplier: (1) face-to-face, (2) written, (3) telephone, (4) email, (5) fax, (6) extranet. Phase 7: Place and Receive Order: (1) fax, (2) face-to-face, (3) telephone, (4) email, (5) written, (6) extranet. Phase 8: Evaluate Performance of Product and Supplier: (1) face-to-face, (2) telephone, (3) written, (4) email, (5) fax, (6) extranet.

8. A real business case: “A serious intention to purchase a 3G-CDMA2000 Network by CSL in 2002” Phases 1, 2 and 3 are quite similar to the research findings with slight differences => (1) face-to-face, (2) telephone, (3) email, (4) written, (5) extranet, (6) fax. Phase 4 is matching with the research findings => (1) telephone, (2) email, (3) face-to-face, (4) fax, (5) extranet, (6) written. Phase 5 and 6 are quite similar with slight differences: (1) face-to-face, (2) written, (3) telephone (4) email, (5) extranet, (6) fax. Phase 7 and 8 are quite similar with slight differences: (1) face-to-face, (2) written, (3) telephone, (4) email, (5) extranet and (6) fax.

9. Research Limitations The factors influencing communication choices can extend beyond those considered in this study. The complexity of industries and situations limited the identification of common variables that moderate communication choices. Limited number of respondents working within an extranet environment did not allow for meaningful analysis. As technologies changes, so do the communication choices available to salespeople and buyers such as Yahoo, Alibaba, etc.. The findings may not include all of choices that are currently used by some salespeople and buyers.

10. Some questions for class discussion Email has been considered as least expensive yet most efficient means of communication in modern time, what are the potential problems and drawbacks you may foresee if buyers and sellers are too dependent on this communications medium? When we face multiple sellers of the same product or service, are we going to use different communication means to suit different sellers to achieve better results? Why?

Thank you ! Any question?