"This book examines global strategies for industrial champions. In particular, it highlights three categories of supply in industrial markets: premium products, low-price products, and complex digital solutions. The authors identify opportunities for creating synergies between these three strategies and address the overarching question: How can the company of the future be organized?"--
Extant literature has studied how customer–salesperson price negotiations evolve in "normal" circumstances. However, recent economic recessions illustrate the need to advance theory on the question of how price negotiations evolve in "abnormal" times when customer demand significantly contracts beyond expected variation. In response to this gap in the literature, this study uses a multi-method design to investigate price negotiations during exceptional demand contractions. Our results from a theories-in-use study reveal that during such circumstances, salespeople's perceived dependency on customers increases while customers' perceived dependency on salespeople decreases. The inherent "power shift" should benefit customers in subsequent price negotiations. However, customers are less likely to capitalize on their power if they have a close relationship with a salesperson, implying that salespeople do not have to concede on price negotiations. This effect is likely due to increased sympathy during periods of exceptional demand contractions. The authors further validate key propositions from this qualitative study in a field study and a scenario-based experiment. Altogether, this study suggests that managers should not be too hasty in approving and encouraging salespeople to offer unnecessary price discounts during exceptional demand contractions as buyers may become more sympathetic and lenient during price negotiations.
Extant research established that customers' expectations play an ambivalent role in the satisfaction formation process: While higher expectations are more difficult to meet and thus cause dissatisfaction, they simultaneously increase satisfaction via customers' perceived performance owing to a placebo effect. However, to date, knowledge is scarce on the question under which conditions either the positive or negative effect of expectations on satisfaction prevails. Building on information processing theory, the authors hypothesize that an essential contingency of the indirect, placebo-based effect is the degree to which customers are able and motivated to process a service experience. Three studies with a total of over 4,000 customers in different service contexts provide strong evidence for this hypothesis. Thus, managers are well advised to provide a realistic or even understated prospect if the service context favors customers' ability or motivation to evaluate. Conversely, if customers are neither able nor motivated to evaluate the service, increasing customer expectations represents a viable strategy to enhance satisfaction. Relatedly, if customers hold low service expectations, managers should foster customers' ability and motivation to evaluate the service. In contrast, if service expectations are high, managers may benefit from reducing the likelihood that customers overly focus on the service performance.