Caught in the middle: buying from markets and selling to networks

Abstract

The purpose of this paper is to look at how relationships between buyers and sellers are affected when on the supply side the most important resource is available only through a trading system created from a market perspective, whereas on the customer side the interaction resembles a network where relationships are long-term and complex. The empirical setting of the study is the pelagic industry, where this situation represents a challenge for the Norwegian herring exporters as they try to bridge these two types of interactions. In this industry, the purchasing of the herring is subject to a blind auction by law. At the same time, Norwegian exporters have customers in European seafood markets characterised by long-term relationships and close cooperation between importers, processors, producers and retailers. To analyse this situation, the study applies a qualitative research design including personal interviews with selected respondents in Norway and the three largest Norwegian herring export markets: Germany, Poland and Russia. The authors find that the interaction in these particular supplier–customer relationships is not extended to its full potential. It seems that the market-type transactions create “spillover-effects” to the other relationships, meaning that it is difficult to maintain high-involvement relationships when interaction in connected relationships is limited.