The business scope is no longer limited by the region. So long as accord with the cost, all kinds of products and service can come from different countries. Therefore, it seems that the price becomes the only factor in business competitions. In fact, industry customer chooses supplier not only considering the price but also including a lot of other factors. This research synthesizes the literature to examine the determinants of industry customer’s choice of supplier. In addition, this research also studies when the industry customers will intend to change their suppliers, whether he renegotiate with the incumbent supplier in order to try to continue the cooperative chance. We discuss from four aspects - trust, switching cost, price and product mix. Among them, trust and switching cost are related to incumbent suppliers. They will make the industry customer improve reliance on the incumbent supplier, and are also the switching barrier. Price and product mix are also related with the new supplier. They are the marketing programs that the new supplier can use, and their purpose is to induce the industry customer to switch.
So, after understanding the determinants of industry customer’s choice of supplier, this research discusses enterprises how to maintain the good and lasting business relationships in practice. The goal of study includes the screw industry and steel industry, and the main findings are as follows:
1.In the industry customer''s switching intention, trust and switching cost are important factors to influence the industry customer to choose the supplier.
2.In the industry customer''s renegotiated intention, trust, switching cost, price and product mix all have significant effect on the customer’s tendency to renegotiate before he switch.
3.The effect of a new supplier’s superior price on the likelihood of customer switching will be moderated by the presence of trust relationships and supplier-related switching cost. Moreover, the effect of a new supplier’s superior price on the likelihood of customer renegotiating will be moderated by the presence of trust relationships.
Finally, we discuss the implications of our finding, the study’s limitations, and possible topics for future research.