An Assessment of Supplier Selection: Chinese Purchasing Managers′ Criteria and Their Implications for Western Marketers

Abstract

China′s foreign trade and investment policies have appeared more attractive to Western marketers in recent years. China presents an opportunity for huge market potential and rapid growth for American multinational firms. However, Western marketers have only limited knowledge about Chinese purchasing decision making, particularly the supplier selection and evaluation criteria of Chinese purchasing managers. Highlights six key criteria of supplier selection and describes the responses of a sample of Chinese purchasing managers. Segments the respondents into three clusters, based on similarities in their supplier evaluation processes and differentiates these clusters in terms of whether the managers emphasize reliable deliveries, price/cost considerations, or product quality. While these findings are of a preliminary nature, they reveal that service/responsiveness of a supplier is not a high priority as opposed to purchasing managers in Western industrialized countries. As China moves rapidly towards a market economy, many Chinese purchasing managers will require suppliers to improve their responsiveness, given comparable levels of price and quality. An understanding of this transition will help Western marketers to enhance their market positions in China.

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