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Trends in Internet-based business-to-business marketing
Arun Sharma*
Department of Marketing, University of Miami, P.O. Box 248147, Coral Gables, FL 33124, USA
Received 26 July 2000; received in revised form 15 December 2000; accepted 13 March 2001
Abstract
The Internet is changing the transactional paradigms under which businesses-to-business marketers operate. Business-to-business
marketers that take advantage of the operational efficiencies and effectiveness that emerge from utilizing the Internet in transactions are
outperforming firms that utilize traditional transactional processes. As an example, Dell computers, by utilizing business-to-business
processes that take advantage of the Internet, has gained the largest market share in the PC business when compared to traditional
manufacturers such as Compaq. This paper first examines the genesis of the Internet movement in business-to-business markets. The
long-term impact of the increase of business-to-business utilization of the Internet on the marketing theory and marketing process is
then discussed. Finally, managerial implications and directions for future research are highlighted. D 2001 Elsevier Science Inc. All
rights reserved.
Keywords: Internet; Business-to-business; B2B; Marketing trends; Practise
1. Introduction
The growth in the adoption of the Internet in marketing
has been revolutionary in the last decade. Although the first
wave of growth of the Web was in the business-to-consumer
domain, the business-to-business domain is regarded as
larger, with e-commerce transactions expected to be in the
range of US$800 billion by the year 2003 — five times as
much as business-to-consumer transactions. In the first
stage, the Internet was utilized to enhance the efficiency
of processes through a dramatic reduction in exchange costs.
This enhancement of the efficiency of exchanges could be in
the domain of information (e.g., sales materials, manuals),
customer support (e.g., frequently asked questions), and
transactions. In the second stage, firms sought to enhance
the effectiveness of their transactions. Business-to-business
marketers used the Internet to increase their supplier and
customer involvement in order to enhance customer sat-
isfaction and loyalty. Business marketers such as GE’s Jet
Engine Division that have increased their utilization of the
Internet in their marketing processes have seen increases in
both efficiency and effectiveness of those processes.
The primary impetus for the move toward the Internet is
the value that can be generated. Since the Internet can be
used to reduce the ‘‘exchange friction’’ that exists both
within and between organizations, business marketers can
better deliver value to their customers. This paper suggests
that the Web is fundamentally changing, and will continue
to change, business-to-business marketing thought and
practice. The paper builds on research that the author has
conducted with his colleagues [1,2]. The implication of the
nonadoption of Internet technologies will be dramatic. If
business marketers do not capture the value that emerging
technologies such as the Internet provides, value will
migrate from their firms. Value migration is an issue that
has affected most industries at most times. For example,
value migrated from small-lot manufacturing of automobiles
toward mass-produced Ford automobiles in the early part of
the century. Similarly, General Motors captured value and
enhanced their market share in the automobile market by
providing variety to customers.
This manuscript begins by examining the Internet and
how business-to-business marketers will evolve in terms of
their presence on the Internet. How the Internet will impact
the thought and practice of business-to-business marketing
will be discussed. This paper suggests that the Internet’s
impact will be in the areas of mass vs. customer-centric
markets, fixed vs. variable costs, geography vs. pervasive-
0019-8501/02/$ – see front matter D 2001 Elsevier Science Inc. All rights reserved.
PII: S0019 -8501 (01 )00185 -7
* Tel.: +1-305-284-1770; fax: +1-305-284-5326.
E-mail address: asharma@miami.edu (A. Sharma).
Industrial Marketing Management 31 (2002) 77–84
ness, time and cooperation vs. competition. Managerial
implications, specifically in the area of value migration,
will be discussed. Directions for future research are also
proposed throughout the manuscript.
2. The nature of the Internet
The Internet is an agent for change that can disrupt
markets. In its essence, the Internet is an intelligent ubiquit-
ous information platform. The information platform is
flexible, and firms utilize the Internet to provide informa-
tion, to accommodate connectivity, community, and trans-
actions, and to share cost reductions [2].
2.1. Information
The most significant/greatest impact of the Internet has
been on informational access. The Internet affords access to
vast amounts of information that can be programmed to
cater to the stated or unstated needs of Internet users [3].
Therefore, the Internet can instantaneously provide specific
and detailed information to a business firm’s employees,
suppliers, and customers.
2.2. Connectivity
The Internet furnishes a platform of instant and constant
connectivity with a firm’s employees, suppliers, and cus-
tomers. The Internet is never closed; the business is always
open in this virtual world, which provides a 24/7 platform
for customers. The Internet reduces dependence on time
norms while encouraging nontemporal relationships across
time zones.
2.3. Community
The Internet creates communities in the virtual world,
communities that share news and expertise in specific areas.
Business infomediaries such as Plasticsnet.com, Vertical-
net.com, and Ultraprise.com provide communities wherein
business members can participate.
2.4. Transactions
Another advantage of the Internet is that firms can
complete transactions in a 24/7 environment. This enhances
marketing effectiveness while reducing the time and errors
associated with traditional order taking. Traditional order
taking typically involves multiple inputs of data that
increase errors.
2.5. Shared cost reductions
The final advantage of the Internet is shared cost reduc-
tion. The customer through self-service and the firm through
automated information systems, reduce the cost of interac-
tions and transactions. This reduction in costs benefits both
buyer and seller.
3. Evolution of Internet presence for
business-to-business marketers
The impacts of the Internet on business-to-business
marketing strategies will be based predominantly on how
business firms utilize the Internet for marketing to their
customers. In this context, traditional communication prac-
tices of business marketing firms are discussed first. This is
followed by a presentation of the hierarchy of Web pres-
ence, followed by a discussion of the final communication
platform that is expected.
3.1. Traditional communication processes
Traditional communication processes are transactional
both within and across business firms. A typical commun-
ication pattern from a business-to-business marketing firm is
presented in Fig. 1. For example, in a traditional business
marketing firm, the marketing and sales departments typ-
ically interact with customers. The manufacturing depart-
ment is contacted when there is a customer order or when
the customer has an inquiry. There is little communication
between the customer and the manufacturing department, as
if they are blind to each other.
Once a customer order is placed, the manufacturing
department is informed. The manufacturer communicates
with suppliers and logistics firms independent from the
marketing and sales departments. The logistics firm may
contact the customer directly. Clearly, there is a lack of
sharing of data both within and across organizations.
4. Evolution of business-to-business marketers’
Internet presence
The evolution of business-to-business marketers’ Internet
presence is expected to evolve through five stages. The five
stages — information, knowledge, conversations, relation-
ship, and e-commerce — are described in this section and
are sketched in Fig. 2. An evolutionary stages model is used
because the complexity of processes increases as the Inter-
net is used for higher-order purposes. However, to com-
pensate for the complexity, the potential returns from
business marketers’ Internet presence increases as business
marketers attempt more complex processes. The boundaries
of the stages are fuzzy, but the progression of firms is
anticipated in the ‘‘higher value’’ direction.
4.1. Information
In this stage, firms provide information to their custom-
ers. Although customization is sometimes available, the
A. Sharma / Industrial Marketing Management 31 (2002) 77–8478
customer is the navigator for the information. The customer
visits the site and obtains information, and may conduct
some transactions. The business-to-business marketer is
aware of the names and addresses, and of some transactions
of these customers. However, the flow of information is
one-way, from the marketer to the customer.
4.2. Knowledge
In the second stage, the firm starts to collect more
information on their customers. Through both internal data-
bases and actual behavior on their Web sites, firms attempt
to collect information regarding such concerns as prefer-
ences, attribute importance, channel preference, purchase
cycle, and purchases. Typically, firms use customer rela-
tionship management (CRM) systems to triangulate data on
their customers.
4.3. Conversations
In the third stage, business-to-business marketers use
the Internet to begin two-way conversations. These may
occur before and after transactions. For example, business
marketers can involve the customers in designing a
product over the Internet. An email system may be used
to inform customers of new product introductions. Sim-
Fig. 2. Evolution of Internet presence.
Fig. 1. Typical communication patterns.
A. Sharma / Industrial Marketing Management 31 (2002) 77–84 79
ilarly, service information can also be provided over the
Web. The Internet is used in the same ways that written
letters and telephone conversations were used in the past.
4.4. Relationships
The evolutionary stage following conversations is rela-
tionships. In this stage, business marketers use the Web to
develop relationships with their customers through com-
munication and design of the interaction platform. For
example, some Internet providers may provide all financial
data required for a bank on a single site customized for the
bank (e.g., Reuters). In these cases, there is a formal or
informal tying of firms’ information systems. The system
that ties Wal-Mart and Procter & Gamble systems together
is also an example. Manifestations of this structure are an
increase in cross-selling and referrals within existing cus-
tomer groups.
4.5. E-commerce
The e-commerce stage is the final stage in the evolution
of a firm’s Internet presence. In this stage, firms conduct
commerce through the Internet rather than through any other
means. The business marketer ties all the systems together
to reduce costs related to transactions. Reduction in costs
associated with repeated transactions increases the effi-
ciency and effectiveness of relationships. An ideal model
is presented in Fig. 3, showing how the communication
system presented in Fig. 1 will evolve. In this environment,
all departments within the organization, as well as custom-
ers and suppliers, access the same information platform.
This reduces costs, and reduces other inefficiencies such as
cycle time. Cisco manages their Web site on this principle
and estimates cost reduction in million of dollars. Similarly,
GE Power Systems has reduced costs, reduced cycle time,
and increased customer satisfaction through this type of
platform.
It is expected that most business-to-business marketing
firms will gravitate to this type of information platform. This
migration to the e-commerce model will increasingly lead to
a common information platform that encompasses all the
functions of a firm and external suppliers (see Fig. 3). Such
a network of firm, suppliers, and customers is labeled
‘‘extended enterprise’’ or ‘‘Interprise,’’ and a tremendous
growth in this area is expected. These ‘‘extended enterprise’’
networks lead to a reduction in ‘‘exchange friction,’’ and an
increase in both efficiency and effectiveness of firms.
Research questions:
(1) Will the evolution stages model presented in Fig. 2
maintain the current growth patterns? Will technol-
ogy better define the boundaries of the stages?
(2) What are the antecedents and consequences of the
movement of the communication systems from the
present (Fig. 1) to the future (Fig. 3)?
5. How the Internet changes business-to-business
marketing practices
As business-to-business firms begin implementing
e-commerce business platforms, it is expected that the
thought and practice will change. In this section, five domains
that will be affected by Internet marketing are discussed.
5.1. Mass vs. customer-centric markets
Recently, researchers have suggested that businesses are
undergoing a paradigmatic shift toward customer-centric
marketing [1]. Customer-centric marketing emphasizes
understanding and satisfying the needs, wants, and resour-
Fig. 3. Common Internet-based information platform.
A. Sharma / Industrial Marketing Management 31 (2002) 77–8480
ces of individual consumers and customers [1]. In the
practice of customer-centric marketing, marketers assess
each customer individually, and make and service the needs
of the individual customer through customized or stand-
ardized offerings. Their actions are guided by analysis that
seeks to maximize the ‘‘effective efficiency’’ of marketing
actions [4]. Efficiency entails cost–benefit analysis and
seeks to maximize the output-to-input ratio of the marketing
function for individual customers. Effectiveness entails the
enhancement of customer loyalty and ‘‘share of wallet.’’
Just as mass marketing came into vogue in the US after
World War II, segmentation in the 1950s, customer-centric
marketing will emerge in this millennium due to the Internet
[1]. With input from other technologies, the Internet allows
business-to-business marketers to fulfill the needs of indi-
vidual customers. For example, Dell Computers takes PC
orders from business customers that are instantaneously
accessed by manufacturing, and suppliers, and even by
FedEx, who delivers the computers. This fulfills the needs
of the business customer at costs that are dramatically lower
— effective efficiency.
Affordable technological advances are allowing business
marketers to provide unique solutions for individual cus-
tomers, i.e., to practice customer-centric marketing. There
are three major technology thrusts — affordable production
technology, affordable distribution technology, and afford-
able facilitation technology.
Affordable production technology allows firms to prac-
tice customer-centric marketing [1]. CAD–CAM technolo-
gies and databases are being used for better and more
customized products. Similarly, flexible manufacturing sys-
tems and just-in-time production allow marketers to mass-
customize products that are of better quality at lower prices.
Distribution has also been enhanced by affordable tech-
nologies [1]. The introduction of scanners, EDI combined
with forecasting technologies, support faster replenishment
cycles with fewer stock-outs. In addition, firms such as
FedEx and UPS allow marketers to rapidly deliver products
at affordable prices. Through coproduction and coinforma-
tional processes, firms such as PC Warehouse have dramat-
ically reduced their cost of distribution.
The Internet has become one of the major facilitation
technologies to allow marketers to provide customized
information and complete transactions at a fraction of the
cost of other media. The availability of market information
through the Internet is becoming more universal. The
Internet also allows customers to seek unique solutions to
their specific needs. This aspect, the empowerment of
customers to seek unique solutions to their individual needs,
will lead to customer-centric marketing. Shopping habits
change due to the Internet are already being observed, as
most business travelers are provided their itinerary on the
Web, including gate and delay information.
This change in availability of affordable technology has
been extremely rapid during the past two decades, and
indications are that this rate of change will continue. The
prices of most information technologies will continue to
decline, and the capabilities will continue to expand. Many
technologies that operate specifically in the Internet domain,
such as information devices, have already been developed
and will begin to have a significant impact on society [5].
Some industries will be more prone to use customer-
centric marketing. First, industries that have diversity in
demand (e.g., services) and where cost of adaptation is not
high (e.g., personal computers) will be at the forefront of
customer-centric marketing [1]. In other words, industries
that have high cost of customer adaptation in production
(e.g., basic metals) and the majority of customer require-
ments are not variable (e.g., rolled steel) deter the rapid
expansion of customer-centric marketing. Second, industries
in which firms have legacy systems in business marketing
processes, systems, and infrastructure will be more reluctant
to abandon existing assets [1]. To organize for customer-
centric marketing, firms will need to organize themselves as
market specialists, and eventually as customer specialists,
rather than as product specialists. By doing so, companies
begin to look more like ‘‘one-stop shops’’ for a range of
loosely related products and services, some of which the
company produces and most of which they acquire from
other producers. This requires development of core com-
petencies surrounding particular customers and customer
groups [1].
With an increase in customer-centric marketing, custom-
ers will have an increasing role in the fulfillment process,
leading to ‘‘co-creation marketing’’ [1]. Co-creation mar-
keting involves both the marketers and the customer who
interact in aspects of the design, production, and consump-
tion of the product or service on the Internet. This process
has been seen in services (e.g., business consulting) but will
increasingly be also seen for physical products.
Research questions:
(3) What will be rate of increase in customer-centric
marketing? What industry and business market
characteristics will influence the development?
(4) What technology will enable the movement from
mass markets to customer-centric markets?
(5) Will customer focus emerge as a core competency in
business markets?
(6) Under what conditions will co-creation enjoy
increased acceptance in business markets?
5.2. Fixed vs. variable costs
Traditional economics and, therefore, traditional business
marketing practices were based on the existence of variable
costs in all marketing transactions [1]. The genesis was the
industrial age, when the total cost of doing business
included sizable fixed and variable components. This gave
rise to the economics of scale and scope; firms sought to
spread their fixed costs over a larger volume. Average costs
A. Sharma / Industrial Marketing Management 31 (2002) 77–84 81
declined slowly with volume, and prevailing market prices
tended to closely track production costs. The Internet
marketing era will be the era of customer knowledge.
In the knowledge age, fixed costs dominate. Knowledge
products such as software, computer chips, and new drugs
tend to very high upfront costs (R&D), may have very high
fixed costs (plant and equipment), but always have very low
marginal costs of production. Having a fixed-cost-dominated
marketing structure is equivalent to developing a marketing
infrastructure in which everything that can be automated is
automated. The costs of that infrastructure are largely invari-
ant with respect to volume. The Internet-based marketing era
will be the era of extensive investment in technology that
will aid in the reduction of transactional costs [1]. As
examples, databases and voice response technologies have
high fixed costs, but have reduced transactional costs. The
costs of these infrastructures are largely invariant with
respect to volume. The implication is that new technologies
will dramatically reduce the costs of acquiring a new
customer or of servicing an existing customer.
Since most costs in the Internet era will be fixed costs,
revenue maximization will be equivalent to profit max-
imization. The other factor that is different in the Internet
environment is increasing returns to scale when compared to
decreasing return to scale in traditional industries. Know-
ledge-based industries follow an experience curve in which
the slope is steep, and the lower asymptote is close to zero.
For example, software cannot be priced based on marginal
cost to produce an extra unit (cost of extra copy of software
is negligible). Volume and speed are the primary drivers of
the experience curve. Business marketers attempt to force
the experience curve down rapidly by generating a large
volume of demand in a short time. For example, Peachtree
Accounting has made far greater profit selling its small
business accounting software for US$149 rather than its
earlier price of US$4800 [1]. In addition to low variable
costs for a firm’s customers, elements of the infrastructure
can thus be profitably shared with other companies engaged
in similar businesses or others targeting the same customers
with complementary offerings. By sharing the costs, com-
panies can develop infrastructures of virtually unlimited
capacity and extremely low unit costs. Adding additional
complementary products and services that would be of
interest to the same customer group can then leverage the
marketing system.
Research questions:
(7) Will low variable costs increase customer acquisition
activities, as the cost of serving a new customer will
be very low?
(8) Will the nature of the Internet with universal
information access in conjunction with low switching
costs make business relationships difficult to main-
tain?
(9) How can business firms increase the switching costs
for their customers?
5.3. Geographical vs. pervasive
Since marketing developed in a physical world, the
geographical locations of resources have been critical to
success. When markets evolved from local to regional or
national markets, buyers and sellers were typically not in the
same geographic location. This geographical separation led
to the creation of intermediaries that advanced the interests
of the marketers in terms of information, communication,
transactions, physical movement of goods, and customer
service. Distribution, manufacturing, and sales force have
traditionally been location-based. The Internet is reducing
some of the locational advantages that firms enjoy. Firms
can use the Internet to inform customers, communicate with
customers, conduct transactions, and provide customer
service without having locational presence. In contrast to
geographical or locational sales forces, companies using the
Internet can more readily engage in direct order taking and
technical support.
The other issue of relevance to marketers is the creation
of a new kind of intermediary — infomediary. The infome-
diary began as an Internet-based intermediary that aggre-
gated and provided information in areas of interest to their
customers. This typically included information from sellers
packaged in a manner relevant to customers.
Research questions:
(10) Howwill customer acquisition and retention activities
be maintained in nonlocational environments?
(11) How critical will the face-to-face communication be
in the Internet era?
5.4. Time
Time has been central to marketing planning for two
reasons. First, business firms have traditionally set the
times of transaction or exchange. Increasingly, businesses
want more flexibility in their ability to interact with firms
[1]. The Internet has increased the growth of nontime-
based interactions. In surveys, most marketing firms
already provide or plan to provide 24-h access to
information, communications, transactions, and basic cus-
tomer service.
The second and more critical aspect of marketing has
been time-based in slowly depreciating physical assets,
nominal experience curve and network externality effects
[1]. Customers became accustomed to a slow pace of
change, and market behavior evolved correspondingly, with
high levels of inertia and strong resistance to innovations
[6]. The physical life of products and factories dictated the
marketing approach. The ‘‘new economy’’ or ‘‘knowledge
firms’’ are changing the fundamental assumptions. Know-
ledge-based industries use technology that rapidly depreci-
ates (e.g., PCs are obsolete in 2 years) and has very rapid
replacement cycles, and are more frequently attacked by
A. Sharma / Industrial Marketing Management 31 (2002) 77–8482
discontinuous innovation (rather than evolving or continu-
ous innovation).
Research questions:
(12) What are the antecedents and consequences of a
movement from an 8-to-5 weekdays business
toward a 24/7 business?
(13) How will knowledge-based markets differ from
product- and service-based environments?
5.5. Competition vs. coopetition
In the last three decades, the business-to-business strategy
has been preoccupied with competition. With increasing
assets that can be used with low variable costs, high fixed
costs in establishing the technology, and customer needs for a
bundle of products, firms are moving toward coopetition, the
simultaneous cooperation and competition between organ-
izations [1]. Coopetition enables resource sharing rather than
resource duplication or resources deployment to counter
competitors. For example, most Internet firms use the same
news service (e.g., Reuters, AP), hosting service (e.g., Exo-
dus), and advertising agencies (e.g., Double click). In addi-
tion, some portals (Yahoo) firms use search engines from
firms (Google) that seek the same customer. Finally, airlines
(Orbitz.com) and automobile manufacturers (Covisint.com)
cooperated to form Internet portals to increase their own
efficiencies. With a shift toward simultaneous cooperation
and competition, the focus moves from market share to
market growth; from traditional competitive strategies to
nontraditional cooperative strategies including outsourcing
customers; and from vertical integration to virtual integration.
Research questions:
(14) Will business marketing paradigms evolve from
competition-based toward alliance-based rules?
(15) Will evaluation standards change from market-based
(e.g., market share) to alliance-based (alliance
share)?
6. Implications of the acceptance of the Internet:
value migration
The major impact of the lack of usage of the Internet by
business firms will be in the domain of value migration.
Recently, the dramatic implications of ‘‘value migration’’
for established industries have been highlighted [7]. Value
migration identifies how firms such as Nicor have captured
growth in revenue, profits, and market value from previ-
ously dominant firms such as US Steel. The shift in markets
is not due to products, but is due to the innovative business
design of these new businesses that allows them to capture
value. These firms use superior customer selection, differ-
entiated offerings, go to market strategies, and configure
resources to capture value in the market space [7].
In the current business market environment of the
enhanced usage of the Internet and fragmented markets,
the disparate utilization of the Internet will lead to value
migration becoming more prevalent in a large number of
established industries. The impact of the Internet will be
dramatic due to the following reasons mentioned below.
6.1. Declining market prices
Economists believe that we may be entering an era of
disinflation. In this context, business marketers are expect-
ing and planning for an era of consistently declining prices
[1]. Therefore, business marketers will be under constant
pressure to maintain margins in the era of declining prices.
The Internet can reduce costs by reducing the informa-
tional and transactional frictions. When the Internet is not
utilized, margins cannot be maintained within a business
design, and there will be a ‘‘value migration’’ from the
given industry.
6.2. Rising competitive intensity
Most business marketers agree that the level of competi-
tion is rising. One of the reasons is the availability of capital,
especially in the US, for alternative business designs. Also,
due to global restructuring, competition is emerging from
new arenas. For example, the steel industry that was
dominantly based in the US, Japan, and Germany is under
successful attack from firms in South Korea, Russia, and
India. In this era of hypercompetition, firms that use all of
their resources will survive. If the Internet’s capabilities are
not utilized, business value can migrate to different nations.
6.3. Advanced technology enablers
Advanced technology is increasing the communication
flows between suppliers and buyers [1]. Therefore, value
migrates from firms at a more rapid pace. Technology such
as Internet, electronic commerce, and EDI are fundament-
ally changing business processes. If firms do not adapt their
processes to include the Internet, value will migrate due to
technology enablers.
6.4. Reverse marketing strategies
Traditional strategies are product-focused — the tra-
ditional business process flow is from R&D and sourcing
to manufacturing, sales, and service. Increasingly, market-
focused organizations are organizing into reverse marketing
— they begin with customer needs, and the customer
becomes the focus of their business marketing strategies
[1]. It is apparent that the latter strategies will provide more
value to customers of firms. The Internet is the medium that
will allow an easy adaptation of reverse marketing strategies
because of the ease of informational transformation. There-
fore, value will migrate from firms that focus on products
A. Sharma / Industrial Marketing Management 31 (2002) 77–84 83
and follow traditional marketing, when compared to firms
that use the Internet to practice reverse marketing.
6.5. Strategic positioning
In the past, companies partnered primarily for operational
efficiency (i.e., just-in-time procedures or zero-inventory
models). Today, due to intense competition, firms need to
concentrate on alliances based on effectiveness. Recently,
IBM and Dell formed an alliance to share technology. The
Internet is a platform for extensive communication (Fig. 3),
and firms that do not partner for effectiveness by utilizing
the Internet will see value migrate from their industry.
6.6. Disruptive innovation
In addition to business design leading to value migration,
another reason for value migration is the innovator’s
dilemma. New firms utilize disruptive technologies that
negatively affect incumbents [8]. Established companies
are effective at creating value for their existing customers
and do not take notice of disruptive technologies that may
affect the very nature of their industry in the future.
Established firms allocate their resources to focus on activ-
ities that address customers’ existing needs. This focus on
existing customer needs keeps firms from investing resour-
ces in disruptive technologies that are not seen as valuable
to their prominent customers.
An example of disruptive technologies leading to value
migration can be seen in the telecommunications industry.
Traditional firms such as Lucent, Nortel, and Siemens sold
telephone switches to traditional telephone companies.
Cisco Systems developed networking solutions for personal
computers. As the technology for voice and data have
merged, Cisco personal computer network switches have
become suitable for telecommunications markets. To com-
pete, Northern Telecom acquired Bay Networks and Lucent
acquired Ascend. It is expected that the majority of tele-
communication switching will be packet-based and net-
works such as Level 3 have emerged that are IP-based.
Therefore, disruptive technology from personal computers
has changed the telecommunications industry. The Internet
is a platform that allows firms to better monitor needs of
existing and emerging customers, as well as existing and
emerging competition; firms that extensively utilize the
Internet will be less vulnerable to disruptive innovations.
7. Conclusion
Based on the confluence of marketing needs and the
emergence of the Internet, this paper suggests that business
firms will need to utilize the Internet in their marketing
processes. By utilizing the Internet, firms will better serve
the needs of their customers. This movement will impact
business-to-business marketing in the areas of markets, cost
structures, location, time, and competition. If business firms
do not utilize the Internet, there is a high probability that
value will migrate from the firm.
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Arun Sharma is Professor and Chair of the Department of Marketing at
the University of Miami. He received his PhD from the University of
Illinois at Urbana Champaign and has published extensively in the areas of
sales management and business marketing.
A. Sharma / Industrial Marketing Management 31 (2002) 77–8484