Executive summary and implications for managers and executives

Citation

(2010), "Executive summary and implications for managers and executives", Journal of Business & Industrial Marketing, Vol. 25 No. 3. https://doi.org/10.1108/jbim.2010.08025caf.001

Executive summary and implications for managers and executives

Article Type: Executive summary and implications for managers and executives From: Journal of Business & Industrial Marketing, Volume 25, Issue 3

This summary has been provided to allow managers and executives a rapid appreciation of the content of the Special Issue. Those with a particular interest in the topic covered may then read the Special Issue in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Necessity, so they say, is the mother of invention. When a fledgling marketing advisory centre was planned at a small rural US university, the first problem to face was the fact that there was no space on campus to house it. So, for the first year, Southwest Marketing Advisory Center (SMAC) operated on desks placed temporarily in a hallway at Southwest Minnesota State University (SMSU). Equipment was borrowed from various sources, strictly on a “loan” basis. Items such as desks found in storage were considered fair game for use. Each morning computers were taken out of the office of the founder (guest editor Professor Michael K. Rich) and set up on the borrowed desks. Each night, they were taken down and locked back in the office. The desk chairs were stored in another faculty member’s office in similar manner. SMAC was recognised on the books of SMSU but not listed anywhere in the literature or university website. The university was taking a wait-and-see approach for further recognition.

It’s not so secret nowadays. Its website proudly says: “SMAC is a self-funded entity within the academic marketing program at Southwest Minnesota State University. Its mission is to service the marketing and research needs of Southwest Minnesota, while giving ‘real-world’ experience to the junior, senior and graduate-level student employees”. Never using grants or university dollars during its six years of service to the area, SMAC has completed over 250 client projects – and, to everyone’s relief, has moved from its temporary corridor to a permanent base.

As Professor Rich and Darrell Bartholomew suggest in “Undergraduate research centers: simply a source of student employment or a model for supplementing rural university finances?”, the SMAC approach offers a new frontier which can be a model for financing under-funded, small, rural universities while providing related work experience for undergraduate marketing students.

For many smaller colleges and universities today, financial pressures can be critical. Universities continue to look for private sources of funding as public funds decline. The solution for this problem is based upon the convergent model of education, where universities have become more entrepreneurial. It has been suggested that institutions have more autonomy and are better able to adapt in changing environments by having a discretional funding base. Partnering with companies has led to a new business model where a department can provide services to companies in exchange for revenues to help run the department.

Funding for post-secondary education in the USA from outside sources increased by 155 per cent between 1992 and 2000. Although corporate-funded projects provide revenues to finance non-subsidised academic programs, they also have the unintended effect of shaping the research that is conducted and the academic curriculum content. The pursuit of corporate grants and research contracts helps universities gain the necessary funding but does so by compromising the classroom instruction by full-time tenured faculty.

In the case of SMAC, it is demonstrated that funding and running a non-profit market research centre can not only help finance real-world student learning, but can also increase interaction with full-time tenured faculty in a hands-on educational setting.

Such learning experiences help students to develop soft skills that are prized by future corporate employers. Learning experiences that students gain from running the operation as a small business has improved their marketability, as demonstrated by their improved job placement outcomes.

SMAC’s beginnings were in 2002 when the Agricultural Utilization and Research Institute (an agency for promoting value-added Minnesota agricultural products) approached Professor Rich to conduct a study on the marketability of Berkshire hogs. Two upper-division marketing students were to assist with the research. As the project progressed, questioning of local businesses in the area determined that none of them had considered the value of consumer attitude and perception studies, target market analysis, or preference studies. Subsequent conversations with the regional director of the Small Business Development Center (SBDC), located on the SMSU campus, indicated that many individual entrepreneurs approached the SBDC with an idea and their consultants analysed whether the person had a decent business plan, but generally the marketability of the venture was not analysed.

After extensive conversations, the director agreed that it would be helpful to SBDC clients to have marketing due diligence performed on many of the ideas that are presented to the SBDC. Armed with verbal agreements from both the SBDC and AURI that they wanted to pursue market analysis on many of their ongoing projects, the author approached four additional students about working on these projects. The initial enticement for students was the pay that was set 20 per cent higher than the highest prevailing wage rate on campus.

The evolution of SMAC was not to answer the need for financial alternatives to support the marketing program at SMSU, but in its present state it could expand to become a significant source of academic funding. Analysis of the road travelled by SMAC could provide insights into approaches that other small rural universities might pursue to arrive at a viable alternative source of funding.

While the SMAC experience helps open up the frontiers of funding smaller educational establishments, a fascinating technological advance could hold the key to pushing back the frontiers of business-to-business website performance.

Even the least technologically minded among us know that using websites offers marketers a huge array of knowledge about us. When we click on sites and navigate our way around them, we’re – maybe unwittingly – divulging information about ourselves. OK, some people might think that’s a bad thing – “spying” they’ll say – but if the information gathered has benefits for both buyer and seller, surely that’s a good outcome. For instance, for the number of potential buyers who go to a site’s product index and product specification pages, far fewer enter the shopping area. For those who do, some abandon the site before going to the shopping cart, and even fewer go on to complete a purchase. The seller loses out, of course, if relatively few visitors to the site actually buy something. And the buyer loses out if he or she did want to buy something but was put off doing so, perhaps by difficulties in navigating the site, or a reluctance to pay a shipping charge.

In “Using clickstream data to enhance business-to-business web site performance” R. Dale Wilson illustrates how clickstream data, collected from a B2B website and then analysed using web analytics software, can be used to evaluate and improve B2B website performance. The collected data can offer insight into problems in website design associated with “sticking points” which cause potential customers to abandon their visits.

Clickstream data offer a particularly useful source of information about how site visitors obtain and use internet information, respond to marketing offers, and order online. Using this data, B2B marketing executives can identify problems that are found in the three main areas that influence website abandonment before the purchase is made – the appropriateness of the content, the effectiveness of the design, and the efficiency of the website. As a result, B2B marketing executives can use performance measures stemming from clickstream data and web analytics software (also sometimes referred to as web traffic analysis software) as a competitive weapon to increase the overall efficiency and effectiveness of their internet marketing activities.

Such analysis helps B2B marketers, as well as practitioner-oriented academics, to obtain a more complete picture of the impact the internet is having on B2B buying decisions. It offers the ability for B2B marketers to gain knowledge about who visits their sites, which pages they view, how long they stay (on each page and their total visit), what products and services interest them, what marketing offers appeal to them, and what they buy. In many cases, these types of website metrics can be linked to a database through log-on information and/or cookie data so that B2B marketers will have a complete picture of individual website visitors’ clickstreams over time.

Customer relationship management (CRM) techniques can then be used to develop strategies that will attract long-term customers and increase the profitability of online activities. Further, since website usability and performance is always an issue for marketing executives, and since mistakes in website design are common, the specific design of each web page needs to be evaluated to determine how well it is performing.

Professor Wilson conducted three field experiments, the first involving the problem of shopping cart abandonment. Improvements can involve reducing the number of steps in the checkout process, including an online progress indicator so that visitors know exactly where they are in the process. Additionally a free phone number to call for information and/or to resolve any further customer service issues can be provided.

The second and third experiments were used to determine an efficient way to offer free shipping to stimulate sales and improve the conversion rate. In the second experiment the free shipping announcement was made on the shopping area page and in the third it was on the home page. It had been noted that successful online companies such as Dell, Inc. often use free shipping as a way to stimulate both B2B and B2C customers in the final stages of the ordering process.

The experiments demonstrated that conversion rates can be influenced both by website improvements and by specific marketing tactics designed to make the online shopping experience more appealing. The number of visitors who completed the purchase in the three field experiments increased by 39.1 per cent, 20.7 per cent, and 57.1 per cent, respectively. Because additional sales and profits occurred in the experiments, the design changes that were made to decrease shopping cart abandonment were kept permanently; and free shipping now is offered on the home page as a special promotion whenever a boost in sales is needed to meet quarterly sales goals. Overall, the management team of the company sponsoring the research was impressed with the new performance measures as well as with their ability to make website changes and immediately track the resulting performance.

This situation demonstrates that clickstream data and web analytics software provide a useful combination of tools that can enhance the performance of B2B websites by allowing for a variety of opportunities to learn what works and what doesn’t work on a website. For example, scenario analysis can be used to understand the movement of visitors through the website by using a number of well-established performance metrics.

So, yes, clickstream and web analytics might be seen by some people as intrusive but are generally accepted by others – especially businesses which want the most efficient and effective channels for their products or services – as a means of assisting both buyers and sellers. And surely the same can be said of that other “covert” activity we are increasingly subjected to when we have our minds on something else – product placements.

It’s not just the movies or television where product placement takes place; such covert marketing communications now occur in magazine articles, video games, songs, novels, comic strips and even stand-up comics’ routines. To date it’s been rarely used to target organisational buyers, but you have to keep in mind that organisational buyers are also consumers. They may be rigidly objective while at work, and not susceptible to many of the emotionally engaging but informationally vacuous influence attempts levelled at consumers. But away from their work they are consumers too. They go to the movies, watch TV, listen to the radio, read newspapers and magazines and play video games. They relax. Therefore, there is potential value to B2B marketers in turning to product placement despite its more common usage as a B2C strategy. Consequently product placements are beginning to expand into the B2B domain.

In “Response of buying-center participants to B2B product placements”, Kenneth R. Lord and Pola B. Gupta review product-placement research in the consumer-marketing domain, examine the acceptability of the practice for buying-centre participants, and asses recall, attitude and purchase-intention responses to B2B products placed in movie scenes.

Results confirm that buying-centre participants dislike the notion of placing B2B products in movies for commercial gain but like the increased realism such placements bring to popular entertainment. The generally positive levels of acceptance of the proposed use of product placements for a substantial array of organisations suggests that any aversion to the practice based on perceptions of crass commercialism is not a substantial threat if placements are depicted in realistic fashion and the products do not represent companies for which the targeted audience already has some scepticism.

Consistent with results observed in consumer experiments, the prominence of a B2B product/service placement was shown to affect brand recall and cognitive response strongly. Though typically more costly and challenging to execute than subtle placements, depictions or mentions of the product or service in ways that occupy more than fleeting amounts of time and space and represent it in interaction with central characters and plot are likely to elicit high levels of recall and thought generation, especially if such depictions are highly realistic and constitute a good fit with the surrounding content.

Results suggest further that positive emotions evoked by the entertainment context in which the product or service is embedded will enhance recall and cognitive response. Overall attitude toward the entertainment context, however, was negatively associated with recall (unaided and aided) and cognitive-response generation. Possibly a movie (or other entertainment vehicle) that is too enjoyable sweeps the audience up in a style or focus of processing that depletes that cognitive resources needed to recall or think about the product or service. For purposes of generating heightened awareness, then, a B2B placement would optimally appear in prominent but realistic fashion in an upbeat, but not intensely engaging, part of the entertainment context.

Emotional and attitudinal response to the entertainment vehicle in which a product or service is placed, and the involvement felt by buying-centre participants for the product or service category, are clearly associated with the brand attitude and purchase intention that emerge upon exposure to a placement. A positive attitude toward the entertainment context plays well in the influencing of brand attitude. However, too positive an attitude toward the movie (or other entertainment vehicle) appears to impede purchase intention. It seems likely that the formation of purchase intention, the highest-order response examined in this research, requires cognitive-response activity (which is also hindered by a strongly positive movie attitude). Product/service involvement, on the other hand, appears to undermine brand attitude while enhancing purchase intention. Possibly buying-centre participants who are high in involvement are better able to detect subtle departures from realism that evade their less involved counterparts.

However, involvement may induce cognitive-response activity upon exposure to a relevant placement that, in turn, facilitates the formation of purchase intention. This suggests that the optimal strategy may vary, depending on the objectives of the B2B marketer. If the intent is to induce a favourable attitude that, when stored in memory, may bring the brand into the buying-centre participant’s consideration set at some future date, the marketer might choose to place his/her B2B product or service in a setting that evokes a positive attitude that can serve as a positive peripheral cue. If, on the other hand, the intended outcome is more immediate recommendation or purchase, finding an entertainment context likely to be viewed by those high in product or service involvement may be the most important consideration.

From a technological perspective, multiple media (e.g. television, video games) are exploring the benefits of increased user interactivity. With that development will come more real-time participation and episodic game development, thereby creating increased opportunity for product-placement usage.

While not relaxing watching TV or a movie (and maybe being “brainwashed” by placements at the same time) back at work, managers and sales forces alike get on with the day-to-day business – and business tends to throw up barriers to effective performance. It’s just the way it is. Recognising, understanding and coping with them are the keys to overcoming those barriers. A significant difference between business relationships/networks and other resources is that relationships are not under the absolute control of one firm. Consequently “resource planning” with regard to business relationships needs a different management paradigm than “command and control” – to a large degree business relationships need to be “coped with” rather than controlled.

In “External performance barriers in business networks: uncertainty, ambiguity, and conflict”, Jens Geersbro and Thomas Ritter say that earlier studies which have exclusively focused on sales people and their particular problems of uncertainty, role ambiguity and role conflict does not provide a firm and network level perspective. They develop a model of external performance barriers and discuss the different mechanisms for overcoming them.

It is a fact of life that unexpected events occur, so collective uncertainty can only be coped with by flexibility or risk management. Flexibility is the ability to react to (sudden) changes. Such flexibility may be based on scenario techniques or adjustable production facilities, among others. The level of collective uncertainty depends on the type of industry and network a firm is part of. Networks can be divided into three groups: stable, well-defined ones; established ones with incremental improvements; and emerging value systems with radical changes. In stable networks roles will be better defined due to the longer time partners can communicate with and adjust to each other. Also, as little change is introduced to the network, there is less room for uncertainty.

Regarding individual uncertainty, a given actor is unable to gain all available knowledge. It is impossible to gain full insight because the network is unlimited, endless and open by definition. Thus, the information needed to understand all aspects of a network is unlimited. This means that business relationships and networks are inherently uncertain to some degree for an individual actor. This particular type of uncertainty is founded in capacity problems (e.g. information handling) but also in the associated costs of gaining and processing increasing amounts of information: time invested for search and interpretation, money invested for access to information (e.g. industry reports, consultants), or knowledge management systems for storage and analyses.

Therefore, low levels of individual uncertainty may have high costs. As such, it is not only impossible for an actor to gain “total knowledge” – it is not economical either. Thus, there exists an optimum level of individual uncertainty. Below that level, an actor may cope with this type of uncertainty by increasing information management capabilities and learning. Beyond the optimum level, an actor is left with the mechanism discussed above, i.e. flexibility. As such, the economic evaluation compares the costs of learning (reducing individual uncertainty) and the costs of flexibility and failed investments (accepting individual uncertainty).

Different personalities on the individual level (e.g. in terms of risk aversion, mental flexibility, stress resistance) perceive and cope in different ways with uncertainty. So individuals differ with regard to their levels of “optimal” or “acceptable” uncertainty.

Ambiguity may exist due to a lack of firms’ ability to specify their expectations. Ambiguity is often present in complex, multi-person relationships. Previously, most of the boundary spanning activities were seen as being performed by individual sales people and their respective purchasing counterparts. Increasingly it has been realised that other functions, besides sales, are involved, just as the role of the individual sales people seems to change. Different people with different backgrounds and agendas are involved and need to be integrated into a system of goal fulfilment. This in turn points to the importance of teams in business relationships. The salespeople are no longer seen as being solely responsible for establishing and maintaining the firm’s relationships. Management needs to focus on both the individual salesperson and on the wider team of employees charged with the task of managing relationships with regard to various functions.

Also ambiguity may be actively managed and coped with in business relationships. It can be addressed by improving communication, asking questions when signals are unclear, and build up power to enforce clear communication. Finally, conflict must be handled by firms. It requires them to be able to find ways of managing those conflicts by negotiating compromises or by building up power to enforce conflict resolution.

Conflicts in business relationships are also addressed by Tibor Mandják and Zoltán Szántó in their paper “How can economic sociology help business relationship management?”, which insists that the business relationship is an economic and social phenomenon and must be treated accordingly. Management of business relationships involves human action. Technology can facilitate and increase efficiency but can never totally replace the human being, the social actor, in business.

Business relationships always have economic and social dimensions. The economic dimension is utility. In practice, or at least in principle, this utility can be expressed in terms of figures. The social dimension means behaviour or changes in behaviour. Both dimensions are constituted by different components. The management of the economic components of business relations is rapidly developing. The pace of change is indicated by the widespread adoption of special software (customer relationship management) systems. However, the grave difficulties arising during their use and application call attention to the role of the social components of business relations. The management of the sociological components of business relations has been worked out to a much lesser degree. It is all the more important to develop the joint consideration of the economic and sociological components.

The authors, who develop a conceptual model to improve management of business relationships, say co-operation and conflicts emerge simultaneously between actors involved in a business relationship, adding: “There is no business relationship without conflicts”. They approach business relationship management from the perspective of the organisation being a social actor, economic sociology being the application of a sociological perspective to economic phenomena and quoting a more sophisticated definition as “the application of the frames of reference, variables, and explanatory models of sociology to that complex of activities concerned with the production, distribution, exchange, and consumption of scarce goods and services”.

They define the business relationship as an interactive exchange between two companies embedded into a network of business connections. It is not entire companies that get in touch with each other; it is only groups of people at each company who constitute the relationship. The business relationship actually involves the relationship between the two groups. A business relationship involves a simultaneous possibility and challenge for the participants, who may either recognise the possibilities of deeper investment in the relationship or realise its limits. Efficient management requires the participants to make a decision about the future of the relationship.

Interaction and mutual dependence make business relations dynamic and complex and make the management of relations significantly more difficult. The management of business relations becomes especially complicated because an event or development external to the relationship (for example a change in import regulation, natural disaster, strike, or offer from a new competitor) may substantially influence the action of the participants. This change in behaviour may have either a positive or negative effect on the exchange processes in the relationship and its results.

Economic sociology can help by considering the complexity of business relationships. Their management is a collective activity that manifests itself in several contexts. The business relationship itself involves a relationship between two groups. This relationship changes as a function of the group perception of the parties involved. In the management of business relationships, it seems necessary to take into account the economic psychological and social psychological peculiarities of social relationships in addition to the classical, profit-oriented, and cost-cutting approach of economic management.

In the management of business relationships, economic factors without doubt play an important role. But efforts to make the relationship efficient are always made in light of and as a function of perceptions.

Sociology in general and economic sociology in particular can help managers in different ways. Theories give a broader view of phenomena; they may reveal new or hidden issues. Theories facilitate a deeper understanding of reality. Last but not least they can offer a new framework of analysis. The usefulness of any theory depends on the application. In applying a theory, we must pay attention to its abstraction level and to its assumptions. Unwarranted direct application of theory may be ineffective or even dangerous.

Unwarranted direct application of another sort may also be ineffective – and costly. And while sociology may be immensely useful to managers, there are other useful tools that have their basis in analytical modelling. Evolution of marketing strategy requires companies to employ all possible means, including technology and advanced analytics, to get to know customers, identify their needs and deliver the right solutions in a cost-effective way. However, marketers should refrain from using whatever tool technology brings in the name of short-term gain.

This is especially important in direct marketing campaigns, where many kinds of channels are utilised to maximise the total volume of sale. For example, given that marketers in many of today’s companies have access to communication tools with a very low unit cost like e-mail or text messaging, it becomes easy (and tempting) to increase the ROI of a particular campaign by increasing the size of the target group – all at no significant cost. This, however, if done without a proper selection of target groups, based on knowledge of each particular customer’s needs, can result in a loss of customers’ trust in the value of marketing communication in general. This is why utilising in-depth knowledge about each customer and his/her needs, for initiating any kind of contact, is paramount.

Another, more quantifiable justification for limiting the scale of direct communication is the cost of making the offer to each particular recipient, whether it be just the mere cost of communication, or much bigger in the case of more sophisticated offers (for example sending a ready-to-sign platinum credit card, which can be activated by just one phone call).

For all these reasons, marketing communication, aiming at cross-selling a given product, should be limited to only those customers who will most probably find it useful and accept the offer. That is why the knowledge about each customer’s needs and predicted behaviour becomes a valuable asset to all companies delivering goods and services on the competitive market, whether it be business-to-customer or business-to-business. Knowledge-driven strategies are fundamental for successful customer relationship management in all market segments.

In “B2B relationship marketing analytical support with GBC modeling”, Wojciech Peter Latusek analyses a new method of genetic binary choice (GBC) modelling which he has developed, to discuss predictive modelling of customer behaviour in the context of increasing B2B marketing profitability. The case presented refers to the difference CRM makes in marketing management, as applied to the hundreds of users of the services sold to one big business customer – the example being selling a telecommunications solution to a large business customer whose employees have choice as to what kinds of services and in what volumes such services shall be used. Also important to note is that mobile telecommunications is a very special industry in the context of cross-selling and up-selling as new, more highly-equipped models are launched.

Technological development and launching more and more complicated, but useful, products and services, dedicated to particular groups of users, make marketing more challenging and require more targeted activities. This is one of the reasons why discrete choice modelling can be applied in a growing number of situations encountered also by B2B marketers, helping them to do the job more efficiently.

These are all the situations where, within a large business customer, there are many users, with some decisional power over what services or products they are going to use. This can be clearly seen in case of high-tech products with a growing number of functionalities, allowing for the marketing of new sophisticated products, with narrow target groups, requiring investment and education for the services to be accepted.

Theoretical study and analysis of empirical aspects show the importance of the predictive modelling of customer needs in implementing B2B relationship marketing and improving the profitability of marketing operations. In particular, the example discussed demonstrates to marketing managers that:

• •

  Applying predictive modelling to support relationship marketing operations, in the case of large business customers, can strongly improve the profitability of the business. Especially, optimising marketing campaigns using any of the methods available “off the shelf” significantly increases the financial results of marketing campaigns.

• •

  Once this is reached, optimising the process of analytical intelligence itself, and improving the models’ performance, transforms clearly to a further increase of profitability of the relationship marketing operations, as is presented in the paper with the example of applying the genetic binary choice model.

Also, the paper shows researchers that:

• •

  there is a quantifiable way to show that there is a need for developing new techniques of modelling customer behaviour that can be better than existing ones for some classes of problems; and

• •

  the genetic binary choice model presented in the paper can outperform modelling techniques available nowadays by more accurate prediction of, for example, probability of customer behaviour.

Faced with a mix of competing or complementary (sometimes both at the same time) demands on those responsible for holding together effective B2B relationships, how to assess a mix (sometimes a bewildering one) of actions-to-be-taken, pitfalls-to-be-avoided, awareness of changing environments, etc., can be problematic. But there is no escaping the necessity to keep pace with technological means of creating more efficient ways of doing business. It can be daunting for an individual person or an individual organisation to choose the technology for adoption – even more so in a business relationship where there may be two- or multiple-channel relationships.

Given the importance of buyer-seller technologies in emerging supply chain networks, a better understanding of technology adoption behaviour is necessary for advancing inter-organisational marketing practice. Electronic data interchange (EDI) is now widely used to enhance the information exchange across organisational boundaries throughout a supply chain. Recently, retailers such as Wal-Mart, Metro, and Tesco have required adoption of radio frequency identification (RFID) systems by their major suppliers to improve supply chain efficiency and traceability of product flows. Buyer-seller technologies facilitate inter-firm co-ordination for the efficient movement of information and products across organisational boundaries. Buyer-seller technologies provide channel stakeholders with an opportunity to improve the visibility and traceability of their supply chains. However, an important challenge is that the implementation of the new technologies involves interactions among multiple stakeholders

In “A dynamic process of buyer-seller technology adoption” Jongkuk Lee and William J. Qualls contend that buyer-seller technology adoption should be examined from a dyadic or multi-dyadic perspective to adequately explain buyer-seller adoption behaviour throughout a supply chain network, focusing on two research questions:

1. 1.

   How does each stakeholder in a supply chain network decide to adopt a buyer-seller technology and what is the underlying process through which technology adoption occurs?

2. 2.

   How do ongoing business relationships influence buyer-seller technology adoption behaviour?

The paper extends the TAM (technology acceptance model) framework by building on a social network perspective to identify the inter-organisational technology adoption process and key inter-organisational factors that better capture buyer-seller technology adoption behaviour. The adoption of a buyer-seller technology can increase mutual benefits generated from the channel relationships. The expectations of the mutual benefits, in turn, will motivate the focal firm to respond positively to the partner’s behavioral intention for adopting a new technology.

At the same time, power relations resulting from resource dependence between channel stakeholders are expected to influence buyer-seller interactions in adopting a new technology. To the extent that a firm needs to maintain the relationship with its partner, its decision on buyer-seller technology adoption will be influenced by its partner’s behavioural intention. Therefore, the focal firm will be induced to adopt the technology by its partner’s intention to adopt the technology. The focal firm perceives its partner’s behavioural intention through its partner’s influence strategies, which can be either coercive (e.g. threats on the adverse results of non-compliance with the focal firm in adopting the target buyer-seller technology) or non-coercive (e.g. information exchange on the usefulness of the target buyer-seller technology).

Among the arguments is that an organisation’s position in the inter-organisational network will influence the organisation’s dependence and power relations in the network. For instance, in Wal-Mart’s early days, a powerful supplier such as P&G would dictate how much it would sell and at what price. As Wal-Mart grew and had more suppliers, its relationship with suppliers evolved into partnerships, increasing the power of Wal-Mart over its suppliers. Firms with a high level of degree centrality in the buyer-seller network are likely to have multiple sources for the same or compatible resource. Therefore a firm embedded in a high level of degree centrality will depend less on a certain partner due to available alternative partners to achieve the same goal. Consequently it is suggested that a firm’s structural embeddedness increases the firm’s power over its partners by lowering its resource dependence on a certain partner.

A firm with higher absorptive capacity identifies better the potential opportunities that a technology provides and more efficiently exploits those opportunities. For instance, Wal-Mart, which was an early mover in using EDI with its suppliers, is now pioneering the adoption of an RFID technology for managing its supply chain. The experience and expertise with implementing and using EDI serve as an absorptive capacity for more advanced technologies with similar purposes. That is, absorptive capacity enables firms to understand better how a new technology can be used to improve the current practice. Firms with related experiences and expertise will have more knowledge about what problems they may face and how the problems can be avoided while implementing and using the new technology. Therefore, firms with a high level of absorptive capacity (i.e. experience and expertise) will perceive the potential technology as more useful than do firms with limited absorptive capacity.

So, whether it’s innovativeness in developing a market (as in the SMAC case), awareness of customers’ behavior as gleaned from their website usage, the effectiveness and appropriateness of product placement in entertainment channels, coping with external barriers to performance, acceptance of both social and economic facets of business relationships, analytical support for effective up-selling or cross-selling targets, or extending network effectiveness by technology adoption, B2B marketing’s brave new frontier is exciting and challenging – perhaps the biggest challenge for managers being achieving an understanding of the processes which will lead to success.

(A précis of the Special Issue “Emerging frontiers within B2B marketing: understanding customer needs and managing the customer experience”. Supplied by Marketing Consultants for Emerald.)