11.The Internet and International Marketing(1-17)

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Shameen Prashantham12 University of Strathclyde The Internet and International Marketing: A Review In the second half of the 1990s, a flurry of articles proclaimed that the Internet would revolutionise the way firms, including smaller firms and ones based in developing economies, conducted their international marketing activities. With a view to understanding and assessing how far our knowledge of this subject – i.e., the impact of the Internet on international marketing – has progressed over the past seven years or so (1995-2002), this paper seeks to provide an overview of selected literature pertaining to the Internet and business in general and international marketing in particular. There appears to have been much promise in terms of theoretical applications of the Internet to international marketing and surprisingly little scholarly attention thereafter to validate those propositions. This paper concludes with an exhortation to international marketing scholars to further our collective understanding of it, the collapse of the Internet boom notwithstanding. Keywords: international marketing, the Internet, literature review, e-Opportunity, internationalisation, small firms, developing economy context Introduction Seven years after Quelch and Klein (1996) famously suggested that the Internet would revolutionise international marketing, our understanding of this subject seems at best to be speculative. In part, the collapse of the dot-com bubble seems to be to blame. In part, there has been inexplicably scarce scholarly attention paid to it (Brock 2001, Prasad, Ramamurthy and Naidu 2001). In fact, a search on the ABI/Proquest database for marketing journal articles on the subject did not throw up a single one published in 2002. Perhaps, it is a subject that has fallen out of fashion with international marketing scholars; perhaps it is just that research is underway and research output in the pipeline. Whatever the reason, it seems appropriate to revisit a subject that holds potentially significant relevance for firms, including small ones and those based in developing economies (Quelch and Klein 1996). This paper reviews a selection of relevant literature with a view to arriving Correspondence: Shameen Prashantham, Doctoral Researcher, Strathclyde International Business Unit, Department of Marketing, University of Strathclyde, Stenhouse Building, 173 Cathedral Street, Glasgow, G4 0RQ, Tel: 44-141-548 3085, Fax: 44-141-552 2802, E-mail: s.prashantham@strath.ac.uk 1 This paper recently won the Award for Best paper at the American Marketing Association/ Academy of Marketing Joint Symposium held at Aston, 9 July 2003. 2ISSN 1472-1384/2003/4/00403 + 15 £8.00/0 ©Westburn Publishers Ltd. 404 Shameen Prashantham at an understanding of extant knowledge on the Internet and international marketing; attention is drawn to the need for further research in this area. The literature reviewed in subsequent sections deals with the business – rather than technology – aspects of Internet-enabled electronic business. The understanding of Internet-enabled electronic business that is adopted here is in keeping with that used by Wu et al. (2001): “the use of the Internet technologies to link customers, suppliers, business partners, and employees using at least one of the following: (a) e-commerce Web sites that offer sales transactions, (b) customer-service Web sites, (c) Intranets”.

There are at least three difficulties encountered in dealing with the literature on business applications of the Internet. (a) There is a lack of uniformity in the jargon used. For instance, terms such as digital marketing (Parsons et al. 1996; Wind and Mahajan 2001) and e-marketing (Feeny 2001) abound, and it is not always clear whether they are used with the same meaning or in the same context. (b) Much of the literature available has emanated from practitioners, and while this often results in relatively high relevance to managerial practice, the conceptual and empirical foundations of the literature are often nebulous or non-existent. It appears that much of the early literature – and indeed much of what has been more recently available – has been based on lessons learnt from trial and failure, rather than robust empirical inquiry. (c) There is a relatively high risk of obsolescence in research findings in this field, due to rapid market developments (Fisher and Reibstein 2001). Therefore the following discussion: (a) is based on a selective body of conceptually clear literature and (b) discusses a fair amount of literature published in, in addition to academic journals, respected practitioner-oriented journals.

The remainder of this paper is structured as follows: The next section deals with literature on general, business aspects of the Internet; the subsequent section deals more specifically with literature on the impact of the Internet on international marketing; finally, a concluding section offers some comments and observations in relation to the preceding discussion and future research directions.

The Internet and Business Strategy

Disaggregation of the Value Chain

According to Balasubramanian et al. (2001, p.310), “In recent years, firms have witnessed the early stages of a technology transformation driven by two mutually reinforcing trends – (1) digitization and (2) the networking of firms with their constituents and of products with each other”. (Note that digitisation here is used in the context of executing off-line activities on-line, rather than a conversion of analogous signals to digital). A unique characteristic of the Internet as a medium of communication, in comparison with traditional broadcast media, lies in its ability to support many-to-many communication i.e., interactivity (Hoffman and Novak 1996). Interactivity could greatly facilitate relationships with entities such as suppliers, customers

The Internet and International Marketing: A Review 405 and rivals as implied by the references made in the literature to: the “e-business community” comprising networks of suppliers and distributors who communicate and transact via the Internet (Tapscott 1999).

Evans and Wurster (1997; 2000) have argued that the Internet has given rise to a new economics of information, with the “blowing up” of the trade-off between the richness of information involved in a transaction and the number of people that it could reach. The authors have argued that the Internet has made it is possible for companies to reach a very wide audience, while at the same time doing so with richness of information through the enhanced volume, design and interactivity of content that is feasible on a Web site. Evans and Wurster (1999, pp.85-86) identified a second stage of electronic commerce, which would be based less on “claiming territory to defending or capturing it” i.e., rapid growth, and more on a strategic approach. They identified three bases of competitive advantage: reach (referring to access and connection), richness (referring to detail and depth of information provided to customers), and affiliation (referring to whose interests the business represented).

Other authors have echoed the concept of the destruction or disaggregation of the value chain. The notion of disaggregation – and subsequent reaggregation – of value chains is the underlying principle behind the business web or “b-web” thesis of Tapscott et al. (2000). A b-web is defined as “a distinct system of suppliers, distributors, commerce services providers, infrastructure providers, and customers that use the Internet for their primary business communications and transactions” (Tapscott et al. 2000, p.17). Stern (1998) noted that the destruction of the value chain caused by the Internet gives way to “orchestration”, where possessors of powerful brands were likely to retain control of their value chain, even while outsourcing non-strategic components, thereby acquiring most of the value accruing from it. This leads to the issue of networks and networked companies, given that a value chain is now likely to involve several actors. The issue of orchestration also raised the issue of power and control within such a network, and it appears as if large powerful companies are likely to dominate.

Downes and Mui (1998) have discussed the destruction of value chains wrought by the Internet, in the wider context of a new strategic planning process that they suggest is appropriate given new realities. For instance they describe a strategic planning process that is dynamic, intuitive and based on a relatively short time frame – 12-18 months. This is illustrative of a prominent strand in the literature suggesting that existing strategic planning models of what was termed the “old economy” were now defunct. This literature very often makes reference to “incumbents” i.e., the existing companies as opposed to “start-ups”, with the former seen as being overwhelmed by the onslaught of the Internet. A typical sentiment expressed is as follows: “History will pity the managers of the 1990s. The Internet touched down in their midst like a tornado, tearing up the old game book, disrupting every aspect of business, and compelling them to manage for a

406 Shameen Prashantham new economy” (Brown and Duguid 2000, p.84). However, as seen subsequently, the literature more recently has been more integrative with traditional notions of strategy.

Table 1. Strategic Planning versus Digital Strategy

Nature

Environment Discipline Time Frame

Key Pressure Point Participants Technology’s Role Output

Strategic Planning Digital Strategy

Static Dynamic Physical Virtual Analytical Intuitive 3-5 years 12-18 months Value chain leverage Value chain destruction Strategists, senior Everyone (including business management partners)

Enabler Disrupter Plan Killer apps

Source: Downes and Mui (1998, p.59)

Innovative Mindset

The new realities of the Internet, it was argued, called for a radically new mindset on the part of senior managers, which would allow them the imagination, foresight and nimbleness required to operate effectively amidst vast change.

For example, the importance of a corporate culture that facilitates innovation has been highlighted by Katz and Rothfeder (2000) as well, who say, “Adaptation can be driven only by a corporate culture that breaks through resistance to change. This is especially true in e-business, in which lower barriers to entry, the rapid pace of change, and the continual emergence of new rivals require companies to react with breakneck speed to customers and competitors. Such cultures champion innovation and flexibility, and disdain the turf wars and self-preservation schemes that trap incumbents in losing positions.”

It appears as if such sentiments intensified with the advent of the Internet, possibly largely due to the phenomenal rise of virtual firms that threatened to erode the market share and profitability of more established players who initially did not appreciate or apply the virtues of the Internet. A pervading aspect of some of the e-business literature is an “us-versus-them” attitude; indeed, for a period the business press was full of stories about the distinction between old-fashioned companies that “didn’t get it” and the brave (often young) ones that did (Hamel 1999). The reason for this, according to Hamel (2000), is that many existing companies do not have the mindset that allows them to exploit the new opportunities that are possible as a consequence of the Internet; in fact he suggests that many who appear to do so are themselves not “revolutionary” enough, being contented with mere incremental increases in their performance. According to Hamel (1996, p.69), “Corporations around the world are reaching the limits of incrementalism”.

The Internet and International Marketing: A Review 407 Further, Hamel (2000) has outlined this revolutionary strategy formulation in terms of four aspects: customer interface, core strategy, strategic resources, and value network.

Customer Benefits Customer Interface

Fulfilment & Support Information & Insight Relationship Dynamics Pricing Structure

Configuration Company Boundaries

Value Network Suppliers Partners Coalitions

Core Strategy

Business Mission

Product/Market Scope Basis for Differentiation

Strategic ResourcesCore competencies Strategic Assets Core Processes

Source: Adapted from Hamel (2000, p.92)

Figure 1. Business Concept Innovation

It is evident that Hamel (2000) has retained several traditional theoretical concepts such as core competencies and processes. Thus it is questionable to what extent this actually represents a “revolution”. It is conceded however that this author has emphasised the need for right-brained imaginative thinking and creativity more than some other strategy authors. However as already pointed out earlier, such notions have been expressed in the literature even well before the Internet, including the work of traditional strategy authors such as Porter (1990) who argues that innovation is the basis for competitive advantage. This, therefore, is not an Internet-related phenomenon. The importance of innovation has long been recognised and advocated (see for example, Drucker 1985). Even in the strategy literature was the need for imagination and foresight emphasised, as for example Hamel and Prahalad’s (1994) extortion for senior managers to think well in advance about customers, channels, competitors, basis of competitive advantage, source(s) of margin, and unique skills and capabilities in the future. It appears that dramatic changes heralded by the Internet have intensified the emphasis on firms’ creativity and innovativeness.

Integration with Firm Strategy

With the advent of the twenty-first century and the slump in the “dot-com” sector that accompanied it, authors such as Agrawal et al. (2001) and Porter (2001) are cautious about dismissing principles of the “old world”. Thus a strand of literature has emerged that deals with the integration of the Internet with standard business principles and activities, referred to in some instances as “bricks and clicks” (Gulati and Garino 2000).

Kanter (2001) drew attention to the importance of managing the process of change involved in adopting Internet initiatives within a traditional business organisation. She identifies typical mistakes that could lead to their failure, which primarily deal with managing the expectations (for example, expecting to achieve, in their entirety, offline activities and organisational standards), strategy (for example, being product- rather than customer-oriented), process (for example, assigning responsibilities either loosely throughout the

408 Shameen Prashantham company or to a committee), and reward (for example, failing to reward cooperative efforts).

Table 2. How the Internet Influences Industry Structure

Force Rivalry among existing competitors

• • • •

Impact of Internet

Reduces differences among competitors as offerings are difficult to keep proprietary

Reduces competition to price only

Widens the geographic market, increasing the number of competitors

Lowers variable costs relative to fixed costs, increasing pressures for price discounting

Eliminates powerful channels or improves bargaining power over traditional channels

Shifts bargaining power to end consumers Reduces switching costs

Procurement using the Internet tends to raise bargaining power over suppliers, though it can also give suppliers access to more customers

The Internet provides a channel for suppliers to reach end users, reducing the leverage of intervening companies Internet procurement and digital markets tend to give all companies equal access to suppliers, and gravitate

procurement to standardised products that reduce differentiation Reduced barriers to entry and the proliferation of competitors downstream shifts power to suppliers

By making the overall industry more efficient, the Internet can expand the size of the market

The proliferation of Internet approaches creates new substitution threats

Reduces barriers to entry such as the need for a sales force, access to channels, and physical assets – anything that Internet technology eliminates or makes easier to do reduces barriers to entry

Internet applications are difficult to keep proprietary from new entrants

A flood of new entrants has come into many industries

+/- - - - -

Bargaining

power of buyers

• • • • • • •

+ - - +/- - - - + -

Bargaining power of suppliers

Threat of substitute products or services

• •

Barriers to entry •

• •

- - -

Source: Porter (2001, p.67); figure has been modified into a table

According to Porter (2001, p.), “The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it”. In his assessment, the Internet tends to, on the whole, dampen industry profitability and erodes the sustainability of operations-based advantages. However he acknowledges the opportunities for distinctive strategic positioning, and thereby competitive advantage, that are possible through Internet technology, which he sees as being superior to previous generations of information technology. Porter (2001) makes the

The Internet and International Marketing: A Review 409 distinction between uses of the Internet (e.g., digital marketplaces) and Internet technologies (e.g., site-customisation tools) and suggests that it is the former that lead to the creation of economic value, which he sees as the true determinant of business success. He defines economic value as “the gap between price and cost, and it is reliably measured only by sustained profitability” (Porter 2001, p.65). He maintains that profitability is still understood meaningfully only in the context of individual firms and their industries. While new industries (e.g., digital marketplaces) have been created as a consequence of the Internet, he sees the greatest impact being on the reconfiguration of existing industries. In this context he maintains that the ‘five forces’ – rivalry among existing competitors, bargaining power of buyers, bargaining power of suppliers, threat of substitute products or services, and barriers to entry – are still relevant. The impact of the Internet on these forces is mostly seen to be negative, as apparent from Table 2.

Porter (2001) disagrees with the view that the ‘first mover’ has great advantage, and asserts that switching costs are likely to be low as a consequence of the Internet. Even so called ‘network effects’ cannot result in raised barriers to entry unless they are proprietary, which is clearly not the case on the Internet. He also disagrees with the widespread belief in ‘partnering’ as a source of competitive advantage. He identifies two broad forms of partnering: complements and outsourcing, which may accelerate market growth and lead to great homogeneity of strategy, respectively. In relation to the value chain activities of a firm, several applications of Internet technology have been identified in Table 3.

At a broader level of conceptualisation, three types of Internet applications have been identified by Feeny (2001, p.41) according to whom, “New Web technologies are offering companies unprecedented opportunities to rethink strategic business models, processes and relationships”. He identifies three domains of e-opportunity: e-operations i.e., Web based initiatives that improve the creation of existing products, e-marketing i.e., Web based initiatives that improve the marketing of existing products, and e-services, Web based initiatives that provide customer-affiliated services.

Table 3. Prominent Applications of the Internet in the Value Chain

Value Chain Component

Firm Infrastructure

Applications of the Internet

Web-based, distributed financial and ERP systems

On-line investor relations (e.g., information dissemination, broadcast conference calls)

• •

Human Resource Management

Technology Development

• Self-service personnel and benefits administration • Web-based training • Internet-based sharing and dissemination of company information Electronic time and expense reporting • Collaborative product design across locations and among multiple

value-system participants • Knowledge directories accessible from all parts of the organisation • Real-time access by R&D to on-line sales and service information

Cont’d…

410 Shameen Prashantham Value Chain Component

Procurement

• • • • • •

Operations*

•

Applications of the Internet

Internet-enabled demand planning; real-time available-to-promise and fulfilment

Other linkage of purchase, inventory and forecasting systems with suppliers

Automated “requisition to pay”

Real-time access by R&D to on-line sales and service information Real-time integrated scheduling, shipping, warehouse management, demand management and planning, and advanced planning and scheduling across the company and its suppliers.

Dissemination throughout the company of real-time inbound and in-progress inventory data

Inbound logistics*

Outbound logistics*

Marketing and Sales

After-Sales Service

Integrated information exchange, scheduling, and decision making in in-house plants, contract assemblers, and components suppliers • Real-time available-to-promise and capable-to-promise information

available to the sales force and channels • Real-time transaction of orders whether initiated by an end consumer, a

sales person, or a channel partner • Automated customer-specific agreements and contract terms • Customer and channel access to product development and delivery

status • Collaborative integration with customer forecasting systems • Integrated channel management including information exchange,

warranty claims, and contract management (versioning, process control) • On-line sales channels including Web sites and marketplaces • Real-time inside and outside access to customer information, product

catalogues, dynamic pricing, inventory availability, on-line submission of quotes, and order entry • On-line product configurators • Customer-tailored marketing via customer profiling • Push advertising • Tailored on-line access • Real-time customer feedback through Web surveys, opt-in/opt-out

marketing, and promotion response tracking • On-line support of customer service representatives through e-mail

response management, billing integration, co-browse, chat, “call me now”, voice-over-IP, and other uses of video streaming • Customer self-service via Web sites and intelligent service request

processing including updates to billing and shipping profiles • Real-time field service access to customer account review, schematic

review, parts availability and ordering, work-order update, and service parts management

Source: Porter (2001, p.75); figure modified into table. *Collectively Web-distributed supply chain management

Feeny (2001, p.49) suggests that in the near future firms are more likely to implement e-operations and e-marketing. As he says, “For traditional bricks-and-mortar companies, components of e-operations and e-marketing are likely to represent immediate opportunities with real economic benefits. The e-service strategy creates a strategic intent that will influence the evolution of the other two strategies”. However he predicts that e-services will be the

The Internet and International Marketing: A Review 411 focus of firms’ attention in the future and the source of great profit, potentially; according to him, “E-services represent the ultimate aspiration of the Information Age, with their electronic orchestration of offerings that span the breadth and lifespan of a customer’s needs within a chosen and defined market space” (Feeny 2001, p.46).

Table 4. The Three Opportunity Domains and Their Components

E-Opportunity Domain E-Operations

E-Marketing

E-Services

Components

• Automation of administration processes

• Supply chain reconfiguration and integration • Re-engineering of primary infrastructure • Intensified competitive procurement • Increased Parenting Value • Enhanced selling process

• Enhanced customer usage experience • Enhanced customer buying experience • Understanding of customer needs • Provision of customer service

• Knowledge of all relevant providers • Negotiation of customer requirements • Construction of customer options Source: Feeny (2001, p.42)

In the short term however, Internet-supported marketing has attracted interest. Notions on advertising on the Internet evolved over the second half of the 1990s. Hoffman and Novak (2000) summarise these as: banner advertisements, affiliate marketing programmes, and integrated marketing communication strategy. These issues demonstrate how the collective wisdom on Internet advertising progressed from a heavy reliance on advertisements on other Web sites (banner advertisements) using metrics borrowed from traditional media (such as cost per thousand or CPM) to a process of partnering other firms, often on a revenue-sharing arrangement (affiliate marketing) and the realisation for the need to integrate Internet advertising with more traditional media (integrated marketing communication). It is interesting to note that under integrated marketing communication Hoffman and Novak (2000) include such aspects as word of mouth and strategic partnerships in addition to such traditional media as television, radio and print. Considerable literature emphasises the customer dialogue that the Internet facilitates, including tale telling (Levine et al. 2000) and word of mouth (Godin 1999, 2000), especially in an appropriate context (Kenny and Marshall 2000).

Not surprisingly, the Internet marketing literature is rife with “new rules”. While most of the literature can be ignored as hype, the ideas of a few well known authors are considered here. Wind and Mahajan (2001) have outlined what they call the new rules of digital marketing; these are:

412 Shameen Prashantham • Target segments of one and create virtual communities • Design for customer-led positioning

• Expand the role of branding in the global portfolio

• Leverage consumers as coproducers through customerization

• Use creative pricing in the priceline.com world (i.e. for price-sensitive

customers)

• Create anytime-anyplace distribution and integrated supply chains

• Redesign advertising as interactive together with integrated marketing,

communications, education and entertainment

• Reinvent marketing research and modelling as knowledge creation and

dissemination

• Use adaptive experimentation • Redesign the strategy process and supporting organizational

architecture

The Internet and International Marketing

In similar fashion to Porter relating the Internet to his previously published concepts on strategy, Yip (2000) has identified the potential impact of the Internet on global strategy. His views were optimistic and suggested stronger globalisation drivers and greater scope for effective global strategies.

Table 5. Internet Effects on Industry Globalisation

Drivers/Barriers Internet Effects Market Globalisation Increases global commonality in customer needs and tastes Drivers Enables global customers

Facilitates global channels Supports global marketing Highlights lead countries

Cost Globalisation Drives down global economies of scale and scope Drivers Enhances global sourcing efficiencies

Speeds up global logistics

Exploits differences in country costs Reduces product development costs

Competitive Accelerates needed speed of moves Globalisation Drivers Creates a public forum for signalling

Makes competition comparison easier

Aids global transferability of competitive advantage Creates “born global” rivals

Government Side-steps trade barriers

Globalisation Barriers Spurs global technical standards

Confronts diverse marketing regulations Depends on legal systems

Source: Adapted from Yip (2000, p.2)

The Internet and International Marketing: A Review 413 Table 6. Internet Effects on Global Strategy

Aspect of Global Internet Effects Strategy

Global Market Instant global reach Participation No more one-by-one country rollouts

Have to backfill quickly to provide support

Global Products and The Internet allows companies to be both global Services and local, and

Offer some global products and services Offer some local versions

Offer some personalised content

Global Activity Location Reduces need to have local physical presence in

many downstream an support activities

Allows virtual networks that concentrate and pool expertise and resources from separate location

Global Marketing Makes it easier to build global recognition

Need to offer multi-language Web site Need to adapt style, not just language

Global Competitive Easier to monitor competitors Moves Can respond more quickly

Need to choose right mix of competitive and cooperative behaviour

Establish global standards to pre-empt competition

Source: Adapted from Yip (2000, p.2)

Global strategy however pertains primarily to large global players. Other authors, such as Quelch and Klein (1996), foresaw potential benefits for the international marketing efforts of smaller players. They argued that the Internet was poised to revolutionise the way international marketing was taught and practised, including in developing economies. According to Quelch and Klein (1996, p.62), “Because distribution channels tend to be less developed, less direct, or less efficient in emerging markets than in the United States, the Internet may offer special opportunities in these markets.” They saw the Internet making a significant difference in terms of advertising to global markets and in new product development. Internal corporate communication could be greatly improved through the advantages of an intranet for large corporations, particularly with increase in Internet access in markets outside the US. Of course, in non-US markets the challenges of less developed infrastructure and differing policies would have to be considered. For smaller companies, the Internet could help them reach global markets but they would have to cope with the logistics of round-the-clock order-taking, regulatory expertise and international market knowledge, including a multilingual staff. However there would be challenges to deal with including

414 Shameen Prashantham diverse Internet audiences from different market segments and parts of the world. In their words, “For international marketers, achieving a balance between the new medium’s ability to be customized and the desire to retain coherence, control, and consistency as they go to market worldwide will be a major challenge.”

Quelch and Klein’s (1996) work was closely followed by similar articles that made related points from researchers such as Hamill (1997), Hamill and Gregory (1997), Poon and Jevons (1997), Bennett (1997) and Samiee (1998). This was a period when these researchers seemed to be coming to terms with the fact the Internet was being commercialised and the primary thrust of their articles was the unprecedented opportunities for smaller firms that the Internet provided to overcome several of the barriers that may have hindered their internationalisation potential and efforts in the past. It may be noted, however, that this new literature is, surprisingly, not substantial at all; particularly, little empirical study has been done (Brock 2001, Prasad, Ramamurthy and Naidu 2001).

Of the few empirical studies, the work of Hamill and Gregory (1997), and Bennett (1997) are among the earliest and reveal that exporters and among them, younger firms, were more inclined to adopt Web sites as an international marketing tool. Berthon et al.’s (1999) exploratory study of small international service firms indicated that the Internet was perceived as providing significant opportunities to target international markets while overcoming some of their traditional barriers to internationalisation. Lituchi and Rail (2000) found similar optimism among small inns and bed and breakfasts in Canada and the US who thought of the Internet as a relatively inexpensive form of marketing with global reach; however using Web sites had also made them more aware of their deficiencies such as lack of multilingual staff and competition from larger, better-known players. It further emerged that some of the respondents were afraid of the new technology and in urgent need of training. Brock (2001) found in his study of German small technology-based firms that the Internet had a positive impact on attitudinal, resource-related, information-related and network-related aspects of internationalisation, thereby facilitating the process. However internationalisation was found to continue to follow an incremental path, the Internet notwithstanding. Prasad, Ramamurthy and Naidu’s (2001) study of American manufacturing firms involved in exporting suggests that firms’ integration of Internet technology into marketing activities has a positive impact on export performance when marketing orientation is leveraged.

Other related and conceptual contributions have come from Zugelder, Flaherty and Johnson (2000) who pointed out that the speed at which firms were establishing Web sites did not match their assimilation of the legal implications including consumer protection, defamation and disparagement; Hamill and Prashantham (2001) who emphasise the importance of a cross-cultural orientation to Web site creation; Overby and Min (2001) who argue that international supply chain management is a useful, network-oriented internationalisation process appropriate for a global environment marked by

The Internet and International Marketing: A Review 415 uncertainty; and Wynne et al. (2001), based on a case study of the tourism industry in South Africa, suggest that the Internet’s impact on intermediation (i.e., distribution) must be thoroughly examined in order to exploit Internet technology effectively and appropriately.

Conclusion: The Need for Further Research

For a subject that generated the excitement that it did a mere seven years ago, the extant academic literature on the Internet and international marketing appears rather thin. As was identified earlier, much of the Internet-related literature has emanated from practitioners rather than academics, and while this has certain merits in terms of application to the business world, it may have the failing of not being based on robust empirical inquiry. Further, there is the danger that some of the literature is essentially hype, buzz words, or “advertorials” for consultants – in other words, consultants may have a vested interest in gaining business by presenting concepts, which implies the potential for hyperbole in discussing the Internet’s benefits. This paper has sought to deal with this by being discriminatory in terms of the selection of literature that has been reviewed above.

The primary implication that this paper seeks to highlight is the need for more research on the subject of the Internet and international marketing. Multiple research avenues remain to be explored. One way of approaching this is to think about the variables that the Internet was supposed to render less divisive in terms of international marketing success – such as size of firms. Is it really a more level playing field for small firms? Many will doubt it. However there may be certain types of products or industries wherein even small firms can compete globally, as a consequence of Internet technology. Digitisability is an attribute of certain offerings – such as software – that may enable a small firm based in Glasgow, for example, to compete reasonably well with one based in Palo Alto. Further, there has been little mention of small firms operating in a developing economy, and how the Internet may be utilised in a manner that suits their peculiar (and often ill-equipped) circumstances. Going with the previous line of argument, a small software firm in Bangalore may also be able to fare well against firms based in the developed world. Further, more work is required in re-examining whether the extant views on internationalisation per se require to be re-conceptualised, given the possibilities afforded by the Internet. Perhaps it is only a matter of time before the imbalance between theoretical promise and empirical evidence is rectified. The majority of books and articles on the Internet have emanated from the US where the ‘Internet boom’ was most evident. Perhaps with time, more such contributions to the thinking on Internet applications will emerge from other parts of the world including developing economies, taking into account local conditions. Given the interest that exists worldwide about marketing across borders, it seems mandatory that we should understand more clearly the difference that the Internet can make.

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About the Author

Shameen Prashantham, a former Internet Editor of International Marketing Review, is a Doctoral Researcher at Strathclyde International Business Unit, Department of Marketing, University of Strathclyde in Glasgow, UK; his research deals with the impact of the Internet on the internationalisation of small knowledge-intensive firms in a developing economy context. He has an MSc with distinction in International Marketing from the University of Strathclyde where he won the CIM prize for Best Academic Performance on the course and a BA with Distinction in Economics from Loyola College, University of Madras where he won the gold medal. His prior professional experience includes stints in consulting and advertising firms in the UK and India; while in advertising, he worked on the sun Microsystems account in Bangalore.