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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.

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 satisfaction 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] and [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. pervasiveness, 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.

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.