MKTG-Emerging Research Opportunities for Doctoral Students in B-to-B Marketing

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Emerging Research Opportunities for Doctoral Students in B-to-B Marketing


Jagdish N. Sheth

ABSTRACT. Marketing is a contextual discipline. Therefore, as its
context changes, it creates new research opportunities for doctoral students.
I have identified six major contextual trends relevant to B-to-B
marketing. They are: Internet revolution; inorganic growth through
mergers and acquisitions; breakup of vertical integration; rise of emerging
economies; privatization of public enterprises; and globalization of
markets. Numerous potential areas of research are identified in this paper.
However, it also suggests that the traditional survey research of key
informants and its analysis using LISREL to test hypotheses anchored to
behavioral and managerial theories will be inadequate for the emerging
research opportunities. The doctoral students are encouraged to study
more macro theories in economics, sociology, and political science. In
addition, they are encouraged to use archival studies, simulation, Internet
based experimental research, and virtual bazaars as new research methodologies.

INTRODUCTION

Marketing, likemost social sciences, is a contextual discipline (Zinkhan
and Hirschheim 1992; Sheth and Sisodia 1999; Vargo and Lusch 2004).
Therefore, as the context of marketing changes, it creates new research
opportunities for doctoral students and future scholars.
In this paper, I will identify the following six major contextual trends
relevant to Business-to-Business (B-to-B) marketing, and suggest a
host of new research opportunities: (1) Internet revolution; (2) inorganic
growth through mergers and acquisitions; (3) breakup of vertical integration;
(4) rise of emerging economies such as China and India; (5) privatization
of public enterprises; and (6) globalization of markets.

MAKING OF MARKETING SCHOLAR

Over forty years, I have observed how young scholars in B-to-B marketing
become icons of marketing. Their research and thinking become
a “must” reading in doctoral seminars.
In almost all cases, the making of a scholar and becoming an icon
consists of three ingredients: Pioneer altogether new area of research;
go in-depth by publishing several papers preferably in the same top
journal; and not only publish, but also publicize research by active participation in academic conferences and associations.
By identifying six new trends in B-to-B marketing, I hope the current
doctoral students will carve out their own identity1 and become future
icons of B-to-B marketing.

INTERNET REVOLUTION

The impact of the Internet has been more pervasive on B-to-B marketing
than any other domain of marketing. It has fundamentally altered both
the procurement as well as the sales function. For example, both Dell
Computers and Cisco Systems claim that their customers from around the
world and from multiple locations initiate most of their customer orders
online. It will be very interesting to study how this “reverse marketing”
will influence the traditional “territorial” sales organization and traditional selling tactics of prospecting, initiating, and closing the sale. If selling takes place without the sales force, how should we compensate the sales organization? Indeed, should the senior vice president of sales and marketing become a business development officer and if so, what skills does she or he need to learn in this new role?
A second area is the impact of Web-based online product catalogs.
The Internet is a very rich, multimedia channel and has global reach.
Furthermore, it is not just a communication medium; it is also a transaction medium. In short, it is capable of informing, interacting, and
transacting with customers and markets. It would be fascinating to understand the impact of online catalogs, (with their capability in real time to provide price, delivery, inventory, and other marketing information), on the traditional sales function.
A third area, already researched to some extent, is the emergence of
reverse auctions and B-to-B bazaars. Just as e-Bay has fundamentally
altered matchmaking of buyers and sellers in consumer markets, I believe
emergence of B-to-B bazaars has the potential to dramatically alter
traditional industrial marketing practices. Would it not be nice to
organize a “virtual” B-to-B bazaar on the Internet to simulate real business just as we do with “paper” portfolio of stocks and bonds to study
the stock market behavior?
Finally, while CRM (Customer Relationship Management) and oneto-
one marketing have become routine in consumer services, we need to
study B-to-B CRM especially between distributors and dealers, and
between distributors and manufacturers. Companies such as Ingram
Micro, W.W. Grainger, and Graybar have CRM platforms with data analytics.
Indeed, even in consumer markets, for example, Procter & Gamble
and Wal-Mart have B-to-B CRM and supply-chain analytics for
better coordination and communication using the scanner data.
In summary, Internet has changed the context of B-to-B marketing
and is fundamentally altering the buyer-seller relationship. It would be
interesting to examine the role of transaction cost theory in the context
of the Internet Revolution.

INORGANIC GROWTH THROUGH MERGERS AND ACQUISITIONS

Worldwide mergers and acquisitions in 2005 crossed the trilliondollar
mark in valuation. A significant number of these mergers and
acquisitions were in the B-to-B markets such as oil, chemicals, steel, and
cement. Most recently, consolidation of the Baby Bells telephone companies
in the US and resulting customer industry concentration, has
forced many suppliers such as Lucent Technologies and Scientific
Jagdish N. Sheth 15 Atlanta to merger with other suppliers to maintain symmetry of power with their customers.
This restructuring of industries especially at the mature stage and on
a global basis provides enormous opportunities for research in B-to-B
marketing. I will highlight a few as follows:
1. How does the integration of two merged companies influence key
account management with respect to processes, culture, and compensation
as well as relationship with customers and suppliers?
For example, if the Lucent and Alcatel “merger of equals” takes
place, will it result in a hybrid account-management system because
of cultural differences between a French and an American Company?
2. What is the impact of a merger or acquisition on corporate brands?
While in packaged goods industries, it is common to retain product
brands after the merger or acquisition, is this also the desirable
outcome in B-to-B marketing in view of the fact that product and
company brand names are often the same? Do we have a theory of
brand synergy, for example? Do B-to-B companies unwittingly
destroy brand equity of an acquired company because it is a corporate
brand? Should the strategy be an umbrella group brand and
separate entity brands? General Electric believes in a single global
brand after an acquisition. Is this a good practice both financially
and strategically?
3. Another area of relevance is post-merger relationship with suppliers
of marketing services such as advertising, market research,
and IT services. Once again, a good theory of outsourcing of marketing
services may be very insightful in B-to-B marketing.

BREAKUP OF VERTICAL INTEGRATION

Vertical integration became a foundation of organization structure in
the industrial age. Icon companies such as General Motors and IBM
were organized around vertical integration. It was strategically desirable
and financially justified to engage in all activities internally from
engineering to manufacturing to sales and service.
However, as margins began to collapse at each value chain, it became
desirable and necessary to outsource some functions such as manufacturing.
The concept of virtual integration in place of vertical integration
(where ownership is divorced from operations) became increasingly
prevalent. Vertically integrated incumbent companies were unable to
compete against the new entrants such as Cisco Systems or Dell Computers
in their respective industries. This breakup of vertical integration
and consequent rise of a network company provide some very interesting
areas of research in B-to-B marketing.
First, should the company outsource its sales force especially for
non-key accounts to achieve better productivity and reduce organizational
overheads? In other words, is it possible to do selling without the
sales force? Can a company afford to have customer relations management
through contractors, for example?
Second, one consequence of reorganization and use of six sigma, for
example at General Electric, is downsizing. Its consequence is expansion
of span of control. This often results in enlarging the sales territory
or sales branches with more customers for every account executive.
This phenomenon also occurs in customer contact and customer care organization.
Do we know its impact on customer satisfaction and customer
loyalty? Is it possible to shift activities to customers in a B-to-B
environment and if so, what is its cost/benefit ratio?
Third, often companies in reorganization and restructuring end up
having many marketing functions and people work out of virtual offices
or at home. Since sales people prefer to have autonomy and no direct supervision, it would be interesting to test whether virtual sales force or
work-at-home sales force performs better than facilities-based sales
force. While there is some research on employee productivity and employee
morale in a telecommuting environment, there are no empirical
studies on work-at-home sales force.

EMERGING ECONOMIES

According to the Goldman Sachs Bric Report (Wilson and Purushothaman
2003), it is forecasted that large emerging economies collectively
will surpass advanced countries in economic growth in the next
fifty years. The four nations, namely Brazil, Russia, India, and China
will lead the pack probably in reverse order. China is already emerging
as a super economic power and one of the largest markets for industrial
materials, parts and components, as well as machinery and tools. For
example, China is today the largest steel and cement consumer in the
world. It is also the largest market for mobile phones and second largest
market in beer consumption. Similar statistics are also emerging out of
India. As emerging economies become the markets of tomorrow, they
create numerous opportunities for research in B-to-B marketing.
First, what are the effects of cross-cultural differences in B-to-B marketing?
While impact of cultural differences in consumer markets is a
familiar area of research, a similar focus in B-to-B marketing is equally
useful and interesting. We do have a large number of studies on crosscultural issues with the use of theories and frameworks of Hoefstede
and Theodore Hall. However, we have very limited research on crosscultural
issues in B-to-B marketing with respect to selling, negotiations,
business development, and marketing communication. A recent focus
on Chinese way of doing business based on Guangxi or relationship-
based buying and selling is a good start but lacking in a good theory.
For example, is the Guangxi principle unique to Chinese culture or
is it universal among all ethnic or trading communities of the world?
Second, the focus of emerging economies is more on affordability
and accessibility. Products or services designed and developed for advanced
countries are simply not affordable in emerging markets. Most
of the industries are dominated by family-owned small-to-medium enterprises
(SME) relative to advanced countries. Once again, can our
knowledge with respect to B-to-B marketing largely anchored to large
enterprises be generalizable to this new reality?
Finally, what will be the impact of disruptive innovations from
emerging markets on the incumbents? For example, Brazil leads the
world in sugarcane-based ethanol fuel. It was a direct consequence of the
energy crisis of the seventies. Similarly, to accommodate affordability,
the GSM Forum has mandated mobile handset manufacturers to market
them in India and China at retail price of $30 to $45. This has resulted in
breakthrough innovation of low-cost functional and highly affordable
mobile phones.
Finally, out of nowhere, India has become a global leader in generic
prescription drugs and Indian companies such as Cipla, Dr. Reddy’s,
and Ranbaxy are familiar names in B-to-B pharma and health care markets.
I believe a programmatic research on this reverse influence from
emerging to established markets with respect to technology, sales, and
marketing will be fascinating.

PRIVATIZATION OF PUBLIC ENTERPRISES

With the collapse of communism and concurrent rise of market-driven
policies, there has been aworldwide movement, encouraged by both IMF
and Worldbank, to privatize state-owned enterprises especially in infrastructure industries such as airports, airlines, telecommunications, postal service, electric utilities, and large-scale public works projects. Out of nowhere, these state enterprises are becoming global enterprises; for example,Gazprom from Russia, ONGC from India or Hue Wei Corporation in
information and communications technology from China.
Two areas of potential research opportunities emerge from this context.
First, public private sector partnerships (PPP) are creating a unique
blend of market-oriented practices but with public-sector mandate for
corporate social responsibility (CSR). As suggested by Peter Drucker
more than a decade ago, it would be desirable to study their influence on
traditional for-profit corporations.
A second area of research opportunity is about building processes
and professional talent in sales and marketing in privatized state enterprises.
As state-owned monopoly enterprises, they were not encouraged
to be customer centric. Will they emerge as better marketers or will their
DNA drive them? In my opinion, the transformation of privatized public
enterprises in their sales and marketing culture is an excellent area of
future research in B-to-B marketing.

GLOBALIZATION OF MARKETS

While the last century was driven by ideology (Vietnam War, Korean
War and Cold War) and nationalism, this century is more likely to be
driven by markets and globalization. This is especially true for B-to-B
markets even more so than consumer markets. With the rise of China
and India as major economic superpowers, access to industrial resources
will become strategic for the emerging nations just as it was for Japan
and Korea in the last century and for Great Britain in the eighteenth century.
We are already witnessing this for oil, industrial metals such as
copper, aluminum, and steel, and for industrial raw materials such as
iron ore and coal. It is also true of agricultural resources and technical
human capital (talent) resources.
Similarly, just as the multinational corporations from most advanced
countries are racing to invest in China and India, there is an equal rush
by domestic enterprises from emerging nations to become global enterprises
mostly through inorganic growth.
This is creating a number of exciting new research opportunities in Bto-
Bmarketing. Here are a few examples. First, how will the geopolitical
alignment between nations and regional blocs reshape the B-to-B market
landscape? My most recent book, Tectonic Shift, with Rajendra
Sisodia (Sheth and Sisodia 2006), has attempted to analyze this.
Second, and at a more micro level, with the globalization of markets,
there will be dramatic shift from key account management to global account
management. In fact, large global enterprises such as General
Electric are demanding global account management and global supplychain
management from their strategic suppliers. It is important to analyze
the consequence of pricing rationalization on the supplier firm and
its profitability if its cost structure for supply is significantly different in different parts of the world.
Third, and a very interesting area of research, is the fusion of B-to-B
marketing practices, processes, and people as markets become more
global. This is more than the earlier debates and discussions about how
the multinational firms should operate on a global basis with respect to
global versus local orientation or its hybrid glocal orientation. In my
view, fusion implies loss of national identity and instead acquiring
global identify of a company’s processes, practices, and people. While
the marketing programs may have local flavors with respect to commercial
terms, negotiations, as well as marketing collaterals (e.g., brochures,
catalogs), it implies a way of doing business globally. I find this
to be the hottest area of interest among enterprises both from advanced
and emerging markets.

CHALLENGES AHEAD

In conclusion, I have identified numerous new, and I believe exciting,
emerging research opportunities for doctoral students because of
six external contextual drivers of change. However, I believe it will be
challenging to future scholars to exploit these research opportunities for
two key reasons. First, B-to-B marketing has been heavily skewed in its
research toward understanding decision-making processes, buyer-seller
interaction, sales-force management, and new product innovation (Reid
and Plank 2000). Most of the extant research is anchored to surveys of
key informants in organizations and mostly based on behavioral and
managerial theories. In my opinion, both the prevalent theories as well
as research methods are inappropriate for the emerging areas of research.
A typical empirically based research paper in B-to-B marketing consists
of using LISREL as analytic tool on survey research data collected,
based on hypotheses anchored to behavioral or managerial theories. For
the current doctoral students in the field, it will require overtly searching for alternative methodologies and theories such as archival research,simulation, Internet-based experimental designs as well as learning macro theories of economics, development, sociology, and political science.
Simultaneously, to revitalize the discipline of B-to-B marketing, it
will require consciously recruiting doctoral students from non-traditional
disciplines such as macroeconomics, development, sociology, and finance
as well as natural, biological, and physical sciences. Finally, I believe
it will require existing doctoral programs in B-to-B marketing to
revise the curriculum and courses so that the new contexts are exposed
to students and new theories as well as research methods are incorporated
in the curriculum.

CONCLUSION

B-to-B marketing is a vast and growing field in marketing. Its importance
in managerial practice is rising with the emergence of the Internet;
inorganic growth through mergers and acquisitions; the rise of emerging
economies; privatization of public enterprises; breakup of vertical
integration; and globalization of markets. If we do not grab the research
opportunities generated by these business trends, other disciplines of
business will do it, just as what has happened to marketing strategy and
customer relationship management.

NOTE
1. Course work during doctoral study helps set the stage for the having ability to do
this. A master checklist of courses for outside areas might include Social Theory =
Organizational behavior, social networks and organizations, small group theory, industrial/
organizational psychology, social psychology; Strategic Theory = Resources-based
views and transaction cost economics; Economic Theory = Game theory and microeconomic
theory; Methods = Quantitative-survey design, scale development and testing;
qualitative–in-depth interviewing, focus groups, case research, and experimental design;
Statistics/Quantitative analysis = Regression, ANOVA / MANOVA, categorical
data, econometrics, and LISRE. While it may not be feasible to take all these courses
while in residence, a critical mass of theory and tools proficiency must be sought–a
foundation is gained by navigating a cohesive course of study basically of one’s own
choosing. Source: Lichtenthal (2005).
Jagdish N. Sheth 21
REFERENCES
Lichtenthal, J. David (2005), “Curriculum Issues,” B2B PhD Student Summer Camp,
American Marketing Association (AMA) / Institute for the Study of Business Markets
(ISBM)–Penn State, San Francisco, July.
Reid, David A. and Richard E. Plank (2000), “Business Marketing Comes of Age: A
Comprehensive Review of the Literature”, Journal of Business-to-Business Marketing,
7 (2), 3-9.
Sheth, Jagdish N. and Rajendra Sisodia (1999), “Revisiting Marketing’s Lawlike Generalizations”,
Journal of the Academy of Marketing Science, 27 (1), 71-87.
Sheth, Jagdish N. and Rajendra Sisodia (2006), Tectonic Shift: Geoeconomic Realignment
of Globalizing Markets, Response Books, Division of Sage Publications,
Delhi, India.
Vargo, Stephen L. and Robert F. Lusch (2004), “Evolving to a New Dominant Logic
for Marketing”, Journal of Marketing, 68 (January), 1-17.
Wilson, Dominic and Roopa Purushothaman (2003), “Dreaming with BRICs: The Path
to 2050”, Global Economics Paper No. 99, Goldman Sachs, pp. 23.
Zinkhan, George M. and Ruby Hirschheim (1992), “Truth in Marketing Theory and
Research: An Alternative Perspective”, Journal of Marketing, 56 (April), 80-88.
doi:10.1300/J033v14n01_02