pranay kumar 96 info sharing
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Academy of Marketing Studies Journal, Volume 14, Number 1, 2010
INFORMATION SHARING WITH B2B CUSTOMERS
THE SELLERS DOUBLE-EDGED SWORD
William W. Hill, Mississippi State University
ABSTRACT
The goal of this paper is to recognize the potential problems for sellers who share
information with customers in the business-to-business (B2B) setting, a perspective counterintuitive
to previously discussed in the marketing literature. In doing so, the author hopes to broaden the
understanding of information exchange from the seller to the buyer, providing a perspective to the potential harmful long-term effects. The author proposes relationships are enhanced through
information sharing in the early stages of the relationship, but eventually these relationships often
peak and diminish as expert knowledge is transferred from the seller to the buyer. Also discussed
is the sellers paradox in sharing information to build trust, while taking the risk of diffusing
valuable knowledge to the buyer over the extended relationship.
INTRODUCTION
In the selling domain, it is clear that for the seller to survive, he/she must develop and
maintain long-term relationships with the customers. Indeed, the marketing literature acknowledgesthe importance of the buyer-seller relationship toward sustaining competitive advantage (Hunt,
1983a; Ferber, 1970). Further, the stream of research relative to relationship marketing reinforces
the importance of this strategy (Morgan and Hunt, 1994, Wilson, 1995). One factor noted for
cultivating buyer relationships is information exchange (Cannon and Perraeult, Jr., 1999). Previous
research suggests information exchange fosters customer satisfaction (Cannon and Perraeult, Jr.,
1999), builds trust (Anderson and Weitz, 1992; Morgan and Hunt, 1994; Anderson and Narus, 1990;
Doney and Cannon, 1997), and offers a perception of commitment (Dorsch and Carlson, 1996;
Morgan and Hunt, 1994) for both parties. Information exchange has been suggested to have a
positive impact on the internal functions within an organization (Buckman, 1998) and to be a
constructive influence within alliances and joint ventures (D Aspremont and Jacquemin, 1988;Kamien, Muller, and Zang, 1992). Moreover, in the supply chain, companies often share knowledge
to improve visibility in chain operations resulting in innovative solutions between channel partners
(Im and Rai, 2008).
Yet, surprisingly, previous research in this area has given minimal consideration to the
negative influence of information exchange long-term. Specifically, do negative outcomes exist for
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the seller? Is there a limit to the amount of information that should be offered to the buyer? Are
certain types of information too confidential to share? Are there specific contexts where the
information offered is more detrimental to the business than others? Clearly, from this view, the
answer to these questions is fundamentally yes. There seems to be a genuine sales dilemma insharing information to build trust that runs the risk of transferring valuable knowledge to the buyer.
This does not suggest that information sharing can always be avoided, nor does it imply that every
scenario will necessarily lead to negative outcomes. This paper simply offers another perspective
that is believed to be real. Thus, this view is counterintuitive to the belief that information sharing
by the seller is always good approach for building relationships. In fact, the author suggests it can
have serious impacts to the value of the seller and the products and services offered by the selling
company. Since this issue has been given minimal notice in the marketing literature, this paper
provides needed insight in this area.
INFORMATION EXCHANGE IMPACTS TO RELATIONSHIPS AND PRODUCTS
Not surprisingly, firms seek innovative products as a means of achieving competitive
advantage. A part of this process is being unique and difficult to imitateclearly a key factor in
sustaining companies against competitive challenges. Yet, while firms strive to differentiate, many
find this goal problematic. A key problem here is competitive substitutes eventually become
available in the marketplace. We know this is not uncommon even for the most successful
companies. This issue of avoiding commodity status is particularly difficult within some raw
material channels. Take, for instance, the mineral industry. Kaolin clays are mined, processed,
cleaned, bleached, filtered, chemically treated, etc. prior to being shipped as clay slurries to the
paper and paint industries. These industries use these mineral slurries and other raw materials tomake coating recipes that, when applied to the surface of paper (or the living room wall), give
optical properties that are appealing to the buyer. While many of these recipes are innovatively
unique, in the world of manufacturing where formulating recipes is as much an art as a science,
the likelihood that customers or competitors will discover other mineral combinations that could
provide similar benefits, is a strong possibility. Another example here (in the industrial setting) is
in the control of the pH. There are a variety of chemicals that work adequately in the control pH
beyond the standard industrial acids and bases sold for this purpose. So as you can see, even at the
simplest process level, it is constant battle for the seller to differentiate products to make a valued-
difference to the buyer. Substitutes are often just around the corner.
Because of this challenge, sellers are forced to compete largely through relationships. Indoing so, sellers strive to enrich relationships by sharing information about the product, services,
applications, etc. to secure trust, commitment, and to demonstrate seller expertise to the buyer. For
the latter, the seller is not just selling the product, but the knowledge that can be offered. They are
selling solutions involving their product. This is generally smart businessparticularly with
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products that are otherwise considered commodities. Recall IBMs effective slogan Solutions for
a small planet (i.e., the PC is the commodity). Initially, the buyer will respect the seller for the
knowledge that is shared and the relationship should prosper. Yet, over time, the seller is vulnerable
to sharing valuable knowledge to the customer. In a sense, the seller, at some point, is giving awayexpertiseinformation that accelerates the commodity status for even new products in the market.
Wilsons (2000) depiction of the case of the vanishing salesperson, alludes to this concern.
Wilsons (2000) view suggests that the role of the salesperson is diminished with deep relationships,
and we agree. However, we suggest deep relationships often occur as the result of information
exchange. That is, information exchange reduces the importance of the seller because the buyer has
become knowledgeable of the product and how it is used. Of course, this added knowledge about
the product to the buyer, surely reduces the uniqueness of the product over time. Based on this
discussion, we offer the following propositions.
Proposition 1: For buyer-seller relationships that prosper, informationexchange from the seller is likely a key factor stimulating the
enrichment of that relationship in the short-term. As a result,
the sellers perceived value to the buyer should initially
increase.
Proposition 2: For buyer-seller relationships that prosper, information
exchange from the seller is likely a key factor diminishing
that relationship long-term. As a result, the sellers perceived
value to the buyer should eventually decrease.
Proposition 3: Information exchange by the seller to the buyer to secure and
nurture relationships is likely a key factor in reducing the
timeframe that product remains unique to the market.
INFORMATION EXCHANGE PATHS
Information exchanges can occur through a variety of different exchanges, but as we have
alluded to thus far, the most obvious path is from the seller to the buyer. As a guide to this
discussion, see Figure 1. Here, we illustrate how information is transferred from the seller to the
buyer and, then eventually in several directions. Of course, information can be transferred throughverbal exchange in the selling process, but it also can occur when employees change jobs between
sellers and sellers, buyer and sellers, sellers and buyers, etc. We know that many firms require
employees to sign agreements preventing them from working for competitors, but these agreements
have time limits and preventing an employee from permanently working for a competitor is difficult.
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Moreover, agreements are less common with employees who change jobs between selling and
buying companies and vice versa. Undoubtedly, the information paths exist and must be
acknowledged.
Figure 1. Information Exchange Paths in B2B Setting
Original Seller Original Buyer
Seller
(Competitor)
Seller(Competitor)
Seller
(Competitor)
Buyer
(Competitor)
Buyer(Competitor)
Buyer
(Competitor)
At this point, the discussion moves more specifically to the topic of information exchange,how it is defined, and the aspects of information exchange that are detrimental to the seller.
Information Exchange
Cannon and Perreault, Jr. (1999, p. 441) define information exchange as expectations of
open sharing of information that may be useful to both parties. Moreover, it is suggested here that
the risks associated with information exchange can be grouped into three areas: amount of
exchange, type of exchange, and the contextof the exchange. A discussion of each is addressed in
the following sections.
Amount of Information Exchange Risk Relative to the Relationship
We suggest that the amount of information transferred from the seller to the buyer should
serve to enhance the relationship until it reaches a peak. At some point in that exchange, it is
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proposed the relationship dampens (see Figure 2). That is, eventually, as more information is
exchanged, this giving away of knowledge serves to transfer expert status from the seller to the
buyer. The greater the information transferred, the better the buyer is educated, and the buyers need
for the seller is diminished. This does not infer the relationship is dissolved or it is at a lower levelthan at relationships initiation, just that it is lessened from its peak.
Figure 2. Information Sharing and Relationship Level
Enriching the Relationship Diminishing of Relationship
Amount
of
Information Shared
Relationship Level
(Seller Advantage)
Thus, it is proposed that
Proposition 4: The amount of information exchanged from the seller to the
buyer may contribute to enriching the relationship in the
short-term, but the diminishing the relationship in the long-
term.
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Types of Information Exchange Risk
It also evident that the type of information shared by the seller influences the quality of the
knowledge exchange (i.e., some information is more valuable than others). The marketing literaturemost commonly identifies product and financial information exchange as primary areas subjected
to the sharing environment (Dorsch et al., 2001; Srivastava et al., 1999). For product information,
this may include product data characteristics (i.e., physical and chemical properties), product
makeup, process/production knowledge, etc. Financial exchange could involve pricing, production
costs, product revenue, etc. These types of information are certainly more valuable to the buyer
than other information. Thus, sellers, against their better judgment, often share this information to
help the short-term value of the relationship. Therefore, we propose:
Proposition 5: The type of information exchanged from the seller to the
buyer may contribute to enriching the relationship in theshort-term, but the diminishing the relationship in the long-
term.
Contexts of Information Exchange Risk
Some business contexts are more conducive for transferring knowledge to customers. In
fact, the marketing literature identifies several forums where information exchange occurs more
easily and perhaps with greater understanding than others. In some studies, the authors even warn
of associated risks in these settings or processes. Typical contexts of concern, summarized in Table
1, are discussed next.
Table 1. Typical Risk Contexts Noted in Marketing Literature
Context Citations in Area Summary of Findings
Procurement
Bidding
Process
Williams (2002)Overuse of document exchange to address issues
during supplier bid evaluation process.
Klein (2002)
Avoid invitation of bids where apples-to-
apples comparisons can be made between
products.
Porter (1999)
Ethical Behavior
1) Purchasing shares confidential product
information with others.
2) Purchasing requires bid process to drive
down price when the supplier choice
has already been made.
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Table 1. Typical Risk Contexts Noted in Marketing Literature
Context Citations in Area Summary of Findings
Academy of Marketing Studies Journal, Volume 14, Number 1, 2010
Collaboration
Product
Development
Cannon and Perreault, Jr. (1999)
Both parties share important, even proprietary
information. Activities might include involving
the customer in product design.
Srivastava, Shervani, and Fahey
(1999)
Sharing of information through customer
relationship management process.
Lambe and Spekman (1997)
Buyers benefit from suppliers ideas for new or
improved products and better customization of
the products or services they purchase.
Presentations
Meldrum (1998)
Suggests presentations offer a great deal of
free information for the customer and can be
used for building relationships.
Dorsch et al. (2001) Sales efforts to generate customer resourceinvestments include using fact-based
presentations to customer
Procurement Bidding Process
Buyers use the bid process primarily as a means of reducing product costs. For less
powerful sellers, this is a real problem. If they do not participate in the bid, they will lose their
existing business. Moreover, by ignoring the bid invitation, they show a lack of commitment to the
buyer-seller relationship long-term. If they do participate and actually win the business, they do soat the expense of reduced pricing (i.e. from bidding low). Ultimately, the fear of losing the
relationship (and sales revenue) encourages participation. Yet, when sellers do participate, the buyer
learns a great deal. Specifically, the bid process offers a clear apples-to-apples comparison for
buyer and hence educates the buyer as to similar competitive offerings (Klein, 2002). Buyers are
often not aware of competitive brands before a bid process, and thus the bid process provides a
clearer picture to the purchaser than perhaps ever before. Additionally, the bid process encourages
the overuse of document exchange to questions generated from the bid evaluation process (Williams,
2002). Sellers might tend to be too free with information to please the buyer in this situation.
Finally here, Porter (1999) articulates the bid process may foster unethical intentions as customers
may eventually share information with competitors they want to win the bid. The sharing may beunintentional as well, but regardless, the information is released.
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Collaboration in Product Development Process
The process of collaboration encourages the sharing of knowledge, particularly as the groups
work together on new innovative product designs (Cannon and Perreault, Jr., 1999; Lambe andSpekman, 1997). The concern here is similar to that in the bid process. Working together in the
research and development setting allows buyers to compare (i.e., apples to apples) proprietary
details about the product and its use. These same research scientists are working with competitive
brands as well. Thus, while the intent of collaboration is worthy, the information shared in the
context of product development may provide too great an understanding of the products makeup
and capabilities long-term.
Presentations
In the B2B setting, the use of presentations is a very effective means for closing sales. Theseller informs the buyer of the products benefits, often providing specifics about product offerings.
The buyer appreciates the detail of this information. The seller has the opportunity to touch a
number of key personnel involved in the buying decision. The seller also has the opportunity to
alleviate any concerns about products with the entire buying group in attendance. Thus, the chance
to make a presentation to a buyer is generally considered a great opportunity. Unfortunately, this
method of information transfer may offer an extensive level of product information to the buyer
prior to the sale (Meldrum, 1998; Dorsch et al., 2001). Product line details, application ideas, and
cost information may be shared during presentations.
In summary, only three of a number of possible contexts have been discussed here suggesting
the context of the information exchange provides a risk to the seller. In each example, therelationship is a goal, but perhaps at a cost. Thus, we propose:
Proposition 6: The context of the information exchanged from the seller to
the buyer may contribute to enriching the relationship in the
short-term, but diminishing the relationship in the long-term.
Risk Dynamics of Information Exchange Expanded
In order to better understand the risk dynamics of information sharing by the seller, it
requires taking a broad-based view of the buyer-seller relationship. It also requires an understandingof how important the relationship is to the seller in the B2B setting. Knowing this, this paper offers
a who, what, where, when, why, and how depiction of buyer-seller environment that hopefully
describes how shared information is diffused through the channels within an organization and
beyond. This information is displayed in Table 2.
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The who in this scenario are the sellers contacts in B2B setting. Of particular importance
here is how these contacts use the information shared by the seller. Typical contacts include
operations, engineering, R&D, purchasing, and management. Each function has different
motivations. It is important for the seller to understand these motivations such that they may usecaution when working with these groups. The what dynamic in table 2 involves the types of
information shared. This obviously includes product information, but also service/solution
information relative to processes and practices. The where dynamic involves the locations that
are suggested to be vulnerable for unintended information exchange by the seller. These include the
customers facility, the sellers facility, conference settings, and entertainment settings. The when
scenario involves the time at which the seller tends to share information. This involves the selling
process, but also the recovery process. That is, when the buyer has difficulty with the sellers
product, the seller will share more information to help the buyer eliminate the problem. The why
dynamic is directed at the sellers motives. Clearly, this includes making the sale (economic),
promoting his/her expertise (image), and maintaining business friendships (emotional). Finally, thehow dynamic shown in table 2 describes how information is transferred. This involves both
verbal and written communication. For the latter, salespeople will use brochures, product data
sheets, letters, emails, etc., to help promote their product(s) to the customer. Obviously, this practice
must be monitored such that it is not uncontrolled.
Table 2. Risks Dynamics of Information Sharing with Customers in B2B Selling
Domain Description Relevance Concern
Who?
Operations Informs major user and application
specialist of the product/service.
Operators actually use your product/service
offerings. They have access to competitive
products and know how apply them. This
knowledge dilutes differentiation.
Engineering Informs decision-maker with user
and application knowledge.
Engineers work with product/service offerings
and make decisions based on this information.
Information provided will be compared to
competitive brands.
R&D Informs a highly scientific group
with access to specific comparable
attributes.
R&D has access to competitive product
information and they perform scientific studies
comparing products.
Purchasing Informs a price conscious function
with information that will be price
compared.
Purchasers are bargain shoppers. They will
seek to homogenize products and that could lead
to price erosion.
Management Informs chief decision-makers who
have access to information from all
functions.
Chief information collectors and synthesizers.
Paid to make decisions about product/servicing
offerings.
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Table 2. Risks Dynamics of Information Sharing with Customers in B2B Selling
Domain Description Relevance Concern
Academy of Marketing Studies Journal, Volume 14, Number 1, 2010
What?
Product
Information
Product information such as costs,
product makeup, procedures, and
applications of use are included.
Products can be compared. If they can be
compared, the can be copied. Thus, sustaining a
differentiated competitive advantage is more
difficult.
Service
Information
Service information includes costs,
processes, hiring practices, training,
etc.
Services are copyable as well. Finding good
highly skilled people is hard to achieve. Protect
this information.
Where?
Customer
Location
Salespeople share information
during sales calls at customer
locations. Information is shared on
their turf.
Salespeople are vulnerable at customer locations
to sharing information to impress. There can be a
big audience, so one mistake travels to all
channels.
Seller
Location
The seller may have customer at its
own facility to show product
capability and knowledge.
Salespeople invite customers to their facilities to
show capabilities. The customer is exposed to
details in the product/service offering.
Conference
Settings
Conferences are forums for meeting
many customers at the same time.
Presentations, meetings,
entertainment, etc. occur.
Conferences provide a hub for information
transferInformation is shared in both business
and social settings Thus, caution must be used
during at these events.
Entertainme
nt Settings
Salespeople often use leisure
entertainment as an informal way to
share information.
Selling entertainment activities often result in
stronger relationships, even friendships. As a
result, the seller may be vulnerable to sharing
unnecessary information.
When?
Selling
Activities
Salespeople disseminate information
to gain sales opportunities.
Customers want to make informed
decisions.
Sellers tend to flood customers with information
to make the sale. This information is often more
than necessary and may be compared with
competitive offerings.
Recovery
Activities
Salespeople are challenged to
sustain business when
products/services fail.
The seller will be compelled to share a great deal
of information to help the customer solve their
problem.
Why?
Economic The sharing of information is based
on economics (i.e., generating
sales).
Again sharing information for short-term gains
may result in long-term loss of differentiation.
Image The sharing of knowledge promotes
the sellers and companys image.
The salesperson is trying to make a great
impression on the customer by sharing
knowledge.
Emotional Strong relationships and friendships
with customers exist. Also, crisis
situations evoke emotion.
Selling friendships and crisis situations lead to
information exchange. For the latter, the
customer is seeking answers to solve a problem.
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Table 2. Risks Dynamics of Information Sharing with Customers in B2B Selling
Domain Description Relevance Concern
Academy of Marketing Studies Journal, Volume 14, Number 1, 2010
How?
Verbal
Exchange
Information shared in presentations,
meetings, phone conversations,
entertainment activities, etc.
The seller must use restrain when compelled to
offer information as a part of the selling process.
There are many tempting situations.
Written
Exchange
Information shared via call reports,
handouts, product data sheets,
MSDS sheets, brochures, letters,
email, etc.
The selling party often floods the buyer with
literature as a means of getting the buyers
attention beyond the face-to-fact service call.
CONCLUSIONS AND FUTURE RESEARCH DIRECTIONS
This paper hopefully offers a unique perspective on seller information exchange and the
potential negative ramifications for sellers in the B2B setting. Clearly, the seller needs to buildrelationships and information exchange is often a necessary technique in this process. Thus, we
must understand the dilemma of short-term gains versus long-term losses as discussed in this paper.
It is important to recognize that the amount, type, and context of the information exchange are
relevant in understanding how information is used by the buyer. Moreover, this paper recognizes
the need to take a broad-based view of the information sharing environment such that sellers
understand all the dynamics of the information shared.
This paper has generated a number of thoughts for future research. First, an empirical study
for the ideas proposed in this paper seems warranted. Interestingly, while we take a darker view of
the practice of sharing information with buyers, there would also expect to be long-term influences
for buyers sharing information with sellers. A framework for that process could prove insightful.Future research could include development of a taxonomy system for the types of information
exchange that occur. While we suggest in this paper that information exchange may be present in
different forms (i.e. product, financial), there may be a number of information exchange types that
warrant identification in the marketing literature.
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