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Transcript of JSM Lockett and Blackman 2001
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Strategies for building a customer base on theInternet: symbiotic marketing
ANDY LOCKETTNottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham
NG8 1BB, UK
IAN BLACKMANFieba, Korns House, 6 8 Colne Road, Twickenham TW1 4JR, UK
The advent of the Internet is leading a re-evaluation of existing business practice as
the m ethods em ployed in a non-vir tual world m ay not necessar ily be as effective in a
virtual environm ent. The present paper exam ines the different strateg ic options facing
organiz ations as they attem pt to build a custom er base on the Internet. The traditional
s ite-centr ic approach of directing traf c to a central Internet s ite suffers from the
problem s of the increasing costs and decreasing effectiveness of Internet adver tis ing.
An alternative strategy is the sym biotic approach which is based on the concept of
mutuality. A strategy of symbiotic m arketing involves one organization providing
functionality for another organization s Internet site. In exchange for the provision of
functionality for another Internet s ite the provider bene ts from a increased m arket
coverage and reach. Although the strategy of sym biotic marketing may initia lly appear
counter-intuitive, the following paper highlights the potentia l advantages for a company
pursuing such a strategy. The case demonstrates such a strategy exits as a low cost method
of developing a custom er base on the Internet. Finally, the potentia l scope of symbiotic
m arketing is discussed.
KEYWORDS: Marketing strategy; Internet; customer bases; symbiotic marketing
INTRODUCTION
The impact of the introduction of the Internet on business practice has received disproportion-
ately little attention in the literature when compared to its perceived importance. In particular,
the strategic implications of the introduction of the new medium do not appear to be fully
appreciated. Although the Internet may appear to provide numerous potential advantages to
marketers in terms of reducing costs and time horizons and increasing an organizations reach,
it is important to view the potential of the new medium in a greater strategic context. For
example, it appears that the costs of embracing a new channel of distribution in conjunction
with existing channels may actually lead to an overall increase in an organizations cost base.
However, the lack of empirical support for a link between spending on information technology
(IT) and increases in productivity should not be taken as the de nitive answer on the matter.
JOURNAL OF STRATEGIC MARKETING 9 4768 (2001)
Journal of Strategic Marketing ISSN 0965 254X print/ISSN 1466 4488 online 2001 Taylor & Francis Ltdhttp://www.tandf.co.uk/journals
DOI: 10.1080/09652540010011475
http://www.tandf.co.uk/journals
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Rather, it appears as though government-aggregated statistics used to examine shifts in produc-
tivity overlook the potential impact of IT in terms of increasing quality, variety, timeliness and
levels of customer service (Brynjolfsson and Hitt, 1996).
Corporations launching Internet-based services are making a considerable effort to under-
stand how best to use the bene ts of the Internet when transferring their product or service to
the new medium. However, merely transferring content to the Internet is not suf cient to
guarantee a viable Internet-based product/service. This becomes an even greater problem for
companies that are purely Internet based as they do not have customers via non-virtual
distribution channels. A necessary condition of success is the attraction of customers and
the assembly of a customer base. Watson and Zinkhan (1997) argued that one of the six
key questions of an electronic commerce strategy is that of how does an organization develop
a web site that attracts customers? However, phrasing the question in such a way appears to
suggest that a companys website is the only important factor in in uencing the size of a
companys customer base. The following paper argues that it is not only the companys web-
site that in uences the size of its customer base, it is also the way in which it uses and distributes
the content of its own website on the sites of other companies that may be important.
The dominant approach to building a customer base on the Internet has been to imitate
existing strategies employed in a non-virtual environment. However, the most cost-effective
means of attracting existing and new customers to the newly developed Internet-based service
may not necessarily appear to be initially intuitive. The present paper outlines the different
methodological approaches to attracting customers to an Internet service, including both
traditional perspectives (site-centric models) and the novel approach of symbiotic marketing.
The approach of marketing through symbiosis is one that has been borrowed from the biol-
ogy literature and refers to the harmonious living together of dissimilar organisms in a
mutually bene cial relationship (Adler, 1966). The issues arising from the different approaches
will be discussed with reference to case data gathered on an Internet-based organization.
The paper concludes by arguing that a corporations approach to Internet-based promo-
tion should be primarily determined by the structure of their existing market(s) and position(s)
within it.
MARKETING AND THE INTERNET
The impact of the introduction of IT on business has been both dramatic and well-documented.
However, the introduction of the Internet is considered to have potentially far greater con-
sequences for business than just those of increasing spend on IT and the resulting changes
of increasing technical sophistication (Dutta et al., 1998). Examples of the innovative applications
of IT to business are the virtual organization (Handy, 1995; Scott Morton, 1995; Lockett and
Holland, 1996) and Internet-based marketing (Bianco, 1997; Loebbecke and Jelassi, 1997). There
are an increasing number of marketing success stories of organizations which have embraced the
Internet as a medium of business. For example, see the cases of Dell (http://www.dell.com/)
(Magretta, 1998; Naud and Holland, 1998), Schwab (http://www.schwab.com/) (Naud andHolland, 1998), Netscape (Yof e and Cusumano, 1999) and American Express (http://
www.americanexpress.com/) (Berry, 1994).
In addition to changes to existing marketing practice, the introduction of the Internet is
arguably heralding the development of a new era of marketing theory (Dutta et al., 1998; Naudand Holland, 1998). Existing research has highlighted the impact of the Internet on speci c
marketing activities such as marketing research (Quelch and Klein, 1996; Lockett et al., 1999)
48 LOCKETT AND BLACKMAN
http://www.americanexpress.com/http://www.dell.com/http://www.schwab.com/http://www.americanexpress.com/
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and new product development (Lockett et al., 1998). Furthermore, Buttler and Peppard (1998)
highlighted the Internet s importance in facilitating dyadic information ows between supplier
and customer and that the inverse relationship between the richness and reach of information no
longer holds. As a result the Internet has the potential to encourage simultaneous two-way ow
of information between large numbers of customers and suppliers.
One of the biggest implications for marketing theory and practice is the shift from a non-
virtual market-place to a market-space, the implication of which is that industry players do
not have to have a physical presence as with traditional industries (Rayport and Sviokla, 1995).
This market-space is conceptualized by the ICDT (information space, communication space,
distribution space and transactional space) model which comprises four different virtual business
spaces, which are new spaces of opportunities for businesses: virtual information space (VIS),
virtual communication space (VCS), virtual transaction space (VTS) and virtual distribution
space (VDS) (Angehrn, 1997). However, in order to capture the opportunities provided by
each of these spaces it is necessary that rms have a website. The dominant theme in much
of the electronic commerce literature is that the introduction of the Internet presents great
opportunities for smaller companies to enter markets that were previously characterized by high
barriers to entry, such as the traditional requirement for a physical presence in retail markets.
The problem is that the creation of a website does little more than establish contact, it does not
in itself create interest (Angehrn, 1997).
The above perspective views the advent of the Internet as reducing such barriers to entry
and, therefore, when coupled with the potential accessibility of information in reducing
customers search costs, will lead to new market entrants, increasing price competition and
the development of electronic markets (see Malone et al., 1987, 1989; Daniel and Klimis,
1998). However, this perspective has been challenged by empirical studies of both the imple-
mentation of electronic data interchange (EDI) (Holland et al., 1992) and, more recently,
of Internet market structures and what drives the differences in traf c across sites (Ennew et al.,
2000). The study by Ennew et al. (2000) found that traf c across the top sites in a range of
market sectors was highly skewed, with nearly all traf c being concentrated on only a small
number of sites. This nding provides evidence for challenging the orthodoxy that the intro-
duction of the Internet will lead to the development of electronic markets. Although
companies are able to establish web sites, Angehrns (1997) statement that the creation of an
Internet site establishes contact with customers may be challenged as the existence of a web-
site does not mean that the site will be visited by a meaningful number of people. Therefore,
the authors feel that the opportunities of the new market-space are even more dif cult for
companies to capitalize on as the creation of a website does not necessarily equate to making
contact with customers and potential customers. In reality many websites have very small traf c
with over 90% of Internet traf c owing through less than 10% of the most popular sites
(Ennew et al., 2000).
Therefore, if websites exist in a market-space that is so vast that their existence is not a
suf cient condition for gaining traf c and the development of a viable Internet venture
requires customers, the building of a customer base becomes a key component of any com-
panys marketing strategy towards the Internet. In addition, the development of a customer base
facilitates other stages in the marketing process such as market research and new product/service
development/testing of the development (Lockett et al., 1998, 1999). Therefore, the develop-
ment of an Internet customer base is a strategic priority for all Internet companies. The next
section proceeds to outline the range of different methodologies that companies may employ
in attempting to build a customer base on the Internet.
BUILDING A CUSTOMER BASE ON THE INTERNET 49
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STRATEGIES FOR BUILDING A CUSTOMER BASE ON THE INTERNET
In addition to the potential advantages that may be associated with the introduction of
electronic commerce (e-commerce), the introduction of the Internet has led to a re-examination
of the economics of business transactions. The new medium has the potential to reduce the
average costs associated with a transaction as a signi cant portion of the costs of maintaining and
developing an Internet service are xed. However, variable costs traditionally include those
involved in attracting customers to an Internet site and usually vary in direct relation to the
number of potential customers attracted.
There appears to be two distinct methodological approaches to building a customer base on
the Internet.
(1) The site-centric model involves a range of techniques that can be used to attract
customers to a central site offering a particular product or service. This strategy involves
a signi cant investment being incurred in the building of a Internet-enabled product
or service, advertising the service to attract a user base and then using feedback to adapt
the site to speci c target market(s) needs. This is the dominant method for building
a customer base on the Internet, a strategy that has been pursued by the vast majority
of companies, for example, Ebay (http://www.ebay.com/), and Yahoo (http://
www.yahoo.com/).
(2) The second model is best described as the symbiotic marketing model and is unique to the
Internet. With symbiotic marketing the processing required for a service is centralized but
other sites are encouraged to incorporate the input and output of the service within their
own site. The service is effectively taken to the site the customer wants to use rather than
the customer having to go to the service provider s central site. The most high pro le
company to employ a symbiotic strategy is the book and CD retailer Amazon (http://
www.amazon.com/). Amazon encourages third party Internet sites to become associates
and to provide Amazon services on their websites through a number of different arrange-
ments. Companies can either link directly to the Amazon home page, link to an Amazon
associates search box or link to individual products. A large number of different Internet
sites have joined the Amazon associates programme for which the associate receives a 5%
referral fee for each item purchased. An example of an Amazon associate is America
Online Inc. (http://www.aol.com/). Approximately 200 000 websites have enrolled on
the Amazon associates programme (http://www.amazon.com/). Examples include Excite
Inc. (http://www.excite.com/), Microsoft (http://www.microsoft.com/) and Netscape
Communications Corporation (http://www.netscape.com). The symbiotic strategy has
the advantage that, by delivering content to third party web sites, Amazon is able to raise
its pro le on the Internet, therefore attracting more customers. (Information regarding
links into any web site may be obtained from the altavista search engine (http://
www.atavista.com/), both in terms of the number of links and to which sites a particular
web site is linked).
Although the two approaches have been presented as polar opposites this is not to say that a
company cannot pursue a hybrid of the two models. For example, although Amazon pursues
a symbiotic strategy through its associates programme, it still advertises heavily. The current
section now continues to outline the different methodological approaches to building a
customer base on the Internet and examines the different substrategies involved in the different
approaches.
50 LOCKETT AND BLACKMAN
http://www.ebay.com/http://www.amazon.com/http://www.altavista.com/http://www.ebay.com/http://www.yahoo.com/http://www.amazon.com/http://www.aol.com/http://www.amazon.com/http://www.excite.com/http://www.microsoft.com/http://www.netscape.comhttp://www.altavista.com/
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The site-centr ic m odel
The site-centric model has clear parallels with traditional forms of retailing where customers are
attracted to a particular institutions brand in order to meet their broad requirements. The organ-
ization invests in building a high degree of content on the companys own Internet site and
seeks to protect the content it has developed, as it perceives it to be a valuable resource of the
rm. (The notion of a rm-speci c resource dates back to the seminal text of Penrose (1959)
and, more recently, Wernefelt (1984) who viewed a resource as anything that can be considered
to be a strength or weakness of the rm.) In being naturally protective of its own services the
strategy becomes one of attracting and retaining customers within the central site. However, in
order to do this it is usually necessary for the organization to develop strong brand recognition.
This strategy towards the Internet is one that large marketing and advertising rms are familiar
with from a non-virtual context.
The site-centric approach may be viewed as an umbrella strategy that encompasses a range of
different, non-mutually exclusive techniques. The common theme running through all of the
techniques is the need to concentrate on attracting customers to the companys own speci c
Internet site (see Fig. 1). The range of different site-centric approaches is outlined below.
Portal sites
A portal Internet site is either the rst site a user sees when logging on to the Internet or
a central site (search engine) used to identify other sites. The log-in screen is often pre-set by the
Internet service provider (ISP) of access to the Internet (e.g. AOL) or the provider of the soft-
ware browser (e.g. Netscape and Microsoft). A second category of portal sites is the search
engines used to nd appropriate sites (e.g. Yahoo, Excite and Infoseek).
FIGURE 1. The site-centric model: attracting customers to a central site.
BUILDING A CUSTOMER BASE ON THE INTERNET 51
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Both the portal forms, i.e. ISPs and search engines, have been attempting to enhance their
Internet presence by offering an increasing range of complementary services. A number of
portal sites have begun to offer complementary e-mail services as a means of attracting
customers to their site, for example Yahoo (Yahoo Mail) and Microsoft (Hotmail). (Microsoft
acquired the existing Hotmail service for approximately US$400 million. This may be viewed as
a payment for acquiring the functionality and brand name; however, it was anticipated that the
existing customer base of Hotmail was the most attractive resource possessed by the company.)
In addition, the larger search sites such as Yahoo have been successful in simplifying the search
process by suggesting sites that have been reviewed by their own staff in addition to providing a
listing of the sites identi ed. The portal sites have an advantage in recognizing the key interests
of the users of their sites. By using this information the sites are able to provide value-added
services to meet the identi ed customer needs or, in cooperation with content providers
on a co-branded basis, to retain the customers within their own site. An example of this strategy
is the development of Excite s personal nance site by Intuit and the Financial Times (http://
www.quicken.excite.com/).
However, the strategy of developing a portal site has become increasingly dif cult to follow,
particularly in the form of a search engine portal. Evidence of this is the attempt by Northern
Lights (http://www.northernlight.com/) to become one of the main search engine portals by
offering an improved search engine platform. Although the search engine platform was initially
acknowledged to be an improvement on the competition, to date Northern Lights has yet to
build a customer base to challenge the top ve search engines. Therefore, it appears as though
the cost to the largest portal sites of matching a short-term technological advantage is sig-
ni cantly less than the cost to the new entrants of building a recognizable brand and signi cant
user base.
In the UK, a number of companies (e.g. the food retailer Tesco (http://www.tesco.com/),
the building society Nationwide (http://www.nationwide.com/) and the electronics retailer
Dixons (http://www.freeserve.com/) have attempted to build their own ISP portal sites through
providing free Internet access to their own customers. The approach appears to be one of cross-
selling to an established customer base while reducing the likelihood for the customers viewing
the products/services of a competitor.
Purchase links to a portal site
In addition to developing their own portal sites, companies are able to purchase prominent links
in existing key portal sites. AOL has been particularly active and successful in selling links
on its information pages. An example is the willingness of three online discount stock brokers to
pay US$75 million to be the sole brokers linked to AOL personal nance site for 3 years. The
cost of acquiring a key position on a portal site appears to be growing with Citigroup agreeing
to pay Netscape US$40 million to provide the personal nance content for the Netscape
Personal Finance site. The option of purchasing links will continue to become increasingly
expensive as Internet traf c increases and demand for such links grows.
Purchase advertising
The strategy of advertising on the Internet is somewhat similar to that of acquiring a portal link
because of the ability to link an advertisement directly to the advertisers own site. Where the
customer can purchase the product/service from the Internet site a direct and instantaneous
52 LOCKETT AND BLACKMAN
http://www.quicken.excite.com/http://www.quicken.excite.com/http://www.northernlight.com/http://www.tesco.com/http://www.nationwide.com/http://www.freeserve.com/
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link is provided between the advertisement and the point of purchase. However, the rate of
people clicking on advertisements appears to be declining with an average of approximately
one click-through per 200 views stated as the norm in industry newsletters. In addition to the
ineffective nature of Internet advertisements, the high prices charged for advertisement
space does not make the economic model for Internet advertising compelling (Lockett et al.,
2000). (For a comprehensive discussion of advertising on the Internet see Novak and Hoffman
(1996).)
The large portal sites have exploited key advantages in selling targeted advertisements, in
particular the following.
(1) Keywords can be used to select an appropriate banner advertisement.
(2) Advertisements can be presented on Internet pages with related topics.
(3) Regional-speci c advertising can be provided on regional-speci c search engines.
(4) Detailed information can be collected in order to assist buyers determine the success of
speci c banner advertisements.
The portal sites appear to have been successful in maintaining a premium price for their
targeted advertising space, with Yahoo being prominent in not discounting its space (Lockett
et al., 2000). As a result, a number of intermediaries are attempting to duplicate the bene ts of
the portal sites by delivering banner advertisements to groups of second tier Internet sites;
however, the price of the advertising space here is much lower.
Direct e-mail: registered users or subscribers to e-mail services
Customers can be encouraged to register their interest in receiving details of new product
launches by e-mail or register for regular news or information updates. On the basis of e-mail
lists messages can be targeted with advertisements included in the e-mail or the customers
contacted with speci c product updates. For example, the companies Ad-Online (http://
www.a-o.com/) and NUA (http://www.nua.ie/) disseminate weekly e-mails to subscribers
informing them of their latest products and research. However, the problem still exists that traf c
has to be initially directed to a central site in order that the customer may register for the
service. Therefore, although e-mail may be a quick, low cost alternative to postal mail (Mehta
and Sivadas, 1995), the strategy still requires the identi cation and compilation of a list of
potential customers to contact.
Direct e-mail: junk mail or spam-mail
In addition to solicited e-mail, junk mail or spam-mail e-mail is the Internet s version of
unsolicited direct mail. There are a number of techniques available for building very large e-mail
lists. In addition, the cost of distributing the e-mail is very low. The spammer often uses the
unprotected servers of other companies in distributing the e-mail, avoiding the cost of dis-
tributing the mail. The person who receives the e-mail then effectively pays to receive the junk
mail in the time taken online to delete or download the mail. Complaining to the junk mailer is
generally not a good idea as it con rms that you have read the mail and that your e-mail
account is active, thus attracting further mail. Spammers are generally regarded as the marketing
low life of the Internet, whose business model is based on abusing the open structure of the
Internet in order to use other companies resources.
BUILDING A CUSTOMER BASE ON THE INTERNET 53
http://www.a-o.com/http://www.a-o.com/http://www.nua.ie/
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In summary, leaving the strategy of junk mail/spam-mail aside, the common problem that
is common to all site-centric strategies is the increasing costs that have become associated
with attracting traf c to a central site and building a customer base. Symbiotic marketing may
be viewed as a response to some of the problems associated with the site-centric approach to
building a customer base on the Internet.
Sym biotic m arketing
The term symbiosis , as borrowed from biology, refers to the living together in intimate
association of two dissimilar organisms for mutual bene t (Street, 1975). The existence of such
mutualistic interactions has been widely reported from a wide range of taxa and include many
different types of relationships in the biological sciences (Boucher, 1985). The driving force
behind the formation of the symbiotic relationship must be that the mutualism should lead to an
increase in tness of both participants (Poulin and Vickery, 1995). Adler (1966) highlighted
the case of the African buffalo bird that lives on the back of the rhinoceros. In return for a free
mobile home and a free food supply of insects off the hosts back the bird provides a valuable
service. The bird, with its nely tuned sensory equipment, is able to detect danger at an early
stage and, thus, is able to squawk and y off the back of its host thereby providing an early
warning of any potential danger.
Adlers (1966) article was the rst to explore the concept of symbiosis in marketing. Although
the concept has become one that is highly applicable in the context of business practice it is one
that has been largely under-researched in the academic world (Varadarajan and Rajaratnam,
1986). Symbiotic marketing is an alliance between two or more independent organizations
which is designed to increase the market potential of each (Adler, 1966, p. 60). This de nition
only refers to organizations that remain distinct and excludes the traditional marketer marketing
intermediary relationship (Varadarajan and Rajaratnam, 1986). The present paper applies the con-
cept of symbiotic marketing to the case of Internet marketing and, in particular, to the develop-
ment of a customer base. As with Adler s (1966) example of the buffalo bird and the rhinoceros,
the basis of this symbiotic marketing relationship is the concept of mutuality, i.e. both parties
derive a bene t from the relationship. The services provided will bene t the host site, which will
form the incentive to include the services on their site. In addition, the service is delivered to
the site that the customer would prefer to use rather than the customer being directed to the site
the supplier would prefer they used. In addition, by forming a symbiotic relationship with the
host site an organization can easily provide its services to a wider audience than they could
otherwise do if they only existed on their own site. The development of symbiotic relationships
in the market-space is manifested through electronic links between organizations websites. The
willingness to link to different rms websites is in effect the provision of a seal of approval for
that website; however, the link relationship is very different from the concept of a relationship
that we think of in the context of strategic alliances between organizations. In the case of
a symbiotic strategy such a link may be implemented by a rm without the consent of the
content-providing link partner. The easy implementation of links is an important element in a
symbiotic strategy as an organization will want to link to as many other websites as quickly as
possible. However, although symbiotic relationships are characterized by no interpersonal contact
between rms this is not to understate their potential importance. Recent research by Ennew et
al. (2000) examined the importance of links in determining the level of traf c on an Internet
site and found that links were overwhelmingly the most important determinant of site traf c
with elasticities of approximately 0.75 across a range of different market sectors.
54 LOCKETT AND BLACKMAN
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On initial examination this strategy may appear to be counter-intuitive because, under the
site-centric model, companies protect their functionality and attract customers to their central
site. However, the service industry does not enjoy the same legal protection of intellectual
property as the manufacturing industry. Although companies are able to protect intellectual
property in the form of trademarks and brand names they are less able to protect ideas. An
extreme example of this is the nancial services industry where it is not possible to patent
an actual service concept/idea (Naslund, 1986). Therefore, if it is not possible to protect the
intellectual property rights of a service, the actual functionality of an Internet page becomes a
rm-speci c resource that cannot be fully protected. This has interesting implications for how
rms approach their strategy towards marketing on the Internet.
As discussed earlier, the building of a customer base is considered to be key in developing a
viable Internet-based organization. However, the traditional approach of the site-centric strategy
is becoming increasingly costly and one that is not an option for rms with small advertising/
promotion budgets (Lockett et al., 2000). The strategy of symbiotic marketing builds on the idea
that it is not possible to protect content and, therefore, concentrates on what is the best way
to build and defend a customer base. The case below demonstrates that, rather then protecting
content, in certain instances the best strategy may be one of providing content to whichever
Internet page the customer requires. However, the important distinction to make is that giving
away content is not the same as losing customers. The customers of the service will remain
with the company, as it is the original company that provides the service. The only difference is
that the port of entry for the client is not always the service provider s own Internet site. The
strategy of symbiotic marketing is represented diagrammatically in Fig. 2.
The symbiotic strategy has the advantage that, by making the service available on as many
sites as possible, the chances of a new customer nding the service are increased. The technique
appears to be particularly appropriate for the business-to-business market where the most
important site for a service to be referenced is their own companys Intranet site or access page
FIGURE 2. The symbiotic marketing approach.
BUILDING A CUSTOMER BASE ON THE INTERNET 55
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to the Internet. In addition, through the development of its links the company is effectively
building itself an electronic presence in the market-space. Not only does each link raise the
visibility of an organization and, therefore, drive more traf c to a site, the possession of a link has
the added advantage of depriving a direct competitor of building the same link (Ennew et al.,
2000). The strategy is explored using case data in the following section.
RESEARCH METHOD
The present research employed a case study-based method based on those of Eisenhardt (1989)
and Yin (1994). The decision to use a case-based methodology was based on two main con-
siderations. First, the number of companies that are following a symbiotic strategy in developing
their customer base appears to be very small and only three were identi ed during the course of
the research: Xenon Laboratories, Google and Amazon. In addition, as the strategy of symbiotic
marketing in the case of the Internet has not been explored before, the case study method pro-
vides an important vehicle for the development of theory generation. This was considered to be
an appropriate approach when focusing upon this novel research area. The information sources
used in the development of the case included interviews with board-level employees of Xenon
Laboratories, information collated from the Xenon servers that host their website and additional
data that is publicly available from web monitoring companies, the best of which is considered
to be Alexa (http://www.alexa.com/). (The data provided by Alexa.com is publicly available and
provides measures of site traf c, links into a site and a number of different site-level data relating
to factors such as the speed, freshness and content of a web site. For a fuller discussion of
the data see Ennew et al. (2000).) The motive for employing a range of different data sources
was that such an approach would facilitate the triangulation of evidence (Deshpande, 1983). A
case approach involving the use of multiple sources of data is particularly useful in areas where
existing theoretical and conceptual frameworks are not applicable and, thus, the research pursues
the less common direction of moving from data to theory.
A CASE EXAMPLE OF SYMBIOTIC MARKETING
The objective of the case is to present a real life example of how a strategy of symbiotic
marketing may be used in order to build a customer base on the Internet. One company that has
pursued such a strategy is the Canadian Internet nancial service provider Xenon Laboratories
(http://www.xe.net/). (A corporate overview of Xenon Laboratories may be obtained from its
web site at (http://www.xe.net/xenon/brief.htm). Xenon Laboratories states that it aims to
work in partnership with nancial institutions in order to develop and deliver Internet-based
international nancial services for their corporate customer base.) Xenon Laboratories has
followed a symbiotic approach to building a customer base as it attempts to enter the nancial
services market in order to support cross-border business-to-business trade. However, as the case
demonstrates, the strategy of symbiotic marketing may not be considered to be initially intuitive.
Instead, Xenon Laboratories symbiotic strategy has been one that has emerged over time, the
logic of which has become increasingly apparent.
The market for international payment services is highly fragmented, with basic services pro-
vided by over 4000 different banks and the introduction of high value-added services dominated
by the large international banks, including Citibank, Bank of America, Chase and ABN AMRO.
Xenon Laboratories strategy in entering the market has been to build a customer base of
importers and exporters by providing free information tools. This was the rst stage as, once
56 LOCKETT AND BLACKMAN
http://www.alexa.com/%29.http://www.xe.net/%29.http://www.xe.net/xenon/brief.htm%29.
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a customer base has been developed, it is then possible to contact customers in order to test
product concepts and develop enhanced information products that prompt the purchase of a
nancial product. By employing such a strategy Xenon Laboratories has been able to circumvent
the large expense of the traditional site-centric model of attracting hits to a central site. In
addition, the cost of developing a fully functional service can be postponed until after the
product concept has been tested with a signi cant customer base.
Attracting a custom er base of im por ters and exporters
In April 1995, Xenon Laboratories launched a simple foreign exchange calculator on the Inter-
net, the Universal Currency ConverterTM (http://www.xe.net/currency). This is a free service
that enables users to calculate a value in a second currency. In addition, a free daily e-mail
delivery of a foreign exchange table expressed in the currency of the customers choice was
provided. The e-mail service was not advertised, with the bulk of registrations obtained from
users clicking on a link on the output page of the Universal Currency ConverterTM. The
registration procedure for each of the services provided a suf cient level of information such
that Xenon Laboratories was able to determine that the users of the converter were split
between two main segments.
(1) Business-to-business: importers and exporters using the service to price transactions in
their trading partners currency.
(2) Retail users: converting prices for holidays.
(The level of data collected from the registration procedures for each of the services
included capturing information regarding (1) the respondents name, address and personal
details, (2) company information, where necessary, (3) reasons for using the Xenon Labora-
tories services, (4) users of level awareness of other Xenon Laboratories services, (5) how
users became aware of the Xenon Laboratories services and (6), potential service
improvements.)
In August 1996 the customer base of the Currency Update Service was large enough to
test an initial product concept with only just over 300 registered customers. The initial product
concept tested was the Exporter Pricing ServiceTM, a service aimed at reducing the risk
facing exporters when pricing sales in their customer s currency (see Naud et al., 1998). As a rst stage in the new service development process e-mails were forwarded to 300 customers
requesting their input on the product idea. The e-mail contained the address of a simple
questionnaire placed on Xenon Laboratories site. Within 24 h of sending the e-mails over 15%
of the sample had completed the questionnaire on the site.
The purchasing of advertising was not an option in growing the user base for two main
reasons. First, Xenon Laboratories did not possess the required nancial resources and,
second, there are a limited number of high use exporter- and importer-speci c sites on which to
advertise. In addition, Xenon Laboratories faced the problem that, during 1995 and 1996, there
was a limited number of companies who entered the market offering a similar service. However,
during this time the site did receive considerable coverage in the press and a large number of
links from other sites.
In the rst year of use it was found that other sites were creating their own input pages
and sending the calculations to the Xenon Laboratories server; the result was then returned as
the Xenon Laboratories output page. While the actual page views of the Xenon Laboratories
site were reducing relative to the number of calculations, the likelihood of an importer or
BUILDING A CUSTOMER BASE ON THE INTERNET 57
http://www.xe.net/currency
-
exporter using the Xenon Laboratories service and, therefore, seeing the links to the Currency
Update registration form increased. Therefore, it was decided that rather than blocking the use
of Xenon Laboratories services that did not originate on the Xenon Laboratories site, Xenon
Laboratories would actually encourage it. In order to do this, in late 1997 instructions were
provided in order to help customers produce their own customized versions of the Universal
Currency ConverterTM (http://www.xe.net/cus/customize.htm). However, customers who
established their own customized versions of the service were still requested to register
and, as a user, were asked why they were using the converter. In early 1998 an average of
10 customized versions of the Universal Currency ConverterTM were being registered per
day. The daily average signi cantly increased in March 1999 when the process for setting up
the input pages was simpli ed by providing a downloadable le. The growth in the number
of monthly new registrations for customizing the converter over the last 12 months is shown
in Fig. 3.
The large number of customized versions of the Universal Currency ConverterTM greatly
increased its coverage on the Internet and, thus, the probability of an Internet user nding the
service. In addition, the large number of sites listed with the Universal Currency ConverterTM
also resulted in the Universal Currency ConverterTM taking a large portion of listings when a
search was made for a currency converter on the main search engines. As a result, the growth
of the service has continued to date with usage increasing approximately 8% compound per
month. Fig. 4 shows the increased usage of the converter over the period March 1997 to
November 1999.
As a defensive measure Xenon Laboratories also provided co-branded versions of their
converter for use by the large portal sites (e.g. eBay, AT&T, Go and Virgin) where the site
owner s prime objective was to retain customers on their own site. Again, the main bene t in
providing functionality to a non-Xenon Laboratories site was that a link was shown to Xenon
Laboratories additional services in order to build the database of customers for testing product
concepts.
FIGURE 3. Registration of customized versions of the Universal CurrencyConverterTM.
58 LOCKETT AND BLACKMAN
http://www.xe.net/cus/customize.htm
-
Initially it was anticipated that, by following the symbiotic strategy, the bulk of calculations
would be delivered by sites that had placed the input page within their own site with custom-
ized versions of the calculator, with the majority of calculations coming from the key portal sites
using co-branded versions of the service. However, during April 1998 it was found that 85%
of calculations were entered into the calculator on the actual Xenon Laboratories site and that
10% were from free customized versions and only 5% from the prominent portal sites.
Following the analysis, Xenon Laboratories concentrated on simplifying the process for
smaller sites in order to implement the free customized versions within their own site rather
trying to convince the large portal sites to implement tailored co-brands within their sites. In
order to illustrate the bias towards the Xenon Laboratories site, the ratio of page views for the
Universal Currency ConverterTM to the number of calculations is shown in Fig. 5. Although
the proportion of calculations that come through the Xenon Laboratories web site appears
to be lower than in April 1998 the proportion is holding relatively stable at around 65%. This
proportion has been achieved despite a strong growth in the number of input pages installed
within other sites.
The reason why only a low and stable proportion of calculations are being performed on the
prominent portal sites or co-branded sites is not yet fully understood. The low proportion of
calculations generated by the portal and other sites may re ect their low share of the business-
to-business market on the Internet. The peak load on the Xenon Laboratories service is at the
start of the working day on the West Coast of America with a large portion of the calculations
generated from corporate Intranet sites. The portal site for the business users is their companys
home page when the employees are accessing services from the company Intranet or from links
on their companys home page (both are effectively the portal site for the organization).
It appears that a strategy of assisting business customers in either inserting links or the input
pages for Xenon Laboratories services on their own Internet and Intranet sites is an effective
approach to generating a virtual portal site or business-to-business marketing.
FIGURE 4. Usage of the Universal Currency ConverterTM over the last 18 months.
BUILDING A CUSTOMER BASE ON THE INTERNET 59
-
As with the portal sites the reason why usage of the converter from customized sites may
be far less than rst anticipated is not fully understood. One potential explanation is that users
of the customized site typically bookmark the output page (on Xenon Laboratories site) rather
than the input page used to make the calculation on the customizer s site. If the customer
does this then they will automatically go to the Xenon Laboratories central site each time rather
than the customized company site. Other websites may be linking to the Xenon Laboratories
site rather than the site that has implemented their own input page to the Xenon Laboratories
service. Xenon Laboratories encourages this by providing simple instructions on how to
implement the link.
Com par ison of Xenon Laborator ies with com petitor s
The above case outlines how Xenon Laboratories has been successful in growing its own
customer base by using a strategy of symbiosis. In order to determine the success of Xenon
Laboratories relative to its competitors two public sources of data were used. The search engine
Google (http://www.google.com/) was used to provide a list of the 10 most popular currency
converters. Google ranks websites according to the number and/quality of links to a website.
(The Google ranking takes into account the quality of links directing traf c to a site. A rms
ranking is computed using a complex algorithm which attributes a weight according to the
popularity of a site.) The second source of data used was that provided by one of the range of
web monitoring services that currently exist. Rather like the omnibus consumer surveys which
operate in conventional markets, web monitoring surveys collect data on the Internet activities
of consumers registered with the particular service. Of the range of monitoring services avail-
able, Alexa (www.alexa.com) was identi ed as probably the most comprehensive. Alexa is a page
FIGURE 5. Ratio of Universal Currency ConverterTM calculations to page views.
60 LOCKETT AND BLACKMAN
http://www.google.com/http://www.alexa.com
-
counter site which has one of the widest reaches in terms of both sites covered and number
of users (estimated at approximately 0.5 million users). For the user, it appears as a toolbar once
a web browser has been invoked. It provides the user with background information on the
sites visited. When a user visits a site, Alexa recognizes the location, identi es any related links
and gives the user the opportunity to comment. The number of visits recorded is based on the
number of Alexa users who have visited the site in the previous 6 months. Every time an Alex
user visits the site, it counts as a visit and the number of visits is recorded on a daily basis. The
ten most popular currency converters identi ed by Google and their volume of Alexa traf c are
presented in Table 1.
Table 1 indicates that Xenon Laboratories had the largest customer base (as measured by
Alexa data) of the websites providing currency converters. The market for currency converters
appears to be highly concentrated with most of the traf c going to Xenon Laboratories and its
main competitor Oanda, which it appears has also adopted a symbiotic approach to marketing
its services. The importance of the symbiotic strategy is demonstrated by the fact that four of
the top 10 web pages listed by Google are linked to the Xenon Laboratories converter and one
other is linked to the Oanda converter. The high degree of market concentration between the
two companies demonstrates the potential of a symbiotic strategy for reducing competition by
creating barriers to entry for new entrants. The ndings are consistent with those found across a
range of different market segments including books, CDs, retail broking, retail banking and travel
agency services (Ennew et al., 2000).
The va lue of links
The symbiotic approach appears to be successful in building a customer base on the Internet and
reducing the likelihood of competitors entering the market. However, such an approach does
require a considerable amount of time in order to build up a network of links and a client base
(5 years for the present case). The site-centric approach offers a much quicker strategic option
for rms wishing to build a customer base which may be pursued through the use of advertising
in order to purchase temporary links from other sites as banner adds. An estimate of the number
of banner advertisements required to generate the equivalent page views as the output page
of Xenon Laboratories converter should give an indication of the value of the symbiotic
process used by Xenon Laboratories. An attempt to calculate the value of the symbiotic strategy
is presented in Table 2. During December 1999, Xenon Laboratories Universal Currency
ConverterTM was processing an average of approximately 95 000 calculations daily. The pro-
portion of these calculations that came through links to the Xenon Laboratories web page was
approximately 35%. Therefore, in order for banner advertising to generate the same volume
of page views as do links it would be necessary for banner advertisements to result in 33 250
calculations per day. The click-through rate for banner advertisements is estimated at 0.5%
and, thus, Xenon Laboratories would have to purchase the equivalent of 6 650 000 banner
views in order to drive the same level of calculations. If the cost per thousand impressions
(CPM) is taken as $6, then the total value of Xenon Laboratories links in driving calculations
on the converter is $39 900 per day (the gures for the click-through rates and CPM are both
conservative industry standards).
Table 2 indicates that, if Xenon Laboratories did not have any links and required maintaining
its current level of calculations through its site via banner advertising, then it would face costs
of around $39 900 per day. Therefore, the symbiotic approach can be seen to have saved Xenon
Laboratories a substantial amount of money as it has not incurred the costs of accessing a
BUILDING A CUSTOMER BASE ON THE INTERNET 61
-
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62 LOCKETT AND BLACKMAN
http://www.oanda.com/classic/http://www.xe.net/ucc/http://www.asia1.com/html/currency.htmlhttp://www.travelnotes.org/General/currencies.htmhttp://www.195583.com/http://www.rosewoodhotels.com/currency.htmhttp://www.ozemail.com.au/%7Eman7/osa/ccc.htmlhttp://www.travelfinder.com/currency.htmlhttp://www.4tourism.com/uk/convert.htmlhttp://www.myna.com/%7Ecfeltham/money.htm
-
customer base via banner advertising (or any other form of advertising). The costs identi ed in
Table 2 highlight the prohibitive costs of building a customer base that any potential entrant
faces in any Internet market. In addition, the value of the links to Xenon Laboratories may be
considered to be greater than in the case provided above because of the non-temporary nature
of the links. Unlike banner advertisement which are only visible as long as a company continues
to pay, the link will remain until it is removed by the company. Therefore, the link also provides
a form of barrier to entry for companies as they would have to displace existing links before
creating their own.
Case discussion
The case demonstrates that Xenon Laboratories, by actually encouraging companies to
incorporate their own content into their own Internet sites, have built a customer base. This
has been achieved without having to incur the costs generally involved in a more traditional
site-centric approach. However, it must be acknowledged that the strategy of symbiosis was not
initially intuitive to Xenon Laboratories. The emergence of the symbiotic strategy was due to
the realization that other websites were linking into the Xenon Laboratories site and that, by
doing this, Xenon Laboratories would be gaining rather than losing customers. In addition to
not stopping customers from embedding Xenon Laboratories functionality in their own web-
sites, Xenon Laboratories actually saw the potential bene ts from making the process as simple
as possible in order to encourage this behaviour. An additional bene t that has accrued to
Xenon Laboratories and one that the management of Xenon Laboratories do not fully under-
stand is why over 50% of all calculations are input on the Xenon Laboratories site. It appears as
though even when the Xenon Laboratories input pages are embedded in third party websites,
that customers overwhelmingly prefer to use the actual Xenon Laboratories site for inputting
their calculations. This has interesting implications for the symbiotic strategy as it means that, not
only can the symbiotic strategy lead to low cost development of a customer base, but also that
these customers may choose to make either a bookmark or link their site to a source provider of
the functionality.
The lessons that may be drawn from the case are that it appears as though it is more import-
ant to be the rst to promote the symbiotic approach for the service by other sites than the rst
to produce the solution. The important aspect of the strategy is that the content of the service is
delivered to as many different Internet sites as possible and as quickly as possible. The greater the
TABLE 2. The value of Xenon Laboratories links interms of banner advertising
Number of daily calculationsProportion of calculations from links %Number of views of outputs page linksClick-through rate from banner adds %Number of banner views required to achieve
comparable level of page viewsCPM ($)Cost per day ($)
95 00035
33 2500.5
6 650 000
6.0039 900
BUILDING A CUSTOMER BASE ON THE INTERNET 63
-
Internet coverage of the service, i.e. the more Internet sites it is embedded in, the more dif cult
it becomes for the competition to remove it. Evidence of this is Amazons strategy of associate
companies and the more than 200 000 associate members it has on the Internet. This makes it
increasingly dif cult for other book retailers to erode Amazons position as Internet users are
more likely to be directed to the Amazon site than a competitors. The recommendation of
the service by another web site may increase the likelihood of a customer using the service as
this could raise the perception of trust in the service. A comparison on the effectiveness of the
approach versus purchased advertising banners is an area for future research.
THE POTENTIAL SCOPE OF SYMBIOTIC MARKETING
Although the case above demonstrated the advantages of employing a strategy of symbiotic
marketing for Xenon Laboratories this is not to say that it will be universally applicable. The
following section attempts to examine which factors will in uence an organizations strategy
towards building a customer base on the Internet. This is a similar approach to the one taken by
Holland et al. (1992) in their paper on the implementation of EDI strategies. It is anticipated
that a number of factors will in uence on organizations decision as to the strategy they
will follow in building a customer base. It is anticipated that building a customer base using a
symbiotic marketing strategy will be best suited to services where (1) the service is based on
changing data, i.e. that there is a requirement for an enquiry to be sent to the central server and
a results page to be returned, (2) the service is viewed as adding value to the host site and not
seen as competitive threat, (3) the service is simple for other sites to implement and (4) the
feedback from clients can be immediately used to enhance the service.
In addition to the characteristics of the service, the nature of the market the service is targeted
at may in uence the choice of strategy in building a customer base. It is anticipated that the
strategy will be best suited to the following cases.
(1) Where markets are fragmented and, thus, there are no big established dominant players
in the industry. In addition, this will be related to a large number of small Internet
sites serving a particular market segment, on which the functionality of the service can be
placed.
(2) Where market segments have had traditionally long product development cycles. This is
important as it provides a suf ciently long time period to build a large enough customer
base before competitors react.
(3) Where the customer base is in a business-to-business rather than a consumer context. This is
considered important as it is anticipated that there will be less need for a highly established
and visible brand name than with consumer marketing. In addition, the big portal sites are
perceived to be less important and companies own portal sites more important in this
market.
It is anticipated that highly concentrated Internet markets are least suited to the symbiotic
approach. For example, the Internet-based book retailing industry is dominated by Amazon
(http://www.amazon.com/) which has been particularly aggressive in implementing a combined
advertising campaign (site-centric) and symbiotic approach. Here, tailored Amazon bookstores
are offered by other (non-Amazon) sites who receive a share of the revenue from the books sold.
It is anticipated that, to displace Amazon from the sites which they are already receiving a
revenue share from, will be a dif cult and costly exercise. This is exempli ed by Barnes and
Noble (http://www.barnesandnoble.com/) who are currently working with Bertelsmann (http:/
64 LOCKETT AND BLACKMAN
http://www.bertelsmen.de/http://www.amazon.com/http://www.barnesandnoble.com/
-
/www.bertelsmen.de/) of Germany in order to attempt to displace Amazon. The companies
have stated that they intend to spend several hundred million US dollars in order to develop and
promote their alternative service.
A related issue is what role links may play in the competitive dynamics of a market-space.
The work of Ennew et al. (2000) highlighted the fact that links are the most important
determinant factor in driving traf c to Internet sites. Although the dominant theme in the
literature is that the advent of the Internet will lead to the creation of electronic markets
as the Internet reduces barriers to entry (Malone et al., 1987, 1989), barriers to entry exist
in part due to the large budgets needed to advertise in order to drive traf c to a site and links
may be another way in which companies may begin to erect barriers to entry. Once the
links are put in place then it seems likely that the site is not going to replace the link with
another if the services being offered are as good as any other in the market, i.e. there has to
be some positive net bene t to offset the costs associated with switching services. Therefore,
if links are relatively stable then there is obviously a rst mover advantage to developing them
because every link you have developed is an additional link that a competitor is unlikely
to capture. The building of links may be viewed as a method of erecting barriers to entry for
competition.
The concept of employing links in order to develop barriers to entry in markets has interest-
ing implications for whether or not a company pursues a strategy of being a leader in a market.
The advantage to moving rst and establishing links in the market-space has a logic in that
companies on the Internet face the problem that services cannot be patented (see Naslund,
1986) and, therefore, the content or functionality of a site is something that cannot be protected
from imitation. This problem is further exacerbated by the fact that the speed with which
services can be imitated on the Internet is very high. Therefore, rather than try and pro-
tect content, it seems logical to give the content away to build links that are a much more
protectable resource. In addition, the quicker and greater the number of links you develop as a
company the more dif cult it becomes for other companies to develop such links.
The one downside of the symbiotic approach is that the building of links requires time and,
therefore, there are time-based issues regarding whether or not such a strategy may be feasible in
all cases. In the case of Xenon Laboratories it appears as though no other market participant has
retaliated strongly to its strategy; however, retaliation is always a threat. Any company that lacks
resources and is fast building a customer base on the Internet is always facing the threat of a
larger organization committing large amounts of resources to advertising campaigns to attract
traf c and/or acquiring it whilst it is in its infancy. In addition, replicating a symbiotic strategy
whilst channelling resources towards sites to provide these links may be a hybrid strategy that
would accelerate the process considerably. A company that pursues a pre-emptive strategy of
symbiotic marketing may be able to build barriers to entry and, therefore, deter market entrants.
However, such an outcome is dependent on how long the company pursuing the symbiotic
approach is allowed to grow without retaliation. It appears as though Amazon was handed very
long lead times for developing its links and customer base before Barnes and Noble entered the
Internet book retailing market. If Barnes and Noble had responded to the Internet threat of
Amazon as a market entrant much earlier then Amazon may not have been able to build the
dominant position in the market sector.
The most dif cult issue to be tackled by large corporations is organizational, as the symbiotic
approach does not t comfortably with organizations that have developed sophisticated,
marketing push strategies. The key issues that face an organization in wishing to implement a
symbiotic strategy are due to the method having the following qualities.
BUILDING A CUSTOMER BASE ON THE INTERNET 65
http://www.bertelsmen.de/
-
(1) It is relatively cheap. In organizations where the size of a managers team or budget is the key
determinant of their position and status within the organizations the symbiotic approach
may offer few bene ts to the management team.
(2) It is slow to generate results. Senior managers are unlikely to be willing to sponsor
projects that are unlikely to generate results within 2 years. Key staff are also unlikely to
want to be attached to business projects that are unlikely to progress their careers in the
short term.
(3) It has potential impact on the brand value of an organization. The lack of control of the type
of site that implements a symbiotic service and the potential impact on the reputation of the
large organization could result in a large number of controls that would dramatically impact
on the value of the service. Few large corporations would be willing to have a branded
service on a pornographic site.
(4) Reluctance to assist competitors. To be effective there has to be a willingness to let a
potential competitor enhance the value of their website by implementing the symbiotic
service. This approach can be completely counter-intuitive to marketing departments in
large organizations.
Initially, large organizations could approach the technique as an investment in research
and development. The key bene ts would be the data that could be captured on the type of
customers and the popularity of Internet sites in their target market that have implemented the
symbiotic services. With smaller sites the information could be used to target acquisitions,
whereas with larger potential competitors that use the symbiotic service the technique is an
effective blocking strategy thereby reducing the likelihood of them developing a similar service.
CONCLUSION
The paper has presented an alternative marketing strategy for testing and launching Internet-
based services. While the approach of symbiotic marketing is a relatively low cost strategy it does
have the downside of the need for long lead times and may require more persistence than would
be tolerated within a large organization. The advantages of successfully adopting a strategy of
symbiotic marketing are that it simultaneously reduces the need to purchase advertising through
enhancing Internet coverage and leads to the development of a targeted customer base.
Symbiotic marketing presents companies with a strategy for the possibility of developing a
presence on the key portal sites in the business-to-business market through giving away content.
This approach of developing useful content and giving it away appears to be counter-intuitive to
larger corporations and is most probably the greatest barrier to the adoption of such a strategy
by large corporations. However, the authors do not suggest that such a strategy will be optimal
for all companies; rather, it may be applicable in certain instances. It is anticipated that the
strategy will be most useful in a business-to business context where market segments are highly
fragmented and there are traditionally long product development cycles and little differentiation
between products.
A large corporation willing to commit a substantial investment to advertising alternative
products could still overtake a company that has concentrated on developing a customer
base with a symbiotic approach by paying web sites to take their service. However, comparable
new entrants would nd dif culty in raising suf cient funds to mount a marketing campaign to
catch up. In addition to the bene ts of building a low cost user base, advantages exist in the
incremental approach of symbiotic marketing where the feedback from customers can be used
66 LOCKETT AND BLACKMAN
-
to enhance services. The cross-marketing of additional services to registered websites appears to
be a key bene t in reducing the lead time to building client bases for second generation services
that meet a different need for the same target markets. Companies that have implemented
a symbiotic approach should be able to accelerate their growth as they broaden their product
range. Amazons broadening of its af nity programme in order to include additional products to
books is a clear example.
The analysis used in the case study was limited due to a lack of tools for analysing the large
amounts of data involved. The current research project is ongoing and longitudinal data is being
stored in order to address a number of important future research questions that follow from the
symbiotic strategy outlined in the present paper. First, does the effectiveness of a link vary over
time, i.e. does the link become less effective the longer it has been in place. Second, how can the
effectiveness of links be enhanced? It is envisaged that there are a number of different strategies
that may in uence the effectiveness of a link such as the amount of functionality that is delivered
to a partner site. Third, if links are the most important determinant of traf c on a site then
the prohibitively high costs of banner advertising may mean that advertising should be targeted
not at end customers but rather at developing links with suitable sites that may wish to link
symbiotically. Finally, via the use of cookies it may be possible to examine whether individual
customers continue to access a web site via a link or bookmark the original site.
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