Executive Insights: Use of the Internet in International Marketing: A Case Study of Small Computer Software Firms

This study focuses on how small exporting firms use the Internet in their international marketing activities. The authors conducted six case studies of software firms. The software sector has several notable features: It is one of the world's fastest-growing industries, its products can be distributed electronically, and software companies are “Internet literate.” This study's findings suggest that most firms use the Internet to search for information about customers, distributors, and partners. The Internet does not replace personal sales; most firms reported a rather complex purchasing process and an extensive need for communication with customers before the purchase decision. The authors found standardized products to be most suited for Internet-based sales; however, standardization reduced firms’ competitive advantage and profit margins. Software firms’ most significant use of the Internet was for postsales service and support activities; these activities both generated revenue and improved customer relations. Partnership agreements with well-known firms, positive product reviews, and image building through the Internet were important to most firms in order to reduce the uncertainty that potential customers often experience when unknown suppliers offer unfamiliar products. The authors also discuss implications for managers in industrial sectors other than software.