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 acknowledges the 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 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 in sharing 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 imitate--clearly 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 to make 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. …