end-consumer business transactions through electronic commerce [Romano, 2002]. As

McFarlane (1984), Porter and Millar (1985) and Cash and Konsynski (1985) explained;

Since the beginnings of the computing era, Information Technology [IT] has suggested

that the implementation of computing technologies would have a serious positive effect

on the enterprise. These authors assert that Internet technology may serve as a strategic

tool, which has a potential effect in any of porter's competitive strategies [Obra, et.al,

2002]. Some of the research results do not entirely support the academic literature

which assumes to be a net positive effect of the Internet on the competitive advantage of the enterprise [Obra, et.al, 2002]. According to resource-based Theory, Internet

technology could not be as a source of sustainable competitive advantage, because

Internet is imitable and it is not rare. Therefore, companies must identify their

competitive advantage and then develop an Internet marketing strategy for success in

the Internet markets. The authors believe that companies should understand their core

competencies in the Internet markets then develop their Internet marketing strategies.

Internet is a tool for marketing and creating competencies, and it could not be a

competency or source of sustaining competitive advantage itself.

Literature review

Marketers have long accepted that success in the competitive markets requires the

identification of competitive advantages which are capable for distinguishing an

organization from others operating in the same market sector [Chasten, 2001]. Although

competence-based marketing strategy has not been explained and discussed enough in

the literature, we discussed some of the Internet marketing strategy and then develop a

competence-based marketing strategy for Internet markets. The characteristics of virtual

markets reduces costs of information processing, allows for profound changes in the

ways through which companies operate, and in how economic exchanges are structured.

They also open new opportunities for value and wealth creation [Amit and Zott, 2001].

Then marketing strategies in these markets need to be different and in new type. Many

of authors have discussed Internet marketing strategies based on 4Ps framework

[Brennan et al, 2003], but we think that marketing strategy is beyond 4Ps. In the virtual

markets, information can fundamentally influence the dimensions of competitive

advantage in terms of efficiency and effectiveness. It concentrates on examining the achievement of advantages for physical outputs in terms of effectiveness, and then the

market space offers improvement potentials, in two ways [Weiber and Kollman, 1998]:

- Increase in effectiveness through the acquisition of information.

- Increase in effectiveness through the transfer of information.

Internet marketing entails using the Internet to provide information, to communicate and

to conduct transactions. The Internet is a ubiquitous information platform, allowing

internal and external customers to reduce costs for both firms and customers. Therefore,

the companies can act as topical-leaders or speed-leaders in the market space. Teo et al

[2002] argued that for achieving overall growth for the company, we could set online

marketing strategies in five categories:

- To attract

- To engage

- To retain

- To learn

- To relate

In the new competitive environment, it is increasingly evident that successful marketing

strategies are based on an amalgam of three critical elements. These elements include:

- Creation of consumer franchise: whereby end-users are attracted to the