Multimedia Marketing/Marketing.iso/market/chapter2.7p

Text File | 1996-08-22 | 16KB | 344 lines

SECTION 2.7  Technology Considerations

INSTRUCTIONS Read and react to the following treatment of technology as it affects
marketing strategy. Then try to predict: "What technology-related changes will marketers face in the future?"

EXAMPLE

The internet has exerted quite an impact on marketing and is becoming
an ever-increasing force. Once a communication device for the use
of various scientists, this network has become a major marketing
tool. The number of websites sponsored by companies is rapidly
expanding as more and more consumers get on the net. This represents
a means of reaching more upscale consumers, who are most likely to
be users. Interestingly, small companies are using the internet
to a large extent--this is not just a tool of the large corporations.

A small producer of ceramic animals to be placed in flower and plant
pots sells her wares through the internet. She contacted a company
that specializes in setting up home pages and using the internet
as a means of advertising. This firm designed a very dramatic home
page and has guided the company owner into the creation of a series
of fascinating facts about the company and its products. Sales have
expanded rapidly and the firm has found that it can generate more
revenues in this way than it could  through magazine and direct
mail advertisements.

DETAILS

High-tech is a term which is often heard today. Most people think
that this activity is restricted to production, however. They
think of computerized production lines, robots on the assembly
line, laboratories doing biogentic research, and similar activities.
Many people are not aware of the extent to which technology has
penetrated marketing thinking and practice, however.

Technology has affected practically everything in modern life.
Synthetic fibres in clothing, new ways of printing books, the
advent of the internet, the invention of CD ROM's , and the ever-
widening influence of the computer are but a few examples of items
technology has made possible. Because technology is like a mist
penetrating every stratum of culture, marketers should be constantly
alert to its change.

Technological breakthroughs often have far-reaching implications
for marketing opportunities. Laser beams, for instance, have
dramatically altered telecommunications, certain metal workings,
surgical procedures, defense systems, and many other processes.
Over the past two decades, many small high-tech firms in industries
such as bioengineering, electronics, computers, and health science
have appeared almost overnight, producing significant innovations>
for consumers.

Technological change can affect virtually every marketing mix
element. To illustrate, a number of firms sell space on direct-
broadcast satellites to television programmers; "Scratch-and-
sniff" chemicals have brought aromas into advertising. Toll-free
telephone numbers have created a free business communications
network for consumers. Electronic funds transfer technology (the
remote transfer of funds from one account to another) has the
potential to dramatically change retailing and create a cashless
society.

 The list is almost endless. Companies that do not adjust
their marketing mixes to reflect this rapidly changing technology
are often destined to failure.

PROBLEM 1

Marketers of all types should recognize that technology has a strong
impact on:

A. Advertising.
B. Product planning.
C. All elements of the marketing mix.
D. Physical distribution.

WORKED

What elements of the marketing mix does technology affect?
As evidenced by the activities of a producer of lawn furniture,
technology affects all of the elements of the marketing mix. This
company employs engineers who design products primarily by computer.
The sales of these items are forecasted through sophisticated
computer software. The products are shipped on railroad cars and
trucks in large containers that permit efficient handling. Most
of the ordering and billing is done by computer. All of the firm's
sales representatives carry laptop computers that make them
invaluable sources of information to customers. Technology has
benefitted this firm significantly.

ANSWER C

INSTRUCTIONS Read and react to the following treatment of technology as it affects
marketing strategy. Then try to predict: "What technology-related changes will marketers face in the future?"

EXAMPLE

The internet has exerted quite an impact on marketing and is becoming
an ever-increasing force. Once a communication device for the use
of various scientists, this network has become a major marketing
tool. The number of websites sponsored by companies is rapidly
expanding as more and more consumers get on the net. This represents
a means of reaching more upscale consumers, who are most likely to
be users. Interestingly, small companies are using the internet
to a large extent--this is not just a tool of the large corporations.

A small producer of ceramic animals to be placed in flower and plant
pots sells her wares through the internet. She contacted a company
that specializes in setting up home pages and using the internet
as a means of advertising. This firm designed a very dramatic home
page and has guided the company owner into the creation of a series
of fascinating facts about the company and its products. Sales have
expanded rapidly and the firm has found that it can generate more
revenues in this way than it could  through magazine and direct
mail advertisements.

DETAILS

Technological change is occurring at an unprecedented rate. Of
importance to marketers is the fact that this pace of change is
not abating. Within the past century, the incubation period required
to bring ideas from technical feasibility to commercial potential
has dropped from an average of seven years to only five. It appears
that this trend will continue into the indefinite future.

Two factors account for this acceleration. First, as in a nuclear
reaction, technological developments tend to accelerate due to
the self-feeding nature of technology. As a greater base of technology
becomes known, ideas interact and provide the basis for still further
research, as well as practical applications. Second, industry's
commitment to research has expanded rapidly. Consequently, today's
managers are faced with a different technological environment
requiring some adjustment in the firm's marketing mix. Those unable
to adjust are likely to be left behind.

Many of the recent technological developments have come from small,
rather than large businesses. Often several employees of a large
firm will see an opportunity and realize that they can take
advantage of it through their own efforts. They resign from the large
firm and set up their own entrepreneurship in pursuit of the
opportunity. Many of the technological developments in computer
hardware and software, biotechnology, and robotics have emanated
from such efforts.

PROBLEM 2

Marketers are discovering that the rate of technological change is
increasing. One important reason for this is:

A. Consumers are increasingly seeking change for the sake of change.
B. Technological advances usually come from universities and their
   R & D efforts are increasing being funded at higher levels.
C. Marketers of all types want technological change.
D. Technology is a self-feeding process

WORKED

Marketers are discovering that the rate of technological change is
increasing. One reason is the self feeding nature of technology.
The computer industry is evidence of the self-feeding nature of
technological change. With advances in technology, more organizations
develop an interest and commit more resources to this function.
Individuals interact with each other and develop further applications,
which in turn develops more interest. Computers increasingly have
advanced memories, more applications, enhanced user compatibility, and
other important features. And the process goes on, at an increasing
rate.

ANSWER D

INSTRUCTIONS Read and react to the following treatment of technology as it affects
marketing strategy. Then try to predict: "What technology-related changes will marketers face in the future?"

EXAMPLE

The internet has exerted quite an impact on marketing and is becoming
an ever-increasing force. Once a communication device for the use
of various scientists, this network has become a major marketing
tool. The number of websites sponsored by companies is rapidly
expanding as more and more consumers get on the net. This represents
a means of reaching more upscale consumers, who are most likely to
be users. Interestingly, small companies are using the internet
to a large extent--this is not just a tool of the large corporations.

A small producer of ceramic animals to be placed in flower and plant
pots sells her wares through the internet. She contacted a company
that specializes in setting up home pages and using the internet
as a means of advertising. This firm designed a very dramatic home
page and has guided the company owner into the creation of a series
of fascinating facts about the company and its products. Sales have
expanded rapidly and the firm has found that it can generate more
revenues in this way than it could  through magazine and direct
mail advertisements.

DETAILS

Management must anticipate future technology in a timely fashion--
when both market opportunities and capabilities develop. This requires
forecasting ability. But forecasting technological change is by no
means a simple task. Technologicial developments are usually the
domain of physicists, electronic engineers, and other technical
experts and many marketing managers are unfamiliar with these fields.

It is not that marketers are inexperienced in forecasting. But their
expertise is primarily in forecasting future data, such as sales,
share of market, and profits. Many firms employ experts in preparing
estimates of these variables in the future. But these are quantitative
forecasts. What is needed to forecast technology is qualitative
(non-numerical) estimates. And this is the domain of futurists and
others who try to employ intuition and judgment tempered with facts
to make their projections.

Marketers can develop the ability to forecast technological
developments. But they need skills other than statistical analysis.
The skills that are needed are creativity, imagination, knowledge
of particular technologies, and sometimes just common sense. The
firm that employs inviduals with these skills has a valuable asset
that may not be in the grasp of its competitors.

PROBLEM 3

A producer of electronic components is interested in forecasting
future technology. An impediment to this is:

A. Future technology depends on past technology.
B. Scientific research in electronics is decreasing in scope.
C. Marketing managers who make forecasts are not experts in electronics.
D. Research in electronics has no predictable patterns.

WORKED

A producer of electronic components is interested in forecasting
future technology. An impediment to this is that marketing managers
who make forecasts are not experts in electronics. Many, even those
who are employed in the industry, have little or no technical
knowledge. Further, many are interested in other things, such as
personal selling and advertising, and direct their efforts in these
directions. It is apparent that there is a need to coordinate the
thinking and efforts of marketing and technical experts in such
industries.

ANSWER C

INSTRUCTIONS Read and react to the following treatment of technology as it affects
marketing strategy. Then try to predict: "What technology-related changes will marketers face in the future?"

EXAMPLE

The internet has exerted quite an impact on marketing and is becoming
an ever-increasing force. Once a communication device for the use
of various scientists, this network has become a major marketing
tool. The number of websites sponsored by companies is rapidly
expanding as more and more consumers get on the net. This represents
a means of reaching more upscale consumers, who are most likely to
be users. Interestingly, small companies are using the internet
to a large extent--this is not just a tool of the large corporations.

A small producer of ceramic animals to be placed in flower and plant
pots sells her wares through the internet. She contacted a company
that specializes in setting up home pages and using the internet
as a means of advertising. This firm designed a very dramatic home
page and has guided the company owner into the creation of a series
of fascinating facts about the company and its products. Sales have
expanded rapidly and the firm has found that it can generate more
revenues in this way than it could  through magazine and direct
mail advertisements.

DETAILS

Complicating fofrecasting, experts in the technical areas are generally
unfamiliar with the marketability of new or potential developments.
Consequently, an integrated, closely coordinated effort involving
both marketing and research and development personnel is essential
to the successful development and introduction of new offerings.

A carefully integrated effort meshes smoothly with the two basic
approaches to technological forecasting. The first of these,
exploratory forecasting, is technique oriented. With this procedure,
forecasters makes estimates concerning developments by examining
expected future production capabilies. Technical experts conduct
analyses of new patents, project recent trends in production
capabilities, study research findings and, based on these estimates,
they produce forecasts of technological develoments. Managers then
assess the expected impact of the technology on market opportunities.

The second approach, termed normative forecasting, is to identify
current and expected future needs with the assumption that these
needs could trigger new technological develpments for fulfillment.
Following this procedure, managers critically appraise how well
needs related to their firm's overall mission are currently being
satisfied.

The major assumption underlying this method is that, when there are
needs, technology eventually will solve these. The method requires
identifying the major needs which target consumers have, and then
projecting how these needs will be satisfied.

But technological forecasting has its limitations. Both exploratory
and normative techniques are rather subjective, using the opinions
of various experts as primary inputs. Since this is the case, the
optimism or pessimism of the analysts easily can influence the
results. Further, forecasters have difficulty in estimating the
current status of technology. Companies are not eager to share their
private research findings with others, for obvious reasons, and often
try to concelal them.

PROBLEM 4

An example of exploratory forecasting is:

A. Asking consumers for their computer needs.
B. Studying the primary problems which society faces.
C. Analyzing new patents in the chemical industry.
D. Studying consumer problems with existing automobile makes.

WORKED

An example of exploratory forecasting is analyzing new patents in
the chemical industry. These provide evidence of the progress of
chemists and related scientists in advancing the state of the art
in their fields. Patents provide detailed written evidence of what
new innovations are appearing and the technology that underlies
their output.

Exploratory forecasting involves making estimates by examining
expected future production capabilities. For example, guided
by progress in genetic research, a large manufacturer has created
a "super-bacteria" capable of digesting crude oil. This breakthrough
could significantly improve the world's ability to clean up oil
spills. Once informed of such capabilities, marketers should try
to assess the potential market opportunities as well as the
anticipated effects on current marketing mixes.

ANSWER  C