Date Posted: 11/8/2012 10:47:42 AM
Posted By: sashoo Membership Level: Silver Total Points: 382
Technology can have a substantial impact on people’s lives and companies’ fortunes. Technological breakthroughs have given us body scanners, robotics, camcorders, the Internet, mobile phones, computers and many other products that have contributed to our quality of life. Many technological breakthroughs change the rules of the competitive game: the launch of the computer and word-processing software has ruined the market for typewriters; the growth of e-mail spelt the decline of the fax machine; the rise of the compact disc decimated the market for cassette tapes.Heavy investment in new technology can pay handsome dividends. ICI, for example, invested heavily in the biotechnology area and is the market leader in equipment used for genetic fingerprinting, and Apple’s investment in the technology supporting its iPod has made it global leader in the mobile music market. The key to successful technological investment is market understanding not technological sophistication for its own sake. Marketing and R&D staff need to work closely together to achieve this aim. The classic example of a high-technology initiative driven by technologists rather than pulled by the market is Concorde. Although technologically sophisticated, management knew before launch that it never stood a chance of being economically viable. By contrast the development of the Airbus A380, the world’s biggest passenger plane, has been market based, taking into account the need for greater passenger comfort on long-haul flights; the larger revenues accruing from a larger number of passengers per flight; and recognition that over the next 20 years around 70 per cent of flights will be from just 25 airports, many of which are so congested they are unable to take any more planes. By using aircraft like the A380 the predicted increase in passenger demand can be accommodated using the same number of planes.A lack of investment in high-potential technological areas can severely affect the fortunes of companies. For example, Sony—once regarded as a leader in high tech product innovation—has lost ground due to its lack of early investment in flat-screen television, liquid crystal display and portable audio systems; which allowed Apple to supersede the Sony Walkman with its iPod, which not only allows high-quality mobile listening but also the downloading of music.Besides investment in technological areas that have high market potential, companies need capabilities in identifying how technology developed in one field can be exploited in another market. For example, Teflon, which has been a major marketing success in the coating of non-stick frying pans, was first developed as a coating on the nose cons of space rockets. A more recent technology transfer success story is of Visco foam, which was developed by NASA for the space program to absorb the tremendous forces that astronauts are subjected to during lift-off. It has been used to create Visco memory foam beds that adjust to body position minimizing pressure points and maximizing body support.As we have seen, technological change can provide opportunities for new product development and also threats to existing markets. Technology also affects the way in which marketing is conducted. Developments in information technology have revolutionized marketing practices. Information technology describes the broad range of processes and products within the fields of computing and telecommunications. The Internet and mobile phone technology have allowed companies to use new channels of communication and distribution (e.g. music downloads) to reach consumers. The importance of these developments explores how these advances are providing new opportunities for marketers. Salesforce automation is improving the efficiency of salesforces. A whole new industry, customer relationship management (CRM), has emerged in recent years, founded on database technologies to enable companies to improve communications and relationships with consumers.Marketing-led companies seek not only to monitor technological trends but also to pioneer technological breakthroughs that can transform markets and shift competitive advantage in their favor. They also seek to use technology to improve the efficiency and effectiveness of their marketing operations.
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