Ch5 - Technology v2

Chapter 5
Technology and
change in
international
marketing
Introduction
Dramatic force transforming the
international environment
Development of a wide range of
new technologies
Provides new markets and
opportunities Eliza Warner
Increase in international trade in

technology-related products and
services
Improved communication and
better access to communication
Reduced costs of doing business
http://www.news.com.au/finance/business/manufacturing-
transport-and-medical-industries-set-to-be-revolutionised-by-3d-
2
printing/story-fn5lic6c-1226865638697
Think about
3-D Printing
View the video of 3-D printing and answer the following
questions:
http://www.youtube.com/watch?v=e0rYO5YI7kA
1. What do you think will be the adoption rate for 3-D
printing in the medical and fashion industries?
2. How will governments deal
with the ethical issues that
arise as a consequence
of adopting this new technology?
http://www.washingtonpost.com/blogs/the-switch/wp/2014/03/31/apple-and-samsung-
Copyright 2014 Pearson Australia (a division of Pearsonhead-back-to-court-again/
Australia Group Pty Ltd) 9781442560833/Fletcher/International Marketing/6e
3
Technology issues and opportunities
for international marketers stages
Supporting infrastructure required includes:
Access to reliable electricity supplies
Availability of maintenance and repair facilities
Skills and knowledge
Creates opportunities
New markets in international domain
Assists small to medium-sized enterprises
Reduces impact of national boundaries
Copyright 2014 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781442560833/Fletcher/International Marketing/6e
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Techno-economic paradigms
Techno-economic paradigm (1)
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Techno-economic
paradigm shift impacts
Diffusion of key technologies have
transformed international markets
at the macro and company levels
Emergence of new industries
based on key technologies and
resources
Effective solutions to limitations
of previous techno-economic
paradigms
New infrastructure on national
and international levels
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Techno-economic paradigm
shift impacts (1)
Countries gaining technological and
economic leadership positions from
application of key technologies and
resources
Significant changes in spatial
distribution and distance between
associated production factors
Shifts in population density
and urbanisation
Radical changes in organisational forms
associated with firms in new industries
http://www.youtube.com/watch?v=jZkHpNnXLB0 12
Fifth techno-economic
paradigm
Driven by microprocessor
Two phases of new
infrastructure development:
A number of carrier branches -
computer systems, operating systems and
software, telecommunications equipment,
satellites, electronic networks and robotics
Carrier branch industries converging into
a new information-based infrastructure
capable of providing data, text, sound
and image
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Techno-economic paradigm
shift impacts (2)
New approaches to national
and international regulations
New training and education

systems, new services
linked to the techno-
economic paradigm
New innovative
entrepreneurs
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Sixth techno-economic
paradigm
Information neural networks
Involves embedding of:
Microprocessors
Global information linkages
Depends on:
Dissemination speedily spreading from
affluent countries to all citizens of the
world particularly those in developing
countries
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Information revolution and
the internet: Global network
Organisations are embracing
three key areas of the networked
enterprise:
1. E-learning: including education,
information and training
2. E-commerce: providing end-to-end

solutions to conduct sales transactions
3. Customer support: enabling the

creation of innovative support offerings
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The information revolution and the
internet: Global network (1)
Naisbitts Mind Set
Strongly integrated global economic and information
systems but with many small units driving the economy
Units of common interest formed across borders
Sheth and Sisodias Rule of Three

Proposes that three firms, one from each triad group
will dominate global industries
Triads are the three economic regions of Europe, North
America and Asia (Japan/Korea/China/India)
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10 companies control what we buy
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Think about
The global network
Sharing and collaborating are the power behind Sony
Pictures Entertainment. In November 2014, cyberhackers
gained access to personal data of its employees and
copies of unreleased Sony films. The hackers demanded
cancellation of the planned release of the film The
Interview. USAs intelligence officials allege the attack
was sponsored by North Korea who deny responsibility.
The incident even prompted comments from President
Obama. However, cybersecurity experts
cast doubt on the evidence, suggesting
current or former Sony employees
were involved. head-back-to-court-again/
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Think about
The global network (1)
View The Interview trailer and answer the following
questions:
https://www.youtube.com/watch?v=frsvWVEHowg
1. Identify the merits of sharing and collaborating online.
2. Overall, did the cyberhacking help or hinder the

release of The Interview?
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New information
infrastructure
The world is much more interconnected
due to the new information infrastructure
Businesses have access to high quality
broadband through:
Optical fibre
Microwave systems
Satellites
E-commerce allows business to stay
open for trading 24/7
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Implications
for international marketing
Customers and consumers have much
quicker and widespread access to business
intelligence
Knowledge - the main source of value and

power in the modern economy
Differentiation - knowledge and

technological intensity of product offerings
Power of information shifting from producers

to consumers
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International diffusion of innovation
Diffusion - movement of new products to
and within overseas markets for
consumption
Time lags in diffusion impact on the costs

and viability of the business
Diffusion process characterised by

production lag-time and market lag-time
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Innovation adoption process stages
Awareness: potential adopters are unaware of the
product
Interest: potential adopters are aware the product
exists but dont understand how it applies to them and
their lifestyle
Evaluation: potential adopters compare the product
with existing products that satisfy the same needs
using key comparative criteria
Trial: first use of an innovation
Adoption: decision to use the innovation on an
ongoing basis
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Adopter Categories
Lead users
Characteristics
Have needs that are general in a market
but confront them much earlier than the
rest of the market
Positioned to gain substantial benefits by
obtaining a solution to those needs
Advantages of focusing on lead users
Present needs are likely to become
general
Serve as a need-forecasting benchmark
for market research
Provide new product concept and design
data when addressing needs
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Influences on adoption decision
Relative advantage over existing alternatives
Compatibility with local customs and habits
Complexity of product
Ability to trial the product before committing to it
Ability to observe product
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Killer application
New technological advancement that makes the
previous one redundant
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Killer application examples
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Implications of online behaviour
for international marketing
Consumers have greater information availability and
choice
Businesses have more competition in delivering
perceived value
Greater need for market research and channel
feedback
Greater focus on acquisition and retention of good
customers
Greater demand for customisation and personalisation
Reorganisation of business processes to allow flexibility
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Business to consumer (B2C)
marketing online
Product Promotion

New class of products e.g., Advertising
digitised music, e-books Sales Promotion
Intellectual property issues Publicity and public
Need for extra information relations
to enhance product Personal selling
suitability assessment Distribution
Pricing Digitised products
Price transparency Disintermediation
Downward pressure Self-service
Dynamic pricing Multiple channels/channel
conflict
32
Business to consumer (B2C)
marketing online (1)
People Physical evidence
Build expertise for online Search engine optimisation
tools Sophistication and
Staff training professionalism
Customer training Innovative methods of
Process increasing tangibility and
Enterprise resource trust
planning systems
Customer relationship
management systems
Secure online transactions
Customer data privacy
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Think about
Online and offline behaviour
There are similarities and differences in how consumers
behave online and offline. Your favourite global brand
which has a physical and online presence in your country
goes on sale.
1. To get the best bargains, do you shop online or
offline? Why?
2. What implications does this have for the global
brands presence in the country?
Information platforms
Facebook and Instagram

is used for consumer
engagement
Twitter is used for

customer service
Universal issues are

addressed publically and
personal issues taken
offline
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Information platforms (1)
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Business to business (B2B)
marketing online
Product Publicity and public
Global supplier sourcing relations
Personal selling
Supplier relationships
Search engine marketing
Pricing
Distribution
Dynamic pricing
Supply chain management
Faster negotiation
Enterprise resource
Pricing innovation
planning
Promotion
Customer relationship
Advertising management
Sales promotion
37
Consumer to consumer (C2C)
marketing online
Increase in consumer-generated content
Firms can also determine consumer trends
Explore response to competitor offerings
Discover potential or actual problems
38
The future and technology change
Cybermediaries
Cloud computing
Cyberterrorism
Consumerism
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Current issues questions
Pokemon Go phenomenon
View the video on the Pokemon Go phenomenon and
answer the following questions:
https://www.youtube.com/watch?v=_lssPImPGQw
1. How has Pokemon Go utilised connectivity in C2C and

B2C marketing? Identify some issues that pose as
challenges.
2. What sub cultures have emerged from the new

technology?
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Chapter 5

Increase in international trade in

New training and education

2. E-commerce: providing end-to-end

3. Customer support: enabling the

Sheth and Sisodias Rule of Three

1. Identify the merits of sharing and collaborating online.

2. Overall, did the cyberhacking help or hinder the

Knowledge - the main source of value and

Differentiation - knowledge and

Power of information shifting from producers

Time lags in diffusion impact on the costs

Diffusion process characterised by

Compatibility with local customs and habits

Ability to trial the product before committing to it

Ability to observe product

Facebook and Instagram

Twitter is used for

Universal issues are

Firms can also determine consumer trends

Explore response to competitor offerings

Discover potential or actual problems

1. How has Pokemon Go utilised connectivity in C2C and

2. What sub cultures have emerged from the new

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