Technological Environment

The technological environment is perhaps the most dramatic force now shaping our destiny. A Technology has released such wonders as antibiotics, robotic surgery, miniaturized electronics, laptop computers, and the Internet. It also has released such horrors as nuclear missiles, chemical weapons, and assault rifles. It has released such mixed blessings as the automobile, television, and credit cards.

Our attitude toward technology depends on whether we are more impressed with its wonders or its blunders. For example, what would you think about having tiny little transmitters implanted in all of the products you buy that would allow tracking products from their point of production though use and disposal? On the one hand, it would provide many advantages to both buyers and sellers. On the other hand, it could be a bit scary. Either way, it's already happening:41

Envision a world in which every product contains a tiny transmitter, loaded with information. As you stroll through the supermarket aisles, shelf sensors detect your selections and beam ads to your shopping cart screen, offering special deals on related products. As your cart fills, scanners detect that you might be buying for a dinner party; the screen suggests a wine to go with the meal you've planned. When you leave the store, exit scanners total up your purchases and automatically charge them to your credit card. At home,

1820 Technological Advances

A Responding to the consumer demands for more environmentally responsible products, GE is using "ecomagination" to create products for a better world. 0

Author I Technological advances Comment | are perhaps the most dramatic forces affecting today's marketing strategies. Just think about the tremendous impact of the Web, which emerged only in the mid-1990s, on marketing. You'll see examples of the surging world of online marketing many times in every chapter and we'll discuss it in detail in Chapter 17.

Technological environment

Forces that create new technologies, creating new product and market opportunities.

readers track what goes into and out of your pantry, updating your shopping list when stocks run low. For Sunday dinner, you pop a Butterball turkey into your "smart oven," which follows instructions from an embedded chip and cooks the bird to perfection.

Seem far-fetched? Not really. In fact, it might soon become a reality, thanks to tiny radio-frequency identification (RFID) transmitters—or "smart chips"—that can be embedded in the products you buy. Beyond benefits to consumers, the RFID chips also give producers and retailers an amazing new way to track their products electronically—anywhere in the world, anytime, automatically—from factories, to warehouses, to retail shelves, to recycling centers. Many large firms are adding fuel to the RFID fire. For example, Wal-Mart requires all suppliers shipping products to its Sam's Club's distribution centers to apply RFID tags to their pallets. If they don't, it charges $2 a pallet to do it for them. Sam's Club plans to use RFID tags on every pallet, case, and item by the fall of 2010. One study found that by using RFID, Wal-Mart can improve its inventory accuracy by 13 percent, saving millions and millions of dollars a year.

The technological environment changes rapidly. Think of all of today's common products that were not available 100 years ago, or even 30 years ago. People did not know about automobiles, airplanes, radios, or the electric light. They did not know about television, aerosol cans, automatic dishwashers, air conditioners, antibiotics, or computers. Franklin Delano Roosevelt did not know about xerography, synthetic detergents, tape recorders, birth control pills, jet engines, or earth satellites. Just 45 years ago, people did not know about personal computers, cell phones, the Internet, or googling.

New technologies create new markets and opportunities. However, every new technology replaces an older technology. Transistors hurt the vacuum-tube industry, xerography hurt the carbon-paper business, CDs hurt phonograph records; and digital photography hurt the film business. When old industries fought or ignored new technologies, their businesses declined. Thus, marketers should watch the technological environment closely. Companies that do not keep up will soon find their products outdated. And they will miss new product and market opportunities.

The United States leads the world in research and development spending. Total U.S. R&D spending reached an estimated $367 billion last year. The federal government was the largest R&D spender at about $102 billion.42 Scientists today are researching a wide range of promising new products and services, ranging from practical solar energy, electric cars, paint-on computer and entertainment video displays, and powerful computers that you can wear or fold into your pocket to go-anywhere concentrators that produce drinkable water from the air.

Today's research usually is carried out by research teams rather than by lone inventors such as James Watt, Thomas Edison, or Rudolf Diesel. Many companies are adding marketing people to R&D teams to try to obtain a stronger marketing orientation. Scientists also speculate on fantasy products, such as flying cars, three-dimensional televisions, and space colonies. The challenge in each case is not only technical but also commercial—to make practical, affordable versions of these products.

As products and technology become more complex, the public needs to know that these axe safe. Thus, government agencies investigate and ban potentially unsafe products. In the United States, the Food and Drug Administration (FDA) has set up complex regulations for testing new drugs. The Consumer Product Safety Commission sets safety standards for consumer products and penalizes companies that fail to meet them. Such regulations have resulted in much higher research costs and in longer times between new-product ideas and their introduction. Marketers should be aware of these regulations when applying new technologies and developing new products.

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