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Current Marketing Issues Seminar BA635 Dr. Ed Forrest TONIGHT: Delineate the Organizing Paradigm of this Course Waves of Change Spheres of Society Defining Dimensions & Operating Principles The Essence of Marketing Anything/Everything one does to facilitate exchange ERGO Whatever impacts Why-What-Where-When-How Exchange occurs… is (or becomes) an Issue… Marketing Issues in Perspective Marketing - part of Business & Business - part of Society Marketing Business Society “Societal Change” creates “issues” for Business… which creates “issues” for Marketing Thus- in order to identify- anticipate- understand Marketing Issues in particular One needs to identify-anticipateunderstand Societal Change in general Society Defined: A group of humans broadly distinguished by: mutual interests, participation in characteristic relationships, shared institutions, & a common culture In the final analysis marketing strategy is formulated to address… THUS- Patterns of/changes to: human interests, relationships, institutions & culture… …become marketing issues Hence- our search for marketing issues begins w/ examination of… Course Organizing Paradigm “… begin in a more or less inductive or empirical fashion by identifying what all civilizations have in common” Alvin Toffler, Previews & Premises (William Morrow & Co. New York, 1983) Page197 All civilizations have: an energy system… producing goods & services… a system for distributing those goods & a method of services… Energy, production & distribution are all … tied together… to form a TechnoSphere All societies have some sort of communication infrastructure– an InfoSphere “ Every civilization has a SocioSphere consisting of interrelated social institutions, associations, reference & affinity groups ‘PsychoSphere’= intimate relationships, subjectivitypersonality All societies operate within a BioSphere & have a PowerSphere-authority allocated thru formal & informal political institutions “Put together these spheres encompass most all that goes on in any civilization or society” POWER SOCIO PSYCHO TECHNO BIO INFO Our Seminar: Techno … will explore each sphere Info ascertain what changes are afoot and– as a consequence– delineate what “marketing” issues have arisen/will arise… Socio Production & Distribution-Customization & Customer-ization Marketing Communication; Internal & externalchannels & strategies Changing consumer living-working patterns; social, professional & corporate networking Consumer values; SocioPsycho Psycho /Techno-Graphic Segmentation Bio Societal/Green Marketing Power Business & Marketing Regulation; Corporate Citizenship & Social responsibility When change concurrently impacts & ripples thru & across all Spheres… SOCIO PSYCHO BIO INFO TECHNO You have a paradigm shift in the principles & processes that define a civilization… Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... Social Wave Theory: When all Spheres totally transformed a new Civilizational-Wave rolls over preceding waves "In a time of change, it is learners who inherit the future. --The learned find themselves well equipped to live in a world that no longer exists." — Eric Hoffer As early as 1969 Peter Drucker foresaw an “age of Discontinuity” w/ upcoming shifts: From manufacturing based economy to knowledge based economy From primary focus on engineering & manufacturing to primary focus on information gathering, analysis & marketing Drucker, Peter F. The Age of Discontinuity. Harper & Row Publishers, Inc: New York, 1969. In 1988 Drucker wrote “The Coming of the New Organization” “by 2008 successful organizations “will be knowledge-based … composed largely of specialists who direct … their own performance through organized feedback… from colleagues, customers & headquarters.” In early ’70’s Daniel Bell foresaw coming post-industrial society-- that would: 1. Shift from a goods-producing to service economy 2. Be dominated by professional & technical class "Coming of Post-Industrial 3. Be knowledge driven Society: A Venture in Social Forecasting; 1973 4. & Future oriented Key Resource Pre-Ind. Industrial Post-Ind. Land Machine Knowledge Corporation Lab Socio-locus Farm 1980- Toffler’s rd 3 First Wave ~8000BC Hunter Gatherer To Agricultural Age Second Wave ~1750’s Agricultural Age To Industrial Age Third Wave ~1950’s Industrial Age To Information Age Wave Addressed transition from heavy industry to new tech- economy Computers emptied factories & gave us paperwork in offices As Machines emptied countryside... & gave us factorywork in cities Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... 1st Wave 2nd Wave 3rd Wave KEY COMMODITY LAND •Basis of economy •Life organized ‘round village •Economy Decentralized •Every village produce most of its necessities CAPITAL •Like land- a zero sum commodity* •Necessary for control of Production-Labor & Raw materials Information Uniquely different from previous key commodities What’s so different about information? • Expandable- infinity expansive commodity • Transportable- geography no longer matters • Compressible- can be summarized, encoded • *Sharable- Value increases when shared Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... TechnoSphere -Energy 1st Wave: MANIMAL winches, wedges, catapults, winepresses, levers & hoists – amplified by man & animals 2nd Wave Electromechanical – “w/ moving parts, belts, bearings & bolts– clacking & ratcheting along” Initial Electro = Hydro & Direct Current necessitated Local Sourcing Alternating allowed Central Utilities w/ Long-D Dist. 3 3 2010 3 2020 2030 Production The Pin: New Technologies powered by New Energy sources enabled mass production… Adam Smith -1776w/ the pin lesson & concept of “manufacturing” Applied in 1908 by Ford in production of Model T One craftsman = ~20 pins/day Break into 18 steps10 workers-each 1-2 specialized tasks = 4,800 pins/day Division of Labor The Model T Requires 7,882 tasks requiring: Characterized by: • Hi energy input • Hi waste pollution “949 strong men 3,338 ordinary men 670 legless 2,637 one legged 2 armless 715 one armed 10 blind men”* • Low skill • Repetitive work • Standardized goods • Centralized control *autobiography 2ND WAVE DISTRIBUTION Sales rate volatility Production rate volatility Supply chain management substitutes information for inventory Standard Deviation, 10-yr Moving Average 20% Production Growth Volatility 18% 16% 14% 12% 10% Sales Growth Volatility 8% 6% '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 100 % Brick & Mortar Economy 75 % U.S. GDP 50 Goods & Services Sold ; Distributed Online 25 0 ’72 ’78 Source: Marvin Zonis & Associates ’84 ’90 ’96 ’02 ’08 Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... The INFOSPHERE 1st Wave 2nd Wave 3rd Wave Interpersonal Mass Interactive Virtual Face to face Mediated 1:1 1:Many Networking: many-to-many Augmented by: •Listening post •Distance Runner •Town Crier •Pigeon •Pony Express •Newspaper •Magazine •Film •Radio •TV Internet •WiFi •Cellular •Satellite Any 1:Every 1 Media Evolution From Mass Mind to Blip Culture “Instead the masses receiving the same messagesmaller fragmented groups/individuals send & receive their own thoughts & images” …(the BLOG??) “On a personal level .. besieged by blips… Info-Blips that are contradictory & unrelated” Toffler- 1980 Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... Dramatic Shift in Marketing Reality Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... The SocioSphere Element 1st wave 2nd wave 3rd wave Relationships Spiritual Contractual Mutual Family Extended Nuclear Expanded Education Elitist Mass/ LifeLong Standardized Business Ind./Partn. Corp. Conglom Relationships W/ Divorce of Production & Consumption— Relationships became set of transactions Society not based on kinship, friendship, tribal allegiances- but on contracts 2nd wave emergence of the Company Man The Family: From Mother Hubbard to Ozzie & Harriet to Big Brother 1st Wave: Extended Family-- Aunts & Uncles; Grand Pa & Ma: Inlaws & In-breds under one roof 2nd Wave: Nuclear Norm (working Pa, housekeeping Ma + 2kids, a dog & BBQ) everybody else own unit or institutionalized 3rd Wave: Aggregate HH’s: Mother-Other; Poly-Parents By 1980’s: <7% US-HH’s nuclear; 20% Single, 1:7 single Mom (1:4 Urban); in one Chicago neighborhood 86 different adult configurations… Education: From Athens, to Ohio State to Phoenix 1st Wave: For Privileged 2nd Wave: For Masses: w/ Standardized Curricula Texts & Tests w/ Bell Curve 3rd Wave: For Individual Life-Long/ Personalized in Time & Mode of delivery Business From Dad & Sons to GM to AOL-Time-LifeWarner-Turner… 1st Wave: Shopkeepers & Partnerships 2nd Wave: The Corporation & Franchise 9-5, Strict Labor – Management hierarchy 3rd Wave: Resurgence of small business & Emergence Global Alliances Horizontally, vertically & strategically integrated Conglomerates— thru leveraged buyouts, hostile takeovers; out-sourcing, networking & symbiotic alliances Ad-Hocracy replaces bureaucracy Flex—Time, Task & Title Many bottom-lines Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... Meta-convergence: “the tightening of connections among spheres that have hitherto been more independent” "Culture, religion, politics, environment, ethics, are all going to interpenetrate one another to an extent never before seen, and they will, in turn, penetrate business in all sorts of strange new ways…“ Riding the third wave: A conversation with Alvin Toffler The 21st Century- Spherical Meta Convergence -Religious & Secular Groups -Industry & Business Associations -NGO’s- IMF, WTO, World Bank Ecological impact Labor conditions Pollution Health & safety concerns Human rights abuses Child labor Working in-w/ anti-democratic regimes Globalization Corporate, & activist – Shareholder organizations -Special -Local, State & National Gov’t Agencies Interest & Affinity groups ILO-list 450+ Activist Org. W3-sites “promulgating policy initiatives” ~ie~ Stark Contrast w/ 2nd wave Mantra: The only business of business is business--Milton Friedman A successful business satisfies enough customers at a high enough price so as to return a profit to those who have invested in the entrepreneurial activity… …to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest." Today's Managers must balance the bottom-line against the ideals – “--- want max profit for shareholders …with honesty in business practices, …safety in the workplace, ..and also serve larger environmental & social issues.” Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... Origins of our identity Our individuality = result of Nature & Nurture War; civil unrest; social movements Political persons & events; economic swings Scientific/Technological discoveries & advances Tragedies: Natural & Manmade Our commonality = results from our shared culture & experience Entertainment: Movies, TV, Music; artists, celebrities Clothing styles; Lifestyle trends, Fads Generational Imprint as we Come of age Each generation molded by world events that occur during its formative years. … distinct historical experiences create characteristics that stay w/ people thruout rest of their lives Generational Marketing: Reaching the Hearts and Minds of Consumers http://circman.com/ar/marketing_generational_marketing_reaching/ Values are shaped by: Generational Life Experiences Called “Markers” Events Culture Politics Economy Technology Personalities February 08, 2005 Lax Natarajan & Sully Romero Ordonez 62 •Generational mindsets … are major factors in determining what & how consumers buy… Common Experiences Common AIO’s, values, tastes, style... The notion a group of people bound together by sharing experience of common historical events 1st introduced by Karl Mannheim - early 1920s Common responses to marketing mix variables Generations Variously Named & Dated: 1. 2. 3. 4. 5. 6. 7. Matures – < 1946 Baby Boomer – 1946-1953 Generation Jones – 1954-1964 Generation Rerun – 1965-1975 Generation Xceptional – 1976-1986 Generation M – 1987-1995 Millennials – 1996 and beyond Depression cohort (1912 to 1921) THE GI GENERATION: 1901-1924 THE SILENT GENERATION: 1925-1942 BABY BOOMERS: 1943-1960 GENERATION X: 1961-1981 GENERATION Y: 1982-PRESENT WWII cohort (1922 to 1927) Post-war cohort (1928 to 1945) Baby Boomer cohort #1 (1946 to 1954) Baby Boomer cohort #2 1955 to 1965) Generation X cohort (1965 to 1976) N Generation cohort (1977 to date) Waves of change affect different generations in different ways Rode the Last Wave GI Silent Caught Between Waves Grow Up w/ New Wave Gen X Depression War Baby 1925 1935 1945 Boomer 1955 1960 1965 1975 Riding the wave Gen Y 1985 2000 Agricultural Industrial Technological Land Capital Data Man-imal Fossil Bio-Tech Widgets Electromechanical Digital/Genetic Production........ Crafted/Self Use Mass/Exchange Prosumptive Distribution..... Restricted Mass Disintermediated Marketing 1:1/ Barter Product-centric Consumer-Centric InfoSphere Interpersonal Mass-Mediated Interactive Spiritual Contractual Mutual/Networked Indiv./Partnership Corporation/Bureaucratic Conglomerate/Ad Hoc Extended Nuclear Expanded Elitist In Mass/Standardized Specialized/Life-Long Inherent Elected Semi-direct Inherited Divided Self Defined/Discovered Toffler's Waves Key Commodity TechnoSphere Energy....... Technology..... Communication SocioSphere Relationships Business Family............ Education PowerSphere Authority..... PsychoSphere Identity....... Old Economy – Manufacturing driven Standardization & New Economy – Information driven Differentiation & Duplication customization Economies of Economies of Scale- Mrkt Share/sales volume Hierarchical Bureaucratic Scope- Versatility –Long Tail Inventories, Marginal Prdtn & Dist. Costs; Networked Customer base Diversified Adhocracy January 3, 2000, page S1 “There’s a new economy out there – and it looks nothing like the old one” At Least Ten Key Differences Old Economy 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Tangible assets Rigid-Vertical Org. Protected markets Competition Distribution hierarchy Rigid barriers Standardization Domestic Prdt-Life Cycle=Years Seller power New Economy 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Intangible assets Fluid & Modular Open markets Hypercompetition Direct to customer Flexible entry Personalization Global PLC=months Buyer power “The new economy is not just a dot.com thing. It’s not just about high tech, computers or microchips. - it is about new ways of doing things in every industry, every government. It’s about speed, quality, flexibility, knowledge and networks. It will affect everything.” (Collaborative Economics) Tapscott’s Defining Dimensions of the New Economy Knowledge Digitization Virtualization Molecularization Integration Disintermediation Convergence Innovation Prosumption Immediacy Globalization Discordance Strategy in the new economy Don Tapscott. Strategy & Leadership. Chicago: Nov/Dec 1997 Knowledge “The new economy is: a knowledge economy based on human capital & networks” Old Economy – Manufacturing driven Buildings, tools & equipment are assets people are expenses New Economy – Information driven Buildings, tools & equipment are expenses people are assets & knowledgeable people greatest asset of all… How many mfgg plants & office buildings does Microsoft own? What is the value of all the equipment in its offices? How much inventory does it have? Microsoft’s real assets walk out the door every night… The New Economy % 75 “InformationWorkers” 65 50% 55 45 35 25 2% 15 5 -5 1860 1990 A Knowledge Economy By 1990 -1/2 American workers are knowledge workers Today -80%+ of new jobs are in information intensive sectors Agriculture Manufacturing Services 80% 70% % 60% o f 50% 40% G 30% N 20% P 10% 0% 1850 1950 2050 Another Dimension to Consider: Digitalization! 1101001011010010010010010 0110001011010010110100100 0010010011000101101001011 0100100100100100110001011 0100101101001001001001001 1000101101001011010010010 0100100110001011010010110 1001001001001001100010110 The “Media Fusion” Bomb Akin to energy generated by nuclear fusion, communication power generated by media fusion is formidable… W/ digitalization all media become translatable into each other –and gives one ability to digitally mix all media on a common palette… The New Economy: Digitalization A Digital Economy Old information flow: atoms - paper • Cash, checks, invoices, maps, photographs… New information flow: bits • All things - done digitally “Being Digital” (’95) is understanding the significance of... The movement of compressed weightless bits of data/ information Transmitted at speed of light Combined seamlessly Retrieved instantly, anywhere 24/7 around globe Virtualization “As information shifts from analog to digital, physical things can become virtual… Changing the metabolism of the economy, the types of institutions & relationships possible, & nature of economic activity itself ” Entering the infosphere Journal of International Affairs ; New York; Spring 1998; Michael Vlahos The Virtual: Partner/ Community Office/ Corporation Store/ Mall Virtualization Molecularization “The old corporation is being disaggregated replaced by dynamic molecules & clusters of individuals which form the basis of economic activity” The knowledge worker (atom) forms working clusters/ molecules Integration & Internetworking “The new economy is a networked economy, integrating molecules into clusters which network w/ others for the creation of wealth” Enables small companies to • Overcome advantages of large companies economies of scale & access to resources • Avoid burdens Bureaucracy, hierarchy & inflexibility ... Work has become Communication! From work dominated by machines & production-- to work dominated by people & conversation. Going to work is to going meet.... Work, education & entertainment are mixed. Work goes on anywhere, anytime... we become nomads as technology becomes mobile Bo Dahlbom: President of the Swedish Research Institute for Information Technology http://www.informatics.gu.se/ Disintermediation Middleman functions …being eliminated thru digital networks Musicians don't need recording companies Airlines, Hotels don't need travel agents Food Companies don’t need wholesalers 100% 90% 80% 70% 60% 50% 40% 30% 20% Mfgrs Wholesalers Retailer s 0% Japan Britain United States Number of companies involved in each level of the food industry, % of total, 1993 ‘Disintermediation’= removal of business process layers in value chain Reduces Transaction Costs: Reduces costs of finding buyers, collecting payments, & (in some cases) delivering product Facilitates Dynamic Pricing: Real-time interactions between buyers & sellers determine worth of items INFORMATION SYSTEMS IMPACT EFFECT OF INTERNET ON BUSINESS MODELS THE EFFECT OF THE INTERNET ON BUSINESS MODELS Convergence 1 “ the 2 dominant economic sector is being created by three converging industries which, in turn, provide the infrastructure for wealth creation by all sectors” - Tapscott. 3 Over 100 years ago a technology convergence fueled a new economy Electric Power Mechanical Engineering Material Sciences The resulting Industrial Economy defined the business landscape for the 20th century Today, another technology convergence is fueling a new economy Computing Communication Technologies Technologies Content Technologies The resulting Techno/Info-sphere is redefining the business landscape for the 21st century Innovation “The new economy is an innovationbased economy. …Obsolete your own products The collapse of product life cycles • ‘96 Sony introduced 5000 new products • “No matter how good you are, you are only 18 months away from failure” Prosumption 3RD Wave finds gap between consumers & producers blurring CUSTOMERS INVOLVED IN PRODUCTION PROCESS •Levi’s – Original Spin Prosumption Dominant Economic Sector Production 1st Wave= Sector A Crafted/ for Self Use 2nd Wave= Sector B Mass/ for Exchange 3rd Wave Mixed Prosumption 2nd Wave created situation where vast majority of food, goods n’ services destined for exchange (Sector B) Virtually wiped out goods produced for selfconsumption (Sector A) Created civilization where almost no one– not even farmer was self-sufficient 3rd Wave Rise of PROSUMPTION: 1970’s few self service retail outlets nor tools, building materials, medical instruments sold to consumers 1980’s DIY explosion in full force 3rd wave characterized by massive growth of sector A 1970 1980 8% 70% Tools <30% >70% PG ID 0 ~20 million Self-Serve Gas Customerization CRAYON- http://www.crayon.net/ Principle of Prosumption- variants= Crowdsourcing &. Wisdom of the Crowd Wisdom in vs. of the Crowd • Wisdom in = CrowdSourcing • Wisdom of = aggregating estimates or aggregating contributions (collective intelligence) CrowdSourcing: Microsoft’s most valuable professionals (MVP) program- MVPs answer more than 10 million questions each year and provide vital feedback TripAdvisor – relies on the opinions and reviews of its members to provide information to people interested in a flight, trip or vacation. With over 40 million reviews Walkers Crisps “Do us a flavour” campaign – Walkers brand regard was eroding and competition was increasing. Through their “Do us a flavour” campaign they handed over creation of their next crisp flavour to the public. uTest – provide software testing services. They have a global community of over 30,000 professionals providing software companies with a new way to test their applications 10 examples of how crowdsourcing is changing the world. We Are Hunted Ranks the Web's most popular songs based on blogs, Twitter, MySpace, Facebook, forums, peer-to-peer file sharing services and more James Patterson's AirBorne let members of the public write most of the chapters for his new book, AirBorne. He handled the first and last chapters of the "chain thriller," then let members of the public submit the other 28. Galaxy Zoo Lets any astronomer, amateur or pro, help classify one million different galaxies that were photographed by the Sloan Digital Sky Survey. ..now packed with more than 50 million classifications GooseGrade Can't afford a proofer or fact-checker for your site? Just sit back, relax and let your anal-retentive readers do the work for you! CrowdSpring- Lets you post design projects or brief copywriting assignments, name your price, then pick from a wide range of solutions submitted from around the world. On average, projects get 68 submissions. Brand Tags Shows you a company logo and asks you to write the first word that comes to mind. Twitter Tees by Threadless Lets you nominate your favorite Twitter posts to be turned into T-shirts, designed and sold by the popular Threadless.com. You can even get a cash reward for your submission, up to $500 TipJar by Google Collects money-saving tips from people around the world. Advice is divided into categories such as shopping, food and travel. BioMapping Creates a map showing how people's emotions are affected by different parts of a certain city or area. The project relies on more than 1,500 volunteers who agree to wear a device that measures their "Galvanic Skin Response," a sign of heightened emotion. Tapscott, Immediacy Economy is global-24/7/365 Technology Technology capture/filter/disseminate information Organization continuously analyzeadjust to changing business conditions In an economy based on bits Immediacy becomes a key driver Product life cycles compressed: From concept to production. In 1990, autos took 7 years; In 1997 < 2 From Introduction to Mass Diffusion New products taken up much more quickly Market Adoption Sequence: Traditional and Internet Life Cycles Source: Patel, McCarthy; 2000; Digital Transformation; Mc Graw Hill “If it works, it’s obsolete.” —Marshall McLuhan From Adoption to Obsolescence- a matter of months “In the old economy, an invention like Polaroid camera ensured revenue stream for decades. Today-consumer electronic products have a typical lifespan of 2 months” *Strategy in the new economy Don Tapscott. Strategy & Leadership. Chicago: Nov/Dec 1997 “If things seem under control, you’re just not going fast enough.” Mario Andretti Acceleration Quiz Q: Disney & Sony (respectively) produce and launch one new product every _________? “Disney =every five minutes… Sony launches three new products per hour…” http://www.enlightennext.org/magazine/j28/business.asp Elizabeth Debold, The Business of Saving the World Discord The natural occurrence when waves/civilizations collide LITTLE JOB MOBILITY BETWEEN OLD INDUSTRIAL & NEW TECHNOLOGICAL WORKFORCE THE “HAVES’ PARTICIPATE FULLY IN SOCIAL & COMMERCIAL LIFE – THE "HAVE-NOTS" WILL FALL BEHIND-INCREASED SOCIAL STRATIFICATION Are jobs obsolete? Globalization “Borders are Becoming Meaningless” Work performed globally…. continuously…. “The entire globe is now tied together in a single electronic market moving at the speed of light. "There is no place to hide” • Walter Wriston, Citicorp Chairman globalization & technology =2 main forces create a new level of interlocking fragility in world economy. the world economy entered new era marked increasingly frequent periods of turbulence = the new normality The new normal in the global economy =continuous & unpredictable turbulence that is punctuated by periodic & intermittent spurts of prosperity and downturn 2009 Globalization @21