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Transcript
Next Generation ICTs and their Impact on Consumer Behaviour and Marketing:
Are we Ready?
Ethel Claffey, Lecturer/PhD Student, claffeye@tcd.ie1
Dr. Mairead Brady, Lecturer, bradyma@tcd.ie1
1
School of Business, The University of Dublin, Trinity College
Abstract
This paper seeks to provide an overview of some of the key attributes of next generation
information and communication technologies (ICTs) that could directly impact on
future consumer behaviour and by implication on marketing practice. While it would
be an arduous exercise to attempt to categorise all next generation technologies that may
impact on consumers, there is significant value in providing an overview of the
attributes and characteristics of emerging technologies. A significant research effort is
necessary to determine the impact these technologies could have on consumer
behaviour, and how marketers may have to adapt their strategies to successfully
compete to gain consumer confidence in this ever changing technical environment.
This paper highlights the need for marketing academics and practitioners to consider
more fully how advances in information and communication technologies (ICTs) are
fundamentally changing the nature of consumer behaviour and how emerging
technologies present a variety of new marketing options to organisations, both tactically
and strategically.
Key Words: Next Generation ICTs, Consumer behaviour
Introduction
New information and communication technologies are constantly emerging, altering
business methods, and particularly, the relationship an organisation establishes with its
customers. Technological innovations ensure that, as soon as consumer behaviour in
any field is on the verge of stability and explainability, new products and services are
introduced to destabilise the consumer behaviour model so as to create competitive
openings for challengers, niche players, and other contenders (Firat et al., 1995). In his
article ‘Insatiable Customers and Technology’s Fast Lane’, McKenna (1998:20) bids us
to welcome the ‘end of the future, the beginning of the present (where) technology and
competition have changed the essence of how we live time …the pace has accelerated
so much that long term marketing strategies must yield to the demands of the present’.
Therefore, it is essential to analyse the impact of ICT on customer behaviour (Ricard et
al. 2001). Some of the key existing information and communication technologies
identified in the literature include mobile communications (Mullins and Doolin, 2005),
the Internet (Chung-Hoon Park and Young-Gul Kim, 2003; Constantinides, 2004;
Shwu-Ing, Wu, 2002), and databases (Desai et al., 1998; Fisher et al., 2000).
Additionally, next generation technologies identified include Radio Frequency
Identification (RFID) (Ferguson, 2002), pervasive communications services1
(Vrechopoulos et al., 2003; European Commission, 2005; Albrecht, 2002) and
neuromarketing (Wahlberg, 2004; Wells, 2003). The following sections provide an
overview of the attributes of emerging next generation ICTs and some of their potential
At a simplistic level the term ‘pervasive service’ refers to the provision of mobile services to multiple users on
multiple devices using enhanced technical techniques to make the underlying technology transparent to the users
(European Commission, 2005).
1
impact on consumer behaviour. This research forms a part of a wider PhD study
currently being undertaken by one of this paper’s authors.
Ubiquity
Sorensen and Gibson (2004) found that the vision of ubiquitous computing can be
viewed as the ultimate convergence of society and technology, where there is no longer
any distinction between the two. Ubiquitous computing represents the utopian
realisation of human-computer interaction (Banavar et al., 2000). Weiser (1991:94)
stated that “the most profound technologies are those that disappear … they weave
themselves into the fabric of everyday life until they are indistinguishable from it”.
From a marketing perspective, ubiquity represents a shift in the way marketers can
provide information to consumers. In a truly ubiquitous technology society, consumers
will have access to mobile devices and computers every where they go, and at all times
during their day-to-day lives. This provides marketers with an audience for advertising
information that is potentially “always-on” as opposed to the current state of play
whereby consumers are contactable intermittently.
Pervasive Communications
At the recent Internet Global Congress, Doolin, (2005) explained that where ubiquity
provides technology integrated into all aspects of society, pervasiveness brings this
concept to another level. When a technology becomes truly pervasive it displays
elements like personalisation and context awareness, using multiple media on multiple
devices, e.g. wearable computers and embedded sensors. These technology aspects
allow application and technology developers to create systems that are automatically
personalised for each and every user, depending on that user’s context (where context
can be time, date, location, temperature, position, country, mood, and so on). This type
of technology could allow marketers to harness the fact that consumers continually want
to feel unique, and should make the opportunity to do this become less daunting
(Venkatesh, 1998). It also enables marketers to target consumers with dynamic
advertising strategies rather than the traditional static style.
Emerging research is taking this dynamicity to another level with the concept of
elucidation of user preferences. This is a concept whereby a communications network
tracks a user’s day to day activity and draws conclusions from this in order to offer the
services that a particular user wants (European Commission, 2005). The introduction of
pervasive services, expected to become mainstream by 2010-2015, will generate an
increased use of information technology and mobile communications, with an increased
number of technical services and products being delivered to users on multiple devices.
It is clear that future research is required to study the positive and negative aspects of
this technology.
Mobility
The advent of the mobile device and mobile internet has provided marketers with a
means to access globally located consumers. Vrechopoulos et al. (2005) indicated that
the changing role of mobile communications is reflected in the increasing use of mobile
devices for e-commerce purposes. Supported by the penetration of mobile devices and
the evolution of mobile technologies, mobile commerce has promised to change the way
certain business-to-consumer (B2C) activities are conducted, however, this has not yet
been fully realised. An example of this is the use of 3G enabled mobile devices to send
advertising information to potential consumers. This provides the potential to access
more consumers, thereby creating a virtual global advertising marketplace. It also
provides a means for consumers to make rapid product decisions and to purchase items
from any location (Mullins and Doolin, 2005).
The importance of the ability for consumers to purchase items regardless of location has
become increasingly apparent when one examines the adoption of the Internet as a
means to make purchases. Heralded since the dot com era and the late 1990s as the
replacement for physical shopping, the shopping habits of customers have been altered
but not changed fundamentally by the Internet. Future developments which could give
rise to more changes in shopping patterns include allowing consumers to make
purchases using multimedia messaging services, such as shopping ‘buddies’ or
automated ‘bots’ (Doolin, 2005). From one perspective Shwu-Ing Wu (2002) argues
that ‘all across Taiwan and around the world, shopping centres are closing their doors as
consumers turn to the Internet for all of their shopping needs.’ Alternatively, shopping
centres are the cathedrals of yesteryear and shopping has not lost its popularity but is
increasingly a social and critical pastime for many (Moyagh and Worsley, 2002).
Convenience
We are the most monitored, tracked and surveyed people ever on this planet. One
example from a range including biometrics, neuromarketing and nano technology is
Radio Frequency Identification Devices (RFID). This “isn’t some sci-fi vision of the
future” (Ferguson, 2002:138), indeed RFID already has many pragmatic uses in creating
enormous value for both the organisation and the consumer. Following the natural
evolution of barcodes and more primitive tags attached to clothing to prevent
shoplifting, RFID is empirically better as it does not require human interaction. RFID
will increase efficiency of interactions at checkouts in shops and supermarkets by
speeding up transaction times or by tracking consumers’ usage of products. When this
technology is fully integrated into product outlets, shoppers will be able to bring a
trolley of goods to the checkout and pass a single scanning interface where all products
will be instantly identified and the final price calculated. Additionally, the user’s mobile
device can be integrated into the process to automate payment for goods. Ferguson
suggests that while at the moment, “information flows with high speed through a few
high-capacity channels, like veins and arteries, soon wireless technology will takeover
creating multiple direct information flows-like capillaries” (2002: 142).
Information Handling
From a strategic perspective and writing in 2000, Struse claimed, “in the future
expertise in information systems, database management, software development and
other technologies will become crucial”. Indeed Holland and Naude (2004) go further
by conceptualising the relationship between ICT and modern marketing as an
‘information-handling problem’, whereby businesses should be focusing their
technologies on ways to bring the customer’s requirements in line with company
resources. This idea of marketing being an ‘information handling problem’ is not new,
but something which Piercy outlined in 1981. Piercy (1981:1) urged that “good
information is a facilitator of successful marketing action and indeed, seen in this light
marketing management becomes first and foremost an information processing activity”
Conclusion
From a tactical perspective, pervasive mobile services and technologies could be ideal
ways for targeting consumers. Today’s consumer has variously been described in the
literature as ‘active’, ‘knowledgeable’ and ‘post modern’ (Hawkins et al., 2004;
Lawson, 2000; Assael, 2004). Current trends suggest that marketers must be sensitive to
the needs and behaviours of specific groups. Moreover, the ‘new’ consumers have been
described as individuals that want to gather marketing information and make purchasing
decisions in real time and are tech savvy (Spero and Stone, 2004). A key point made by
Mitchell is that no matter how advanced new technologies become, they will never be
completely efficient without the input of the consumer. “They depend on customers
‘opting in’ rather than merely acting as passive targets,…making marketing a joint,
cooperative process” (Mitchell, 2002 :77) In short, in the information age, the customer
both shapes and directs the interaction between marketing and ICTs.
It would seem essential that marketing managers must re-examine how best to integrate
next generation technologies with existing marketing channels and practices. Within
this orientation any detailed research agenda would need to address these challenges and
also topics such as access, usage, literacy, trust, security and ethics. This could mandate
rethinking, repositioning and changing the nature of communication and interaction
between almost all parties involved in the value chain. Current and new technologies
present many new opportunities and challenges for marketing academics and
practitioners and a research agenda to study the dynamic developments in this area is a
worthwhile and necessary challenge and one which marketing overlooks at its peril.
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