Download Marketing Technology in New Marketing Environment

Marketing Technology in New Marketing Environment
Yan Liu, Yu Xuzhou
School of Management,
South-Central University for Nationalities, P.R.China, 430074
Abstract: The influence of marketing technology is pervasive, and the environment of marketing
technology is changing sharply. Therefore, how to use the marketing technology rightly is becoming a
big problem to companies. In this paper, the author mainly answers this question. Firstly, the author
introduces the definition of marketing technology and new environment; then the changing role of
marketing technology and its further directions in the new marketing environment are analyzed; finally,
the author gives a seven-steps marketing technology management for solve this problem.
Key words: Marketing technology, new environment, marketing technology management
1 Introduction
“The influence of high technology is pervasive” (David et al., 2000). Marketing technology can not
be exception too. As changing of environment, the improvement speed of marketing technology shows a
high velocity (Avlonitis and Karayanni, 2000). Therefore, it is necessary to let everyone know the effect
of marketing technology in the new environment.
This paper mainly aims to introduce marketing technology in new marketing environment, and it can
be divided four parts in the rough: 1) a introduction of marketing technology’s definition; 2) a discussion
the new marketing environment, mainly based on the internet technology appeared; 3) a description of
the changing role of marketing technology and its further directions for the new marketing environment;
4) an analysis of the steps of marketing technology management.
2 The definition of marketing technology
As marketing technology has developed for many years, there are several different definitions of
marketing technology. A very early definition was given by Bartels Robert (1965); that is, marketing
technology is “a technology has some useful implications”, and “marketing practice developed as a
technique; marketing thought developed as a technology”.
From then on, scholars developed their own definition of marketing technology based on their
understanding of the means of marketing. For example, Van Wyk (1996) broadly defined that marketing
technology is a technology which has been viewed as “a set of skills or processes, hardware or devices,
and software or algorithms, created by people to facilitate human endeavor”, and Maria, Furrer and
Sudharshan (2000) pointed out that marketing technology is “a set of processes (e.g., order handling
process, coupon redemption processes), devices (e.g., scanner, pupil meter, people meter), and
informatics (e.g., pricing decision support systems) that are embodied in the marketing functions of
creating and extracting customer value”. That is to say, it does not have a definition which is widely
accepted by all the scholars.
However, through these definitions, the author finds that at least two aspects are similar about these
definitions; that is, marketing technology is an important part of marketing science, and marketing
technology include a set of skills, process or implications. So the author deems that the definition of
marketing technology can be addressed as an important part of marketing science, which includes a set
of skills, process or implications.
3 The new marketing environment
New marketing environment is coming into being in the new century.
In the one hand, with the aid of computer-aided technologies, the marketing environment turns to
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more diversity than before, and more products or service is provided to the consumers (Thorelli, 1986).
For instance, according to the research of McKenna (1988) said that there were “300 different types of
cars and light trucks and 400 brands of beer”, and products in supermarkets have “increased from
13,000 in 1981 to 21,000 in 1987”. That is to say, the mass markets have been fractured, and marketing
managers must alter their marketing technology drastically. In other words, the new marketing
environment rebuild on the internet technology is coming now.
In the twentieth century, marketing had made several transitions (Achrol and Kotler, 1999). For
example, the emphasis of marketing had change from seller of a firm's outputs to key player in shaping a
firm's products, technologies, marketing policies, and strategic direction. And in the new century,
marketing would be “poised to undergo significant changes in its content, emphases, and boundaries
again” (Achrol and Kotler, 1999). In addition, the twenty-first century is shaping up to be “a
knowledge-driven society in which the basic economic resource is not materials, labor, or capital, but
knowledge” (Drucker, 1991). And internet technology offers a rich knowledge environment as it has
superior information-processing capabilities.
In this new marketing environment, the role of marketing has to be changed to fit for the new
situation, not to mention the marketing technology. According to Achrol and Kotler (1999), they
believed successful marketing in the new environment will create “synergies in one or more of these
areas”. That is to say, the marketing function will need to be proficient in all the areas, e.g. engineering
knowledge to coordinate technical transactions, investments, and skill to manage multilateral
negotiations, inter-organizational harmony, and internet cultural norms. In addition, marketing in the
internet world will be shaped by the following realities: 1) “Multilateral marketing”, that is, marketing
needs “an extensive global network of information-gathering and processing offices staffed” (Stern et al.,
1996); 2) “Marketing as driver of technology”, that is to say, the technology is more and more important
to the marketers; 3) “Integrated financial marketing”, firms would benefit from this strategy because of
the lower costs; 4) “E-marketing”, it will have an advantage in marketing directly to consumers over the
Internet.
In the other hand, Nicole, Roger and Barbara (2001) pointed out that there is “a new phenomenon in
marketing practice and research in terms of the rapid and widespread diffusion of information
technology”. And too many products, too many advertisements, and the daily torrent of data “has made
customer information systems more important than ever” (Bessen, 1993). Therefore, how to collect,
analysis, and use the information is a new question to the companies, and a great deal information form
the new marketing environment as another element. It is the reason that Mairead (2003) believed that
“Managing information technology (MIT) is a major challenge within organisations”.
In order to assimilate information technology into their operations effectively, they must understand the
stages which can be linked to the broad eras of technological developments (Butler et al., 1997) and
technological innovations models (Durand, 1992). According to Zuboff (1988), he suggested that using
the three stages of automation, information and transformation to assimilate the information technology.
At the first stage, information technology would be used for automation purposes, replacing manual
process; at the second stage for informational purposes, resulting in increased effectiveness; and at the
third stage there will be transformation. However, Haeckel (1998) had different attitude about it. In his
theory of information technology assimilation in marketing, he referred to the third stage as
“unthinkable, highlighting the level of confusion surrounding the future developments of IT” (Haeckel,
1998).
4 Redefining the marketing technology’s role
As it has been mentioned before, marketing in the internet and information world would need to
develop strong marketing technology tools to fit for the new market structure and to be more aggressive
in driving new configuration to match changing structures (Achrol and Kotler, 1999). Marketing will
need to be a more aggressive driver of markets and technology than in the past. Marketing theory will
have to change from predicting which technologies are likely to be successful, given consumer needs
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and preferences, to predicting how consumer needs and market boundaries will evolve, given various
technological futures (Clarke, 1992).
In the new marketing environment, the role of marketing technology should also be changed. Thus as
Maria, Furrer and Sudharshan (2000) mentioned, marketing has multiple roles in the management of
technology as follow:
In the first aspect, marketing's continuous search for technologies that could improve products, bring
new markets, and enlarge actual ones, and so on as before. This role refers to the impact of products or
service's technologies on consumers’ value. That is to say, it mainly deals with the match between the
new demand of consumers and the supply of the firms. An example is the CPU industry, where the
average time gap from when the development of a new technology starts until when it is used on the
marketplace is about 18 months. Therefore, managers need to evaluate with considerable advances how
the development of faster and smaller CPUs can add value (Carey and Peter, 1991).
In the second aspect of this subject is its advisory role of providing input as to how new technologies
proposed to be used by other parts of the organization will affect the value delivered to customers (Clark,
1989). This role has been embedded in organizations in the form of cross functional teams.
“Marketing allows a firm to sense how various new product development decisions will have an
impact on the value that will be perceived and acted upon by its customers” (Houston, 1986). After sales,
service personnel come into a customer's production using process in order to know the effect to the
users of a firm's products. The marketing technology used by the service personnel may be very
important to their customers, but very few firms provide marketing or even sales training to their service
personnel (Kolter, 2000). So this opportunity for communication with the buyers often means nothing.
Firms could not get anything from it. Therefore, a larger bound for the technology used by services
personnel than simple that of technology's packaging as a communication aid/media must be performed.
Such a focus on adding value to customers by marketing technology can not only benefit to the buyers,
but also benefit to the firms reputation. Marketing needs to play an increasing role in its understanding
and utilization of how technologies used in a firm delivery more value to customers.
Last but not least aspect is marketing's role in proactively upgrading the technology used in its own
direct activities, and Maria, Furrer and Sudharshan (2000) believed that the third role may be even more
demanding. Clearly, technologies role in identifying, creating and delivering value to customers is
increasing importance to organizations (AT&T Solutions 1997). Marketing must have a proactive
process for testing its own new technologies. Many new technologies in marketing have come about
because of intuition by marketing managers. So it is necessary to pretest marketing technologies, and
make it as a behest to marketing managers (Kotler, 2000). For example, the P&G’s pretest technology
was administrated very well (Nabil, 2002). However, recently there is a lack of regular, proactive,
technology management as part of the routines of marketing processes.
As the marketing environment is changing now, the further marketing management is changing too.
And customers become partners and the firm must make long-term commitments to maintaining those
relationships with quality, service, and innovation (Anderson and Narus, 1991). Webster (1992) pointed
to four major change directions for organizations: 1) Organizations’ marketing aims should move away
from transactions to long-term relationships with customers and other allies; 2) Organizations need to
expand marketing's "intellectual core" beyond the conceptual framework of microeconomics in order to
address more fully the set of organizational and strategic issues inherent in relationships and alliances; 3)
The shift in their focus should be from "products and firms as units of analysis to people, organizations,
and the social processes that bind actors together in ongoing relationships" (Webster, 1992) ; and 4)
Organizational forms should be changed to fit the new environment, for example, establishing networks
and strategic partnerships organizations to replace transactions and hierarchical organizations.
Webster's first suggestion has both a social and a technology component. On the social side,
adjustments in attitude and organizational structures are necessary. On the technology side, for instance,
knowledge of a customer's communication with a company can constitute part of that company's
knowledge base-accessible by those who have to communicate with the customer when necessary. It is
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made possible by technological development that allows the transparency of such knowledge within the
company. The second one suggests that a management of technology perspective may add value to
marketing's current "intellectual core." The third suggestion is a call for a change in the unit of analysis.
Taking technology as a critical part of the social processes which form the rubric of marketplace
relationships is perhaps well in keeping with the spirit of Webster's call. The last suggestion of Webster's
builds on the changes which have taken place in telecommunication and distribution/logistics/
transportation over the last decade.
When Webster is aware of the impact of these technological changes on value chains and the structure
of industries, the effect on organizational structure cannot be ignored either. Another important change
over the decade has been an increasing focus on capabilities as a source of rent and competitive
advantage. Latter, the author is going to examine how marketing technologies are potential sources of
competitive advantage.
5 The steps of marketing technology management
According to, based on the marketing technology literature, there are seven steps described below in
the process of marketing technology management in the new environment. These steps would help the
marketing technology shift from theory to practice successfully. In the follow context, the author mainly
introduces the marketing technology management in the new environment in detail based on the
research of Maria, Furrer and Sudharshan (2000).
Step 1: “Process Mapping”. “Process mapping is a common practice in operations management”
(Hunt, 1996). It is considered the first step of understanding the technologies which are currently used as
a firm's marketing strategy. Some scholars identify the representative technologies in the marketing sales
part of a firm's value chain to be media technology, audio and video recording technology,
communication system technology and information system technology. Examples of the proactive
development of marketing technology are found in case descriptions of Frito Lay's development and
implementation of handheld personal scanners and its information system (Stefano, 2002). Another
example may be seen in the short write up of the development of the people meter for measuring TV
viewing by Nielsen is provided in The Scientific American (Aust, 1996).
Step 2: “Identification of Technologies”. A wide list of representative technologies which are applied
in marketing is shown in the appendix. These representative technologies are offered to seed the search
for and the identification of the technologies that enhance marketing (Anonymous, 1996).
Step 3: “Prioritization of Technologies”. Obviously not every technology should be the focus of R&D
efforts. A prioritization of the technologies in terms of their impact on customer value and economic
value added would be a great help in targeting management attention. The prioritizations of technologies
not only are developed for the firm, but will also serve to focus the environmental scanning activities
(Michael et al., 2003). Such environmental scanning will describe the map of developments that might
be occurring in supplier firms or in competitive firms; the latter could potentially change the competitive
balance in the market place.
Step 4: “Identification of Alternative Technologies”. The identification of the marketing technologies
would have the capability to identify or specify alternatives. Maybe technologies under the purview of
marketing technology management could be viewed as the management of innovations of three types,
namely innovations in Devices, Informatics, and Processes.
Step 5: “Technology Forecasting”. Although possible alternative technologies have identified for
planning purposes, it would be useful to look ahead and forecast the alternative technologies that might
emerge, and when they might be expected to emerge (Charles, 2005).
Following the first five steps, key decisions are of which the alternative technologies to adopt. Whether
to develop the technology in-house or not and whether the technology should be employed exclusively
by the firm. It is critical for the last decision if the development efforts are come from outside. It is
necessary for outsourcing not only to a capability standpoint, but also the only way to create a supplier
infrastructure, calibration/validation date, and incentives for further research and development by
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suppliers.
Step 6: “Choice of Developing or Acquiring Technology”. The importance potential classification
provides a sorting framework for marketing technologies. If a technology is little important in customer
value creation, and is also one for which the firm's potential to leverage that technology to uniquely add
value for customers, and then it is a technology that may perhaps be ignored.
Sometimes company may find that perhaps the technology is developable by an outside firm. If so,
acquisition, adaptation and implementation plan should be developed. Or, there is need to seed the
development of the technology through giving proof of concept in-house, or by providing the necessary
leadership for its development.
If a technology is little important to the industry but will have leverage potential being low, this process
should be outsourced. It is also necessary to raise the question in the minds of management whether the
firm is engaging in that part of the industry value chain that it is best suited for. The last is a technology
that of low importance but of high leverage potential by the firm and t suggests that the company checks
its competitive niche very carefully and builds upon its advantage.
Step 7: “Implementing and Monitoring New Technology”. Finally, in the process of marketing
technology management, the last step is of the management of the implementation and monitoring of the
technologies. In fact, marketing technology management is a continuous process, should be fitting into
the total quality management paradigm.
6 Conclusions
“Marketing is responsible for more than the sale, and its responsibilities differ depending on the level
of organization and strategy” (Webster, 1992). Nowadays, the improvement speed of science and
technology are more and more quickly, and marketing environment is changing endlessly. Therefore,
marketing managers sometime do not have enough time to learn and develop new techniques to adapt
new marketing environment. However, firms now realize the importance of them, and they always train
their managers for the new technology. So the author deems that though some today’s marketing
managers are not even familiar with today’s marketing technology, but they will learn it at their spare
time. That is to say, all the firms and mangers attach importance to the changing of marketing
technology based on new marketing environment. And as more and more people find these importances
of marketing technology, it may be moving away from marketing altogether in some day.
In a word, in the changing marketing environment, the firms which hold the latest marketing
technology can win the fierce competition in the market, vice versa.
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