Parris Petals Designs

Archive for December, 2009

The technological environment must be closely monitored for a number of reasons. For one, creative applications of new technologies give a firm a definite competitive edge. Marketers for Xerox’s new digital color copier target the business market with the ad shown in Figure 2.10. “The Document Company” gives decision makers statistics on the benefits of using its state-of- the-art copier, including a 80 percent improvement in customer recall—a primary objective of promotional or informative messages.
Marketers who monitor new technology and successfully apply it may also enhance customer service. Breakthroughs in electronic communications have brought consumers the convenience of in-home shopping and 24-hour banking at automated teller machines. Some restaurants provide faster service by equipping serving staff with palmtop computers that transmit patrons’ orders to the kitchen staff.
The wide range of software packages and innovative technologies offers many rewards for financial service providers. Merrill Lynch & Co., Wall Street’s largest brokerage firm, recently embraced the power of online financial services. Facing the threat posed by online brokerages like E*Trade Group, Merrill entered the online stock trading business in 1999. The firm has a reputation for superior personal financial service and for relatively high transaction fees—up to several hundred dollars per transaction. With its new online capabilities, fees start at $29.95, matching discount rival Charles Schwab Corp. Future plans will permit unlimited free trading, either with a broker, online, or by phone for a flat fee of up to 2 percent of the account’s assets.23 As its current ads explain, Merrill Lynch is helping to shape the future, not just observe it.
Implementing technology is a huge expense marketers face today, and there is no guarantee that will result in instant success. For the past quarter century, automakers have spent billions of dollars on research and development of an electric car. But when GM first hit the market in 1996, a paltry $10 million was spent on advertising, less than half the typical amount spent to launch a new gasoline model. Four years later, GM had barely 500 of its lease-only EV1 electric car models on the road, and most of those were fleet sales—few were sold to individuals. Honda, Ford, and Toyota have also invested heavily in electric-car development, but all are far from
a profit. Electric cars have not been successful; in fact, Honda stopped production of its EV Plus electric vehicle in 1999. However, car makers have started to produce and market hybrid cars fueled on both gasoline and electricity. Toyota’s Prius model hit the American market in 2000, with a $2 million promotional campaign. Honda is also pushing its Insight hybrid car over the Internet.
Subsequent chapters discuss in more detail how companies apply technologies—such as databases, electronic data interchange, and interactive promotional techniques—to create a competitive advantage.