Marketing of High-Technology Products and Innovations Chapter 12: Realizing the Promise of...

Marketing of High-Technology Products and

Innovations

Chapter 12: Realizing the Promise of Technology:

Societal, Ethical, and Regulatory Considerations

© Mohr, Sengupta, Slater

2005

Realizing the Promise of Technology

Obstacles Surmounting Obstacles

Paradoxes of Technology and Unintended Consequences

Proactive consideration and management

Ethical controversies Using a systematic framework to resolve controversy

Companies’ lack of concern for society

Following socially responsible guidelines

Market forces stymie innovation and access

Judicious oversight by the government

Realizing the

promise of

technology


2005

Paradoxical Effects of Technology on Customers

Control

Chaos

Freedom

Enslavement

New

Obsolete

Intelligence

Stupidity

Efficiency

Inefficiency

Fulfilling Needs

Creating Needs

Assimilation

Isolation

Engagement

Disengagement


2005

Implications of Paradoxical Effects

Marketers must understand how customers cope with presence of paradoxical effects. Ex: Limits on computer usage Ways to lessen impacts via holistic

activities Luddite movement

Marketers should not be blinded by their own enthusiasm for technology.


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Handling Controversies Over Unintended Consequences Understand consumers’ fears Focus on positive benefits (without

disregarding negative effects) Educated trade-offs

Astute marketing via consumer education, labeling, and so forth

Proactive!


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Handling Ethical Controversies

1 Identify all stakeholders who are affected by the decision.

2 For each stakeholder group, identify their needs and concerns, both if the decision is implemented, and if the decision is NOT implemented.

3 Prioritize the stakeholder groups and perspectives.

4 Make a decision.


2005

Benefits of the Framework Makes underlying issues explicit Highlights various stakeholders’

perspectives Leads to enhanced commitment to the

decision Enhances ability to communicate

decision to others


2005

Social Responsibility Considerations

Making business decisions that are based on concerns not solely for profit but also for societal benefits/considerations. Examples:

HP building technology infrastructure in developing countries (opening vignette in chapter)

Telecommunications companies building access to broadband technologies in rural areas.


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Debate on Social Responsibility and Business

“Doing Good” detracts from “Doing Well”

Loss of focus on core business issues

Spending and expenses that detract from bottom line

Decisions on social concerns better made by stockholders with their own money

“Doing Good” facilitates “Doing Well”

Point of competitive advantage with customers

Way to gain employee loyalty and boost morale

Way to cultivate less hostile business environment

Way to find new revenue growth opportunities


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4 Domains to Enhance the Profit Impact from Social Responsibility

Supply/input conditions Investments in social causes that develop:

Company’s human resources; capital resources; physical infrastructure; natural resources; scientific/technical infrastructure

Demand/customer conditions Investments in social causes that develop:

Local markets, improve sophistication of customers, provide insights into emerging customer needs, or develop product standards in the firm’s best interests


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4 Domains to Enhance the Profit Impact from Social Responsibility (Cont.)

Competitive context Investments in social causes that:

Reduce corruption, facilitate fair competition, protect intellectual property, and support an attractive business environment

Supporting infrastructure Investments in social causes that:

Bolster supporting industries and create vibrant industry clusters

“A rising tide floats all boats”


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Social Responsibility: 3 Considerations

Does the mission of the company match the mission of the cause? Ex: Telecommunications companies

building access to broadband technologies in rural areas

Does the target market of the company have a vested interest in the cause? Ex: If target market is women-owned small

businesses, then supporting educational programs might make sense, even for a telecommunications company.


2005

Social Responsibility: 3 Considerations (Cont.)

Will the socially-responsible behavior: (a) generate goodwill and (b) positive exposure? (a) Even if the behavior is not aligned with

the corporate mission, and even if it reaches beyond the company’s target market, creating goodwill may be sufficient justification.

Ex: donation of telecomm company to a local food bank


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Social Responsibility: 3 Considerations (Cont.)

Will the socially-responsible behavior: (a) generate goodwill and (b) positive exposure? (b) Likelihood of generating goodwill

based on degree of exposure company will get for its socially-desirable activities.

Marketing, advertising, publicity, public service announcements that share the pertinent information.


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Other Considerations in Social Responsibility

If company is using socially responsible behaviors in one area to compensate for poor business behaviors in other areas, it can back-fire. Viewed as hypocritical by public

Companies’ efforts perceived as genuine when operating at level 1 or level 2.


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Social Responsibility and Innovation

Extreme needs/conditions faced by the world’s impoverished people

Problems that, when viewed through more traditional lens (i.e. what is used by customers in more moderate conditions) might be considered intractable

Can stimulate radical thinking and breakthrough innovations Examples: telecommunications

breakthroughs; health/hygiene; energy/power


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Government’s Role in Technology Markets

Support science and education to maintain innovativeness Ex: Nanotechnology Initiative On-going focus on enhancing competition and

consumer welfare Initiate legislation to enhance competition

in tech industries Enhance/protect consumer welfare

Ex: Can-Spam legislation; privacy rules Help with dialogues over industry standards


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Government Balancing Act

I n v i s i b l e h a n d o f t h e m a r k e t e f f e c t i v e A n t i t r u s t I n v i s i b l e h a n d o f m a r k e t i n e f f e c t i v e

P a t e n t p r o t e c t i o n e n h a n c e s i n n o v a t i o n I n t e l l e c t u a l

P r o p e r t y P a t e n t p r o t e c t i o n s i n h i b i t c o m p e t i t i o n a n d i n n o v a t i o n

M a r k e t f o r c e s d e t e r m i n e a c c e s s A c c e s s t o

T e c h n o l o g y G o v e r n m e n t s h o u l d f a c i l i t a t e a c c e s s


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Update Regulatory Models Antitrust models Intellectual property models Fair and reasonable access to

technology


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Antitrust Models Developed in era of physical, vs. information-

based, goods Don’t account for network externalities, unit-

one costs, and knowledge spillovers These can lead to monopoly-like concentrations of

economic power Two views to debate:

On-going innovation provides competition –or-

Such monopoly-like concentrations require active monitoring and intervention

Ex: Microsoft Case


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Debate over Patent Protection Provide inventors with incentive to

innovate by giving them protection to reap the rewards from costs/risks of innovation

Stifles competition, knowledge spillovers, and new innovations


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Debate over Copyright Protection (Digital rights management)

Grant copyright holders the rights to benefit from their works-of-art (music, movies, books, etc.)

Technology developments facilitate copyright infringements Should government place restrictions on

technology? What rights do purchasers of digital

content have (to copy/re-use music, movies, etc.)?


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Progression of Law in Digital Rights Management

1984 Betamax Ruling Tech company not liable for facilitating

copyright infringement Courts should not stifle potentially

beneficial technologies before their usefulness fully understood

1992 Audio Home Recording Act Consumers granted right to unlimited

private use of legally-purchased music, movies, books, etc.


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Progression of Law in Digital Rights Management (Continued)

1998 Digital Millennium Copyright Act Illegal to circumvent copy protections

1999 RIAA lawsuit with Napster over peer-to-peer computing Unlike Sony, Napster provided a service

to customers characterized as a relationship (vs. a one-time sale)

Napster shut down (2001)


2005

Progression of Law in Digital Rights Management (Continued)

2001 suit against “2nd generation” file sharing services More decentralized server meant

inability to hold company liable Therefore, these (Morpheus, Grokster,

Kazaa, etc.) were deemed legal 2003: RIAA successfully sued

individuals who had downloaded music


2005

High-Tech Lessons from Digital Rights Management Is entertainment industry following

creative destruction? Will it foreclose revenue opportunities

of tomorrow by stifling innovation today?

Analogy: It tried to make selling VCR machines illegal, but today up to 50% of revenue is from sale of videotapes!


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Idea of a Consumer Technology Bill of Rights

DigitalConsumer.org; creativecommons.org

Right to: Time shift (record for later playback) Space shift (copy to blank CDs or portable

players) Make back-up copies Use content on any platform (PC, MP3 player,

etc.) and to translate content into any format


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Government Role in Access: The Digital Divide

Digital Divide: Should the government play a role in

ensuring access to technology (i.e. bandwidth)?

Analogy to development of highways and phone lines


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Digital Divide Disparity in access between:

Different socio-economic groups Affluent vs. poor

Different geographic areas Inner-city vs. suburban vs. rural

Different ethnic groups Caucasian vs. Asian vs. African American vs.

Latino Different countries

Developed vs. developing


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Issues and Concerns over the Digital Divide Government efforts (pros/cons) Tech. Company efforts

Innovative solutions Social responsibility

Working towards facilitating “technology readiness” of affected groups Focus goes beyond mere access to

developing willingness to embrace and fully utilize technology


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Conclusion Technology holds the hope and promise of

solving many problems and woes It simultaneously causes problems and

woes Effective marketing will be aware of the

interface between promise/problem, and proactively manage customer concerns.

Inventors who understand effective marketing more likely to see the promise of their technology realized

Marketing of High-Technology Products and Innovations Chapter 12: Realizing the Promise of...

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