Technology’s Impact on Customer Value

Advances in technology have important effects on marketing. First, the cost of technology is plummeting, causing the customer value assessment of technology-based products to focus on other dimensions such as quality, service, and relationships. PC Magazine (www.pcmag.com) publishes an article titled, “The Best Free Software,” each year to tell readers about companies that give their software away, with the expectation that advertising or upgrade purchases will generate revenue. A similar approach is used by many U.S. mobile phone vendors, who charge little for the telephone if the purchase leads to a long-term telephone service contract.30

Technology also provides value through the development of new products. More than 3,000 companies recently unveiled 20,000 new products at the Consumer Electronics Show held in Las Vegas. New products included Samsung’s phones with a flexible screen, transparent 3D televisions by Hisense, and driverless vehicle technologies from Audi and Lexus. Better Homes and Gardens magazine announced 63 best new product award winners in four categories: beauty, food and beverage, health and personal care, and household. Some of the winners included Taste Nirvana’s coconut water, the Nestlé Crunch Girl Scout Thin Mint candy bar, and Tide’s single-dose laundry detergent pods. Other new products likely to be available soon include injectable health monitors that will send glucose, oxygen, and other clinical information to a wristwatchlike monitor and robots that use artificial intelligence to master specific tasks.31

Technology can also change existing products and the ways they are produced. Many companies are using technological developments to recycle products through the manufacturing cycle several times. The National Association for PET Container Resources, for example, estimates that 29 percent of all plastic bottles are now recycled, usually to make polyester fibers that are spun into everything from sweaters to upholstery. Tomra Systems has installed more than 67,000 reverse vending machines in North America, Europe, Japan, South America, and the Middle East, facilitating the collection of more than 30 billion cans and bottles annually. In California, there are more than 450 rePLANET recycling centers where consumers can bring back their empty beverage containers and redeem them for the deposit paid when the products were purchased. Another approach is precycling, or efforts by manufacturers and consumers to avoid creating waste. For manufacturers, this includes decreasing the amount of packaging they use; and for consumers, it means buying products that last longer, avoiding products with excess packaging, and reusing as much as possible. According to marketing expert Melissa Lavigne, “It’s about being conscious about products you buy in the first place. That’s the idea behind precycling.”