Keegan 15

		Updated on 05/05/2015
	BusAd 177: Introduction to International Marketing
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Chapter 15:

Global Marketing and the Digital Revolution


	with your questions

	Overview
	Lecture Outline

	Discussion Questions
	Test Your Knowledge

Summary

The digital revolution has created a global electronic marketplace. The revolution has gained momentum over the course of 70-plus years, during which time technological breakthroughs included the digital mainframe computer; the transistor; the integrated circuit; the personal computer; the spreadsheet, the PC operating system; and the Internet, which originated as an initiative of the Defense Advanced Research Projects Agency (DARPA). Three key innovations by Tim Berners-Lee, the URL, http, and html, led to the creation in the early 1990s of the World Wide Web.
The digital revolution has resulted in a process known as convergence, meaning that previously separate industries and markets are coming together. In this environment, the innovator’s dilemma means that company management must decide whether to invest in current technologies or try to develop new technologies. Although leading firms in an industry often develop sustaining technologies that result in improved product performance, the revolution has also unleashed a wave of disruptive technologies that are creating new markets and reshaping industries and value networks.

Chapter Overviews, Outlines, Sample Questions

E-commerce is growing in importance for both consumer and industrial goods marketers. Generally, commercial Web sites can have a domestic or global focus; in addition, they can be classified as promotion sites, content sites, and transaction sites. . Global marketers must take care when designing Web sites. Country-specific domain names must be registered and local-language sites developed. In addition to addressing issues of technology and functionality, content must reflect local culture, customs, and aesthetic preferences. Cybersquatting can hinder a company’s effort to register its corporate name as an Internet destination.
The Internet is a powerful tool for advertisers; click-through rates are one measure of effectiveness. Another trend is paid search advertising. New products and services spawned by the digital revolution include: broadband, which permits transmission of streaming media over the Internet; mobile commerce (m-commerce), which is made possible by Wi-Fi, Bluetooth, WiMax, and other forms of wireless connectivity; telematics, and global positioning systems (GPS); and short message service (SMS). Smart cell phones are creating new markets for mobile music downloads, including ringtones, truetones, and full-track music files; they can also be used for mobile gaming and Internet phone service using VoIP.

Overview

What do Chris Anderson, Sir Richard Branson, George Colony, and Tony Hsieh have in common? Besides being influential and successful business leaders, thinkers, and public figures, they all use the micro-blogging Web site known as Twitter. Twitter is one of many social media Web sites that have burst onto the scene and quickly gone global within the span of just a few short years. Other popular social networking Web sites include Facebook, MySpace, and YouTube; LinkedIn is a social network for professionals. These sites, which are sometimes collectively referred to as Web 2.0, enable individuals and companies to interact using the Internet. Twitter users post short messages (“tweets”) of 140 characters or less from computers and mobile devices such as cell phones, BlackBerries, and iPods.

The digital revolution is driving the creation of new companies, industries, and markets in all parts of the world; the same process is also contributing to the destruction of companies, industries, and markets.
This chapter appears after the five-chapter sequence devoted to the marketing mix. Why? Because all the elements of the marketing mix—the 4Ps—converge in the world of Internet connectivity and commerce. For example, the product “P” includes Google, Twitter, Wikipedia, and the myriad other Web sites that can be accessed worldwide. The Web also functions as a distribution channel, and a very efficient one at that. Case in point: Apple’s iTunes, the digital-only entertainment retailer that has rewritten the rules of music and film distribution. The Internet is also a communication channel. Today, virtually every company and organization has a presence in the online space. The Internet can be used as an advertising channel, as a PR tool, as a means for running a contest or sales promotion, and as support for the personal selling effort. Finally, there is price. Comparison-shopping Web sites make it easy to check and compare prices for products and services. Moreover, the marginal cost of warehousing and distributing digitized products—music files, for example—is practically nothing. This has led to some interesting pricing strategy experiments. For example, Radiohead, the innovative rock band from Oxford, England, harnessed the efficiency of the Web to offer downloads of In Rainbows for free.

Lecture Outline

Discussion Questions

1.	Briefly review the key innovations that culminated in the digital revolution. What is the basic technological process that made the revolution possible?	Click here for hint.
2.	What is convergence? How is convergence affecting Sony? Kodak? Nokia?	Click here for hint.
3.	What is the innovator's dilemma? What is the difference between sustaining technology and disruptive technology? Briefly review Christensen's five principles of disruptive innovation.	Click here for hint.
4.	What key issues must be addressed by global companies that engage in e-commerce?	Click here for hint.
5.	What is the Long Tail? What implications does this have for market segmentation?	Click here for hint.

6.	Briefly outline Web design issues as they pertain to global marketing.	Click here for hint.
7.	Review the key products and services that have emerged during the digital revolution. What are some products and services that are not mentioned in the chapter?	Click here for hint.

Test your knowledge

	1.		True	False
	2.		True	False

True

False

True

False

	5.		True	False
	6.		True	False

True

False

	8.		True	False
	9.		True	False

10.

True

False