Marketing in Customer Technology Environments

Prospective Customers and Magical Worlds

Devanathan Sudharshan

• Publisher: Emerald Publishing Limited
• Year: 2020
• ISBN:
  9781839096020
• Topic: Business
• Subtopic: Marketing
• Index: Business

New customer technology environments are magical worlds. With the rise of virtual reality, augmented reality, the internet of things and more, customers are more engaged, more involved, and easier to reach than ever; while being inundated with increasing amounts of marketing material. How can you market effectively using these new CTEs? Providing an accessible description of these new, emerging technologies, along with novel frameworks with which to apply them, marketing expert Devanathan Sudharshan offers a straightforward guide to leveraging CTEs. Laden with examples to make the discussion vivid for readers and excite their imaginations, Sudharshan covers decision making in CTEs, mixed reality technologies and enabling technologies. CTEs are still emerging, and their business impact is yet to be measured. This exciting investigative text offers students, practitioners and researchers the chance to learn about these technologies, see the possibilities of their impacts, and their growing applications for the world.

Chapter 1

Introduction

We ask Siri about the weather and ask Alexa to order us clothes, diapers, and garam masala. We can monitor and control access to our homes from miles away. We can dissect a human form without dissecting a cadaver. We can fly around Mt. Everest and feel the cold and walk on Antarctica ensconced in electromechanical gear. Soon, we can touch each other even though we are miles apart. Our imagination will be kindled. Imagine tomorrow. Will tomorrow feel magical, I wonder? Will reality tomorrow's experience be realish, I wonder?

For marketing managers, it is a fact that major technological innovations are changing the way we can serve our customers better. The technologies of interconnectivity, computation, sensors, mobile or wireless connectivity, machine learning, vivid virtual representations, and hardware interfaces are advancing rapidly. These advances require us to rethink how we can compete in this new environment and serve customers better. The information, communications, and computational technologies that are advancing so rapidly have four major new relevant technology bundles or technology environments – virtual reality (VR), augmented reality (AR), mixed reality (MR), and Internet of Everything (IoE). When these technology environments involve customers and their interactions, we shall call them customer technology environments or CTEs. These technology environments exist together as well as with existing environments (such as ecommerce, TV, print) and will work together in many instances. By some estimates the global VR and AR markets together are estimated to grow to be over $200 billion by 2022 (www.Statista, 591181). The global spending on IoE is estimated to grow to over $440 billion (Market Watch, 2018, Statista, 688762) by 2022.

Humility requires us to admit that technological change may create different CTEs that may dominate the marketing/customer landscape. However, for the CTEs that are covered in this book the technology landscape will be one of massive machine to machine (mM2M) interconnections. mM2M connectivity requires us also to consider the underlying infrastructure or enabling communications and computing technologies. We expect there to be few applications that are self-contained such as single-person games or dedicated maintenance apps and not needing real-time connectivity. Toward the end of providing readers with an overview of enabling technologies that will be necessary in mM2M applications, we have included a discussion of 5G communications technologies that will be required to provide ultrafast connectivity; service-oriented architecture (SOA) to provide interoperability across technology platforms/systems/machines; edge computing to provide the distributed computing required for mM2M environments; and artificial intelligence (AI) to provide the rapid insights and analysis required.

This book is written to provide readers with knowledge to approach these CTEs with confidence. To that end, the book provides overviews of each of the technology environments, describes customer models that are particularly relevant for these environments, and discusses the impact of these technology environments for marketing management. As mentioned earlier, a description is also provided of the enabling technologies that will make the upcoming magical words emerge from the laws of Maxwell and nature's propagation of waves.

Let us start by considering the four CTEs – VR, AR, MR, and IoE. They are introduced next.

VR CTE

It is a computer-generated 3D (three-dimensional) environment in which a customer gets immersed. To do so, the person must wear special equipment. Within the environment, the customer can interact with whatever enabled entities are in it. The type and extent of interaction depends on the equipment worn, the environment itself, and the extent and expertise of AI used.

AR CTE

Augmented reality is an environment in which computer-generated entities are superimposed on real worlds.

MR CTE

Mixed reality refers to environments in which virtual entities are superimposed on real as well as virtual environments.

The term “mixed reality” can be traced to Milgram and Kishino (1994). Exhibit 1.1 shows the Milgram and Kishino depiction of the continuum between purely (or wholly) virtual and purely (or wholly) real worlds. They termed the continuum a “virtuality continuum.” They termed all environments in between the two ends as mixed reality environments. Environments that in more recent use are termed AR and MR are included in what Milgram and Kishino would call MR. It is also to be noted that, in their view, there could be a fourth environment called augmented virtuality (AV) in which real entities are superimposed on virtual worlds.

Exhibit 1.1. Virtuality Continuum of Environments.Source: Milgram and Kishino (1994).

Exhibit 1.2 shows how Microsoft (Bray, Schonning, & Zeller, 2018) views the continuum, with the continuum being anchored by physical reality on one end and digital reality on the other. Exhibit 1.2 also shows the devices such as mobile phones, holographic glasses, and immersive devices needed today for different environments on the virtuality continuum.

Exhibit 1.2. Devices Placed on Virtuality Spectrum.Source: Milgram and Kishino (1994), Fig. 1 and Adapted from Bray, Schonnine, and Zeller (2018), Microsoft.

Exhibit 1.3 shows example of Microsoft devices and experiences for different environments on the virtuality continuum.

Exhibit 1.3. Experiences on Virtuality Spectrum.Source: Milgram and Kishino (1994), Fig. l and Adapted from Bray, Schonning, and Zeller (2018).

A number of companies, such as Vespa scooters, IKEA, Marriott, and Giraffe360, are using AR/VR as part of their marketing strategies. A number of major technology companies around the globe, such as Amazon, Apple, Google, HTC, Microsoft, Samsung, and Steam, are developing platforms, hardware, and applications for use in various environments along the virtuality continuum.

IoE CTE

When entities have at least minimal sensing and communication capabilities and are connected to a network of other such entities, they form an Internet of Everything. More typically each such entity will have a URL (uniform resource locator) or addressable and unique address, be connected to a network of other such entities, the network will itself have significant communication management capabilities, be connected to a big data storage system (perhaps in a cloud), and also be connected to big data analytics capabilities. Entities as a part of an IoE may range from those with minimal sensing and low power sending and receiving capabilities to those that have complex computing and very powerful communication (transmission and reception) capabilities.

One of the big differences between IoE and other CTEs is that a customer does not actively take part in it. For example, a startup Sidekick has developed AI that can learn about the individual using their own personal data. Having done so, by Summer 2021 the (AI) entity can help the individual make daily decisions. It runs on an individual's mobile phone. It can be connected to an IoE and can execute decisions on behalf of the individual on the IoE without the individual having to be present (https://sidekick.ai/). The capabilities planned for sidekick are:

January 2019

You can talk to your AI and it helps you make daily decisions.

Winter 2019

Developers can create new applications for your AI on our open platform.

Spring 2020

Your AI can talk and share your knowledge with millions of people.

Summer 2021

Your AI can talk with millions of other AIs and make data-driven decisions for you.

Each of these CTEs will be discussed elaborately in the chapters that follow.

To set the stage for the rest of the book, we introduce two abstractions. The first is an abstraction of the CTE–customer interaction and the second is an abstraction of marketing in these environments.

Setting the Stage 1: Abstraction of CTEs

A sketch of the interaction between a CTE and customers is shown in Exhibit 1.4.

Exhibit 1.4. Sketch of Customer Technology Environment (CTE)–Customer Interaction.

A CTE is depicted in Exhibit 1.4 as consisting of two parts. The first is a system that is the bundle of the relevant technologies that define a particular CTE. The second is a customer interface and monitoring setup (CIMS). The technologies involved in each CTE are described in the chapter devoted to that CTE. While the system is owned by the focal marketing firm or its partners, part or all of the CIMS may be owned by customers.

The system and customers interact through a CIMS. The interaction results in outcomes. Feedback from these outcomes is obtained by the marketing firms through the monitoring part of CIMS. The abstraction depicted in Exhibit 1.4 envisages learning by both customers and by marketing firms during a session as well as over time.

Setting the Stage 2: Abstraction of Marketing Management

To provide more details of what the CTE–customer interaction processes are we need to have a common understanding of marketing in the new environments. Exhibit 1.5 presents such an understanding. In our understanding, marketing managers are viewed as making decisions that are guided and constrained by their firms' mission, values, strategy, goals, and resources. The decisions cover a planning horizon which may in turn be broken into shorter action periods. For example, a 1-year horizon may be broken up into seasons, or months, or weeks. Importantly, we view that while the marketing manager has a planning horizon, the concern of the marketing manager extends beyond that period as we expect the firm to wish to survive and thrive even beyond that period. Our abstraction, based on our understanding, consists of four parts: objectives, tasks, learning needs, and key known heuristics.

Exhibit 1.5. Abstraction of Marketing Management.

Objectives

For a planning horizon, marketing managers maximize profits (or revenues as their firm's goals may be) and/or return on resources [return on assets (ROA), or return on investment (ROI)] by presenting customers with a portfolio that consists of relationships and offerings at appropriate times.

Tasks

Offerings are made up of customer value drivers including products, prices, branding, financing, communications, delivery, after sales service, and problem-solving service. The portfolios presented are adaptive, in that they adapt at a microlevel within every interactive session with a customer as well as over the entire planning horizon. Such adaptations are based on learning customer information such as preferences, beliefs, expectations, goals, and appraisals. In order to present a customer with an appropriate portfolio, the firm needs to be able to anticipate the portfolios that may be needed in as much as these portfolios require arrangements for supply chains, manufacturing, production of what is valued (including what are commonly referred to as services), or other infrastructure requirements. The firm, therefore, needs to have developed a universal portfolio of offerings from which it can present a subset to each customer during any given interaction, and perhaps, the subset can be modified by choosing a different one from the universal portfolio even during a session.

Learning Needs

The selection of the subsets to present is made based on the likelihood of the subset being chosen, the likelihood that the chosen subset will lead to a positive appraisal and experience, and that the customer's business will be profitable for the firm over the time horizon. On this last point, firms may differ from some requiring that every session that concludes with a transaction end with direct profit being achieved, versus others who may choose that profits from a customer are calculated over a planning horizon or some part thereof. The firm also needs to h...

Table of contents

• Cover
• Title
• Copyright
• Table of Contents
• List of Figures
• Preface/Acknowledgments/Dedication
• Chapter 1 Introduction
• Chapter 2 Customer Information Processing and Decision-making in CTEs
• Chapter 3 Wonderment and Magic
• Chapter 4 Virtual Reality (VR)
• Chapter 5 Augmented Reality
• Chapter 6 Mixed Reality
• Chapter 7 Internet of Everything (IoE)
• Chapter 8 Enabling Technologies
• Chapter 9 Conclusion for the Magical Worlds in Which Customers Will Lead Artinatural Lives
• Index