Feature article

Staying Ahead in the Digital World

Team Capital talk to former Samsung Electronics Chief Marketing Officer, Anthony Marsella Ph.D., FCIM, on new developments in digital technology, content provision and what this all means for business. Dr Marsella is also co-author of “Marketing Revolution: The Radical New Approach to Transforming the Business, the Brand and the Bottom Line” published by Kogan Page

How does technology innovation change the way we interact with consumers and why is it important for Marketers to lead the trend?

The internet has had a radical impact on how we communicate and share information both as individuals and businesses. A recent study by the Starcom media group showed that interaction with user-generated content on the internet is now at the same level as regional newspapers or commercial radio with 60% of people interacting with it in a week. Brands need to be perceived as open to their consumers. Negative experience – or poor business practice - can be amplified and diffused very fast as Sony found out. They had to recall 4.1 million lithium batteries when a laptop was caught exploding on YouTube in Japan. There were only six reported incidents but it cost them half a billion dollars to rectify the issue.

The fact is that customers are self-recording themselves and telling you and others exactly what they think about your products. People are window shopping online and building up a picture of the retailer’s reputation based on previous customer opinions and comparing prices. When they go into the retailer now, increasingly the customer knows what they want to buy and what they are willing to pay. New business models have emerged as a result of the internet - think Lastminute.com.

But what does the future have in store for us? I believe that as broadband and high speed internet continues to spread over the next few years, a market of new products and services using this broadband will appear with two-way transmission of voice, text and multimedia data. It will become easy to enjoy the internet on TVs, perform PC functions on mobile phones and transfer video clips in real time. As products become increasingly networked to the server, the server will be able to analyze and deduce the features and services that the customer wants and satisfy their needs better.

Digital technology convergence is continuing - not standing still. Today we stand at the beginning of a third digital era, perhaps the most exciting change for us marketers: that of digital video. The television - the heart of the home - is going digital. The old TV is being steadily replaced by new flat-screen televisions bring us a Full High definition image – that is to say 1080p resolution and contrast ratios 1 million to one, allowing very realistic and clear viewing in the living room. The progress of the Full HD television is growing in pace with up to 50% of new sales being Full HD in 2009. The transition to Full HD is being fuelled by several major contributors. In addition to a whole eco-system from Blu-Ray devices to HD Camcorder devices, many channels now offer digital HD broadcasts bringing this technology to life. A less obvious contributor is the arrival of high definition gaming into the living room. Today’s gaming console has moved to the living room and provides high definition gaming for the family. The release of gaming titles such as Halo 3 create huge queues and gross more than major Hollywood blockbuster movies. A whole industry from graphics to music is growing around this pass time – a pass time in which 42% of UK adults indulge. There is no better way to experience HD gaming than through the HD TV – or at least my children claim!

But it does not stop there. Your television is becoming intelligent! A new generation of TV will contain flash memory for pre-recorded content and act as a network home hub able to deliver the internet and IPTV into the home without the need for a PC. This will enable better targeting and direct response. Marketers will see an increase in the delivery of products, software and services as companies exploit this technology. The television is by no means the only broadcast digital video device that is rapidly evolving. In Korea, people are already able to enjoy digital TV not only in their homes, but through their mobile phones on the way to work using DVB-H. The introduction of wireless high speed broadband networks could enable devices to become truly free.

The pace of change is increasing. At the same time, the advancements in core technologies are making it difficult for existing players to distinguish themselves, while making it easy for the followers to enter the market. The introduction of new hit products like the Nintendo Wii and the Apple iPhone with user friendly interfaces and sophisticated design are creating new user segments through functional convergence. The Nintendo Wii sold over 6 million units in the first 3 months after release and the Apple iPhone as many units in the first 4 months as Blackberry in 40 months.

So what does this all mean for us marketers? The electronics industry is evolving at a very fast pace, and this in turn is challenging us to take the initiative and stay ahead. The way we view, consume and interact with new technology will continue to change rapidly. So must we. How we leverage these new opportunities in the near term future will impact our business success.

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