Technology Modifies the Four Ps

Technology is defined as the application of science to convert an economy's resources to output. The creation of technology affects the marketer's environment. The past decade has witnessed the deployment of ground$-$breaking technologies in the areas of medicine, manufacturing control, and communication technologies. Leveraging these opportunities is critical to the success of the market$-$oriented firm. Marketing managers must critically examine the application of technology in order to create a sustainable competitive advantage.

When marketers think of how the application of technology affects their marketing mix, most think of the changing promotions environment. Social networking, mobile communications, and web usage have completely modified the way in which products and services are promoted to consumers. However, technology has affected more than the communications of product benefits. Technology has modified the products and services themselves, as well as their method of distribution.

Review the brief case about the recording industry. Respond to the questions at the end of the case. These questions will help you think about how the recording industry has responded to changes in the technological environment and the changing ways that consumers use its products.

Take an impromptu survey of those around you and find out how many have downloaded music or videos without paying for them. You will likely find that $9$ out of $10$ of your closest friends have engaged in the illicit downloading of digital media content. The problem of copyright violation is rampant and growing. Technology is to blame.

Less than $20$ years ago, the primary method of taking a song to the market required a significant investment in production equipment to "press" out viny! albums or duplicate cassette tapes that were then distributed to retailers for consumer distribution. Because the equipment used to manufacture recordings on vinyl or cassette tapes efficiently were costprohibitive for the average consumer, a small number of record labels were able to control the production and distribution of music$-$related products. The same was true in the video industry.

Enter the digital age. Significant changes in production allowed for the digitization of audio and video content. The result for consumers was a high$-$quality sound and visual experience. At the same time that the digitization of audio and video was being introduced to the market on a large scale, advances in computer and information technology were also occurring. Computers became fast and more powerful. The Internet allowed consumers to share more information with each other easily. Very few in the recording industry saw the ultimate result. A perfect storm of combined forces in technology resulted in the creation of a new set of distribution requirements and an underground industry.

Technology now allows consumers to "rip and burn," upload, download, resize, share, and distribute digital content. While technology has empowered consumers, the audio and video recording industry has been left struggling to modify its business model and remain profitable and relevant. Record labels, distributors, artists, and actors alike were affected by the new technology$-$based environment. Consumers' desires completely changed the way in which audio and visual content were distributed. Consumers began demanding that digital content be available for immediate download via the Internet. No longer were independent retailers and chain stores the only source of CDs and DVDs$.$ Disintermediation $($the