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• In an economy based on bits, immediacy becomes a key driver and variable in economic activity and business success.
Product life cycles are cratering. In 1990, automobiles took six years from concept to production. Today they take two years. Hewlett-Packard’s Computer Systems Organization chief Wim Roelandts says that these days most of HP’s revenues come from products that didn’t exist a year ago. In the old economy, an invention (like the Polaroid camera, xerography) ensured a revenue stream for decades. Today, consumer electronics products have a typical lifespan of two months
The new enterprise is a real time enterprise, which is continuously and immediately adjusting to changing business conditions through information immediacy. Goods are received from suppliers and products shipped to customers “just in time,” thus reducing or eliminating the warehousing function and allowing enterprises to shift from mass production to custom on-line production. Customer orders arrive electronically and are instantly processed; corresponding invoices are sent electronically and databases are updated Enterprises seek to “compete in time” effectively.
Electronic data interchange (EDt) is a powerful, if badly misunderstood, example of how the I-Way is creating information immediacy.’1 Advocates of EDI argue that by linking computer systems between suppliers and their customers for purchase orders, invoices, billing, and record keeping, companies can save considerably over manual (nondigital) methods. In fact, EDI goes well beyond those possibilities. It’s just the first splash in a tidal wave of electronic commerce that will shift the metabolism of business to real time and in so doing forever change the relationship between companies.

In today’s global economy, marketers must also monitor the economic environment of other nations. Just as in the United States, a recession in Europe or Japan changes buying habits. Changes in foreign currency rates compared to the U.S. dollar also affect marketing decisions. The strong dollar and the problems in Asia hurt companies such as BP/Mobil, whose foreign sales fell nearly 20 percent in just two years, and international insurance provider Aflac, whose U.S. sales increased 29 percent while foreign revenues fell 7 percent.2°
For the most part, however, U.S. companies have posted higher revenue gains in overseas operations. Technology companies are the biggest beneficiaries of U.S. expansion into the international arena. Combined, Lucent Technologies, Dell Computer, and Seagate Technology accounted for well over $12 billion in sales from outside the United States.
In 1990, when Beijing opened the huge China market to foreign business, direct selling took off rapidly, growing to over $2 billion annually.
Amway revenues soared to almost $200 million a year. Mary Kay waited
the mid-1990s to enter this market and quickly hit the $25 million mark. And Avon generates about $75 million each year. Combined, these three companies alone have $180 million invested in this single foreign market. But the Chinese government was not as happy as the foreign companies were with this rapid and enormous success. In 1998, the Chinese State Counsel ordered all direct-sales operations to cease immediately. Companies from North America and Europe were understandably shaken by the news. Losing their investments and being locked out of such a promising market was more than disappointing. It also meant that 20,000 Chinese working for these firms would be unemployed—immediately! Several months later, the order was rescinded after pressure from diplomats and corporate representatives convinced Chinese authorities of the benefits of allowing direct marketing activities to continue there.

Resources are not unlimited. Shortages—temporary or permanent—can result from several causes. Brisk demand may bring in orders that exceed manufacturing capacity or outpace the response time required to gear up a production line. A shortage may also reflect a lack of raw materials, cornponent parts, energy, or labor. Regardless of the cause, shortages require marketers to reorient their thinking. One reaction is demarketing, the process of reducing consumer demand for a product to a level that the firm can reasonably supply. Oil companies, for example, publicize tips on how to cut gasoline consumption, and utility companies encourage homeowners to install more insulation to reduce heating costs. Many cities discourage central business-district traffic by raising parking fees and violation penalties and promoting mass transit and car pooling.
A shortage presents marketers with a unique set of challenges. They may have to allocate limited supplies, a sharply different activity from marketing’s traditional objective of expanding sales volume. Shortages may require marketers to decide whether to spread limited supplies over all customers or limit purchases by some customers so that the firm can completely satisfy others.
By 2000, the building construction boom that accompanied the period of U.S. prosperity caught up with materials suppliers, and shortages of wallboard, lumber, and bricks slowed plans for expanding construction. The low unemployment rate produced a human resource shortage. To compete, employers had to increase wages and improve their benefits packages. Other companies turned to automated equipment to counter the employee shortage. Still others “imported” workers from regions with higher unemployment rates with promises of higher hourly wages, job security, and relocation allowances. Marketers today have also devised ways to deal with increased demand for fixed amounts of resources. Reynolds Metal Company addresses the dwindling supply of aluminum through its recycling programs, including cash-paying vending machines. Such “reverse” vending machines allow people to insert empty cans into the machines and receive money, stamps, and/or discount coupons for merchandise or services.