DISCUSSION QUESTIONS
15-1. Briefly review the key innovations that culminated in the digital revolution. What is the
basic technological process that made the revolution possible?
The origins of the digital revolution can be traced back to the mid-twentieth century;
between 1937 and 1942, Atanasoff and Berry developed the electronic digital computer.
transistor radios. During the 1950s, Noyce and Kilby invented the silicon chip, the
The basic technological processes that made the computer revolution possible were
15-2. What is convergence? How is convergence affecting Sony? Kodak? Nokia?
Convergence refers to the coming together of previously separate industries and product
categories; new technologies affect the business sector(s) in which a company competes.
15-3. 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.
According to Christensen, executives are so committed to a current, profitable technology
that they fail to provide adequate investment in new, riskier technologies. Companies
Christensen’s five principles of disruptive innovation include:
Companies depend on customers and investors for resources. The best innovations
15-4. What is the Long Tail? What implications does this have for market segmentation?
“One of the most interesting aspects of the digital revolution has been noted by Chris
Anderson, the editor of Wired magazine and author of The Long Tail. The book’s title
and demand in our culture start to disappear and everything becomes available to
everyone.” Anderson notes that “below-the–radar” products—for example, obscure
Assuming you “buy into” this theory, the implications for market segmentation are quite
15-5. 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?
As a result of the digital revolution, a new generation of products, services, and
technologies is being developed by a variety of companies in all parts of the world. These
A product not mentioned in the chapter is biometrics – the identification of an individual
the South launched a pay-by-fingerprint system. At the Statue of Liberty, to rent, close,
15-6. You have the option of purchasing electronic editions of many of your college textbooks. Is
this something that you are interested in doing?
Student answers will vary.
15-7. Which pricing model do you think is the best for music downloads, iTunes Store’s “pay-
per-track” or Rhapsody’s subscription service? Do you think cloud-based music services will be
successful?
technology.
CASES
Case 15-1: Africa 3.0
Overview: Investment in telecommunications and other sectors in Africa is being driven by a
variety of factors. Several demographic trends are clear. For example, nearly half the population
is under the age of 15. The World Bank reports that half the population lives on $1.25 per day.
However, according to a study by the African Development Bank, Africa’s middle class now
comprises 34 percent of the population, some 313 million people in all. The report defines
“middle class” as those who spend between $2 and $20 per day. A narrower definition would
include the 120 million. Demand from this emerging middle class has been a boon to
telecommunications’ companies.
One of the biggest African success stories involves Celtel International, a telecom created by
Sudanese businessman Mo Ibrahim. In 2005, Mr. Ibraham sold the company to Zain, based in
Kuwait, for $3.4 billion. In 2010, India’s Bharti Airtel paid $10.7 billion for Zain’s African
assets. Zain had operations in 15 African countries, including Malawi, Chad, and Zambia. The
acquisition makes Bharti the world’s largest mobile provider—165 million subscribers in all—
with operations only in emerging markets.
Not surprisingly, the market opportunity is also attracting investment from other global telecom
operators. Arguably the biggest mobile innovation in Africa is M-Pesa (M for“mobile”; pesa is
Swahili for money”). M-Pesa is a mobile phone– based money transfer service developed by
Safaricom Kenya and Vodaphone, with backing from Britain’s Department for International
Development. Today, however, banks can work with shopkeepers and bar owners who dispense
or collect cash and then credit or debit a customer’s mobile phone account. The target market is
the “unbanked”; that is, people who do not have bank accounts.
Discussion Questions
15-8. The United States and Latin America have been far slower than countries in Africa and
Europe in adopting mobile payments technology. Why is this the case?
Student answers will vary.
15-9. Further economic liberalization in Africa depends, in part, on government leaders
overcoming suspicions that foreign companies want to exploit Africa. How quickly is this likely
to happen?
Not as quickly as one would expect it to develop – unless current leaders decided to
change their focus from their individual comforts to their country’s needs. The
15-10. If marketers “think local and act local,” what are some of the new products and services
that are likely to emerge from Africa in the next few years?
Student’s can and should mention a wide variety of products and services from their
own experiences and lifestyles. Everything from running water, electricity,