Marketing in Customer Technology

Environments

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Marketing in CustomerTechnology Environments:Prospective Customers andMagical Worlds

DEVANATHAN SUDHARSHANUniversity of Kentucky, USA

United Kingdom – North America – Japan – India – Malaysia – China

Emerald Publishing LimitedHoward House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2020

Copyright © 2020 Emerald Publishing Limited

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British Library Cataloguing in Publication DataA catalogue record for this book is available from the British Library

ISBN: 978-1-83909-601-3 (Print)ISBN: 978-1-83909-600-6 (Online)ISBN: 978-1-83909-602-0 (Epub)

Table of Contents

List of Figures vii

Preface/Acknowledgments/Dedication xi

Chapter 1 Introduction 1

Chapter 2 Customer Information Processing and Decision-making in CTEs 17

Chapter 3 Wonderment and Magic 49

Chapter 4 Virtual Reality (VR) 79

Chapter 5 Augmented Reality 97

Chapter 6 Mixed Reality 141

Chapter 7 Internet of Everything (IoE) 161

Chapter 8 Enabling Technologies 209

Chapter 9 Conclusion for the Magical Worlds in WhichCustomers Will Lead Artinatural Lives 249

Index 253

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List of Figures

Exhibit 1.1 Virtuality Continuum of Environments. 3Exhibit 1.2 Devices Placed on Virtuality Spectrum. 3Exhibit 1.3 Experiences on Virtuality Spectrum. 3Exhibit 1.4 Sketch of Customer Technology Environment

(CTE)–Customer Interaction. 5Exhibit 1.5 Abstraction of Marketing Management. 6Exhibit 1.6 Sketch of CTE–Customer Interaction Process. 8Exhibit 1.7 System–Customer–Social Processes. 11Exhibit 1.8 Everett Rogers’ Characteristics of Innovations

that Impact their Adoption. 12Exhibit 2.1 Adapted Homo Prospectus Model. 22Exhibit 2.2 Cognitive Appraisal Models. 23Exhibit 2.3 OCC Model. 29Exhibit 2.4 Circumplex PANA Model of Emotions. 29Exhibit 2.5 Emotions Resulting from Value Comparisons. 31Exhibit 2.6 Belief–Goals–Expectations–Actions Process

(Appraisal Not Emotion Process). 32Exhibit 2.7 Dynamic LTM. 35Exhibit 2.8 Imagination, Prospection, Originality, Creativity,

and Innovation as Nested Terms. 36Exhibit 2.9 Normal Reality. 38Exhibit 2.10 Normal Reality. 38Exhibit 2.11 Virtual Reality. 39Exhibit 2.12 Augmented Reality. 39Exhibit 2.13 Mixed Reality. 39Exhibit 2.14 Affordance Formation and Appraisal. 40Exhibit 3.1 Four Elements of Magic. 53Exhibit 3.2 Schematic Description of Bruno’s (1978)

Taxonomy. 56

Exhibit 3.3 Schematic Diagram of Sharpe’s (1988)Taxonomy. 57

Exhibit 3.4 Schematic Diagram of Lamont and Wiseman’s(1999) Taxonomy. 57

Exhibit 3.5 Schematic Diagram of the Physiologically basedTaxonomy, Showing Its Highest Levels. 58

Exhibit 3.6 Schematic Diagram of the AttentionalMisdirection. 59

Exhibit 3.7 Schematic Diagram of NonattentionalMisdirection. 59

Exhibit 3.8 Schematic Diagram of Memory Misdirection. 59Exhibit 3.9 Schematic Diagram of Memory Misdirection. 60Exhibit 3.10 2018 Best Illusion of the Year Contest First Place

Winner Kokichi Sugihara’s Entry, “TriplyAmbiguous Object.” 61

Exhibit 3.11 Method–Effect Sequences. 66Exhibit 3.12 Classification of the Effects of Magic based on

Nature of Transition and of End State. 67Exhibit 3.13 Wonder as the End State of the Gap between a

Sequence of Effects and Beliefs. 69Exhibit 3.14 Integrative Model of Magic. 70Exhibit 3.15 New Magic Design Flow. 71Exhibit 3.16 Magic Innovation. 71Exhibit 4.1 Global Size of VR Market. 81Exhibit 4.2 Interactivity and Immersion along a Dimension

from Low to High with Example Technologies. 84Exhibit 4.3 VR Technology Layers. 89Exhibit 4.4 Checklist for Identifying Potential VR

Applications. 93Exhibit 5.1 Global AR Market Forecast. 98Exhibit 5.2 Market Predictions of AR Adoptions

NewGenApps/Blog. 98Exhibit 5.3 Forecast Shipment of Smart AR Glasses. 99Exhibit 5.4 Morton Heilig’s Telesphere Mask, Patented in

1960. 100Exhibit 5.5 Coexistence of 2G, 3G, and 4G: 5G to Ramp up

Similar to 4G. 102Exhibit 5.6 An Early Version of Map-based AR. 106Exhibit 5.7 Example of a Marker on Packaging. 106

viii List of Figures

Exhibit 5.8 Examples of Markers from Vuforia’s VuMark. 107Exhibit 5.9 Multisensory AR. (a) Pompeii Multisensory

Space with Multitouch Video, Audio, Smell,Wind, and Lights at Helsinki Airport.(b) Vibrotactile Sensation Using a Bracelet. 107

Exhibit 5.10 An Early Version of Markerless or Mobile AR. 109Exhibit 5.11 Example of Projection-based AR. 109Exhibit 5.12 Example of Superposition-based AR. 110Exhibit 5.13 Example of Superposition-based AR in

Neurosurgery. 110Exhibit 5.14 Examples of Holographic Projection. 111Exhibit 5.15 Process of Augmented Reality in Mobile

Application Using Vuforia. 113Exhibit 5.16 Isolated Level, Social Level, and Live Level

Architectures. 114Exhibit 5.17 Adding a Host. 118Exhibit 5.18 Fnac in Situ Placement Example. 118Exhibit 5.19 Ecosystem of Mobile AR Segments. 125Exhibit 5.20 A Version of the Virtual Recreation of Schipor

and Vatavu’s (2018, p. 78) Physical Space. 132Exhibit 6.1 Demonstration of ThirdEye’s Mixed Reality

Glasses at Verizon’s 5G Lab in New York City-First Responder View from Drone. 142

Exhibit 6.2 Demonstration of ThirdEye’s Mixed RealityGlasses at Verizon’s 5G Lab in New York City-Auto Repair. 142

Exhibit 6.3 High-level Comparison of VR, AR, and MR. 144Exhibit 6.4 Global Forecast of MR Hardware and Software

in Millions of USD. 146Exhibit 6.5 Example of an Enhanced Environment. 147Exhibit 6.6 Example of a Blended Environment. 148Exhibit 6.7 Example of an Immersive Environment App class

of TF. 149Exhibit 7.1 Growth of IoE. 162Exhibit 7.2 Expected IoT Spending and Applications. 162Exhibit 7.3 Connected Autos. 165Exhibit 7.4 IoT Technology Stacks – Microsoft. 169Exhibit 7.5 Sensors. 170Exhibit 7.6 Eight Components of IoE Platforms. 172

List of Figures ix

Exhibit 7.7 Intel IoT Connected Vending Machine. 173Exhibit 7.8 Market Size by Component. 175Exhibit 7.9 Cisco’s View of IoE. 180Exhibit 7.10 IoE Framework. 184Exhibit 7.11 Possibility → Enablement → Consequence. 186Exhibit 7.12 Structuration Elements. 192Exhibit 7.13 Strategies for Applying Structuration Theory. 194Exhibit 8.1 Needed Infrastructure Technologies. 209Exhibit 8.2 Global Mobile Traffic (ExaBytes per Month)-

Ericsson. 216Exhibit 8.3 Global Mobile Traffic Data by Region and

Device. 217Exhibit 8.4 Mobile Traffic by Usage Category 2016–2022. 217Exhibit 8.5 International Mobile Telecommunications (IMT)

in the Future. 219Exhibit 8.6 5G on a Card. 219Exhibit 8.7 First Order Benefits of 5G in Europe. 220Exhibit 8.8 5G for Europe: IMT 2020 Technical Feature

Goals. 220Exhibit 8.9 A Roadmap for SOC. 224Exhibit 8.10 Service-oriented Architecture with Multiple

Objects Tracking on a Mobile AR System. 225Exhibit 8.11 Needs by Industries for mM2M

Communications. 226Exhibit 8.12 Forces on Edge Computing Evolution. 227Exhibit 8.13 Cloud-Edge-User Connectivity. 228Exhibit 8.14 Simple Artificial Neural Network. 235

x List of Figures

Preface/Acknowledgments/Dedication

Preface

I was motivated to write this book by my own experience which, given thatthese CTEs are rather recent and are still emerging, is albeit somewhat limited.My experience with the various new forms of technology-based environmentswere magical, to say the least. I could see how my life as a customer would notbe the same again in these new technology environments and that MarketingManagers and budding Managers would benefit from a book devoted toMarketing in these new environments. I felt that readers would benefit fromknowledge regarding the new environments and the technologies whose devel-opment and deployment will help shape the diffusion and utilization of theemerging environments. In addition, I felt that the new customer environmentscalled for providing knowledge on customer behavior supplemental to what istraditionally available in books on Marketing Management. After the firstchapter that introduces the book, the next chapters intend to set the customercontext for the discussion of specific customer technology environments (CTEs)that follow.

For these early chapters, I searched for and found new perspectives on humanbehavior that would enrich the discourse that traditionally fills our customer/consumer behavior textbooks. The Homo Prospectus approach seemed to fill thatneed effectively. It incorporates a view of human decisions and actions as beingthe result of a mental preparedness to act, and in focusing on mental simulationsas mental preparation it provides a significant role for new customer technologyenvironments or CTEs. The feeling of wonderment I felt in CTEs, naturally, ledme to search for work on wonderment and to the work on it in the emerging fieldof Magic Science. Both Homo Prospectus and Magic Science play significantroles in this book. I thank the scholars who are making this knowledge availableto us.

The next chapters focus on CTEs themselves. We as customers are seeing theimpact of tremendous discoveries, innovations, and inventions in computing,communications, manufacturing, miniaturization, and other technologies. Mar-keting Managers are in the midst of managing changes brought about due to theavailability of “big data”, its analysis, and the subsequent ability to personalize/customize customer relationships and offerings. In this book, I have deliberatelychosen to focus on the emerging technology environments that customers willincreasingly have access to and use and not on big data and its analysis. Several

books are now available on the use of big data in Marketing, Ecommerce, andDigital Marketing from which the interested reader will benefit. There, however, isa gap in the book space for books on the emerging CTEs. For managers andbudding managers to be able to develop Marketing Strategies and practices forCTEs, I felt, that they needed to understand not only the CTEs but also some ofthe key enabling technologies for the CTEs. The book therefore focuses on the fourexciting CTEs that are emerging as the key CTEs, namely, Virtual Reality (VR),Mixed reality (MR), Augmented Reality (AR), and Internet of everything (IoE).The rate of development and diffusion of these CTE books will depend on speedwith which computing and communications infrastructures will embrace the fourkey enabling technologies: 5G, Edge Computing, Service-Oriented Architecture(SOA), and Artificial Intelligence (AI)/Machine Learning (ML). Therefore, thisbook also provides brief introductions to these enabling technologies.

I hope that this book will encourage Marketing Managers and students to takefull advantage of the possibilities afforded by these new CTEs and seek to servecustomers in the more fulfilling ways that the CTEs enable.

Acknowledgments/Dedication

I wish to dedicate this book to my family. I express my thanks and love to my wifeNalini who has been my constant companion in our journeys through space andtime. To my wonderful parents Rajam and Kasturi Devanathan, who not onlygave me life but also taught me to live and contribute positively to society, I offermy eternal gratitude. To our children Venkat, Amit, Sangita, Megan, and Adamwho brought a greater purpose to my life – thank you and I wish you the bestthroughout your lives. To our grandchildren who will create their own realitiesand wonderment, I wish that your lives be fulfilling and full of productive crea-tivity. I would also like to dedicate this work to the very many individuals whohave played enormous roles in my professional life. They are, to name a few: Myhigh school teachers Ms. Parvathi and Ms. Indira Jaganathan, and my classfellows at DTEA Lodhi Road, New Delhi. My Professors V.G.K. Murthy andYegyanarayanan, and my class fellows at IIT, Madras. My Professors Bill King,Jerry May, Allan Shocker, and Gerry Zaltman, and my PhD student colleagues atthe University of Pittsburgh. My Professor colleagues Ananth Negandhi, LouPondy, Jagdish Sheth, Seymour Sudman, Howard Thomas, and Rick Winter atthe University of Illinois at Urbana-Champaign. My coauthors Olivier Furrer,Ravi Kumar, Ben Liu, and R. Venkatesh, and many other wonderful colleagues. Iwish to extend a special thanks to the many executives with whom I have had theprivilege to interact with, and who have taught me so much and to my manystudents who have shared their learning journeys with me. To the many otherswho have shaped me – a big thank you and I request your forgiveness for notnaming you individually. I would be remiss if I did not thank Charlotte Maioranaat Emerald for captaining this book, as well as acknowledging the careful editingsupport provided by Emerald and Mohamed Imrankhan and his team atTNQ Technologies.

xii Preface/Acknowledgments/Dedication

In closing, I offer a brief salutation to Saraswati for bestowing upon me thebest of knowledge and learning ability; and to thank nature for allowing me tobe its imperfect scribe on the topics covered in this book. In Sanskrit the salu-tation is:

“Saraswati Mahabhage Vidye KamalalochaneVishwaroope Vishaalaakshi Vidyam dehi namosthute.”

Preface/Acknowledgments/Dedication xiii

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Chapter 1

Introduction

We ask Siri about the weather and ask Alexa to order us clothes, diapers, andgaram masala. We can monitor and control access to our homes from milesaway. We can dissect a human form without dissecting a cadaver. We can flyaround Mt. Everest and feel the cold and walk on Antarctica ensconced inelectromechanical gear. Soon, we can touch each other even though we aremiles apart. Our imagination will be kindled. Imagine tomorrow. Willtomorrow feel magical, I wonder? Will reality tomorrow’s experience be realish,I wonder?

For marketing managers, it is a fact that major technological innovations arechanging the way we can serve our customers better. The technologies ofinterconnectivity, computation, sensors, mobile or wireless connectivity, machinelearning, vivid virtual representations, and hardware interfaces are advancingrapidly. These advances require us to rethink how we can compete in this newenvironment and serve customers better. The information, communications, andcomputational technologies that are advancing so rapidly have four major newrelevant 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 technol-ogy environments exist together as well as with existing environments (such asecommerce, TV, print) and will work together in many instances. By someestimates the global VR and AR markets together are estimated to grow to beover $200 billion by 2022 (www.Statista, 591181). The global spending on IoE isestimated to grow to over $440 billion (Market Watch, 2018, Statista, 688762)by 2022.

Humility requires us to admit that technological change may createdifferent CTEs that may dominate the marketing/customer landscape. How-ever, for the CTEs that are covered in this book the technology landscape willbe one of massive machine to machine (mM2M) interconnections. mM2Mconnectivity requires us also to consider the underlying infrastructure orenabling communications and computing technologies. We expect there to befew applications that are self-contained such as single-person games or

Marketing in Customer Technology Environments, 1–16Copyright © 2020 Emerald Publishing LimitedAll rights of reproduction in any form reserveddoi:10.1108/978-1-83909-600-620201002

dedicated maintenance apps and not needing real-time connectivity. Towardthe end of providing readers with an overview of enabling technologies thatwill be necessary in mM2M applications, we have included a discussion of 5Gcommunications technologies that will be required to provide ultrafast con-nectivity; service-oriented architecture (SOA) to provide interoperability acrosstechnology platforms/systems/machines; edge computing to provide thedistributed computing required for mM2M environments; and artificial intel-ligence (AI) to provide the rapid insights and analysis required.

This book is written to provide readers with knowledge to approach theseCTEs with confidence. To that end, the book provides overviews of each of thetechnology environments, describes customer models that are particularlyrelevant for these environments, and discusses the impact of these technologyenvironments for marketing management. As mentioned earlier, a descriptionis also provided of the enabling technologies that will make the upcomingmagical words emerge from the laws of Maxwell and nature’s propagation ofwaves.

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

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

AR CTEAugmented reality is an environment in which computer-generated entities aresuperimposed on real worlds.

MR CTEMixed reality refers to environments in which virtual entities are superimposed onreal 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 betweenpurely (or wholly) virtual and purely (or wholly) real worlds. They termed thecontinuum a “virtuality continuum.” They termed all environments in betweenthe two ends as mixed reality environments. Environments that in more recent useare termed AR and MR are included in what Milgram and Kishino would callMR. It is also to be noted that, in their view, there could be a fourth environmentcalled augmented virtuality (AV) in which real entities are superimposed on vir-tual worlds.

2 Marketing in Customer Technology Environments

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

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

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

(2018), Microsoft.

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

(2018).

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

Introduction 3

A number of companies, such as Vespa scooters, IKEA, Marriott, andGiraffe360, are using AR/VR as part of their marketing strategies. A numberof 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 virtualitycontinuum.

IoE CTEWhen entities have at least minimal sensing and communication capabilities andare connected to a network of other such entities, they form an Internet ofEverything. More typically each such entity will have a URL (uniform resourcelocator) or addressable and unique address, be connected to a network of othersuch entities, the network will itself have significant communication managementcapabilities, be connected to a big data storage system (perhaps in a cloud), andalso be connected to big data analytics capabilities. Entities as a part of an IoEmay range from those with minimal sensing and low power sending and receivingcapabilities to those that have complex computing and very powerful commu-nication (transmission and reception) capabilities.

One of the big differences between IoE and other CTEs is that a customerdoes not actively take part in it. For example, a startup Sidekick has developedAI that can learn about the individual using their own personal data. Havingdone so, by Summer 2021 the (AI) entity can help the individual make dailydecisions. It runs on an individual’s mobile phone. It can be connected to an IoEand can execute decisions on behalf of the individual on the IoE without theindividual having to be present (https://sidekick.ai/). The capabilities plannedfor 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 openplatform.

Spring 2020

Your AI can talk and share your knowledge with millions ofpeople.

Summer 2021

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

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

4 Marketing in Customer Technology Environments

To set the stage for the rest of the book, we introduce two abstractions. Thefirst is an abstraction of the CTE–customer interaction and the second is anabstraction 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.

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

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

Setting the Stage 2: Abstraction of Marketing Management

To provide more details of what the CTE–customer interaction processes are weneed to have a common understanding of marketing in the new environments.Exhibit 1.5 presents such an understanding. In our understanding, marketingmanagers are viewed as making decisions that are guided and constrained by theirfirms’ mission, values, strategy, goals, and resources. The decisions cover a

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

Introduction 5

planning horizon which may in turn be broken into shorter action periods. Forexample, 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 expectthe firm to wish to survive and thrive even beyond that period. Our abstraction,based on our understanding, consists of four parts: objectives, tasks, learningneeds, and key known heuristics.

ObjectivesFor a planning horizon, marketing managers maximize profits (or revenues astheir firm’s goals may be) and/or return on resources [return on assets (ROA), orreturn on investment (ROI)] by presenting customers with a portfolio that consistsof relationships and offerings at appropriate times.

TasksOfferings 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 amicrolevel within every interactive session with a customer as well as over theentire planning horizon. Such adaptations are based on learning customerinformation such as preferences, beliefs, expectations, goals, and appraisals. Inorder to present a customer with an appropriate portfolio, the firm needs to beable to anticipate the portfolios that may be needed in as much as these portfoliosrequire arrangements for supply chains, manufacturing, production of what isvalued (including what are commonly referred to as services), or other infra-structure requirements. The firm, therefore, needs to have developed a universalportfolio of offerings from which it can present a subset to each customer duringany given interaction, and perhaps, the subset can be modified by choosing adifferent one from the universal portfolio even during a session.

Exhibit 1.5. Abstraction of Marketing Management.

6 Marketing in Customer Technology Environments

Learning NeedsThe selection of the subsets to present is made based on the likelihood of thesubset being chosen, the likelihood that the chosen subset will lead to a positiveappraisal and experience, and that the customer’s business will be profitable forthe firm over the time horizon. On this last point, firms may differ from somerequiring that every session that concludes with a transaction end with directprofit being achieved, versus others who may choose that profits from a customerare calculated over a planning horizon or some part thereof. The firm also needsto have knowledge of customer preferences for timing of interaction.

Key HeuristicsMarketing managers use knowledge developed in the discipline over decades. Thekey heuristics that drive their strategic approach are four in number.

The first is that while customers are unique, there is enough similarity betweentheir preferences that they can be grouped for the purposes of developing andupdating universal portfolios of offerings. Customers who share similar prefer-ences are collectively referred to as a segment. A key assumption is that of limitedresources and therefore of choices having to be made on the universal portfoliothat a firm can present and serve successfully.

The second key heuristic is that firms prioritize customers in terms of theirlifetime value (over the planning horizon) in their universal portfolio developmentand in developing relationships with them. Again, such a prioritization is neededonly because of resource constraints. The ability to estimate the lifetime value ofcustomers requires that the firm has knowledge of customers in terms of theirprobabilities of choice of different offering sets, their likely satisfaction with theirchoice. The firm should also know the likely profit (ROA/ROI) from such choices.

The third heuristic is that customers will only transact with a firm from whichthey expect to get a positive experience. Such expectations can be based on pastpersonal experience or learned from others. Therefore, profitability over a plan-ning horizon from a customer depends on an ongoing set of positive experienceswith the firm and its offerings.

The fourth key heuristic is that the times at which a customer will needinteractions and make choices will vary from customer to customer. While theremay be some common general time preferences in a segment or group of seg-ments, such as gift buying during holidays (which may vary from country tocountry, Christmas, Deepavali, Lunar New Year, Hanukah, etc.), the specifictime of interaction will vary across customers.

The two abstractions, one of CTEs and the other of marketing management,allow us to sketch out a CTE–customer interaction process that will furtherinform marketing management in the world of CTEs.

CTE/CIMS–Customer Interaction ProcessThe interaction between a customer and a CTE is sketched out in Exhibit1.6. The sketch sets out in a little bit more detail what marketing activities a

Introduction 7

CTE will engage in as well as the customer decision process during aninteraction. Any session is likely to involve many actions on behalf of thefirm as well as much information processing and decision-making by thecustomer.

The interface between the firm as represented by a CTE and a customer iscalled CIMS, for customer interface and monitoring setup. As the name suggests,CIMS consists of two parts. First, CIMS acts as the mechanism by which a CTEand a customer exchange information. Any physical transfer of material (say agood or currency) is expected to be carried out by other means. Money, orfinancial consideration, may be exchanged within a CTE. A financial transactionis also considered as exchange of information. The exchanged information beingwhat needs to be transferred, by whom to whom, when, and in what currency,and, that a transfer has taken place, when it occurred, and other transfer details.Second, CIMS acts as a monitoring system. It is the mechanism by which a CTEmonitors information regarding the customer. It is, therefore, critical to the firm’sability to learn, adapt, and optimize its relationship with the customer over therelevant planning horizon. A CIMS may use sensor on entities that come intocontact with or are used by a customer, such as sensors on smart light bulbs in thecontext of an IoT or IoE. It should also be noted that a CTE may be connected toan environmental monitoring setup (EMS) which monitors the broader envi-ronment beyond a customer.

Based on our abstraction of CTEs and marketing management the roleswithin a CTE are (1) knowledge management, (2) negotiator, (3) problemsolver, (4) focal relationship manager, and (5) social relationship manager.While these are distinct roles, for an effective and efficient management

Exhibit 1.6. Sketch of CTE–Customer Interaction Process.

8 Marketing in Customer Technology Environments