EXTERNALFACTORSTHATAFFECTPLANNING 113ward.Consequently, consumersareunableorreluctanttopurchaseproducts, particularly
big-ticketitems.Also,consumerstendto delayreplacementpurchases. Althoughmanymar-
ketersfailduringthisperiod, insightfulmarketerscangainmarketshare.
Recove~y Recoveryis a complicatedeconomicpattern, inthatsomeeconomicindi-
catorsincreasewhileothersmaystayloworevendecrease. Muchofwhathappensduring
a recoverymaybea resultof intangibles, suchasconsu~erconfidenceortheperception
ofbusinessesthatthingswillgetbetter. Tentativemarketerstakeseriousrisks.Premature
marketersmayfacedireconsequences.
Formarketers,animportanttaskistoattempttodeterminehowquicklytheecon-
omywillmoveintoa situationofprosperity.Improperforecastingcanleadsomefirmsto
overextendthemselves,asconsumersmaybeslowtochangepurchasehabitstheyhavebeen
accustomedtointhemoredifficulteconomictimes.
~hc;economyis cyclicalinnature.'Neknowthatthecycleswilloccur.Wejust can-
notpredictexactlywhen,orhowseverethecycleswillbe.Assumptionsmustbemadeabout
money,people,andresou,ces.Forexample,manyorganizationsbecomelessaggressive
whentheybelievetheeconomyisnotgoingto grow.Iftheyareright,theymaydowell.
Butif theyarewrong, thoseorganizationsthataremoreaggressivecanperformverywell-
oftenat theexpenseoftheconservativeorganizations.Assumptionsmustalsobemadeabout
sucheconomicfactorsasinterestrates,inflation,thenatureandsizeoftheworkforce,and
theavailabilityofresourcessuchasenergyandrawmaterials.
Technology
Isthecarofthefuturetheelectriccar?They'recalledzero-emissionvehiclesbytheiradvo-
cates, buttheydonothavezeroemissionsaccordlngtosomeexperts.Whileanelectriccar
doesnotemitexhau~t,thetechnologyrequiredtochargetheirbatteriesdoes,accordingto
theEnvironmentalProtectionAgency.6Criticsarguethatthemoreelectriccarsthataredriven,
themorepollutionfromsmokestacksattheplantsthatprovidetheelectricpower.Youare
familiarwiththecomplaintsaboutgas-drivenautomobiles,but,iftheelectric-poweredauto
isnodifferentintermsofitsimpactontheenv:ronment,thantherecouldbesomeinter-
estingbattlesaheadbetweenproponentsoftheelectriccarandenvironmentalgroups.In
fact,someautoindustryexecutivesfelttha[theEPAreportdidnotgofarenoughindis-
creditingtheelectriccar.
Technologyistheknowledgeofhowtoaccomplish::asksandgoals.Technologyaffects
marketersinseveralways.First,aggressivelyadvancingtechnologyis spawningnewprod-
uctsandprocessesat anacceleratingratethatthreatensalmosteveryexistingproduct.Sec-
ond,competitioncontinuestointensifyfrombroadandneworganizationsandmanysubstitute
technologiescompetewithestablishedproducts.Third,productinnovationsthatresultin
superiorperformanceorcostadvantagesarethebestmeansofprotectingorbuildingmar-
ketpositionwithoutsacrificingprofitmargins.Thisis especiallytrueintoday'sworld,when
manymarketsareexperiencingflatorslowgrowthandexcesscapacityis commonplace.
Historyprovidesmany examplesofcompanies thathave losttheircompetitive
advantage- andperhapseventheirentirebusiness-becausea competitorcameintothe
marketwitha productthathadsuperiorcostadvantageorperformancecharacteristics.These
examplesarenotlimitedtosmallorweakcompanies;evenindustrialgiantslikeIBM,Gen-
eralElectric,andAT&Thaveseencertainpartsoftheirmarketserodedbycompetitionthat
surprisedthemwitha distinctlysuperiorproduct.IBM. despiteitsdominantpositioninthe