CONSUMER BEHAVIOR

Latest Study Shows High Gas Prices Affecting Consumer Shopping Behavior
Consumers Alter New Vehicle-Buying Decisions, Shop and Eat Out Less Often Due to High Gas Prices With gas prices reaching their highest level in recent history, $3.10 a gallon for regular unleaded, a majority of consumers plan to take steps to combat the hit to their wallets. According to the latest Kelley Blue Book Marketing Research study on gas price effects, half of new vehicle shoppers plan to purchase less retail items such as clothes and shoes, more than a third plan to eat out less often, and another third plan to buy less media entertainment items as long as gas prices continue to squeeze their wallets. Luxuries like a night out on the town, music sales, as well as movie ticket sales could all experience declines through the summer when gas prices are expected to top $4 a gallon. When it comes to shopping for their next new vehicle, nearly six out of 10 new-vehicle shoppers (59 percent) say that the upward trend in gas prices has either changed their mind about the vehicle they are considering buying or are strongly considering the purchase of a vehicle they normally would not have considered With the quick rise in gas prices and expectations for even higher prices heading into the summer, only a small few are not yet fazed, while others plan to do more research before they buy a new vehicle. Twenty-seven percent of in-market new-vehicle shoppers said that current gas prices are having little or no effect on the vehicle they are planning to purchase. Fourteen percent of vehicle shoppers say higher prices did not have an effect on their decisions because they were already planning to buy a fuelefficient vehicle. Forty-one percent of those participating in the survey say that if gas prices rise an additional 25 cents above current levels, they too will start researching vehicles they would not normally have considered. "These results make it clear that American consumers are more than willing to make changes in their buying decisions due to rising gas prices," said Jack R. Nerad, executive editorial director and executive market analyst at Kelley Blue Book. "This will have negative implications for the domestic manufacturers as they are perceived as building low mileage vehicles and will therefore be an issue the new ownership of Chrysler will have to deal with immediately to assist in the turn-around of that company." SOURCE: http://mediaroom.kbb.com/index.php?s=43&item=64 AUTHOR: Kelley Blue Book (kbb.com) DATE RETRIEVED: 06-11-12

LATEST TECHNOLOGICAL IMPLICATIOS AND DEVELOPMENT Targeting innovation and implications for capability development Abstract Innovation is often described in terms of changes in what a firm offers the world (product/service innovation) and the ways it creates and delivers those offerings (process innovation). Arguably this definition is insufficient since it does not take into account two other areas where innovation is possiblemarket position and business models. Market position relates to the situation where an established product/service produced by an established process is introduced to a new context; here the innovation management challenge is concerned with issues like adoption behaviour and technology transfer. Business model innovation relates to the situation in which a reframing of the current product/service, process and market context results in seeing new challenges and opportunities and letting go of others. Each of these poses challenges for the ways in which innovation is organised and managedwhat we term innovation management capability. The paper explores some of these challenges and also looks at the additional issues raised by discontinuous innovation, moving beyond the steady state conditions of doing what we do but better to a new set of conditions in which doing different things in different ways becomes the norm. SOURCE: http://www.sciencedirect.com/science/article/pii/S0166497204000525 AUTHOR: Dave Francis, John Bessant DATE RETRIEVED: 06-11-12

E-Business and Export Behavior: Evidence from Indian Firms Abstract The paper identifies and analyzes the factors that have influenced the export performance of firms in the post-liberalization era of the Indian economy. Entrepreneurial characteristics, historical data of firms, and other firm-specific factors such as the size of operation, export intensity, technological collaboration, wage rates, and profit margins, were included in the analysis. The findings of the study suggest that the performance of firms in international markets has been better for those that have adopted more advanced e-business tools. The size of operations and the skill intensity of a firms workforce also play an important role in its export performance. SOURCE: http://www.sciencedirect.com/science/article/pii/S0305750X03002390 AUTHOR: K. Lal, UNUINTECH, Maastricht, The Netherlands DATE RETRIEVED: 06-11-12

The Impact of Investment in IT on Economic Performance Implications for Developing Countries Summary We review quantitative and qualitative research on the impact of IT on economic performance in developed and developing countries. In general, studies from the developed world have yielded evidence of a strong positive correlation between IT and economic performance, as well as IT-induced changes in workforce composition in favor of highly skilled or educated workers and organizational changes that allow firms to implement IT more effectively. To maximize social returns to IT investment, policymakers in developing countries must address two key deficiencies: (1) a lack of knowledge of best practices in IT usage and (2) IT-related skill deficiencies in the workforce.

SOURCE: http://www.sciencedirect.com/science/article/pii/S0305750X05000094 AUTHORS: Rouben Indjikian UNCTAD, Geneva, Switzerland, Donald S. Siegel Rensselaer Polytechnic Institute, Troy, NY, USA DATE RETRIEVED: 06-11-12