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Purchasing power to the people 
The times they are a-changin’ – and to the benefit of consumers. New communication tools have increased consumers’ purchasing power and forced companies to rethink their business models.

Michael Goodman, director of digital entertainment at research and consulting firm Yankee Group, refers to the change as the birth of the "anywhere consumer." "People today have access to information, services and entertainment at all times," he says. "You therefore need to understand your customers fully before you start to deliver services to them."

Goodman says some companies have historically behaved like "imperialists," trying to lock their customers into buying only their services or products. "That has been successful in the past, but in the future, consumers expect to be able to leave a service without financial penalty, which will speed up market corrections and increase competition."

The telecom industry is likely to benefit from increased usage of networks and devices as people use mobile devices to do more. "There is great potential for those who provide the best offerings," Goodman says. "But better information attracts customers to companies with the best offerings ever more quickly, so only the companies with the best business models are likely to be successful."

By "imperialistic" firms, Goodman means those who tend not to realize their products' limitations and who do not like change. "The recording industry is a perfect example. A CD is a bundle of songs from one artist that is not specifically chosen by the consumer. As most people generally like only a few songs on an album, it is not a perfectly packaged product and is therefore out-competed by digital downloads."

Single-song downloading such as that offered through Ericsson's Napster Mobile service is a good example of packaging a service with the consumer in mind. Daniel Staub, head of product marketing at Swisscom Mobile, says he is amazed by the endless variety of music offered by the Napster Mobile service. "Its 3-million-track-strong music offering contains everything from international smash hits to hard-to-find local tunes," he says.

That is three times as much music as in the world's largest music store - and yet another reason for consumers to abandon the record shops.

So how should companies behave in order to be successful in the future marketplace? They have to embrace change, Goodman says. "You have to see the possibilities that come with change because change is happening all the time."

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