Virtual Reality (VR) is a computer generated simulation that replaces or augments the real world by various media. Virtual Reality environment aims to provide participants a perception of “presence”, that can be described by two aspects: immersion and intuitive interaction. Based on this concept, all kinds of technologies in the VR field are developing rapidly.
Virtual reality is an artificial environment that is created with software and presented to the user in a way that the user suspends belief and accepts it as if a real environment. On a computer, VR is primarily experienced through two of the five senses: sight and sound.
Collaborative virtual reality (CVR) supports interaction among multiple participants, and remote CVR can be implemented based on telepresence. Augmented reality (AR) superimposes computer-generated objects into the real world. Although the history of VR is only about half a century old, its benefits have been extended to various application areas, such as simulators for aircraft cockpits and vehicles, movement analysis for sports and rehabilitation, scene representation for archaeological sites and museums, skill training for surgery operation and engineering repair, data visualization for scientific research and industry design, as well as entertainment.
The simplest form of virtual reality is 3-D image that can be explored interactively at a personal computer, usually via manipulating keys or the mouse so that the content of the image moves in a direction or zooms in or out. More sophisticated efforts involve such approaches such as wrap-around display screens, actual rooms augmented with wearable computers, and haptics devices which let you feel the display images. Rapid technological development and lower production costs have recently made VR commercially available, and since sales are climbing, content creators are starting to take notice of this new medium.
VR headsets are making remote experiences possible with inexpensive and available technology, and the applications of VR are huge. Due to the versatility and variability of the technology, VR has the potential to disrupt various industries, such as video games, live events, real estate, retail, education, healthcare and the military. Imagine surgeons perfecting a difficult procedure in VR before operating on real patients, going to virtual open houses when looking to buy a new house, or being able to experience a travel destination before even deciding to go there. In these applications, VR allows us to reduce uncertainty to an extent, one of the technology’s major strengths. When we are not confined to the 2-D limitations of photos or regular video, we are able to get more information that can be used to make better choices.
The development and adoption of VR technology is burgeoning quickly, and shipments are expected to reach 12.2 million units in 2017, increasing to 55.8 million units by 2022 (Smith, 2016). According to estimates and forecasts conducted by Goldman Sachs (2016), they expect the market of VR to reach $60 billion only in revenue by 2025. The same report covers nine markets they expect to be disrupted by the technology in the same time frame. Hence, it seems very obvious that VR will play a major role in several industries in the upcoming coming years.
The main reason why VR is gaining popularity and success, is also because of smartphone-powered head mounted displays (HMD) which have been introduced to the mass market. A very rapid development in the mobile technology has made it possible for consumer level smartphones to power VR HMDs. Also, the recent technological advancements in VR have enabled HMDs to render immersive virtual environments without even inducing motion sickness. As Virtual Reality is becoming more accessible and the user experience improves, great opportunities arise for companies to use VR to communicate with consumers in a much more effective, immersive and personal ways. However, there is a very little knowledge on how best to take advantage of this new communication channel in order to use it for marketing purposes.
The Emergence of Virtual Reality:
The concept of virtual reality was introduced in the late 19th and in the 20th centuries. In that time, participants stay in a room with screens all around them and the films were played on all the screens. With this method, participants could have an experience that was similar to the virtual reality environment these days. The term virtual reality was defined by Lanier in the 1987, whose research and work greatly contributed to the development of VR industry (Lowood, 2017). VR was originally used only for the military purposes during the 1950s and 1960s. According to Lowood (2017), the U.S. Navy and the U.S. Air Force respectively funded various projects in radar warnings. With the development and a series of new theories about computer technology, VR became more and more related to human life. At first, the U.S. Air Force applied this technology into their military training. With the virtual environment becoming more advanced, people began applying it to the entertainment arena. Different devices were designed for films, theme parks, video games and other entertaining activities. Virtual reality has a great potential in many aspects. It has been used in treating psychological diseases, like phobia. Ryan (2001) also indicates in an article the potential of virtual reality in education, design, medicine and in business field as well.
Picture 1: Virtual Reality (StartUX 2017)
“Augmented reality is a technology that superimposes virtual objects in the real world
and in real-time, enhancing our information about the world around us” (Augment 2016). AR is mostly used on mobile device applications to enrich the real world experience by blending digital components into it, but still having them easily be told different.
It looks like AR will be the main driver of the global AR and VR market, as it is one of the hottest technology developments in the telecom industry and most people already own it. The latest smartphones are coming out with even more advanced technical abilities to be even more compatible with AR applications, and big companies like Facebook, Microsoft and Apple have invested in their AR development. With the help of AR, users will also have awareness and control of Internet of Things (IoT) devices in smart homes and offices for instance.
People are already using their cell phones as a handy tool for almost everything. AR will make it better and faster. Imagine instantly translating unknown language to the native language by just showing the text to your phone. Or when you are out shopping, you could get some extra information about products by showing the product tag to your phone for instance. Also, you could be trying out clothes and various accessories with AR in your own home, instead of actually going to the store.
Right now, there’re still a few technical issues coming in the way of mass market adoption. One of them would be current battery technology. AR requires a hefty amount of battery power to render digital elements in real time and empower the camera. Secondly, publishers and marketers are yet to come up with a way to monetize AR applications without annoying the users and ruining their experience with advertisements, as they are probably less tolerated in an immersive mixed reality world. (Venturebeat 2018).
The hardwares needed for AR are a processor, display, sensors and input devices, that can all be found on modern smartphones and the tablets. They also tend to have a camera, an accelerometer, a GPS and solid state compass, that makes these mobile computing devices very suitable AR platforms. (Wikipedia 2017a).
Picture 2: Augmented Reality (StartUX 2017)
Picture:3 Seamless Augmented Reality Product Visualization (Augment 2017)
Most of the people think marketing refers to sellers promoting companies’ products and services to customers by using techniques, so that companies can make profit out of it. However, many previous studies have indicated that the definition of marketing is quite broad (Lee, 2013). According to Hibbard (2017), marketing is a series of activities involved in redirecting the flow of goods and services from producers to consumers. Lee (2013) indicates in her article “Marketing can be more broadly understood as the communication channel linking a product or a service to the targeted customers (or patrons)” (p.169). The purpose of business is not only making profits, but “to create and keep customers” (Tracy, 2014). Tracy also points out making profits is the consequence of attracting customers’ interests, create customers and keep their interest on companies’ products and services.
It is quite common that people think marketing is just about advertising, promoting and selling goods and services. But this kind of view is somehow incorrect. The whole marketing activities includes the process both before and after sales activities too, such as analysing various market and scenarios, identifying the marketing segment and also customer service.
The Birth of Marketing:
The concept of marketing originated in U.S. in the late 19th and in the 20th century. At first, marketing focused only on gathering information about market and analysing this data. People still regarded it as a part of selling. Marketing only existed in universities. With the development of technology, the existence of mass media, and the growth of economics, the function of marketing became more and more important. Companies in America began to apply marketing to their sales and operations, which meant marketing was not just a course in American universities any longer but it had raised and attracted interest of the whole industry. Also, at the same time, marketing still had its limitations and just focused on the field of physical products, and researched how to make promotion and advertisements.
Traditional Marketing Theory:
The period from the birth of marketing to when marketing raised public interest is called the period of traditional marketing theory. During this period, people thought marketing began after the production process and was finished when products were delivered to consumers. The marketing strategies were producer-orientated and the aim of these strategies was to make profits.
After 1950s, traditional marketing began to change and transition to consumer- orientated marketing and the concept of marketing expanded to the whole new process, including analysing the market, identifying the consumers’ needs, making new marketing strategies, delivering finished products and customer services. In 1960s, marketing became an independent science combined with management theories, also psychological theories and etc.
In order to conduct a successful marketing campaign, marketers need to understand customers’ needs and grasp the market environment first, so that companies have to conduct marketing investigations and research by using various kinds of methods such as interviews and questionnaires. Then companies will make marketing strategies according to the data. There were many different kinds of methods, such as the 4Ps theory (product, price, promote and place), proposed by Jerome McCarthy in 1960 and spread by Phillip Kotler and the others. Nowadays, the 4Ps theory has been widely accepted and used (Constantinides, 2006). After sales process, companies still need to pay attention to consumers’ feedback in order to retain them.