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Marketing High Technology

Marketing High Technology. Chapter 12. Characteristics of High-Tech Markets. Market Uncertainty Technological Uncertainty Highly competitive Market Know-how, Complexity, and Velocity Effects Integrating R&D with marketing Managing Strategic Alliances

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Marketing High Technology

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  1. Marketing High Technology Chapter 12

  2. Characteristics of High-Tech Markets • Market Uncertainty • Technological Uncertainty • Highly competitive Market • Know-how, Complexity, and Velocity Effects • Integrating R&D with marketing • Managing Strategic Alliances • Promotion to Alleviate Customer Uncertainty

  3. Crossing the Chasm Tornadoes and High Growth

  4. The Technology Adoption-Diffusion Cycle Bowling Alley Main street

  5. Characteristics of A-D Segments

  6. Cracks in the Adoption Cycle Tech enthusiasts Visionaries Pragmatists Conservatives Skeptics

  7. Differing Goals in the Chasm • Early adopters looking for change agents. • Early majority looking for a productivity improvement • So, early adopters not good reference points for early majority customers

  8. Technology Languishing in the Chasm • DSL • IP telephony and videoconferencing • Voice processing for dictation • Electronic books • Interoperability with television • GPS

  9. The Case of Artificial Intelligence • 1980s: brains in a box • Intellicorp, Symbolics - pioneers • Customer list from Fortune 100 – early adopters • Today: languishing in the chasm • Lack of support for mainstream hardware • Didn’t integrate into legacy systems • Few people who could implement it • Hidden in terms like object-oriented programming and expert systems

  10. Successfully Negotiating the Chasm

  11. Moore’s Zen Proverb First there is a market Then there is no market Then there is Geoffrey Moore

  12. Execution • Use opinion leaders • Reduce the risk of adoption • Be a gorilla (Geoffrey Moore) • Focus on a particular application-dominate 1-2 niches

  13. After the Chasm The good news and the bad news

  14. There are some losers in a Tornado • VHS v. Betamax • Sony refused to license • Couldn’t meet demand • vendors circumvented Sony • Word Star v. WordPerfect • Word Star introduced a new product in middle of tornado

  15. Lessons from the Tornado • Attack the competition ruthlessly. • Expand the distribution channel as quickly as possible. • Forget the customer • Focus on the process above all else • Extend distribution to every type of outlet possible

  16. Lesson: Drive to the next lower price point-Hewlett Packard 10,000 customers 2 million customers 15 million customers HP $1,000 HP $500 Introduce new product HP $299

  17. More Lessons • Have good partners in place before entering the tornado • Bundle products with partners so customers buy more than one product. • I.e. Microsoft: Office Suite

  18. Lesson: Cannibalize Your Market • Wall Street JournalOnline– killer app ahead of its time • Charles Schwab - - discount online brokerage • Cannibalize the market, not the brand

  19. Vertical Positioning Pyramid Least Costly to Buyer Most Costly to Seller

  20. Innovation Marketing Matrix Customer Groups

  21. Understanding Customer Needs • Cost/benefit Analysis • Compatibility with Existing Technology • Difficulty of Use • Readily Identifiable Benefits • Ability of Benefits to be Observed

  22. Collecting Market Intelligence • Delphi Method – qualitative • Panel of anonymous experts • Substitute Products • Triangulation • Approaching demand from three perspectives

  23. Pricing High Technology Products • Defining the components of price • Cost of producing • Overall price strategy • Promotions and discounts • Degree of standardization or customization • Profit required • Margins in the industry • Converging on a price point through triangulation • Constructing a pricing strategy

  24. The Marketing Plan • Purpose • Value proposition • Target market • Market niche • Marketing tactics • Company’s identity

  25. Promoting • Tell a compelling story • Why you? • Why now? • How will you change the world? • Preannouncements • Develop a brand presence

  26. Take-Aways • Add students’ comments here

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