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Marketing High Technology

Explore characteristics of high-tech markets, manage uncertainties, and successfully navigate the technology adoption cycle for marketing innovation. Learn how to cross the chasm, manage strategic alliances, and promote products effectively to alleviate customer uncertainty.

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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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