marketing strategy in high tech markets ii n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Marketing Strategy in High-Tech Markets II PowerPoint Presentation
Download Presentation
Marketing Strategy in High-Tech Markets II

Loading in 2 Seconds...

play fullscreen
1 / 34

Marketing Strategy in High-Tech Markets II - PowerPoint PPT Presentation


  • 172 Views
  • Uploaded on

Marketing Strategy in High-Tech Markets II. The Big Group Smack Down!. Define “High-Tech” and why are hi tech markets particularly dynamic? What do you consider the most important barriers to adoption of the Wearable Computer ?

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Marketing Strategy in High-Tech Markets II' - varana


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
the big group smack down
The Big Group Smack Down!
  • Define “High-Tech” and why are hi tech markets particularly dynamic?
  • What do you consider the most important barriers to adoption of the Wearable Computer?
  • Give an example of what you would consider a radical innovation (tech or no tech) and develop a short definition.
  • Contingent on the type of innovation, the role of marketing differs. How?
  • What would you call these and what do they have in common?
  • “Unit-one costs of HT products are often high, payback cycles of a new HT products shorter and shorter.”
    • Why is this so?
    • As a marketing consultant, what do you recommend a company do that has a breakthrough product on its hand ready to launch?
slide3
Why are High-Tech markets particularly dynamic?
    • No established rules of the game
    • Significant size economies
    • low entry barriers.

Back

barriers of adoption
Barriers of Adoption
  • Perceived value
  • Institutional support
  • Observability
  • Compatibility
  • Ease of use
  • Reliability

Back

continuum of innovations
Continuum of Innovations

Incremental

Radical

  • Extension of existing product or process
  • Product characteristics well-defined
  • Competitive advantage on low cost production
  • Often developed in response to specific market need
  • "Demand-side" market
  • New technology creates new market
  • R&D invention in the lab
  • Superior functional performance over "old" technology
  • Specific market opportunity or need of only secondary concern
  • "Supply-side" market

Back

contingency theory
Contingency Theory

Type of marketing strategy is contingent upon the nature of the innovation.

slide8
Muskets/then machine guns
  • Steam ships
  • Automobiles
  • PCs
  • Digital photography
what is a disruptive technology
What is a disruptive technology?
  • Disruptive technologies typically have worse performance, at least in the near term.
  • But: They have features that a few fringe and generally new customers value and which represent a key source of competitive value in the future.
  • Products based on them are typically cheaper, simpler, smaller and frequently more convenient to use - often representing a new product architecture, design, and even market (category).
  • They often bring a new and different value proposition.
          • See Christensen: “The Innovator's Dilemma”

Back

characteristics common to high tech markets supply side
Characteristics Common to High-Tech Markets: Supply Side
  • “Unit-one” costs: when the cost of producing the first unit is very high relative to the costs of reproduction
    • Ex: development vs. reproduction of software
  • Demand-side increasing returns: When the value of the product increases as more people adopt it
    • Also called network externalities and bandwagon effects
    • Ex: telephone, fax, MS Word
    • Implications: may give away products for free (IM)
characteristics common to high tech markets supply side1
Characteristics Common to High-Tech Markets: Supply Side
  • Tradeability problems arise because it is difficult to value the know-how which forms the basis of the underlying technology
    • Ex: How much to charge for licensing the rights to a waste-eating microbe?
  • Knowledge spillover: Another type of externality that arises from the fact that technological developments in one domain spur new developments and innovations in other areas.
    • Ex: Human Genome Project
common underlying characteristics of high tech markets demand side perspective
Common, Underlying Characteristics of High-Tech Markets: Demand Side Perspective
  • Market Uncertainty
  • Technological Uncertainty
  • Competitive Volatility
market uncertainty
Market Uncertainty:
  • FUD factor
  • Customer needs
  • Anxiety over the lack of standards and dominant design (Laserdisc, DVD, DivX)
  • Pace of adoption
  • Inability to forecast market size
technology uncertainty
Technology Uncertainty:
  • Will it function as promised?
  • Timetable for new product development?
  • Who will fix customer problems?
  • What are unanticipated/unintended consequences?
  • (When) Will our technology be obsolete?
competitive uncertainty
Competitive Uncertainty:
  • Who will be future competitors?
  • What will be “the rules of the game” (i.e., competitive strategies and tactics)?
  • What will “product form” competition be like?
    • competition between product classes vs. between different brands of the same product
  • Implication: Creative destruction?
effects of uncertainty
Effects of Uncertainty?
  • Adoption rate!
  • There are five variables that have been cited as responsible for speed of technology adoption:
    • Relative Advantage: the degree to which an innovation is perceived as better than the idea it supersedes
    • Compatibility: the degree to which an innovation is perceived as consistent with existing values, technologies, past experiences, and needs of potential users
    • Complexity: the degree to which an innovation is perceived as relatively difficult to use and understand
    • Trialability: the degree to which an innovation may be experimented with on a limited basis
    • Observability: the degree to which the results of an innovation are visible to others (Wow-factor).
          • Rogers, “Diffusion of Innovation.”
diffusion rates
Diffusion Rates
  • The printing press (~1440):
    • 400 years (1833, NY Sun).
  • The automobile (1885):
    • 75 years (market saturation in US around 1960)
  • The telephone (1876):
    • 85 years (full saturation in the 1960s)
  • The fax machine (1843):
    • 140 years (late 1980s)
  • The Internet (1968)
    • 35 years
value perceived need perceived price
Value: Perceived Need-Perceived Price
  • Variables essential to the successful uptake of technology:
    • Providing an infrastructure
    • Providing a function
    • Providing the right price point
    • Providing a compelling need to buy (make it a necessity).
telegraph faster than phone why
Telegraph! Faster than Phone…Why?
  • Morse presented prototype of the electric telegraph to the US Congress in 1838
  • by 1873 Western Union had carried more than twelve million messages
    • creation of the infrastructure which supported it.
    • cheap and predictable rates.
    • a shared language (global communication).
what is a disruptive technology1
What is a disruptive technology?
  • Muskets/then machine guns
  • Steam ships
  • Automobiles
  • PCs
  • Digital photography
what is a disruptive technology2
What is a disruptive technology?
  • Disruptive technologies typically have worse performance, at least in the near term.
  • But: They have features that a few fringe and generally new customers value and which represent a key source of competitive value in the future.
  • Products based on them are typically cheaper, simpler, smaller and frequently more convenient to use - often representing a new product architecture, design, and even market (category).
  • They often bring a new and different value proposition.
          • See Christensen: “The Innovator's Dilemma”
continuum of innovations1
Continuum of Innovations

Incremental

Radical

  • Extension of existing product or process
  • Product characteristics well-defined
  • Competitive advantage on low cost production
  • Often developed in response to specific market need
  • "Demand-side" market
  • New technology creates new market
  • R&D invention in the lab
  • Superior functional performance over "old" technology
  • Specific market opportunity or need of only secondary concern
  • "Supply-side" market
contingency theory1
Contingency Theory

Type of marketing strategy is contingent upon the nature of the innovation.

the big group smack down1
The Big Group Smack Down!
  • Define “High-Tech”.
  • What do you consider the most important barriers to adoption of the Wearable Computer?
  • Give an example of what you would consider a radical innovation and develop a short definition.
  • Contingent on the type of innovation, the role of marketing differs. How?
  • Give an example of what you would consider a disruptive technology and develop a short definition.
  • “Unit-one costs of HT products are often high, payback cycles of a new HT products shorter and shorter.”
    • Why is this so?
    • As a marketing consultant, what do you recommend a company do that has a breakthrough product on its hand ready to launch?
slide28
Why are High-Tech markets particularly dynamic?
    • No established rules of the game
    • Significant size economies
    • low entry barriers.
slide29
Continuous shortening of product life cycles, which if true leads to a serious dilemma:

=> High first part costs in innovation phase is associated with shorter pay-back cycles!

concentrated vs differentiated
Concentrated vs. Differentiated
  • Pros and Cons?
  • Strategic Implications?
    • (Segmentation, timing, participation)
slide31
STP

High innovation costs plus shortening PLC means strategically:

  • Enter as many market segments as possible at the same time to shorten pay-back time.
  • Develop a broad geographical strategy as low entry barriers allow competitors to exploit uncovered territory.
slide32

STP

Three Entry Options:

  • Pioneers
  • Early Followers
  • Late followers

What are some pros and cons of each?

slide33

STP

Strategic Considerations:

  • Differentiation versus Standardization?
  • Price-Quantity (cost utility) versus preference oriented (buyer utility)?
  • Customer-orientation versus competitor-orientation?

Back