Transcript Marketing of High-Technology Products and Innovations Jakki J. Mohr

Marketing of High-Technology
Products and Innovations
Jakki J. Mohr
Chapter 10:
Advertising and Promotion in
High-Tech Marketing:
Tools to Build and Maintain
Customer Relationships
Chapter Agenda
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The Advertising and Promotion Pyramid
Branding Concerns in High-Tech Markets
New Product PreAnnouncements
Using Marketing Communications to
Manage Customer Relationships
© 2000 Jakki Mohr
Advertising and Promotion Pyramid
HIGH
Salesperson
Cost per Contact
Telemarketing
Catalog Literature
and Manuals
Trade Shows, Seminars,
Training
Direct Mail
Public Relations /Publicity
Media Advertising
LOW
Narrow
Broad
Coverage of Target Audience (Reach)
© 2000 Jakki Mohr
Media Advertising
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Select media vehicle
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Audience overlaps with firm’s target market
Cost efficiency (CPM)
“Fit” of editorial climate with brand message
Size/Frequency of ads
SRDS, CMP Media, media kits
Select message strategy
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Break through clutter/gain attention
Reinforce brand message
© 2000 Jakki Mohr
Public Relations/Publicity
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Event sponsorship
Charitable events/cause marketing
Corporate advertising
Press conferences, press releases
Product announcements
Positive image is vital, yet hard to quantify
© 2000 Jakki Mohr
Direct Mail
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Effectiveness a function of:
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List quality
Appropriate mailing size/frequency
Message strategy
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Trade Shows
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To launch new products, reach sales
prospects, compare competitor’s products
Expense vs. return
Attract traffic to booth
Follow-up on leads
© 2000 Jakki Mohr
Catalogs, Literature, Brochures
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Build on earlier communications
Showcase key benefits in terms of
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Relative advantage
Compatibility
Scalability
Service/warranty
Total cost of ownership
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Telemarketing
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Outbound
Inbound
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Way to manage customer relationships
efficiently
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Personal Selling
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Effectiveness of this most expensive
tool a function of foundation established
by lower-level tools in the pyramid.
Premise of the pyramid: Use the more costefficient/wider-reach tools at the base of the
pyramid to establish foundation with prospects and
to more effectively leverage more
expensive/narrower reach tools.
© 2000 Jakki Mohr
Internet
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Can be used at all levels of the pyramid
Focused attention in Chapter 11
© 2000 Jakki Mohr
Branding in High-Tech Markets
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Advantages of strong brands to firms:
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Command premium prices
Have credibility which can be leveraged in new
markets
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Can lower customer acquisition costs
Reduces risks with new product introductions
Advantages of strong brands to customers:
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Signal of a safe choice: trustworthy and longlived
Decision-making heuristic
© 2000 Jakki Mohr
Branding in High-Tech Markets
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Short product life cycle and customer
fear, uncertainty, and doubt put a
premium on having strong brand
names.
© 2000 Jakki Mohr
Strategies to Develop Strong Brands
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Supply steady stream of innovations
that deliver value
Emphasize traditional media advertising
and PR tools rather than sales
promotion
“Influence the influencers” to credibly
stimulate word-of-mouth via opinion
leaders
© 2000 Jakki Mohr
Strategies to Develop Strong
Brands (Cont.)
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Brand the company, platform, or idea
(rather than the individual product)
Rely on symbols and imagery to create
brand personality
Effectively manage all points of customer
contact
Work with partners in co-branding
Effectively use the Internet
© 2000 Jakki Mohr
The Internet as a Branding Tool
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Use when Internet is part-and-parcel of
the company’s value proposition
Accounts for the “viewer’s” active role
(vs. passive viewing)
Focuses on the customer experience at
the Web site
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“Rational branding:” emotion +
meaningful experience
© 2000 Jakki Mohr
Branding Strategies
for On-Line Companies
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Brands very important where switching is
easy.
Make customer experience meaningful
Understand importance of speed and
response time
Deliver on their promise
© 2000 Jakki Mohr
Ingredient Branding
Suppliers
OEM/Manufacturers
-raw materials
-components
-production equipment
-services
Dealers
Customers
personal
consumption
-
-business use
© 2000 Jakki Mohr
Ingredient Branding
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Stimulates “derived demand”
Rely on cooperative advertising
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Pros/Cons of Ingredient Branding
PROS
Supplier
Create competitive advantage
Costly
Possible risk if OEM has product problem
Conflict with large OEMs
Erodes ability to differentiate
Risk if supplier’s product has performance
problems
If doesn’t co-brand, consumers might
question product
Worry about supplier forward integrating
Large OEM
Small OEM
CONS
Lends credibility to its product
Gets advertising support
© 2000 Jakki Mohr
Pros/Cons of New Product
Preannouncements
PROS
CONS
Pioneering advantage: pre-empt competitors
Cue competitors
Stimulate demand
Cannibalize current products
Encourage customers to delay purchase
Delays damage reputation or survival of firm
Help customers plan
Confuse customers
Gain customer feedback
Create internal conflict
Stimulate development of complementary
products
Generate antitrust concerns
Provide access to distribution
Pursuit of leadership position
© 2000 Jakki Mohr
Tactical Considerations in
PreAnnouncements
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Timing:
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Function of the innovativeness, complexity,
customer buying considerations, timing of
product design decisions
© 2000 Jakki Mohr
Timing of PreAnnouncements
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Use EARLIER preannouncements when:
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Product complements are needed
Products are novel or complex (engender
buyer uncertainty)
Long buying process
High buyer switching costs
© 2000 Jakki Mohr
Timing of PreAnnouncements
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Use LATER preannouncements when:
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Need to keep development information from
competitors
Product features not known till late in the
product development process
Want to minimize risks of cannibalization
Time preannouncements to coincide with
purchase cycle of customers
© 2000 Jakki Mohr
Tactical Considerations in
PreAnnouncements
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Nature and Amount of Information
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Reveal product attributes?
Reveal how product works?
Reveal how it compares to existing
products?
Reveal pricing/delivery?
© 2000 Jakki Mohr
Tactical Considerations in
PreAnnouncements
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Communication Vehicles
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Trade shows
Advertisements
Press releases/press conferences
© 2000 Jakki Mohr
Tactical Considerations in
PreAnnouncements
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Target audiences
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Customers
Competitors
Distributors
Partners
Shareholders
Employees
Industry Experts
© 2000 Jakki Mohr
PreAnnouncements Useful When:
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Firm has low market dominance
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Firm believes competitors not likely to
respond
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Faces lower cannibalization risks
Faces fewer antitrust concerns
Ex: specialized technology/patent protection
To advance the customer decision process
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Product requires customer learning or
customers face switching costs
© 2000 Jakki Mohr
Avoid PreAnnouncements When
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Cannibalization might be high
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Firm has strong portfolio of products
Customers would postpone current
purchases
Firm is large and might be accused of
predatory intent
© 2000 Jakki Mohr
Customer Relationship Marketing
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Use database marketing to categorize
customers on volume and profitability
and/or on share of customer purchases
and consumption level
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Rely on customer relationship management
software
Tailor marketing communications
appropriately
© 2000 Jakki Mohr
Categories of Customers
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Low share of purchases/Low consumption
in category
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Absent compelling reason, avoid the
customers
“The Strategic Power of Saying No”
Risk of alienating wrong customers
© 2000 Jakki Mohr
Categories of Customers (Cont.)
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High share of purchases/Low consumption in
category
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Reasonably profitable, but not compelling
Sustain with occasional offers
Low share of purchases/High consumption in
category
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Major opportunity
Grow firm’s share of business
Aggressive marketing
© 2000 Jakki Mohr
Categories of Customers (Cont.)
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High share of purchases/High
consumption in category
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Bread and butter customers
Attractive to competitors!
Don’t be complacent
© 2000 Jakki Mohr
Other Strategies for CRM
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Capture the customer
Event oriented prospecting
Extended organization
Manage by wire
Mass customization
Yield management
© 2000 Jakki Mohr
CRM Software
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Front office software to:
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Automate the sales force
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Track accounts and prospects
Automate call centers
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Create customer profiles
Provide scripts
Cross-sell
Coordinate communication
© 2000 Jakki Mohr
CRM Software (Cont.)
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Analyze customer purchase history
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Design targeted campaigns
Measure results
Develop Web interface
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Product catalog, shopping cart, credit-card
purchases
Web configurator, for custom products
Web analysis of cookies
© 2000 Jakki Mohr