Transcript 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
 Promotion to Alleviate Customer Uncertainty
Crossing the Chasm
Tornadoes and High Growth
The Technology Adoption-Diffusion
Cycle
Bowling
Alley
Main street
Characteristics of A-D Segments
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Want the highest
performance available
Want to be leaders
Want to stay ahead
Don't want to fall too far
behind
Reluctant to make change
Best informed, most
profitable, most
independent
Want to see it done once
before they buy it
Want to buy from
established accessible
suppliers
Want no glitches; Want a
thouroughly proven
performer
Most fearful of new
technologies
Will buy an unproven
concept
Among the more profitable
firms
Must be easy to buy and easy
to incorporate
Buy on price above all
Least informed about their
business
Eager for new solutions,
want to be leaders
Interested in new solutions
Want to know you have sold
lots of it
Want to buy locally
Adopt innovations when
they can be avoided no
longer
Don't need to see it done to
buy it
Hesitant to be the very first
to buy
Watch the Early Buyers
Demand absolute simplicity
of purchase and use
Often the least profitable
Cracks in the Adoption Cycle
Tech
enthusiasts
Visionaries
Pragmatists
Conservatives
Skeptics
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
Technology Languishing in the Chasm
 DSL
 IP telephony and videoconferencing
 Voice processing for dictation
 Electronic books
 Interoperability with television
 GPS
The Case of Artificial Intelligence
 1980s: brains in a box
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Intellicorp, Symbolics - pioneers
Customer list from Fortune 100 – early adopters
 Today: languishing in the chasm
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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
Successfully Negotiating
the Chasm
Moore’s Zen Proverb
First there is a market
Then there is no market
Then there is
Geoffrey Moore
Execution
 Use opinion leaders
 Reduce the risk of adoption
 Be a gorilla (Geoffrey Moore)
 Focus on a particular application-dominate 1-
2 niches
After the Chasm
The good news and the bad news
There are some losers in a Tornado
 VHS v. Betamax
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Sony refused to license
Couldn’t meet demand
vendors circumvented
Sony
 Word Star v. WordPerfect
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Word Star introduced a
new product in middle of
tornado
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
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
More Lessons
 Have good partners in place before entering
the tornado
 Bundle products with partners so customers
buy more than one product.
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I.e. Microsoft: Office Suite
Lesson: Cannibalize Your Market
 Wall Street Journal Online– killer app ahead
of its time
 Charles Schwab - - discount online brokerage
 Cannibalize the market, not the brand
Vertical Positioning Pyramid
Sell
Or License
Know-How
Sell Proof of
Concept
License Core Tech
For Applications
Sell Components or
Subsystems
Manufacture, Market, and
Distribute Applications
Least Costly
to Buyer
Most Costly
to Seller
Innovation Marketing Matrix
Customer Groups
EXISTING
Technology
NEW
Incremental
Substitution Diffusion
Radical
Early
Adopter
Niche
Creation
Understanding Customer Needs
 Cost/benefit Analysis
 Compatibility with Existing Technology
 Difficulty of Use
 Readily Identifiable Benefits
 Ability of Benefits to be Observed
Collecting Market Intelligence
 Delphi Method – qualitative
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Panel of anonymous experts
 Substitute Products
 Triangulation
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Approaching demand from three perspectives
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
The Marketing Plan
 Purpose
 Value proposition
 Target market
 Market niche
 Marketing tactics
 Company’s identity
Promoting
 Tell a compelling story
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Why you?
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Why now?
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How will you change the world?
 Preannouncements
 Develop a brand presence
Take-Aways
 Add students’ comments here