Transcript Marketing of High-Technology Products and Innovations

Marketing of High-Technology
Products and Innovations
Marketing Research In
High-Tech Markets
Outline of Chapter
: Gathering
Information in High-Tech Markets
• What is Marketing Research
• “Traditional” Marketing Research Tools
– Qualitative or Quantitative Methods
• High-Tech Marketing Research Tools
– Empathic Design
– Lead Users
– Quality Function Deployment
• Gathering Competitive Intelligence
• Forecasting Demand
– Delphi method
– Analogous Products
– Information Acceleration
Marketing Research
• Definition: the function which links the consumer
and market to the marketer through information by
which
– market opportunities and problems are identified
– marketing performance is generated, monitored and
evaluated
• Process
–
–
–
–
–
Identify issues
Specify information necessary to address these issues
Data collection
Analyze results
Communicate the findings and implications
“Traditional” Marketing Research
Tool
• Qualitative Method
– Used when the nature of problem is uncertain
– Exploratory research
– Focus group, interview
• Quantitative Method
– Used when the problem and necessary information can
be identified
– Exploratory/confirmatory research
– Factor analysis, multidimensional scaling (MDS),
discriminant analysis, MANOVA, conjoint analysis,
structural equation modeling, LISREL,…
High-Tech Marketing Research
• Align marketing research tools with type of
innovation
– Incremental innovation:
• Rely on traditional marketing research tools—
• Focus groups, surveys, conjoint analysis, etc.
– Breakthrough products:
• Market intuition, future scenarios
– Mid-range
• Empathic design, lead users
Contingency Theory
Marketing Strategy
New Product Success
Type of Innovation
-Breakthrough
-Incremental
Type of marketing strategy is contingent
upon the nature of the innovation.
Aligning Market Research with
the Type of Innovation
Traditional
Market Research
Market Intuition
Empathic Design
Lead Users
Incremental
Innovation
(need known)
Break-through innovation
(technical solution
precedes customer need,
"technology push")
Empathic Design
• Because users may be unable to articulate their needs,
this technique focuses on observations of customer
behavior to develop a deep understanding the user’s
environment.
• Types of insights
–
–
–
–
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Triggers of Use
Unarticulated user needs/coping strategies
New usage situations
Customization
Intangible Attributes
5 Steps in Empathic Design
• 1. Observation
– Who should be observed?
– Who should do the observing?
– What behavior should be observed?
• 2. Capture the Data
– Less focus on words/text; more on visual, auditory,
and other sensory cues
– Via photos, etc.
5 Steps in Empathic Design
(Cont.)
• 3. Reflection and Analysis
– Identify all customers’ possible problems and
solutions
• 4. Brainstorm for Solutions
– Transform observations into ideas
• 5. Develop prototypes of solutions
– Tangible representation or role play/simulation
of ideas
Use of Empathic Design At Intel
• Success rate based on engineers’ idea only
20%
– Example: video phone
• Team of 8 design ethnographers to find how
technology can help solve user problems
– Salmon industry
– Business owners
– Teenagers
Customer Visits
• Use cross-functional teams
– Engineering, marketing, sales account manager
– Supportive corporate culture
• Visit different kinds of customers:
– Competitor’s customers, lost customers, lead users,
channel intermediaries, internal personnel
– Customer councils
Customer Visits (Cont.)
• Go to the customer’s site
– (versus bringing them on-premise for a “dog
and pony” show)
• Ask probing questions
• Ensure customer visits are
programmatic/systematic
– (not ad hoc)
Lead Users
• Some customers face needs before a majority of the
market place;
• Their needs may be more extreme than typical
customers
– Ex: auto racers’ and military’s needs for better brakes
• They stand to benefit by obtaining solutions to their
needs sooner rather than later
• They tend to innovate their own solutions to their needs
(see Table 5-1)
Lead Users
Time
NUMBER OF USERS WITH NEED
FOR NOVEL PRODUCT
"LEAD USERS"
of later commercialized
modifications and enhancements
"LEAD USERS" of
novel products
Some Users Begin
To Experience/
Respond To Need
First Responsive
Commercial
Product Introduced
Market Growth
Lead Users in Market Research
• The lead user process can create
breakthrough products by systematically
identifying lead users and learning from
them.
Steps in Lead User Research
• 1. Identify important trend
– Via standard environmental scanning
– 3M identified trend of detecting small features
via medical imaging, which required higherquality high-resolution images
Steps in Lead User Research
• 2. Identify and question lead users
– Personal contacts with customers, surveys, networking
with experts, empathic design
– Respect possible sensitivity of information
– Ex:
• 3M identified radiologists working on most challenging medical
problems, who had developed imaging innovations to meet their
needs
• Networking to other fields in pattern recognition (the military)
and semiconductors
Steps in Lead User Research
• 3. Develop the breakthrough product(s)
– Host a workshop for experts and lead users to
brainstorm
– Ex: medical imaging, experts in high-resolution
imaging, and pattern recognition developed ideas
• 4. Assess how well lead user data and
experiences apply to more typical users
– Gather market research from typical users
Benefits of the Lead User Process
• New insights from gathering and using
information in new ways
• Cross-functional in nature
• Collaboration with innovative customers
• Requires corporate support, skilled teams,
time.
Example of Lead User Process:
3M Corporation and Infection Control
• 1. Identify important trends in infection control
– Travel to extreme situation: surgical environments in
developing countries
• 2. Identify lead users
– Veterinary hospitals, make-up artists in Hollywood
Example of Lead User Process:
3M Corporation and Infection Control
• Develop the breakthrough ideas at a workshop
with experts and lead users
– Economy line of surgical drapes, hand-held devices
to apply anti-microbial substances to skin, “armor”
line to coat catheters and tubes with anti-microbial
protection, and upstream containment of infection
prior to surgery for high-risk patients.
Quality Function Deployment
• What: A tool that provides a bridge between
the voice of the customer and product design
• Purpose: Ensure tight correlation between
customer needs and product specifications.
• Requirement: Close collaboration between
marketing, engineers, and customers
QFD Process
• Collect the “voice of the customer”
– Identify customer needs regarding desired product benefits
via customer visits or empathic design
– Weight or prioritize desired benefits/attributes
• Collect customer perceptions of competitive products
• Transform data into design requirements:
– “Customer requirements deployment:” identify product
attributes that will meet customer needs
– “House of quality:” a planning approach that links customer
requirements, design parameters and competitive data.
QFD—Using the Kano Concept
Satisfaction
One-dimensional
Attractive
Dysfunctional
Functional
Must-be
Know vs. Unknown
Spoken vs. Unspoken
Dissatisfaction
QFD—3 Types of Attributes
• 1. “One-dimensional quality”:
– Increases in level of attribute linearly related to
customer satisfaction
– Typically “known” attributes identified by customer
– EX: battery life in lap tops
QFD—3 Types of Attributes
(Cont.)
• 2. “Must-be quality”:
– Increases in level of attribute has negligible effect on
customer satisfaction;
– However, decreases in attribute has strong negative effect
on customer satisfaction
– Because they are so basic to product functionality, they
are typically unspoken attributes: customer expects
product to deliver these
– EX: ability of laptop to handle bumps and rough
handling
QFD—3 Types of Attributes
(Cont.)
• “Attractive Quality:”
– Increases in level of attribute associated with
exponential increase in customer satisfaction
– But, because attribute is one that “delights” the
customer, its absence does not necessarily lead to
dissatisfaction
– Typically unknown to customer at conscious level
– Ex: decompressable/expandable laptop
QFD: Summary
• Firmly grounds product design in customer
needs
• Allows product development team to
develop common understanding of design
issues and trade-offs
• Reveals friction points and enhances
collaboration
QFD and
Total Quality Management
• TQM grounded in customer knowledge and
ability to deliver customer value, which is
enhanced by:
–
–
–
–
Customer excellence
Cycle-time excellence
Cost excellence
Cultural excellence
Customer excellence
• Tied to being customer-focused and marketoriented
• Knowledge of customer environment and
product useage
Cycle-time excellence
• Products late to the market suffer negative impacts to
profitability from two reasons:
– Long time-to-market cycles typically experience cost over-runs
– More importantly, products late to the market suffer loss of
market share
• Lesson: Being fast to market is important, but only when
combined with ability to accurately deliver customer requirements
– Therefore, link QFD with TQM
Relationship between Entries in
the Market and Quality
Attractive Quality
Model 3
ONE-DIMENSIONAL
QUALITY
Model 2
Model 1
Development
Overall Revenue
Incr. Revenue
New Models
Must be quality
Time
Does this approach to cycle time
excellence make sense?
• Bring higher levels of product functionality to the
market incrementally over time with successive product
iterations.
• Yes!
– Striving for complicated set of features with initial
offering can lead to delays
• Delays mean that customer needs may have changed or
a competitor beats firm to the market
• Purchasers of first generation of new product become
installed base for later generations
QFD and TQM (Cont.)
• Cost Excellence
– Provide customer value and lowest possible cost
– Use supply partnerships
– Use downsizing cautiously, lest negative impact on customer
value
• Cultural Excellence:
– Align goals of the organization and of personnel to be
able to capitalize on market opportunities
– Ex: culture of innovation, effective marketing/R&D
interaction
Competitive Intelligence
• What: Information about competitors
• Why: Provides information for better decision
making and improved strategies
– An early warning system
Effective Competitive
Intelligence Programs
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Affect decisions of top managers
Are proactive in reading the market
Look beyond existing market boundaries
Utilize the Web
Gauge potential for misleading signals
Forecasting Customer Demand
for High-Tech Innovations
• “Who the hell wants to hear actors talk?”
– Harry M. Warner (1927) reacting to addition of audio
technology to silent movies
“ “Television won’t be able to hold on to any market it
captures after the first six months. People will soon get
tired of staring at a plywood box every night.”
– Darryl Zanuck, 20th Century Fox Films, 1946
• “There is little reason for any individual to have a
computer in their home.”
– Ken Olsen, president and founder of the DEC
Corporation,1977
Qualitative Forecasting Tools
• Delphi method
– Rely on a panel of experts
• Analogous data
– Rely on similar products
• Information Acceleration
– Use “virtual” prototypes to obtain customer
feedback
High-Tech Forecasting Hazards
• Lack of historical data
• Difficult for customers to articulate
preferences
• Inflated projects from over-enthusiasm
• Competition from incumbent technologies
• Don’t confuse confidence in the forecast
with quality of the information