Transcript Marketing High Technology: Crossing the Chasm and Other Issues

Marketing High
Technology: Crossing the
Chasm and Other Issues
Dr. Dawne Martin
MGMT 897
April 22, 2003
Agenda
 What
makes high-tech marketing
different?
 How does technology create
competitive advantage?
 What are in critical success factors in
moving technology through the
Technology Adoption Life Cycle?
 How do you build a high-tech
marketing plan?
What Makes High-Tech Marketing
Different?

Types of Innovations
– Continuous – extensions of previous
technology
– Discontinuous – disruptive technologies
 Changes
in strategy and behavior
 May not be intuitive to market
 May require changes in infrastructure

Customer Knowledge
– Education of customer to create value

Life Cycle Time
– Pace of adoption of new technologies and
change to other technologies
Market Penetration and Market
Development Index
Figure 3.6 – Roger Best, Market-Based Management,
2nd ed.
Competitive Advantage Hierarchy
Differentiation
Markets
Value Chains
Technologies
Offer Power
GAP
Customer Power
Industry Power
Category Power
CAP
Competitive Advantage Drivers
Competitive Advantage Effects
Adopted from Paul Wiefels, The Chasm Companion, Harper Business, 2002.
What Speeds Adoption?
Relative advantage
 Compatibility
 Visibility
 Trialability
 Ease of Use


Question: What are the advantages and
disadvantages of the McMasters engine
relative to current technology and fuel cell
technology.
Early Market -- Technology
Enthusiasts

Assume that discontinuous innovation is
superior to current technology
– Seek out opportunities to explore new
technologies
– Forgiving of mistakes and bugs
– Gatekeepers for new technologies in business
– What they want
 The
truth about product
 Access to most knowledgeable technical people
 First to get new stuff
Geoffery A. Moore, Crossing the Chasm, Harper Business, 1991
Early Market -- Visionaries





Match new technologies to opportunities
Create high-visibility, high-risk projects
Looking for a “quantum leap” forward for industry
and customers – “fundamental breakthrough”
Not price-sensitive or adverse to risky products
What they want
– Project orientation
– Meet window opportunity
– Expectations – manage these through project timelines
with specific deliverables and frequent updates
Geoffery A. Moore, Crossing the Chasm, Harper Business, 1991
Mainstream Markets -- Pragmatists
Focus on making incremental
improvements in productivity
 Desire standardization – loyal customers
 Communicate within their own industry
 Keep vendors to a minimum
 What they want

–
–
–
–
–
Cost effective solutions
Proven technology
Single point of contact
Price
Take their time to make decisions
Geoffery A. Moore, Crossing the Chasm, Harper Business, 1991
Mainstream Markets – The
Conservatives
Against discontinuous innovation on
principle – tradition focused
 Buy and use discontinuous innovations
because they must to keep up
 Invest only in mature technologies
 Price sensitive
 What they want

–
–
–
–
Pre-assembled packages
Heavily discounted prices
Ease of use
Single function
Marketing to Cross the Chasm
Paul Wiefels, The Chasm Companion, Harper Business, 2002


Target specific niche markets through
technology enthusiasts and visionary stages
Broaden niche to cross chasm – Bowling Alley
– Shared applications
– Word of mouth for refereneces
– Develop a must have value-statement



Capability to ensure competitive advantage
Improves productivity
Reduces operating costs
– Choose a niche


Application niche
Thematic niche: portability across incompatible
hardware platforms
Marketing to Cross the Chasm
Paul Wiefels, The Chasm Companion, Harper Business, 2002

Inside the Tornado – hyper-growth through changes in business
paradigm
–
–
–
–
Herding – move together
Preference for emerging market leader
Competitors enter to fill supply gap – Gorillas, Chimps & Monkeys
Competing in the Tornado


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
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Showcase your strengths & highlight competitor’s weakness
Standardize product offering – reducing complexity, time to customer, service
requirements
Drive price down
Make products widely available
Community all points of advantage
Main Street Issues – Market Maturity and Decline
– Growth slows or sales decline
– Profits lag
– Competing


Commodity approach
–
–
–
–
Market share
Superior and sustainable economies of scale
Low-cost channels
Operate profitably on low and declining margins
–
–
–
–
–
Focus on installed base
Reconnect customer sub-segments and add additional value (mass customization)
Support products – engineer additional benefits into product
Differentiation
Plus One Marketing – doing everything as well as competitor plus one thing really well.
Value-driven approach
Components of a Marketing
Plan
 Environmental
& Internal Analysis
 Marketing Strategy
– Analysis of potential markets
– Target market(s)
– Positioning
 Tactical
Marketing Strategy
 Marketing Budget
 Performance Timeline
 Performance Evaluation
Environmental & Internal Analysis

What’s happening as the industry as a whole?
What’s driving the industry
–
–
–
–

Technology changes
Economics
Socio-cultural changes
Political legal changes
What are you’re companies strengths and
weaknesses?
–
–
–
–
–
Technology/Product
Marketing Expertise
Management & Manufacturing Capabilities
Financial Resources
Human Resources
Analyze the current climate in the auto industry
and what McMaster’s has going for it.
Marketing Strategy

Choose target markets from segments –
VALUE!
– Assess market attractiveness



Market growth
Competitive intensity
Market access
– Assess competitive advantage





Cost advantage
Differentiation advantage
Marketing advantage
Positioning – focus on relative competitive
advantages and customer needs
Conduct a preliminary analysis of potential
market segments.
Figure 11.4
Factors That Shape Market Attractiveness
Roger Best, Market-Based Management, Prentice-Hall,
2000.
Figure 11.6
Determinants of a Competitive Advantage
Roger Best, Market-Based Management, Prentice-Hall, 2000.
Develop Tactical Plan

Marketing mix decisions to implement
strategy
– Product and service quality and attributes
– Pricing
– Channels of Distribution



Multiple Channels
E-commerce
Sales force or manufacturer’s reps
– Promotion

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

Direct marketing
Publicity
Advertising
Based on the needs and habits of
transportation customers, where should
you spend your money?
Marketing Budgets
 Provide
detailed expenditures with
justification for each expenditure
how it was calculated
 Start with a cash flow projections
 Should forecast sales growth over 3
– 5 years
 Justify your sales forecasts by
information on market growth,
competitors and customer needs
 Justify your expenditures