HIGHTECHNOLOGY MARKETING

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HIGH-TECHNOLOGY MARKETING
Prof. Horst O. Bender, Ph.D. Rotterdam School of
Management Erasmus University (NL) THESEUS
Institute (F) hobender_at_B2B-MSI.com
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HIGH TECH MARKETING
Immer gleich betriebsfähig! Bequem und
absolut gefahrlos! Vollständiger Ersatz für
Wagen mit Pferden! Erspart den Kutscher, die
theure Ausstattung, Wartung und Unterhaltung
der Pferde! Lenken, Halten und Bremsen
leichter und sicherer als bei gewöhnlichen
Fuhrwerken! Keine besondere Bedienung nötig.
Sehr geringe Betriebskosten! Always ready
to go! Convenient and absolutely safe!
Complete substitute for horse and carriage!
Saves the coachman, the expensive fittings, and
the stabling and maintenance of the horses!
Steering, stopping and braking easier and safer
than with traditional carriages. No special
operating skills required. Very low operating
costs!
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THE CHARACTERISTICS OF HIGH TECHNOLOGY MARKETS
RISK!!!
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PROXIMITY TO THE STATE-OF-THE-ART (TECHNOLOGICAL
BOUNDARY)
1. Risk for the Company A. Technical Risk
Technological unfeasibility B.
Market Risk Specification failure
Diffusion failure 2. Risk for the
Customer
Technological Boundary
Difficulty
Time
RISK REDUCTION STRATEGY
The more innovative the product, the more
important The service content! Supplier
reputation!
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DYNAMIC COMPETITION (RAPIDLY CHANGING MARKETPLACE)
1. Rapid rates of Technological change Market
change change - Product innovation -
New entrants - Process innovation -
Globalization 2. Compression of Process life
cycles Product life cycles life
cycles (manufacturing processes (user needs
evolve evolve rapidly) rapidly) 3.
Difficulty to conduct market research
RISK REDUCTION STRATEGIES
Be flexible in product development! Realize
that you are aiming at a moving target! Be
pro-active! Maintain a quick react
capability! Proximity to the customer is
crucial! Use interactive communication! Pay
the utmost attention to inventories and the
management of the supply chain!
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KNOWLEDGE INTENSITY
Technological Boundary
1. The knowledge base may plateau Management
of the learning organization 2. The exchange of
information needs to be managed
Intra-team Intra-firm In the
supply chain (suppliers and customers) 3. Charge
information gatekeepers with keeping the
knowledge base up-to-date Purchasing
Research Development Engineering
Manufacturing Marketing Distribution/logisti
cs e-Commerce 4. Exploit the gatekeeping
position of the customer service personnel
In feeding information into the company
In providing information to customers
(testimonials) 5. Consider service as a function
of the knowledge intensity of the offering
Communicate value (benefits) to generalists
Communicate value and technical details to
specialists Make knowledge intensity a
major consideration in delineating marketing
communications and channels of distribution
F
Difficulty
Time
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MANAGING THE TECHNOLOGY ADOPTION CYCLE
Main Street
Tornado
Chasm
EarlyMarket
End-of-life
Bowling Alley
Technology Substitution and Obsolescence
Technology Growth
Mature Technology
Technology Launch
Pragmatists
Skeptics
Techies
Conservatives
Visionaries
Source Moore, 1995
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PHASES OF THE HIGH TECHNOLOGY ADOPTION CYCLE

• 1. The Early Market. A time of great excitement.
  Customers are technology enthusiasts and
  visionaries looking to be the first to get on
  board with the new paradigm
• 2. The Chasm, a time of great difficulty, when
  the early-markets interest wanes but the
  mainstream market is still not comfortable with
  the immaturity of the solutions available
• 3. The Bowling Alley. A period of niche-based
  adoption in advance of the general marketplace,
  driven by compelling customer needs and the
  willingness of vendors to craft niche-specific
  products
• 4. The Tornado. A period of mass-market adoption,
  when the general marketplace switches over to the
  new infrastructure paradigm
• 5. Main Street. A period of aftermarket
  development, when the base infrastructure has
  been deployed and the goal now is to flesh out
  its potential
• 6. End of Life, which can come all too soon in
  high tech because of the semiconductor engine
  driving price/performance to unheard of levels,
  enabling wholly new paradigms to come to
  market and supplant the leaders who themselves
  had only just arrived

Source Moore, 1995
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CHARACTERISTICS OF ADOPTERS

• Techies
• Want to be first to own new technology
• Like technology for its own sake
• Do not have large resources, but can influence
  others
• Will accept rough offerings
• Visionaries
• Seek what is possible
• Motivated by future opportunities
• Intuitive
• Contrarian
• Break away from the pack
• Follow their own dictates
• Have resources
• Take risks
• Want a more developed offering
• Generally respected by peers

• Pragmatists
• Pursue what is probable
• Motivated by present problems
• Analytical
• Support evolution
• Conformist
• Stay with the herd
• Consult with their colleagues
• Want to solve present problems
• Manage risks
• Want proof and consultation
• Conservatives
• Price sensitive
• Cautious
• Generally afraid of tech
• Skeptics
• Will generally never adopt

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MARKETING STRATEGIES OVER THE ADOPTION CYCLE
BOWLING ALLEYHIGHLY CUSTOMER-CENTERED NICHE
STRATEGY
MAIN STREET RETURN TO THE CUSTOMER-CENTERED
APPROACH
TORNADO MASS MARKETING STRATEGY

• Standardize product for general-purpose use to
  achieve cost-leadership
• Distribute through low-cost, high-volume channels
  to ensure maximum market exposure
• Price to maximize market share
• Attack competition to gain market share

• Concentrate efforts on very few high-value
  applications
• Focus on the value buyer
• Emphasize return on investment as the compelling
  reason to buy
• Partner with a value-added distributors to ensure
  customized solution delivery
• Use value-based pricing to maximize profit
  margins
• Avoid competition to gain niche market share

• Differentiate the standardized product by
  targeting specific niches at higher prices
• Sell to end users
• Focus on the end users experience of the
  product, seeking to meet their individual needs
• Generate 11 value propositions to gain margins
  above the low-price offering
• Position yourself in niche markets, based on the
  individual preferences of end users

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CHARACTERISTICS OF SUCCESSFUL HIGH TECH COMPANIES
1. Narrow business focus Product line
synergy Focused RD Consistent
priorities 2. Adaptability
Organizational flexibility 3. Organizational
cohesion Low communication barriers
Job rotation 4. Entrepreneurial culture
Venture management styles Small
divisions Variety of funding sources
Tolerance of failure Opportunity to
purpose outside projects 5. Sense of
integrity 6. Hands-on top management 7. The
paradox continuity and chaos
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DIAGNOSTICS
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CRITICAL SUCCESS FACTORS IN HIGH-TECH MARKETING
Avoiding technical overkill Customer
value/service orientation Matching technology and
marketing Flexibility Sense of urgency Parallel
approach Go for leadership Conflict resolution
customer value based Avoid perfection/engineering
delight/the not-invented-here syndrome