Marketing of High-Technology Products and Innovations

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Marketing of High-Technology Products and
Innovations

• Market Orientation and
• RD/ Marketing Interaction in High-Technology
  Firms

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Market Orientation

• Philosophy of doing business that emphasizes
  shared gathering, dissemination, and utilization
  of market information in decision making.
• Impact of market orientation on performance
• Firms which are strong technologically see a
  greater impact of market orientation on
  performance (than firms which are not strong
  technologically)

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Aspects of a Market Orientation
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How market-oriented firms use information

• Gather information
• Current and future customers
• Competitive information
• Market trends
• Disseminate information
• Across functions and divisions
• Utilize information
• Across functions and divisions to enhance
  commitment
• Execute decisions in coordinated fashion

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Knowledge Management

• Proactive management of firms bases of knowledge
  to better share and use information
• Requires conscious oversight to overcome natural
  boundaries (between functions/divisions)

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Barriers to Being Market-Oriented

• People hoard information
• Core rigidities can cause people to disparage
  information about/from users
• Tyranny of the served market
• Listening only to current customers
• Users inability to envision new solutions
• Solving problems only with current technologies

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Downside to Being Market-Oriented

• Listening to customers can inhibit innovativeness
• Customers may be inaccurate both in their
  positive endorsement of new products as well as
  in their rejection of new ideas.

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Overcoming the Pitfalls in Being Market-Oriented

• Dont focus on what customers SAY focus on what
  they DO.
• Empathic design
• Match use of customer feedback to the type of
  innovation
• For incremental innovations
• Customer feedback is vital and useful.
• For breakthrough innovations
• Customers bounded by current solutions, and
  insights about new technologies may be sketchy at
  best.

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Overcoming the Pitfalls in Being Market-Oriented
(cont.)

• Focus on future customers (and not just existing
  customers)
• Champion new ideas
• Work in cross-functional teams

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Effective Marketing/RD Interaction
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Nature of Marketing/RD Interaction Matched to
Type of Innovation

• Break-through innovations
• Success based on technological (RD) prowess
• Role of marketing To provide market-related
  feedback on
• market opportunity areas,
• market development,
• feedback on product features/engineering
  feasibility

Marketing brings voice of customer and
marketplace into the development process
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Nature of Marketing/RD Interaction Matched to
Type of Innovation (Cont.)

• Incremental Innovations
• Because customers can provide useful feedback for
  product development, role of marketing is
  critical
• Role of RD
• Ensure marketing understands technological
  capabilities
• Assist with marketing efforts
• Assist with understanding customers

RD remains close to the customer
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Barriers to RD/Marketing Interaction

• Corporate culture/core rigidity that is
  technology-driven
• Elevates status of engineering over marketing
  personnel
• Engineering takes on important marketing tasks
• Spatial distance in physical locations of
  marketing and RD

Justifies and institutionalizes disregard for
market-related information/feedback
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Overcoming Barriers to Marketing/RD Interaction

• Formalize systems to share/use information from
  other groups
• Use informal networks to build bridges
• Co-locate marketing/RD in close proximity
• Understand and be able to communicate
  articulately about the others domain, be it
  products, technology, markets
• Be effective at building consensus in a
  nondirective fashion

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Overcoming Barriers to Marketing/RD Interaction

• (To be used in cases where engineering
  systematically disregards marketing input)
• Form strategic coalitions with upper management
• Risk May alienate peers
• Bypass engineering to get the job done via
  external partners

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Overcoming Barriers to Marketing/RD Interaction
(Cont).

• Enhance opportunities for communication
• Increased frequency of communication beyond
  minimum threshold, but below overload
• Formal, planned interactions have more
  credibility than informal communications
• Some conflict/tension is healthy

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The Impact of Information Sharing Norms on
Marketing/RD Communication

• Norms expectations for extensive sharing of
  information between functions
• These norms are most useful when marketing
  managers identify strongly with the organization
  as a whole (vs. the marketing function
  specifically)

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The Impact of Goal Integration on Marketing/RD
Communication

• Integrated Goals The organizations goals are
  superordinate to either marketings or RDs
  individual goals
• Stressing integrated goals most useful when
  marketing managers identify strongly with the
  marketing function specifically (vs. organization
  as a whole)
• Risk increases use of coerciveness in
  communication by marketing

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Caveat

• Effective marketing/RD interaction must be
  firmly grounded in an understanding of customer
  needs and wants.

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Keeping the Customer In RD/Marketing Interaction?