Exhibit 8-1 Decline Introduction Growth Maturity Time Sales Revenue/ period Development

Exhibit 8-2 Technophiles Visionaries Laggards Time Sales from New Adopters/ period Pragmatists Conservatives

Continuous period between development and introduction  No sales volume  Product is not yet completely defined  profits do not exist  Price/value are being determined.  Promotion may be oriented towards publicity about technological developments  Heavy investment to prepare the offering satisfying customer needs

 Low sales volume  Product is somewhat basic  Profits are typically negative  Price/value are being determined  Promotion is used to build awareness  If offering elements are outsourced or first-time value network, logistical process experiences a learning curve

 Profits increase, new adopters and pragmatists accept product  Market penetration pricing  Product differentiation is important  Distribution is often important in the training and education of customers

 Product acceptance by Pragmatists and the need for differentiation  Significant changes from economies of scale when crossing the chasm Example: Sensacon Corporation

 Profits have peaked  Promotion reinforces buyer decisions and focuses on supplier reputation and value  Remaining major players compete in an oligopoly  Distribution serves market sub-segments  Price is a major component of the marketing mix  New customers do not replace sales volumes as old customers move to newer products

 Consolidation usually occurs among suppliers  Product line is reduced to minimize product variation  Promotion reduced to minimal levels to accommodate existing customers  Price in relation to long-term contracts, is a major part of the marketing mix

Idea Generation Product Screening Business Case Analysis Product/ Strategy/ Plan Developm ent Test Market Product Launch Hand off to innovation/ translation team Stage 1 Stage 2Stage 3 Stage 4Stage 5 Stage 6 Stage 7

Two development approaches:  Engineering Driven  Market/Customer Driven

 Avoid Silos—cross functional approach  Product “Champion” often required

Market Driven Standards:  New Ideas often question marks  Concept must fit and support the organization

 Checkpoints on path of product development  Multi-disciplinary review of product development  Stage Gates shadow milestones to ensure: o Original goals and objectives still viable o Offering still meets expectations initially approved

 Understand the technology in depth  Define and redefine current and future customer needs and guide development with this process  Motivate other company departments and organizations  Screen and select ideas from all sources  Reward the efforts of the technical and support staff  Catalyze company resources to get the right talent on the job

 The Missing Marketing Plan  No Real Need Exists  The Market Size is Overestimated or a “Me Too” Product Fails to Penetrate the Market  The Offering Fails to Meet Needs Adequately  Market Will Not Pay  Contrary Perceptions of Innovation A good marketing plan is a solution to all of these!

How much does the component contribute to our product’s value Image in our customers’ view? Minor Major Are we good at it? Can we own the marketfor it? Can we or do we want toprotect it? Is it our kind of business? -Financial justification -Risk assessment -Stability of technology Make it! NoYes Is the component unique to our markets? Purchase as a Commodity Yes No Yes No Yes Develop Partnership with qualified supplier(s) Collaborate in development with technology-oriented supplier(s) Exhibit 8-4