Bus 297D Technology Marketing Summer, 2010, Session 1 J.J. McClatchy Joe Giglierano

What is High Technology? What is technology? What is High Technology? –Definitions based on R&D spending or intensity –Number of technical employees –Common characteristics –Contribution of new technology to value delivered

Common Characteristics Technological uncertainty Market uncertainty Competitive volatility

Common Characteristics Technological uncertainty Market uncertainty Competitive volatility Others possible: –High first unit costs –Demand side increasing returns –IP –Knowledge spillovers

Key Marketing Ideas Marketing concept and market orientation Value and Porter’s Value Chain Strategic Management Model Technology Adoption Life Cycle

Marketing Concept A firm will tend to perform well when it: –understands the needs and wants of targeted customers and prospective customers; –delivers superior value by meeting those needs and wants through coordinated activities –does this while working toward organizational goals

Implications of Marketing Concept Need to target segments Need to understand motivations and behavior of customers and prospects Need to create an integrated package of products, services, communications, channels, and prices Need to manage so that meeting customer needs drives profits

Elements of Market Orientation Scanning and learning –e.g. market research, evaluation of program results, satisfaction measurement Information dissemination –e.g. intranet, team meetings, cross-functional team design, informal networks Enabling / reinforcing structure –e.g. values, policies, reward system

More Market Orientation Elements Use of information –e.g. strategic thinking, marketing planning, implementation planning, planned adaptation Execution effectiveness –e.g. programs and tactics done well, activities coordinated, end results pursued and obtained, performance data collected and used

Porter’s Value Chain Support Activities Direct Activities Offering Target Customers Product Service Image Comm. Channl Utils. Price

INBOUND LOGISTIC OPERATIONS OUTBOUND LOGISTICS SALES & MARKETING SERVICE INFRASTRUCTURE HUMAN RESOURCES & DEVELOPMENT TECHNOLOGY & DEVELOPMENT PROCUREMENT SUPPORT ACTIVITIES DIRECT ACTIVITIES PORTER’S VALUE CHAIN

Value Concepts Value = sum of benefits minus sum of costs –Implication: value can be increased by raising benefits or reducing costs Value is Perceived Value in the eyes of prospects and customers –Implication: vendor’s view of value may be different than prospects’ / customers’ view –A Reality: perceptions may be malleable, but ultimately rely on experienced performance

Implications of Value Chain + Definitions Segments exist Value comes from more than product Markets change concurrently with technology change => uncertainty Marketing must be involved in product design and strategy Best technology does not always “win,” but Technology can be the reason you lose

Value Network Customer Segment Vendor Partner

Technology Adoption Life Cycle # New Users Time technophiles visionaries pragmatists conservatives Skeptics - laggards CHAS M

Segments in Adoption of New Technologies CHASM VISIONARIES PRAGMATISTS OF DIFFERENT TYPES; SOME CONSERVATIVES? # OF NEW ADOPTERS TIME FIRST PRAGMATISTS TECHNOPHILES

Concurrent Processes in a Technology Startup IDEAIDEA Strategy Dev Product Dev Customer Value Dev Organization Dev Financing Dev Initial Value Proposition Initial Product Concept Initial choice of target segments Build the Team Initial business pitch prepared ValidateValidate

Strategy Dev Product Dev Customer Value Dev Organization Dev Financing Concurrent Processes, continued Simple. Strategy Test, validate,revise Init. Bus. Model Elaborated Model & Strategy Prototypes Dev. customer1st customer(s) Customer infoTarget & recruitTranslate to next segs. Early hiresBuild strengthsEarly co-ord. procedures Early moneyBus. PlanMore formal $

Other Key Ideas to Weave In Bootstrapping – marketing in a startup that is not venture funded Expeditionary Marketing (marketing by iterative learning) “Business Development” as early stage marketing Marketing processes

How is Technology Marketing Different from Traditional 4Ps Marketing Marketing Processes – Different configurations –Customer Decision Processes –Customer/market knowledge development process –NPD process –IMC process –CRM process –Customer fulfillment process

Process Evolution New Prod Dev & Bus Dev NPD Launch Market/Custr Knowing CRM Comm Sales IMC Fulfillment