Description
Is to define high technology marketing. What are hi tech characteristics, differences in marketing for hi tech.
3/25/2010
Hypothesis
• B2B Managers in Hi-tech marketing situations face issues fundamentally different from lowtechnology markets
S2 –high technology marketing
Gurudas Nulkar
Gurudas Nulkar | SCMHRD
1
Gurudas Nulkar | SCMHRD
2
Gurudas Nulkar | SCMHRD
1
3/25/2010
Objectives
• Define hi-technology marketing • What is different from traditional marketing? • What’s common
What constitutes high tech?
Gurudas Nulkar | SCMHRD
3
Gurudas Nulkar | SCMHRD
4
Gurudas Nulkar | SCMHRD
2
3/25/2010
Technology
• Technology is
– Practical knowledge, know-how, skills – that can be used to develop a new product or service – Can be embodied in people, materials, cognitive & physical processes, plant & equipment and tools.
High Technology
US Bureau of Labor • Hi tech industry – would have at least twice the number of technical employees and double the R&D outlay than the US average • Complex products, customer confusion, rapid change • Requires strong scientific or technical base
• Product technology • Process technology • Management technology
Gurudas Nulkar | SCMHRD
5
Gurudas Nulkar | SCMHRD
6
Gurudas Nulkar | SCMHRD
3
3/25/2010
High tech or Disruptive Tech?
• Disruptive technologies
– Technologies that improve a product or service in ways that the market does not expect – – Lower prices – More conveniences not expected – Unexpected competition from an unexpected player
Disruptive Technology
• Seemingly irrelevant, inferior technology • Developed independent of the prevailing technology • Meets the performance requirements of the customers • Grow in capabilities to meet mainstream needs • Necessitates a change in the buyer behavior
7 Gurudas Nulkar | SCMHRD 8
Gurudas Nulkar | SCMHRD
Gurudas Nulkar | SCMHRD
4
3/25/2010
Disruptive Technology
• • • • • • Plastic v/s metal, wood Film camera v/s digital Main frames v/s desktops Floppy drives v/s USB sticks Wired v/s unwired telephony LEDs v/s traditional bulbs
• • • • • • • • • •
High tech areas
Information Technology Artificial intelligence Health care Robotics Communication Transport – aviation, mass transport Process equipment Defence Renewable energy Semi conductors
Gurudas Nulkar | SCMHRD
9
Gurudas Nulkar | SCMHRD
10
Gurudas Nulkar | SCMHRD
5
3/25/2010
Hi-tech characteristics
• Market uncertainty Not knowing fully what the customer wants • Technology uncertainty
– Not knowing if the technology is capable of meeting uncertain needs – Not knowing if the technology has the capacity to replace existing technology – Not knowing the reliability of technology – Lack of information about potential side-effects
Gurudas Nulkar | SCMHRD 11
High Technology
High
High-tech marketing
Technological uncertainty
Low-tech marketing
Low Low Market uncertainty
SCMHRD, Pune | Gurudas Nulkar
High
12
Gurudas Nulkar | SCMHRD
6
3/25/2010
Uncertainty v/s life cycle
High Technology v/s life cycle
Uncertainty
Gurudas Nulkar | SCMHRD
Life
13
Gurudas Nulkar | SCMHRD
14
Gurudas Nulkar | SCMHRD
7
3/25/2010
Hi – Technology perspectives
Market uncertainties
Buyer’s perspective
• Need uncertainty – customer is confused about the need & extent to be satisfied. Uncertain needs
– He has to rely on functional promises – Monorail, Metro trains
Buyer’s
Uniqueness of hi-tech marketing
Seller’s
Technological uncertainties
Gurudas Nulkar | SCMHRD 15
• Customer is unsure about technology’s potential use and benefits
– No proven track record of the technology exists – OR user experience is not distinguishingly different MacOS or Windows – Hi-tech drugs and medical procedures Gurudas Nulkar | SCMHRD
16
Gurudas Nulkar | SCMHRD
8
3/25/2010
Buyer’s perspective
• Rapid & unpredictable changes in the needs satisfaction. Satisfaction is a moving target
– Cell phones, LCD-Plasma-LED tv
Buyer’s perspective
• Unpredictability of the present technologies obsolescence
– Airlines – to buy jet engines or stick to props? – Celeron – Pentium – Pentium Core 2 – Quad ? – VCD – DVD – BluRay – HDD ?
• Compatibility standards for technology are not yet established
– VHS & Beta. Data com LAN standards etc
• Uncertainty of side effects
– Surgical procedures, drugs – Technology replacingNulkar | SCMHRD jobs Gurudas
17 Gurudas Nulkar | SCMHRD 18
Gurudas Nulkar | SCMHRD
9
3/25/2010
Seller’s perspective
Seller’s perception as Hi-tech • Level of tech-capabilities required to design, manufacture & sell • Level of tech-skills required for creating LTV • Level of competing technologies • Life cycle of the technology
High tech
Hi-tech perspective Buyer – seller
Voice conferencing system ERP software
Seller’s perspective
Office supplies
Upgrading machinery
Low tech Low tech
Gurudas Nulkar | SCMHRD 19
Buyer’s perspective
Gurudas Nulkar | SCMHRD
High tech
20
20
Gurudas Nulkar | SCMHRD
10
3/25/2010
Differences in marketing for Hi-tech
• Sales and Marketing
– Increased interaction between R&D and Marketing – DecisionBuy = f (Understanding technology) – High uncertainty about need satisfaction – Identify and improve human competencies for technology adoption – Communication of the value proposition is conducted jointly – R&D helps in technology adoption
Gurudas Nulkar | SCMHRD 21
Differences in marketing for Hi-tech
• Understanding customers
– Qualitative Marketing Research – – Consumers cannot articulate what they need, when considering a breakthrough technology – Sony Walkman – Use of Questionnaires & scales may not be indicative. – Use FGD & Interviews, conjoint analysis, laddering – Microsoft uses qualitative tools for new Windows
Gurudas Nulkar | SCMHRD 22
Gurudas Nulkar | SCMHRD
11
3/25/2010
Differences in marketing for Hi-tech
• Relationships with channels and customers
– Channels too are uncertain customers – Smaller role in the actual customer decision process – Capabilities need to be higher & scalable
Differences in marketing for Hi-tech
Pricing
• Not a simple “cost plus” approach • Price can be a function of ‘benefits’ to the consumer • Price generally falls drastically over time • Use of ‘non-linear pricing’ in High tech services
• Communication
– Understanding needs precedes communication – Technology communication v/s product communication Gurudas Nulkar | SCMHRD – One to one communication
23
Gurudas Nulkar | SCMHRD
24
Gurudas Nulkar | SCMHRD
12
3/25/2010
Differences in marketing for Hi-tech
• Lifetime value creation process
– Need identification – Help in understanding the technology – Support in adoption of technology – Training in manpower competency – Assistance in achieving Functional performance promises – Service – Up gradation
Gurudas Nulkar | SCMHRD 25
High Technology diffusion
When will you buy a Hybrid car? • “When the technology is proved” • “Not until I see enough people going around” • “I’d buy it as soon as its available” • “Not until hell freezes over!”
Gurudas Nulkar | SCMHRD
26
Gurudas Nulkar | SCMHRD
13
3/25/2010
High Technology diffusion
• Technology adoption life cycle
Early and late majority
What remains common?
• Market selection – segmentation & targeting • Marketing concept – identify unmet needs in the marketplace
Laggards
Innovators
Early adopters
Gurudas Nulkar | SCMHRD
27
Gurudas Nulkar | SCMHRD
28
Gurudas Nulkar | SCMHRD
14
3/25/2010
Myths
• Hi tech is a label for ever –
– today’s technology is tomorrows relic – Transition between intro stage and diffusion – Continuous v/s discontinuous
• An Organization is Hi-tech –
– No. It is the source of need satisfaction
• Hi-tech is for buyers and sellers –
– No. Can be different for both.
Gurudas Nulkar | SCMHRD
29
Gurudas Nulkar | SCMHRD
15
doc_660928092.pdf
Is to define high technology marketing. What are hi tech characteristics, differences in marketing for hi tech.
3/25/2010
Hypothesis
• B2B Managers in Hi-tech marketing situations face issues fundamentally different from lowtechnology markets
S2 –high technology marketing
Gurudas Nulkar
Gurudas Nulkar | SCMHRD
1
Gurudas Nulkar | SCMHRD
2
Gurudas Nulkar | SCMHRD
1
3/25/2010
Objectives
• Define hi-technology marketing • What is different from traditional marketing? • What’s common
What constitutes high tech?
Gurudas Nulkar | SCMHRD
3
Gurudas Nulkar | SCMHRD
4
Gurudas Nulkar | SCMHRD
2
3/25/2010
Technology
• Technology is
– Practical knowledge, know-how, skills – that can be used to develop a new product or service – Can be embodied in people, materials, cognitive & physical processes, plant & equipment and tools.
High Technology
US Bureau of Labor • Hi tech industry – would have at least twice the number of technical employees and double the R&D outlay than the US average • Complex products, customer confusion, rapid change • Requires strong scientific or technical base
• Product technology • Process technology • Management technology
Gurudas Nulkar | SCMHRD
5
Gurudas Nulkar | SCMHRD
6
Gurudas Nulkar | SCMHRD
3
3/25/2010
High tech or Disruptive Tech?
• Disruptive technologies
– Technologies that improve a product or service in ways that the market does not expect – – Lower prices – More conveniences not expected – Unexpected competition from an unexpected player
Disruptive Technology
• Seemingly irrelevant, inferior technology • Developed independent of the prevailing technology • Meets the performance requirements of the customers • Grow in capabilities to meet mainstream needs • Necessitates a change in the buyer behavior
7 Gurudas Nulkar | SCMHRD 8
Gurudas Nulkar | SCMHRD
Gurudas Nulkar | SCMHRD
4
3/25/2010
Disruptive Technology
• • • • • • Plastic v/s metal, wood Film camera v/s digital Main frames v/s desktops Floppy drives v/s USB sticks Wired v/s unwired telephony LEDs v/s traditional bulbs
• • • • • • • • • •
High tech areas
Information Technology Artificial intelligence Health care Robotics Communication Transport – aviation, mass transport Process equipment Defence Renewable energy Semi conductors
Gurudas Nulkar | SCMHRD
9
Gurudas Nulkar | SCMHRD
10
Gurudas Nulkar | SCMHRD
5
3/25/2010
Hi-tech characteristics
• Market uncertainty Not knowing fully what the customer wants • Technology uncertainty
– Not knowing if the technology is capable of meeting uncertain needs – Not knowing if the technology has the capacity to replace existing technology – Not knowing the reliability of technology – Lack of information about potential side-effects
Gurudas Nulkar | SCMHRD 11
High Technology
High
High-tech marketing
Technological uncertainty
Low-tech marketing
Low Low Market uncertainty
SCMHRD, Pune | Gurudas Nulkar
High
12
Gurudas Nulkar | SCMHRD
6
3/25/2010
Uncertainty v/s life cycle
High Technology v/s life cycle
Uncertainty
Gurudas Nulkar | SCMHRD
Life
13
Gurudas Nulkar | SCMHRD
14
Gurudas Nulkar | SCMHRD
7
3/25/2010
Hi – Technology perspectives
Market uncertainties
Buyer’s perspective
• Need uncertainty – customer is confused about the need & extent to be satisfied. Uncertain needs
– He has to rely on functional promises – Monorail, Metro trains
Buyer’s
Uniqueness of hi-tech marketing
Seller’s
Technological uncertainties
Gurudas Nulkar | SCMHRD 15
• Customer is unsure about technology’s potential use and benefits
– No proven track record of the technology exists – OR user experience is not distinguishingly different MacOS or Windows – Hi-tech drugs and medical procedures Gurudas Nulkar | SCMHRD
16
Gurudas Nulkar | SCMHRD
8
3/25/2010
Buyer’s perspective
• Rapid & unpredictable changes in the needs satisfaction. Satisfaction is a moving target
– Cell phones, LCD-Plasma-LED tv
Buyer’s perspective
• Unpredictability of the present technologies obsolescence
– Airlines – to buy jet engines or stick to props? – Celeron – Pentium – Pentium Core 2 – Quad ? – VCD – DVD – BluRay – HDD ?
• Compatibility standards for technology are not yet established
– VHS & Beta. Data com LAN standards etc
• Uncertainty of side effects
– Surgical procedures, drugs – Technology replacingNulkar | SCMHRD jobs Gurudas
17 Gurudas Nulkar | SCMHRD 18
Gurudas Nulkar | SCMHRD
9
3/25/2010
Seller’s perspective
Seller’s perception as Hi-tech • Level of tech-capabilities required to design, manufacture & sell • Level of tech-skills required for creating LTV • Level of competing technologies • Life cycle of the technology
High tech
Hi-tech perspective Buyer – seller
Voice conferencing system ERP software
Seller’s perspective
Office supplies
Upgrading machinery
Low tech Low tech
Gurudas Nulkar | SCMHRD 19
Buyer’s perspective
Gurudas Nulkar | SCMHRD
High tech
20
20
Gurudas Nulkar | SCMHRD
10
3/25/2010
Differences in marketing for Hi-tech
• Sales and Marketing
– Increased interaction between R&D and Marketing – DecisionBuy = f (Understanding technology) – High uncertainty about need satisfaction – Identify and improve human competencies for technology adoption – Communication of the value proposition is conducted jointly – R&D helps in technology adoption
Gurudas Nulkar | SCMHRD 21
Differences in marketing for Hi-tech
• Understanding customers
– Qualitative Marketing Research – – Consumers cannot articulate what they need, when considering a breakthrough technology – Sony Walkman – Use of Questionnaires & scales may not be indicative. – Use FGD & Interviews, conjoint analysis, laddering – Microsoft uses qualitative tools for new Windows
Gurudas Nulkar | SCMHRD 22
Gurudas Nulkar | SCMHRD
11
3/25/2010
Differences in marketing for Hi-tech
• Relationships with channels and customers
– Channels too are uncertain customers – Smaller role in the actual customer decision process – Capabilities need to be higher & scalable
Differences in marketing for Hi-tech
Pricing
• Not a simple “cost plus” approach • Price can be a function of ‘benefits’ to the consumer • Price generally falls drastically over time • Use of ‘non-linear pricing’ in High tech services
• Communication
– Understanding needs precedes communication – Technology communication v/s product communication Gurudas Nulkar | SCMHRD – One to one communication
23
Gurudas Nulkar | SCMHRD
24
Gurudas Nulkar | SCMHRD
12
3/25/2010
Differences in marketing for Hi-tech
• Lifetime value creation process
– Need identification – Help in understanding the technology – Support in adoption of technology – Training in manpower competency – Assistance in achieving Functional performance promises – Service – Up gradation
Gurudas Nulkar | SCMHRD 25
High Technology diffusion
When will you buy a Hybrid car? • “When the technology is proved” • “Not until I see enough people going around” • “I’d buy it as soon as its available” • “Not until hell freezes over!”
Gurudas Nulkar | SCMHRD
26
Gurudas Nulkar | SCMHRD
13
3/25/2010
High Technology diffusion
• Technology adoption life cycle
Early and late majority
What remains common?
• Market selection – segmentation & targeting • Marketing concept – identify unmet needs in the marketplace
Laggards
Innovators
Early adopters
Gurudas Nulkar | SCMHRD
27
Gurudas Nulkar | SCMHRD
28
Gurudas Nulkar | SCMHRD
14
3/25/2010
Myths
• Hi tech is a label for ever –
– today’s technology is tomorrows relic – Transition between intro stage and diffusion – Continuous v/s discontinuous
• An Organization is Hi-tech –
– No. It is the source of need satisfaction
• Hi-tech is for buyers and sellers –
– No. Can be different for both.
Gurudas Nulkar | SCMHRD
29
Gurudas Nulkar | SCMHRD
15
doc_660928092.pdf