Marketing high-technology products and innovations is not the same as marketing more traditional products and services. For example, the marketing of a familiar product, such as Coca-Cola, is very different than marketing products with which customers are unfamiliar, such as new computer hardware, software such as a Pentium chip or customer relationship management software, or even a new computer video game. Customers' fear, uncertainty, and doubt about how to use and attain the full benefits of using the product contribute to the need for different marketing considerations. In addition, the competitive environment found in high-tech industries is different than that found in more traditional contexts: Often, innovations are introduced by industry outsiders that industry incumbents are not aware of. Yet another factor contributing to high-tech marketing challenges is the velocity of change: Due to technological breakthroughs, products change so rapidly that standard marketing concepts may not be sufficient.
While a standard approach to marketing, such as the "four Ps" of marketing (product, price, place, and promotion) is still relevant, the standard approaches must be modified to account for the inherent uncertainty in high-tech environments. My primary aim in this book is to provide a framework for making marketing decisions in a high-tech environment. Using a framework to manage the marketing decision-making process will foster greater understanding of the common characteristics in high-tech environments and help manage the riskiness of marketing in a high-tech context.
Based on theories and research from both academics and industry experts (including both venerable hallmarks in the writings on high-tech marketing and more recent articles), the concepts covered in this text represent best practices in the field of high-tech marketing. Although high-tech marketing is an emerging field of study (and because of this, some believe it would be hard to identify right or wrong answers about how to market high-technology products and services), I believe that using the frameworks developed in this book will help high-tech firms to maximize their odds of success. Naturally, as in any emerging field, there will be some tools and concepts that may challenge one's own ideas and beliefs. I encourage readers to draw on the material that is useful and incorporate their own experience and insights.
I use examples from a wide variety of industries and technologies to illustrate the marketing tools and concepts covered in the book. This variety not only captures the richness of the high-tech environment, but also proves the utility of the frameworks and gives the reader experience in applying the frameworks to diverse situations. Some of the industries and contexts covered include telecommunications, information technology (hardware and software), biotechnology, and consumer electronics such as high-definition TV and digital videodisks.
The Internet is an important context in which the frameworks are applied. This book is the first to provide a systematic approach, grounded in relevant theories and empirical research, of marketing on the Internet. Each chapter applies the pertinent concepts to e-commerce and marketing on the Internet.
Marketing does not occur in isolation in any firm but rather is cross-functional in nature. This book brings together marketing with other business disciplines (for example, research-and-development, legal, and management and strategy) to offer insights on how marketing is inter-related and dependent on interactions with other disciplines. Issues for both small and big business will be addressed. The book provides a balance between conceptual discussions and examples, small and big business, products and services, and consumer and business-to-business marketing contexts. Who Should Read This Book
The book will prove useful in a variety of venues, including
Upper-level undergraduate and graduate courses on the marketing of high technology and innovation Technology institutes, engineering management programs, biotechnology centers, and telecommunications programs Executive education courses Managers in high-tech firms Training programs in high-tech firms Technology incubators Pedagogical Intent
The book is written as a twelve-chapter handbook. Chapter 1 begins with an introduction to high-technology products and industries, offering a definition of high technology based on common characteristics found in empirical research: market, technological, and competitive uncertainty. Chapter 1 also introduces the notion that high-tech marketing strategies must be tailored to the type of innovation (incremental or radical). This notion is carried through subsequent chapters.
Chapters 2 through 4 address issues related to strategy and corporate culture in high-tech firms: core competencies/core rigidities, organizational learning, a culture of innovation, product champions, venture capital funding, relationship marketing, market orientation, and R&D-marketing interactions. Coverage of these issues lays a foundation for marketing effectiveness.
Chapters 5 and 6 address marketing research tools and customer behavior considerations, respectively. One of the particularly challenging aspects of high-tech marketing is understanding customers and markets. Topical coverage in Chapter 5 includes empathic design, lead users, quality function deployment, competitive intelligence gathering, and forecasting. Customer considerations in Chapter 6 include customer decision making for high-tech products, and how marketing to early adopters must be different than marketing to late adopters. This chapter draws heavily on the work of Geoffrey Moore (Crossing the Chasm and Inside the Tornado).
Chapters 7-10 provide coverage of the 4 Ps of marketing: product, place, price, and promotion:
Chapter 7, Product Development and Management Issues in High-Tech Markets, begins with the framework of the use of a technology map to guide product development. Pertinent considerations include decisions about technology transfer and licensing, product platforms and derivatives, protection of intellectual property, and so forth. Chapter 8, Distribution Channels and Supply Chain Management in High-Tech Markets, provides a framework for making distribution decisions. Focus is given to the use of the Internet as a new channel, and the need to manage the transition and resulting conflict. Chapter 9, Pricing Considerations in High-Tech Markets, provides a framework for pricing decisions, with heavy emphasis given to the need to be customer-oriented in managing this element of the marketing mix. Moreover, in light of the rapid price declines in many high-tech industries (the most extreme of which is a price of $0 for many digital products available on the Internet), focused attention is given to strategies used to generate profits in light of the "technology paradox" (how to make money when the price of product is declining rapidly). Chapter 10, Advertising and Promotion in High-Tech Markets: Tools to Build and Maintain Customer Relationships, emphasizes the importance of using advertising and promotion tools to develop a strong brand name (as one mechanism to allay customer anxiety), the need to manage product preannouncements, and communication tools used in managing customer relationships.
Chapter 11 focuses exclusively on e-commerce and Internet marketing. Using the case of Charles Schwab's successful foray into the world of on-line brokering, the chapter discusses issues unique to marketing and managing business on the Internet.
Chapter 12, Realizing the Promise of Technology, concludes with regulatory and ethical considerations high-tech marketers face.
The book's flexibility lets it be used in several ways. First, it can be used as the primary textbook in a full-semester course on the marketing of high technology and innovation. In addition to covering the material in the text, instructors can add cases, semester projects, class presentations, and industry speakers for a very full semester. The companion Instructor's Manual provides suggestions for cases, as well as ideas for semester projects that have worked well in the class I teach. The Instructor's Manual will also provide Powerpoint slides for class lecture and answers to end-of-chapter discussion questions. Instructors and students will also have access to a text Web site, providing updates and current events on a timely basis.
Second, the book can also be used for classes of less than a full semester in duration. The twelve-chapter format makes the material accessible in a compressed time period.
Third, in addition to being used as a stand-alone text in a full-semester course, the book can also be used as a companion text for other courses, including
The management of technology and innovation Business-to-business marketing New-product development Internet marketing and e-commerce Marketing management A Caveat: What This Book Is Not
First, this book is not meant to be the only marketing reference that a high-tech marketer relies on. Rather than addressing marketing fundamentals, the book's primary focus is on the unique characteristics of the high-tech environment and the challenges those characteristics pose for marketing. This is not to say that standard marketing concepts should not be used; hence, a book of marketing fundamentals should be used as a reference as well.
Second, this book is not focused specifically on Internet marketing nor on the use of technology for marketing purposes. Although Internet and e-commerce applications are woven throughout, Chapter 11 deals specifically with Internet issues, interested readers are referred to other sources for more thorough coverage of the background and issues in Internet marketing.
Third, although this book addresses new-product development, it draws very selectively from that literature and research. For readers interested in a more thorough overview of issues and the process of new-product development, a new-product development/ management book should also be referenced.
Fourth, many high-tech marketing tools and concepts relate to business-to-business marketing, or the selling of high-tech products and services to other businesses, be they users of the product, manufacturers who incorporate the product, say, computer chips, into their own products, or resellers of the product. Cultivating relationships can be a critical component in such business-to-business relationships, and interested readers are referred to the several recent books on this topic.
Finally, this book is focused primarily on the marketing of technology and innovation. There are related books on the management of technology and innovation that might also be useful complements. Special Features End-of-Chapter Discussion Questions. The discussion questions at the end of each chapter are designed to assess the reader's knowledge of the material covered, offer additional opportunities to apply the chapter's concepts, and allow students to generate additional insights about the concepts. Technology Tidbits. Each chapter includes a one- or two-paragraph summary about cool, cutting-edge technology of which the average person is unaware, to stimulate thoughts and knowledge about radical innovations coming down the pike. Technology Expert's View from the Trenches. Each chapter has one or two technology experts sharing their views about specific issues pertinent to each chapter. These are insights from people working in the field in a variety of high-tech positions. For example, Keith Flaugh, IBM's director of pricing, offers his insights in the pricing chapter; Tami Syverson, competitive intelligence analyst at Sun Microsystems, offers her insights in the market research chapter; Judy Mohr, patent agent for biotech products, offers her insights in Chapter 7 on protection of intellectual property. Other experts include Mike McDonough, senior vice president of sales and marketing, GTE Wireless; Jack Trautman, general manager, Hewlett-Packard's Bristol Division; Jennifer Longstaff, technical marketing, Xilinx; and Greg Simon, CEO, Simon Strategies (consulting group for government policy on high tech), to name a few. Web site. The text will have a password-protected companion Web site for use by instructors. The site will feature current events articles and assignments on a chapter-by-chapter basis, a chat room for instructors to share resources and pedagogical information, and updated and current information on available cases and resources (such as recommended readings from the trade press for books and related information). Links to useful related Web sites will also be provided for each chapter. Instructor's Manual. The Instructor's Manual will feature answers to the end-of-chapter discussion questions, PowerPoint slides for each chapter, suggested course projects and student assignments, suggested films, and case recommendations on a chapter-by-chapter basis. Conclusion
High-tech products and services are introduced in turbulent, chaotic environments, where the odds of success are often difficult to ascertain at best and stacked against success at worst. This book is designed to provide frameworks for systematic decision making about marketing in high-tech environments. In doing so, it offers insights about how marketing tools and techniques must be adapted and modified for high-technology products and services. The text highlights possible pitfalls, mitigating factors, and the how-to's of successful high-tech marketing.