INNOVATION & TECHNOLOGY MANAGEMENT Chapter 7 - Learning from markets

How do Technology & Markets affect commercialisation? Marketing Mix (Four Ps) Product Price Place Promotion Technological maturity Market maturity Strategic Marketing – wheter or not to enter a new market and then establishing. Tactical marketing – differentiation of existing products and services

Figure 7.1 Technological and market maturity determine the marketing process ©2005 Joe Tidd, John Bessant and Keith Pavitt

Differentiation Old technology and old market Customer needs, product improvement Profit associated with High relative quality Good value Product differentiation/Brand

Figure 7.3 Relationship between innovation and market performance ©2005 Joe Tidd, John Bessant and Keith Pavitt

QFD – Quality Function Deployment Customer requirements → measurable variables → development needs Articulate needs - Inarticulate needs – basic, performance measures, features Communication between departments Identifies opportunities

Figure 7.4 Quality function deployment matrix ©2005 Joe Tidd, John Bessant and Keith Pavitt

Architectural Old technologies to new markets Market leaders make most profit New market segments Identify similar customers Create for unmet needs Segmenting Consumer Markets Behavioural science Segmenting Business Markets Informed purchasing decisions

Segmenting customers Utilitarian theories – rational buyers Behavioural theories – attitudes Depends on the product rare/often cost and risk level of understandability Psychography

Segmenting business More rational? Buying process – customer, user, gatekeepers, influencers Three stage process Functionality of technology Behavioural segmentation Combine to find potential customers

Technological New technologies to old markets Identify new applications Technology/product – why replace? Informed customer behaviour (High tech) Factors affecting Buyers’ behaviour Differences in technolgy Rate of change Relationships to suppliers (for organisations)

Special case – IPR Patents – usually 20 years protection Copyright Design rights Leads to licensing... Cost and risk

Complex Co-evolvement of markets and technology Interacting components Educate users Long-term commitment Many lag years Components/bundled systems Range of applications and number of users Lead users – early recognition, expect benefits, own innovators Performance risk and psychological risk

Diffusion of innovation Relative advantage Compatibility Complexity Trialability Observability Demand side/Supply side models

Figure 7.7 Typical diffusion curve for a new product ©2005 Joe Tidd, John Bessant and Keith Pavitt