B to B Marketing Mastering the Life Cycle

Mastering the Life Cycle The Adoption Pattern NPD and Lead Time Break Even and Pay Back Technology Push and Market Pull 2

The Life Cycle 3

What happened to these Products ? 4 4

Source : Everett M. Rogers The Product Life Cycle Sales Emergence Growth Maturity Decline Time 5 Source : Everett M. Rogers

Source : Everett M. Rogers What’s Next ? Sales Emergence Growth Maturity Decline Time 6 Source : Everett M. Rogers

Life Cycle of Intel Micro Processors Pentium Pro Pentium 486 386 286 1985 86 87 88 89 90 91 92 93 94 95 96 97 98 99 7 Source : Le Nouvel Economiste 1026

The Adoption Pattern 8

The Pattern of Buying Behaviour Early Early Late Adopters Majority Majority Laggards 13.5% 34% 34% 16% Innovators 2.5% Time 9 Source : Everett Rogers

10 10

The Cumulative Buying Pattern : a S Curve 100% 84 50 16 Early Early Late Adopters Majority Majority Laggards 13.5% 34% 34% 16% Innovators 2.5% Technology Visionaries Pragmatists Conservatives Skeptics enthusiasts Time 11 Source : Geoffrey Moore

Profits after Revenues Loss Revenues Profit R&D Emergence Growth Maturity Decline Source : Roger Palmer

NPD and Lead Time 13

R&D Emergence Growth Maturity Decline The Lead Time Profit Revenues Profit R&D Emergence Growth Maturity Decline Time Go/No Go Lead Loss Source : Roger Palmer

Steps in R&D Idea Building value Capturing Value Fuzzy Front End New Product Development Commercialization Idea Concept Product Idea Chaotic Unpredictable Goal oriented High degree of certainty Results oriented Building value Capturing Value Lead Time 15

« EADS delays Airbus A350 launch » Reading « EADS delays Airbus A350 launch » The Financial Times as of July 27, 2012 By Andrew Parker

Sales, Break Even and Pay back

R&D Emergence Growth Maturity Decline Profit after Revenues Profit Revenues Profit R&D Emergence Growth Maturity Decline Time Loss Source : Roger Palmer

How much Time to Break Even ? Revenues Profit Revenues Break Even Profit R&D Emergence Growth Maturity Decline Time Lead Pay Back Pay Off Loss Source : Roger Palmer

Training Idea case

Lead Time by Industry 18 months 26 months 10 years Airbus A400M Lead Time Life Cycle R&D Spend Agro Food 15 years €100k Automobile 5 years €1 to 2bn Aeronautics 30 years € 10bn Pharmaceuticals 20 years+ 10 €1bn 18 months 26 months 10 years Airbus A400M 12 years Compound

Industries Spend R&D R&D Expenses in % of Sales 2006 Source : Les Echos

Pay Back and ROI Pay Back is an easy way to compare projects Pay Back is assessed against a 3 to 5 years time period ROI = Profit/ Sales * Sales/Investment = Profit/ Investment ROI is assessed against industry benchmark

Leveraging the Key Factors of Success Sales Experience Curve A&P Milk Consolidate Divest R&D Agile Emergence Growth Maturity Decline Time Source : Everett M. Rogers

Technology Push and Market Pull

2 Business Models Market Pull : Demand triggers the market Active role of Customer Process and methods Technology Push : the offer creates the market Visionary guru Launches

Market Pull The Customer Adopted generates a new idea by other companies after adjustment Company develops a taylor made response 27 27

innovations in products Technology Push Search of leveraging innovations in products Market research, test and introduction R&D to submit innovations 28 28

Technology Push or Market Pull ?

The Patent Process

The European Patent A uniform application Procedure Allows to file for 40 European countries The patent may be filed either in French, English or German Cost is c €18 000

« Summit gives birth to common EU patent » Reading « Summit gives birth to common EU patent » The Financial Times as of June 29, 2012 by Joshua Chaffin

TM above Patents Trademark : Brand

Ranking

Conclusions Life cycle is made of 4 stages : emergence, growth, maturity and decline Lead Time, Break Even and Pay back are key elements to assess a life cycle R&D and patents are mandatory to secure life cycle 2 models in today’s industries Technology Push Market Pull