1. Marketing High Technology Chapter 12

2. Characteristics of High-Tech Markets Market Uncertainty Technological Uncertainty Highly competitive Market Know-how, Complexity, and Velocity Effects Integrating R&D with marketing Managing Strategic Alliances Promotion to Alleviate Customer Uncertainty

3. Crossing the Chasm Tornadoes and High Growth

4. The Technology Adoption-Diffusion Cycle Bowling Alley Main street

5. Characteristics of A-D Segments InnovatorsEarly AdoptersEarly MajorityLate MajorityLaggards Want the highest performance available Want to be leadersWant to stay ahead Don't want to fall too far behind Reluctant to make change Best informed, most profitable, most independent Want to see it done once before they buy it Want to buy from established accessible suppliers Want no glitches; Want a thouroughly proven performer Most fearful of new technologies Will buy an unproven concept Among the more profitable firms Must be easy to buy and easy to incorporate Buy on price above all Least informed about their business Eager for new solutions, want to be leaders Interested in new solutions Want to know you have sold lots of it Want to buy locally Adopt innovations when they can be avoided no longer Don't need to see it done to buy it Hesitant to be the very first to buy Watch the Early Buyers Demand absolute simplicity of purchase and use Often the least profitable

6. Cracks in the Adoption Cycle Tech enthusiasts VisionariesPragmatistsConservativesSkeptics

7. Differing Goals in the Chasm Early adopters looking for change agents. Early majority looking for a productivity improvement So, early adopters not good reference points for early majority customers

8. Technology Languishing in the Chasm DSL IP telephony and videoconferencing Voice processing for dictation Electronic books Interoperability with television GPS

9. The Case of Artificial Intelligence 1980s: brains in a box Intellicorp, Symbolics - pioneers Customer list from Fortune 100 – early adopters Today: languishing in the chasm Lack of support for mainstream hardware Didn’t integrate into legacy systems Few people who could implement it Hidden in terms like object-oriented programming and expert systems

10. Successfully Negotiating the Chasm

11. Moore’s Zen Proverb First there is a market Then there is no market Then there is Geoffrey Moore

12. Execution Use opinion leaders Reduce the risk of adoption Be a gorilla (Geoffrey Moore) Focus on a particular application-dominate 1- 2 niches

13. After the Chasm The good news and the bad news

14. There are some losers in a Tornado VHS v. Betamax Sony refused to license Couldn’t meet demand vendors circumvented Sony Word Star v. WordPerfect Word Star introduced a new product in middle of tornado

15. Lessons from the Tornado Attack the competition ruthlessly. Expand the distribution channel as quickly as possible. Forget the customer Focus on the process above all else Extend distribution to every type of outlet possible

16. Lesson: Drive to the next lower price point-Hewlett Packard HP $1,000 HP $500 HP $299 10,000 customers 2 million customers 15 million customers Introduce new product

17. More Lessons Have good partners in place before entering the tornado Bundle products with partners so customers buy more than one product. I.e. Microsoft: Office Suite

18. Lesson: Cannibalize Your Market Wall Street Journal Online– killer app ahead of its time Charles Schwab - - discount online brokerage Cannibalize the market, not the brand

19. Vertical Positioning Pyramid Least Costly to Buyer Most Costly to Seller

20. Innovation Marketing Matrix Customer Groups

21. Understanding Customer Needs Cost/benefit Analysis Compatibility with Existing Technology Difficulty of Use Readily Identifiable Benefits Ability of Benefits to be Observed

22. Collecting Market Intelligence Delphi Method – qualitative Panel of anonymous experts Substitute Products Triangulation Approaching demand from three perspectives

23. Pricing High Technology Products Defining the components of price Cost of producing Overall price strategy Promotions and discounts Degree of standardization or customization Profit required Margins in the industry Converging on a price point through triangulation Constructing a pricing strategy

24. The Marketing Plan Purpose Value proposition Target market Market niche Marketing tactics Company’s identity

25. Promoting Tell a compelling story Why you? Why now? How will you change the world? Preannouncements Develop a brand presence

26. Take-Aways Add students’ comments here