The Marketing of Technology Intensive Products and Services

Driving Innovations for Non-Marketers

Patrick Corsi, Mike Dulieu

• Publisher: Wiley-ISTE
• Year: 2013
• Print ISBN: 9781848211049
• eBook ISBN: 9781118617656
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Marketing
• Index: Marketing

This book provides the basic models applicable to, and the applicable methods for, the profitable use and marketing of advanced technology. It provides a guide to developing and administering marketing plans, conducting market research, searching for and managing partners, tapping capital for innovation, scoping adequate pricing methods, managing intellectual property rights and selling and distributing products and services. It also shows how to develop formatted business plans which will prove attractive to investors.

It is rare that technology professionals fully understand the esoteric world of marketing and, similarly, few marketers are familiar with advanced technology. As such, this title is uniquely focused on the critical technology/market interface and provides an executive introduction to the competitive marketing of products and services. Modern managers and technology professionals who need to understand marketing in technology-intensive business worlds will find this an indispensable source of information.

Part 1

Generating Value from Innovation

Chapter 1

The New Operating Context

“Innovation is an alliance between research, marketing, instinct, imagination,
product and industrial courage.”

Antoine Riboud.

1.1. Where the future can be invented

With increasing globalization, barriers to world trade have fallen. The porosity of the open business world makes new successes possible and they can happen overnight.

Unfortunately, we are still operating within economies of scale theories, thinking in terms of linear penetration of markets and growth, adding capital to resources and leveraging from a past success. The time has come for us to learn from the past decade’s phenomena and reference the new rules.

1.2. Understanding the new world

The new economy is often dubbed the Network Economy. It is generally understood that it is based on the growing economic role of information and the so-called Knowledge Element.

These factors add much value to the Information Society, which was itself built on the massive availability of data everywhere.

In the last three decades, the capital value has shifted from data ownership to information repositories and now to knowledge assets. Moreover, the connectivity factor has become dominant. It enables us to exchange data, to flow information in and out, to share knowledge across computer networks and across human circles. It has become the new engine for economic growth.

Whenever new technologies interact with networks, they add to this new acceleration. This will continue until network saturation happens all over our planet, like a huge mental web connecting our minds and triggering our actions. The planet was wired not so long ago with telephone cables, but it is now being connected into a sort of single virtual mind. The next step is still unknown, possibly a return of instant locality via biocomputing and related technologies…

The following table shows how phases of technological evolution accelerate (often exponentially).

Table 1.1. The exponential acceleration of technological evolution. Each newer phase is characterized by a layer of technology that converges with the previous one, while maturing

TECHNOLOGY

SIGNALS (from telephone wires to wireless)

1870-1950 A contact point

Distance link up, point to point

COMPUTERS (from mainframes to personal computing)

1950-1990 Everyone

Power at fingertips

NETWORKS (from Internet to web to broadband to Peer to Peer)

1990-2010 Me, Us, All as One

Total, global connections

AWARENESS (biocomputing, ubiquitous and remote sensing)

2010-2020? Ubiquitous localization

Everything local, portable and conscious

It is likely that the overall wealth created by the new economy multiplies the mere arithmetic of the sums of the contributions. The result is a vastly enriched economic world. More than a race, innovation has become a war. Today, the pressure principally comes from three forces active at the end of the 20^th century:

Digitalization, Globalization and Deregulation

These are superimposing themselves on the classical five marketing forces:

– the buyers,

– the suppliers,

– the competitors,

– the new entrants,

– the products/services substitutes.

This makes in total eight forces with which a company has to deal in the modern era. In the telecommunications sector, the various national political frames must be taken into account. In information technologies, de facto standards often come into effect and leave you with no choice other than to capitalize on them.

To innovate implies the ability to operate at the rich intersection between technology and market. This constitutes a new competency, which requires a double background and the management of a dual exposure, a still rare skill in practice. Experts operating at this intersection routinely find ways and methods, for instance in:

– accelerating the innovation in application domains (software engineering, biotechnology, etc.) and applications using advanced techniques coming from research (ways to escape traps towards the markets, etc),

– enhancing R&D and productization through opportunistic combinations of project timing for actions (halting R&D centered, inward spirals).

1.3. From shortage of resources to a surplus of abundance

There used to be times where scarcity created demand, which led to price escalation. At that time, value had a specific meaning: the economy was partially based on managing rarity in order to create value. This still exists. We as customers wait for many months to get our trendy latest generation Golf car, but for industrial items born in the high-tech sphere and addressed to the multitude — a portable telephone, a copy of Windows 2000, a Nintendo game, a semantic Web browser and consumer software in general — everybody seeks the value-by-using-it. In a networked society, it is as if each of us were playing squash with the wall of our universe in front of us, bouncing back the sum of the acts of the rest of us. We are all playing together.

By digitizing the processes of the design and distribution of industrial items, the contemporary economy has abandoned the notion of original versus copy and as a consequence blurred the distinction between main production and marginal production (since it becomes the same at the same cost). Your publisher can print quantities of your book on demand. Nothing prevents the production of non-differentiated additional copies, not even the manufacturing cost and therefore abundance, and possible over-supply is the result.

The marketer must take account of the consequence of the above. Marketing should not be geared towards managing the surpluses (the stocks, the legacy items) but to producing on demand, then on producing modified versions.

Additionally, in a networked society, a major value comes from being part of the network and not the fact that you are a given competitor or supplier. The “being-in” makes you valuable because you can potentially play many roles in working the network with your goals contributing to the fulfillment of the other player goals. In this sense, we could say that competition is no longer what it used to be. The Webbed Society is increasing its overall wealth not through opposing pairs like one company against the other (the old dualism seems in fact to be a thing of the past) but by coordinating them better. Are cooperation schemes the new partnering schemes of tomorrow?

However, an increase in sales is not a sign of success in itself; a company can die from selling too much or from selling what it should not be selling. This happens if it cannot follow the increase in demand, orders get too long to be satisfied, the support is not organized in parallel, the quality is not maintained, etc. If it diversifies itself too soon before establishing a clear and unambiguous market reference, before establishing a solid first market position or if it tries to satisfy incoherent demands in several directions, it risks losing its identity. These all give rise to problems.

1.4. Three economic eras, three marketing attitudes

It is useful to draw comparisons between three epochs subsequent to the era of the hunter/gatherer:

– The first epoch was typified by the plough where wealth derived from agriculture and the ownership of land. The feudal and military organization metaphor is key: you must follow from an agricultural central authority. This period lasted until the Industrial Revolution.

– The second epoch then arose from the conjunction of the following factors: industrial innovation, massive energy reserves (coal), availability of labor (due to agricultural changes), the protestant work ethic and the entrepreneurial spirit of e.g. the 17^th century Huguenots with commercial skills. The second epoch can today be symbolized by the car. In that period, which began to fade towards the end of the past century, money resources are key and you must produce and sell.

– We have now moved into a third epoch, under the ruling of the World Wide Web and typified by Internet-based tools, from routers to intelligent software agents. In this growing period, influence is key and you must give first. The Knowledge Society awaits you…

An enormous pool of labor available at the right time always forces innovation at a massive scale. Labor calls for productivity (like technological change calls for innovation and capital for investment). As an example, the invention of the steam engine (Stevenson, Watt, Cougnot and others), and of textile mass production required massive labor forces before it came of age. This is happening again now with Internet-based products and the huge investment of capital in Internet-based companies — despite some local turmoil. The example of the USA is eloquent: 44,000 jobs were lost around the 1990s and 6-7 million were created, of which 64% deal with “professionals”, in contrast to experts predicting the growth of unqualified jobs (“high technology produces jobs with little qualification”). In the late 1990s, a single job at Microsoft induced, in chain, 6 jobs in industry. One job at Boeing ended in only 3.8 similar chained jobs.

Chapter 2

A Few Key Points a Technical Manager Should Know

“As soon we are shown something old in an innovation, we are at peace.”

Friedrich Nietzsche

2.1. The only sure thing about innovation is that it is about change

Firstly, innovation is not a directed thing: it happens in unpredicted and possibly unpredictable ways.

To innovate is to change. Indeed, often innovation leads to a deep cultural change. To innovate is to manage the relationship between an idea and a saleable product or service. Change is instrumental. Change costs energy. Change wasn’t previewed. Change works for you (you ride the wave and you get there) or against you (it destroys you); it is either an engine for growth or for destruction. The fact is our world needs both of these to facilitate innovation. Today, some companies create the post of “director of innovation”. The reward for innovating presupposes a risk of destabilizing the existing order. Innovation is possibly the big ecological game of our modern society, killing past approaches to make way for the new.

Innovation is what makes you different once today and again tomorrow. There is no future without innovation. It is only the death of our old world that gives meaning to our emerging Knowledge Society. Finally, to innovate is to master time, as long as the process to bring innovation forward can be mastered.

Innovative technologies are found in every sector of the modern economy. In the past, innovation was a fact to be managed by exception; it has now become the rule, to be managed as a process, for which improvements can and should be sought by organizations. A truism is that a society based on innovation is bound to change! Marketing can be seen as the single most natural instrument for managing that change.

2.2. ...

Table of contents

• Cover
• Title Page
• Copyright
• Preface
• Introduction and Overview
• Part 1: Generating Value from Innovation
• Part 2: Marketing Technology Intensive Products, Services and Processes
• Part 3: Managing Your Environment
• Appendices
• Glossary of Terms
• Bibliography
• Index