Marketing High Technology Services

Colin Sowter

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351753470
• Topic: Sozialwissenschaften
• Subtopic: Soziologie

This title was first published in 2000: An examination of how marketing concepts and practices can be applied to generate profitable growth in the high-tech service sector. Part One looks at the implications of becoming market-led. Part Two explains how to use the various methods of communication to best effect. Finally Part Three examines the role of business development, including research, innovation and planning. Along the way, Dr Sowter provides detailed guidance on key issues such as identifying your unique selling proposition, setting optimal prices, dealing with competition and ensuring the maximum impact from your promotional literature, proposals and exhibition stands. He proceeds by asking questions, and the answers he supplies are practical and often based on personal experience. The text is supported throughout by illustrations, "real life" examples, checklists and model formats. Each chapter includes exercises and action plans to help readers put the author's ideas to work in their own organizations.

PART I

THE ROLE OF MARKETING

1

WHAT IS MARKETING?

A WAY OF THINKING ABOUT BUSINESS

Key business issues
Marketing should be seen as a means of generating profit. If it is not, there is something wrong, and the problem needs to be resolved
Marketing is a rational process which should not compromise our intellectual, professional, technical or ethical integrity
Marketing does not always require large budgets or extra staff – it is a way of thinking about business
We cannot assume that people know or want what we sell, or that they are prepared to find out
Marketing should be proactive not reactive
The ‘best’ service is not always the most commercially successful
Becoming market-led involves a shift of focus away from ‘what we do’ to ‘what they need’
Nobody, not even our best customer, actually wants what we do; they want what it will do for them
Marketing starts with identifying customer needs, and then organizes the whole company operation to satisfy those needs in a profitable way
Marketing is too important to be left to the Marketing Department. Key staff in all functions must be market led
Professionalism in marketing should be recognized and sought. Many senior managers set their sights too low in recruitment and appointment
Marketing influences three components of profit – market share, market size and margin. Two of these are often ignored
Marketing and selling have an entirely different focus and should not be confused
Marketing is not telling people what we do
Marketing is not persuading people to buy what they do not need
Marketing is not only about brochures, advertising, customer support or customer service
Being market led does not mean satisfying every whim of every customer

1.1 MARKETING SHOULD BE A MEANS OF GENERATING PROFIT

‘The trouble with marketing is that it is a debit against profit.’ This remark, made to me at one of my seminars, reveals volumes about some people’s attitudes to marketing. It suggests that it is some sort of disease that needs to be eradicated! Unfortunately this is a commonly held view, and it is based on a complete misunderstanding of what marketing is there to achieve.

Most of what we do in business is a debit against profit, and marketing is no exception. However, if it is not a means of generating profit there is something wrong, either with what we are selling, the market demand or the way in which we are setting about marketing. The problem needs to be identified and dealt with, and this may involve a change in the whole operating philosophy of the company. The fact is that, in a market-led operation, the money spent on marketing is seen as an investment from which we expect a positive return. The short-term negative profit and cash flow is the price we have to pay for long-term success.

Inept and inappropriate marketing is certainly a debit against profit!

Sadly, people venture tentatively into some form of marketing that they have seen elsewhere, are disappointed with the results and conclude that marketing does not work in their particular business. It is not the fault of marketing but of the way in which they are trying to apply it. Wherever there is competition and customers do not spontaneously demand our service, marketing is necessary. It is not enough to offer a good service – excellence is expected. Whether we like it or not, the actual service we are selling may not be the main factor in the buying decision, and success goes to those who are best at marketing.

This is equally true whether the ‘product’ is a tangible item such as a computer, or something intangible such as a professional service.

We are not suggesting that money should be poured aimlessly into a bottomless marketing pit. But, intelligently applied, time and money spent on marketing can be the biggest single factor contributing to profitable growth (Exercise 1.1).

1.2 MARKETING IS A RATIONAL PROCESS THAT SHOULD NOT COMPROMISE OUR INTEGRITY

Until relatively recently, one could obtain qualifications, degrees, further degrees and so on in almost every subject except marketing. A consequence of this is the widespread feeling that marketing is not quite as ‘professional’ as other disciplines. Doubts about some of the highly emotive activities such as advertising and promotion even lead some people to regard marketing as a rather inferior and irrational process.

The aim of this book is to demonstrate that, properly applied to each particular set of circumstances, marketing should not compromise our intellectual, professional, technical or ethical integrity in any way. The attempt to persuade people to buy products or services that they do not really need might be described as marketing, but it is not the subject of this book. It is wrong to indulge in irrational or dubious marketing, and no reputable business would do so.

1.3 MARKETING DOES NOT ALWAYS REQUIRE LARGE BUDGETS OR EXTRA STAFF

Marketing is an attitude of mind that can transform the way existing staff carry out their normal tasks. It does not always require additional staff or large budgets. The people who have to deliver the service are often the best people to market it. They have an unrivalled knowledge of the needs of the customer and the way in which they can contribute to meeting those needs.

Where the rewards for success are very high, leading companies spend a large percentage of turnover on marketing in its various forms – market research, marketing strategy, market-led innovation, selling, sales support, customer service and so on. This makes good business sense. If millions of pounds are to be spent on the development of a new skill or service, it is essential to establish potential customer demand before committing to the development (but how many companies do this?). If a large sales force is to be employed, their activities must be prioritized on the basis of marketplace needs. If large budgets are to be spent on television advertising, it is worth commissioning substantial market research to test the advertisements before committing to the campaign.

While this book is relevant to these high-spending businesses, we particularly deal with the situation where a large budget is not available and would not be appropriate. Many of the delegates to my seminars come from organizations that do not even have a marketing department. For many of us, testing everything by formal market research is simply not realistic, and we have to make judgements in the absence of information that we would like to have. This is one of the reasons why a marketing management post demands abilities of the highest calibre.

Marketing is not primarily a series of separate, specialist and costly activities; it is a way of running a business, a management style, an attitude of mind. As such it need not, in the first instance, cost anything. The salaries and expenses of the staff concerned are already being paid. A market-oriented management style should saturate every part of our daily decision-making process, so that the main factors influencing strategic and tactical decisions are the needs of the customer rather than the needs of the company.

Many companies which have survived with very low levels of marketing expenditure would achieve greater profitability and growth if they were prepared to take marketing more seriously. In many cases, the operation has been the internal reactive service provider of a larger business, accounted for as a cost centre; now it is seen as a profit centre, required to justify its existence and to generate its own funding in a competitive free market. This will undoubtedly involve spending more money on appropriate aspects of marketing, and of course there is a time lag between investment and return, but this is true of many aspects of business and is not a valid reason for not engaging in marketing.

1.4 ‘BETTER MOUSETRAPS’ DO NOT WORK; ‘BETTER DOORS’ DO!

If a man … make a better mouse-trap than his neighbour, tho’ he build his house in the woods, the world will make a beaten path to his door.

(Attributed to R. W. Emerson by S. S. B. Yule in her Borrowings, 1889, emphasis added)

This statement is often seen on the walls of company entrance halls or development departments. It contains a number of dangerous fallacies.

First, we cannot assume that people know what services we provide. Many companies base their operating procedures on a philosophy of ‘enquiries received’. It is much healthier to assume we shall not receive a single enquiry that we ourselves have not generated. Many companies are diversifying out of their historic core business into new fields where they are unknown. Their name would not be on even a ‘long list’ of potential suppliers to this marketplace, let alone a ‘short list’; it is the task of marketing to overcome this.

Second, we cannot assume that people want what we are selling, in the sense that they already have it on their ‘shopping list’. A prime task of Marketing is to stimulate or generate a demand that may be only latent or potential.

Third, we cannot assume that people will ‘beat a path to our door’. We need to be proactive, not reactive. ‘Order-taking’ has little place in a positive marketing strategy. Of course we will take orders when they are presented to us, but the emphasis should be to go out, find potential customers, identify their needs, demonstrate that we have what they need and generate the contracts by our own initiatives.

Fourth, t...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• Preface
• Acknowledgements
• PART I THE ROLE OF MARKETING
• PART II THE ROLE OF MARKETING COMMUNICATION
• PART III THE ROLE OF BUSINESS DEVELOPMENT
• Templates for the Business Plan
• Index