High-technology companies often have better research and development capabilities than their competitors, yet they only achieve mediocre commercial success or fail completely. Do such companies simply need better marketing skills? Not necessarily. Rather, they need to link R&D with marketing.
Although having a strong research and development department or marketing team may help a company, it does not guarantee that the company will be successful. Companies that link strategic planning and marketing can effectively anticipate, analyze, and exploit market opportunities. This article provides managers with tips on creating a connection between their personal and professional lives.
What Sets High Technology Apart?
High-tech industries are unstable and often have a lot of competition. This is seen in the semiconductor, microcomputer, and robotics fields where competition happens quickly compared to less technology-intense endeavors. Several examples suggest that revolutionary changes can happen in high-tech industries.
Five years ago, a robotics trade show would have been small and unimportant. Since the industry started, it has grown to include many competitors who are trying to appeal to a large and growing market. Only recently have microcomputer companies begun to market themselves in a way that is appealing and attractive to consumers.
Technological capability used to be the main success criteria in this industry, and it carried Texas Instruments (TI) along for several years in home computers. Once marketing became an essential part of the home computer market, companies that relied mainly on their technology were no match for IBM, Apple, and others. After suffering from large financial losses, Texas Instruments pulled out of the home computer market. Home computer companies that have gone out of business include Panasonic, Tomy Corporation, Mattel, and Timex. High-technology competition is different from most other businesses because it is much more turbulent.
A way to improve understanding of high-tech markets is to divide them into either markets where there is a lot of demand or markets where there is a lot of supply. In the past, technology has created markets and demand. In the early stages of market development, marketing strategy is less about data and analytics and more about intuition and gut-feel.
Akio Morita, CEO of Sony Corporation, tells us that the marketing philosophy of a prototype supply-side thinker is to work hard and never give up.
If a product is new and innovative, the public might not understand or appreciate it at first. In 1950, our company marketed a tape recorder. Even though it was a big accomplishment and an innovative technology for us, to the general public it looked like a toy. At the time, people didn’t think to record speeches or use a tape recorder to learn languages. If a company is introducing an entirely new product, they need to create a market for it.
Supply-side markets are associated with technology that is driven by innovation. The company plans to make money by selling the things its laboratory creates. During this early stage of market development, research and development is the primary driver of marketing initiatives. An advertising agency executive specializing in high-technology products notes that high-tech efforts of this genre rely on a “presumptive need” rather than identification of buyers’ desires.
As the high-tech market matures, the conditions begin to look more like what is typically seen in the market. R&D’s task is to identify specific market needs and respond to them. This is done in conjunction with marketing, R&D, top management, and others. Marketing’s role here is more like what it used to be, with a bigger focus on advertising, pricing, and distribution. There’s less of an emphasis on entrepreneurship, and marketing is more closely tied to research and development. In brief, laboratory efforts are patterned after market objectives.
Companies that deal with high-tech products must be able to change their ways of doing things to fit the new markets. That evolution is usually not a smooth process. A market-share leader is in a difficult position from the start. There is always the risk that a large company will break into the same industry or market. A technology leader can suddenly become obsolete if a competitor makes a discovery or technological improvement – even if that company is a start-up.
If you’re good at coming up with innovative solutions, you might have a harder time than others when it comes to adapting to a market-based approach. The managers mentioned are not able to adapt to the changing conditions in order to remain successful.
A few years ago, we met a consumer-products start-up company that got a lot of money from venture capitalists. The funding was largely because of the success of the president’s past development of a high-tech industrial product. However, he had sold the company while it was still in the innovation-driven stage of market development, and thus he had never directed a company in a competitive environment.
The president and other high-ranking officials at the new consumer-products company all have engineering backgrounds. Although they lacked marketing experience, they were unwilling to invest any money into research regarding consumer demand and advertising themes. It should come as no surprise that the company has not earned a dollar of profit and is about to go bankrupt. The president’s expertise in technical skills and ability to think analytically has not been as useful in an environment where the market determines what happens.
Instead, they should manage the two activities together to magnify the firm’s strengths and overcome its weaknesses We believe that management should not limit themselves to either marketing or R&D, but utilize both in a way that strengthens the company as a whole and overcomes its weaknesses. There are marketing professionals who have no technological training who are successful in helping guide high-tech companies. Some companies that work with high-tech equipment, like Apple Computer, have started to hire people who typically work in marketing for consumer goods.
Distinguishing Between High-Tech Companies
“High tech” is a term that is used to describe anything that is cutting-edge or state-of-the-art. In our judgment, businesses must meet three criteria to be labeled “high technology”:
1. The business requires a strong scientific-technical basis.
2. New technology can quickly make existing technology obsolete.
3. As new technologies come out, they create or revolutionize markets and demand.
The most important distinction for discussing the marketing-R&D linkage is between market-driven and innovation-driven high technology. Companies that are driven by the market assign R&D the task of creating innovations that meet specific market goals. For technology companies, what customers need or want is not important. After the research and development breakthrough is made, customer needs and wants are considered. G.D. Searle’s Aspartame low-calorie sweetener was discovered by accident by a researcher working on an entirely different project. Only then was the commercial application made. We can differentiate further between market-driven and innovation-driven companies.
Market-driven companies
These companies fall into one of two groups:
1. The state-of-the-art-plus group.
Research and Development advances slowly as competitors take small changes and improvements in existing technology and turn it into a small advantage. Customer suggestions are often the source of new developments in the field of robotics. Timothy Bublick, marketing executive for the DeVilbiss Company’s robotics division, explains that adapting a robot spray-gun attachment to paint for a specific customer can turn into a modification of the product that improves it.
2. The problem-solving group.
These companies are not content with using only the current best methods. You should only continue with a task if it is something that is wanted or needed. This is what Thomas Edison, the first high-tech marketer, said.
Innovation-driven companies
Many high-tech companies are research businesses. For example, companies of all types and sizes are currently investing in biotechnology.
In gene-splicing research, companies like Biogen and Genentech compete with each other, as well as with other more market-driven pharmaceutical and chemical companies. The potential uses for biotechnology are so vast that the initial battle is being fought over basic patents. While some commercial applications of forecasters’ predictions may be ignored by companies, the predictions themselves range from disease-free grains to microorganisms for oil spills.
What is product marketing?
Product marketing involves managing the processes of taking a product to market. This field of marketing involves working with research and development, manufacturing, logistics, communications, and sales. Since your role is so closely linked to the products in your category, product marketers become the customer’s advocate when product-related decisions are made (positioning, launch, development, etc). What makes technology product marketing different will be explored in this blog.
What is technology product marketing?
Product marketing for technology products refers to marketing efforts when your products are related to information technology or other high-tech fields. Typically, technology product marketing is sold in a B2B environment. It is known for extended stakeholder relations and an increasingly competitive market. Many technology products are software. The thriving Software as a Service industry is a testament to cutting-edge business models and tech marketing that focuses on the customer.
The technology product lifecycle
The technology product or software lifecycle follows the 4 stages of the product lifecycle. The product lifecycle covers all products and services. You will need to consider sector trends when creating your marketing mix. The stages are introduction, growth, maturity, decline. Let’s get started.
Introduction
The challenge for technology product marketing managers is to get their product recognized and trusted by the people who matter. An increasing number of IT/high tech companies are working with influencers to promote their products and services. An influencer is somebody who has the ability to generate a large following and influence others on social media. According to the Digital Marketing Institute, 40% of Twitter users have made a purchase based on an influencer’s Tweet.
Influencers can help promote your new tech product, but recommendations from friends are more effective.
Growth
As your product grows, you will want to change your technology product marketing strategy to ensure that you reach the widest possible audience. Now that your brand and positioning is established, using marketing technology to scale up your marketing processes will help you grow faster.
Deloitte’s 2021 outlook for the US technology industry is to recommend modernizing capabilities to support future growth. They believe this is relevant for many global technology industries. Suggested capabilities include:
- XaaS (anything as a service, plus software as a service)
- Edge computing
- Accelerating adoption of cloud
Maturity
With maturity comes increased competition. Product marketers at this stage often choose to position their product either as being differentiated from competitors or as being a lower price than competitors.
One way to make a big impact is to use social proof. Having a large fan base of loyal customers is valuable because they are likely to purchase again and tell others about your product. Your customers are sharing their experiences of your technology product with other potential customers. This means that by improving your customer service and encouraging your customers to advocate for you, you can take advantage of the power of social proof.
Decline
It is the role of the product marketing manager to make decisions to protect profits as the technology product declines. They may cut production and reallocate their budget to other products. If you want to improve your product, you can try updating it or changing its brand/position.
The life cycle of technology products is much shorter than that of other products due to the rate of innovation and improvements.
When Marketing and R&D Go Their Own Ways
Despite company size and complexity, we believe that marketing and R&D can be linked. If either marketing or R&D is removed from the other’s decision making, top management’s direct input is necessary. Top management first needs to prioritize what is most important to link in order to have a successful outcome. After being established, each marketing-R&D group will worry not only about market planning but also about providing suggestions for new research and applications. As we have emphasized, large companies that produce multiple products need to develop systems that ensure they are taking into account all possible applications of new technology.
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