Introduction to technology marketing

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Contents •  Goal: To Define Key Marketing Concepts •  Introduction –  Defining the field and scope •  Part I: Analytical Foundation •  Part II: Critical Value Factors •  Part III: Strategic Approach

Introduction DEFINING THE FIELD

Marketing - the definition •  Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Source: AMA

The Marketing Mix Product Price •  Variety, Quality, Design, •  List price, Discounts, Payment Warranty, Packaging, Brand Terms, Credit Name, Features 4Ps Promotion Place (Distribution) •  Advertising, Sales Promotion, •  Channels, Coverage, Locations, Sales Force, Direct Marketing, Assortments, Transportation, Public Relations Inventory

A Specialized Field Our Focus Marketing Technology Start-ups

Part I ANALYTICAL FOUNDATION

H1: Your Business Idea •  The name of your business/product idea? •  What kind of problem do you solve? Is this an important problem? Is there a big potential market? •  How is your competition solving this problem for their customers today? •  Why are you qualified to solve this problem better than your competitors? Is your uniqueness sustainable over time?

“The Chasm”

Are you Disruptive? Gain Twilight Zone Pain

The Analytical Foundation •  SWOT Analysis –  Internal: Strength, Weakness •  Attributes •  Capabilities •  Assets –  External: Opportunity, Threat •  PEST Analysis (Macro) •  Industry Analysis (Intermediate) •  Market Analysis (Micro)

Part II CRITICAL VALUE FACTORS

Target Customer Ideal 80% of Ideal 60% of Ideal

Customer Pain •  What problem are you solving for your customer? •  Is the customer aware of the problem or is it a latent problem? •  Market Analysis: Customer Needs •  C.Christensen: Job-to-be-done •  Avoid: Your reason to sell…..

Whole Product Potential Align with stage of Adoption Curve Expected Extended Core Product

Value Proposition

Part III STRATEGIC MARKET APPROACH

Competition •  There is always competition! •  Presence of choice is competition: –  Economic: Spend the money on other things •  Compete for product leadership –  Reference: Spend the money with competitor •  Compete through differentiation –  Inertia: Choose not to spend (biggest) •  Compete through FUD (or simply wait….)

BOS: The Art of Differentiation Source: Kim, W. C. & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.

Partnering & Distribution Partner Distributor •  Offers a part that •  Offers an avenue to complements Core customers Product •  Is determined by •  Implicit part of value complexity of solution proposition •  Cost and availability of •  Role of partners change channel important factors over time •  In some cases: distributor and partner is the same.

Partnering for Whole Product Solution Partner Potential Expected Extended Core Product

Distribution Model: Software

Pricing Principles •  Basis: Understand the value for your customer. –  Nature of Value: One-off or ongoing –  Will pay perceived value – not objective value •  Importance of Customer Relationship •  Critical for Positioning •  Avoid pricing complexity •  Be fair

Positioning •  Is in your customer’s mind •  What is the most attractive position to ‘own’? •  Reflects the sum of your Marketing Mix, but your marketing communication, price and physical attributes carry the most weight.

Positioning Statement •  For… (your target customer or market) •  Who… (the compelling reason to buy) •  Our product is a… (your placement within a new or existing category) •  That provides… (the key benefit that directly addresses your customer’s compelling reason to buy) •  Unlike… (the primary alternatives or competitors) •  We have assembled… (key difference or point of differentiation in relation to your specific target customer)

Example: TiVo

The TiVo Story •  Established 1997 •  Created the world's first digital video recorder (DVR) •  Potential to “kill” commercial TV •  Launch strategy: “Celebrity Evangelists” •  Revenue in Q3-07: $ 133M (peak) •  Revenue in Q2-09: $ 106M (down 20%) •  Stock price: $ 10.66 (All time high: $ 70)

TiVo: Customer Pain •  Time-shifting (need currently filled by VCR) •  Challenge: People don’t like VCRs because they don’t understand how to use them. •  Solution: Avoid positioning TiVo as alternative to VCR.

TiVo Positioning •  Original position: –  “TiVo is like having your own TV network where you get to decide what's on and when" •  Problem 1: “Personal TV Network” – customers have no familiarity with term •  Problem 2: Didn’t solve the customer pain •  Problem 3: Wrong type of evangelists •  Problem 4: The life cycle too short

Questions?

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Introduction to technology marketing

by Cathy Bogaart

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