This document discusses marketing for technology-based businesses. It covers several key topics: 1. It outlines the uncertainties in high-tech markets related to technology and competition. 2. It discusses contingency theory for marketing strategies, noting strategies should depend on whether innovations are breakthrough or incremental. 3. Segmentation variables are identified to profile distinct buyer groups that may require separate marketing approaches. 4. The importance of customer orientation, competitor orientation, and interdisciplinary thinking are emphasized for a market-oriented approach.

1. MARKETING
In Technology Based Business
Prof. Dr. A.J.Groen
Professor of Innovative Entrepreneurship
a.j.groen@utwente.nl

2. NIKOS
Prof. Dr. Aard J. Groen
Professor of Innovative Entrepreneurship
 Full professor of Innovative Entrepreneurship, major interest are market oriented
entrepreneurship in networks with technological core element of competititive
advantage, support systems of entrepreneurship, innovation and business
development in existing companies (including corporate entrepreneurship/venturing)
 Department chair business administration (2012>) /director NIKOS (2001>) @ School
of Management & Governance
 Leader research group lnnovation & Entrepreneurship @ IGS Institute for Innovation
and Governance Studies
 Associate editor Technovation Journal for technology entrepreneurship and
innovation management. (Impact factor 2.995, 2010)
 Project leader Venture Lab Twente
 Activity lead Entrepreneurship support system EIT-ICT-Labs
 Contact: a.j.groen@utwente.nl
2

3. NIKOS
High Tech markets
Market
Uncertainty Technological
Uncertainty
High-Tech
Products/
Services
Competitive
Volatility

4. NIKOS
Probability of Success of Innovationprocesses
Probability of Probability of
Overall Probability
probability
of success = of technical
completion X given technical
completion
X
commercialization economic
success given
commercialization

5. NIKOS
Case Video 2000
 Best product in class 8 hours of perfect picture video, quick search
system, mr Philips: “people like to tape a football game”
 But….
 Standard was closed, so competitors could not build it
VHS and Betamax were more open
 The EU standard for TV (PAL SECAM) is not the same as US standard
NTSC no relative advantage for Video 2000 quality there
 No Porn movies to play on Video 2000, but available in video rental
shops for VHS
 VHS worldstandard

6. NIKOS
What if you want to develop new products or services?

7. NIKOS
So what do we expect from a marketing perspective?
 Product orientation  Market orientation
 The best product is best garantuee for
 Serving the need of the customer
profit
drives profit
 A better technological developed
 Knowing and reacting to the
product will drive profit on long run
competitors market behavior supports
 Every part of the organization have to do long term profit
the best they can regarding their goals 
Interfunctional coördination is
necessary for optimal value creation

8. NIKOS
Contingency Theory of High-Tech Marketing
Marketing New Product
Strategy Success
Type of
Innovation
-Breakthrough
-Incremental
Type of marketing strategy is contingent
upon the nature of the innovation.

9. NIKOS
Implications of Contingency Theory:
Examples
Breakthrough
Incremental
R&D/Marketing R&D leads; Marketing leads;
Interaction “technology push” “customer pull”
Type of
Lead users; Surveys; focus
Marketing
empathic design groups
Research
Selective
Role of Primary demand;
demand; build
Advertising customer education
image
Pricing May be premium More competitive
©2010 Pearson Education, Inc. publishing as Prentice Hall

10. NIKOS
Technology based perspective
Radical
I-pad lab on chip for personal
medication
Sustaining Disruptive
OV-chip card electronic thermometer
Incremental

11. NIKOS
How to understand competitive advantage of firms?
 The invisible hand of the market will do its work, those firms delivering
most efficiently products for a certain demand will survive.
 Co-ordinate many visible hands by building value creating networks
 Services versus products
 Role of Innovation & Entrepreneurship

12. NIKOS
Management orientations on marketing
 Strategic marketing (1983-)
‘The marketing function initiates, negotiates and manages
acceptable exchange relationships with key interest groups, or
constituencies in the pursuit of sustainable competitive
advantages, within specific markets, on the basis of long run
consumer and channel franchises (Day & Wensley, 1983)
Being market oriented implies:
1. Customer orientated
2. Competitive oriented
3. Interdisciplinary / integrated thinking about the business
functions

13. NIKOS
Management orientations on marketing
Being market orientated implies:
1. Customer orientation:
Products are designed on the basis of a perceived customer
demand; market research is done;
Making a buy is simple;
Reasonable promises are made and kept;
Adequate reaction on mistakes;
Measure and improve costumer satisfaction;
The company is accessible and provides fast and reliable
information.
Interaction with the customer is a central concern!

14. NIKOS
Management orientations on marketing
Being market oriented implies:
2. Competitor orientation:
An analysis of the competitors behavior is made and the obtained
knowledge is applied in relevant parts of the marketing process;
It is known what instrument competitors use;
It is known how to react on actions of competitors;
Competitive Strategies are made explicit in plans, which are
authorized by top management
Sustainable competitive advantage is searched for .

15. NIKOS
Management orientations on marketing
Being marketoriented implies;
3. Interdisciplinary / integrated network-aimed thinking about
business functions, e.g.:
Thinking about the achievement of added value is process
orientated and if necessary, internal and external contact are
involved;
Customer information is passed on in the network;
Relevant information is shared;
Use of each others instruments;
Partial strategies for departments are being harmonized;
Successes and mistakes are shared;
The entire organization is market orientated!

16. NIKOS
assignment
 Fill out questionair on market orientation
 Think about why you think one side is more important then the other?
 What consequence might it have for your market approach?
 Do you need to change your organization?

17. NIKOS
Three basic preference patterns
for Ice
Creaminess
Creaminess
Creaminess
Sweetness Sweetness Sweetness

18. NIKOS
Segmentation
The act of identifying and profiling distinct groups of buyers who might
require separate products and/or marketing mixes
 Identify segmentation variables and segment the market
 Develop profiles of resulting segments

19. Segmentation variables
Bases
Descriptors
specific; what, why, when, where
General; who and where is the and how buys the customer?
client?
 Product use
 ‘Benefits’ (unmet needs)
 Geografic
 Perceptions and preferences
 Demografic  Sensibility for marketing
 Social-economic instruments
 Psychografic
But, are these segments different But, are these segments
in buying behavior? identifiable and reachable?

20. NIKOS
Segmentation on basis of processes of customers
 Which actors are involved?
 What sources do they use?
 Which activities are performed?
 Dependencies between these categories?
(Hakansson, 1987)
 Example pressure measurement and adjustement of wheelchairs
against decupitis

21. NIKOS
Demands on segments
1. Homogeniety: having the same set of preferences and
sensibility for the offering.
2. Identifiable: can we establish who and where the clients
are?
3. Substantial: is the expected size of the segment large
enough to warrant investments?
4. Measureable: can we measure how much of the market we
have reached?
5. Reachable: Are the clients open for contact with us?

22. NIKOS
Four levels of segmentation
 Mass marketing
 Segmented markets
 Niche marketing
 Micromarketing

23. NIKOS
Marketing is changing: Consequences for
Segmentation
 Micro Segmentation (Micro Marketing)
 Mass Customization (My adidas, My Dell etc)

27. NIKOS
Targeting
The act of selecting one or more segments to enter
 Evaluate the attractiveness of each segment
 Select the target segment(s)

28. NIKOS
Positioning
The act of designing the company’s offering and image
so that it occupies a distinct and valued place in the
customer’s mind
 Identify possible positioning concepts for each target
market
 Select, develop, and communicate the chosen
positioning concept

29. NIKOS
Three generic value propositions
 Operational excellence
 Customer intimacy
 Product leadership

30. NIKOS
What is Strategic Marketing Management?
 Business Definition?

31. NIKOS
What is Strategic Marketing Management?
 Business Definition?

32. NIKOS
What is Strategic Marketing Management?
 Consists five complex and interrelated processes:
 Defining the organization’s business, mission, and goals
 Identifying and framing organizational growth opportunities
 Formulating product-market strategies
 Budgeting marketing, financial, and production resources
 Developing reformulation and recovery strategy