Why Technology Marketing is different!

1. Ute Hillmer 08 TECHNOLOGY TECHNOLOGY MARKETING LECTURE MARKETING Intro is different ! Product ESB Lecture Dr. Ute Hillmer Customer June 2009 Comm. Strategy

2. Ute Hillmer 08 Content of the Lecture TECHNOLOGY MARKETING LECTURE 1. Why is Tech Marketing different? 2. Characteristics of innovative technology Intro 3. Customer profiles Product 4. Marketing Communication Strategy a) Communication content Customer b) Technology decision process Comm. c) Communication channels / networks Strategy

3. Ute Hillmer 08 Examples for TECHNOLOGY MARKETING technology LECTURE products?? Intro Product “… that TECHNOLOGIES changed the way Customer you do things in your discipline / Comm. Strategy profession lately?”

4. Ute Hillmer 08 TECHNOLOGY MARKETING LECTURE Why should Intro marketing be different? Product Customer Comm. Strategy

5. Ute Hillmer 08 Technology Marketing is different because its products… TECHNOLOGY MARKETING … really change the way one is doing things LECTURE … need a lot of explanation – benefits often not readily obvious Intro – difference to competition not readily obvious Product … have a short product lifecycle – today's technology might be outpaced tomorrow Customer … influence and penetrate life and its experiences  rethinking Marketing : New=Good Credibility= important Comm. Strategy

6. Ute Hillmer 08 Technology Marketing is different because its customers… TECHNOLOGY MARKETING LECTURE – are sceptical and expect a dialogue – don‟t have any time to waist Intro – can be well informed – are uncertain due to always new technologies Product – expect customised solutions at low prices Customer  rethinking Marketing : New=Good Credibility= important Comm. Strategy

7. Most importantly: Technology Ute Hillmer 08 Marketing is different because its Products… TECHNOLOGY MARKETING LECTURE Intro … really change the way you are Product doing things Customer Comm. Strategy

8. Ute Hillmer 08 The Diffusion of an Innovation TECHNOLOGY MARKETING Disruptive innovation LECTURE Continuous innovation Tornado Intro Marketsize Early Product Mainstreet Total Market Assimilation Customer Time Comm. Strategy Source: Rogers Diffusion of Innovation 1962, 1995, p.262; Moore; Crossing the Chasm 1995, 1999, p.12; The Chasm Institute LLC 2008.

9. Ute Hillmer 08 Diffusion of an Innovation TECHNOLOGY MARKETING LECTURE Marketsize Intro Time Product Marketsize Marketsize Customer Comm. Time Strategy Time

10. Ute Hillmer 08 Why do certain innovations diffuse much TECHNOLOGY MARKETING LECTURE faster than others? Intro Why do certain Product innovations have a much longer mainstreet Customer momentum? Comm. Strategy

11. Ute Hillmer 08 Success Factors of an Innovation Diffussion Strategy TECHNOLOGY MARKETING LECTURE 1. Favourable Characteristics of Technology Innovations. Intro 2. Business Strategy that recognises different Product customer profiles. 3. Marketing Communication Strategy were Customer communication content and communication Comm. vehicle recognises and considers point 1+2. Strategy

12. Ute Hillmer 08 Inbound Elements of High Tech Marketing TECHNOLOGY MARKETING LECTURE Characteristics of technology Intro Customer profiles Communication strategy Product – Content – Technology decision process Customer – Communication channels / networks Comm. Strategy

13. Ute Hillmer 08 Inbound Elements of High Tech Marketing TECHNOLOGY MARKETING LECTURE Characteristics of technology Intro Customer profiles Communication strategy Product Product – Content – Technology decision process Customer – Communication channels / networks Comm. Strategy

14. Ute Hillmer 08 1. Favourable Characteristics of Technology Innovations TECHNOLOGY MARKETING LECTURE Innovations perceived as having greater: Intro - relative advantage - compatibility - trialability - observability Product Product - less complexity - familiarity Customer will be adopted more rapidly than others Comm. Strategy

15. Ute Hillmer 08 Relative Advantage TECHNOLOGY MARKETING = Degree to which a technology is perceived as LECTURE “better” Intro Measured in economic terms, but social prestige, convenience, and satisfaction are also important Product Product Objective advantages are not so important, it matters if an individual perceives the innovation as Customer an advantage Comm. Strategy

16. Ute Hillmer 08 Yes! TECHNOLOGY MARKETING An advantage for LECTURE one individual, a Intro thread for another? Product Product Customer No! Mmm... Comm. Strategy

17. Ute Hillmer 08 Sub dimensions of Relative Advantage TECHNOLOGY MARKETING LECTURE economic profitability personal goal low initial cost more or less flexibility Intro a decrease in discomfort more or less control Product Product social prestige personal marketability savings in time and effort curiosity Customer immediacy of the reward stability Comm. Strategy

18. Ute Hillmer 08 Subjective Construction of Reality TECHNOLOGY MARKETING LECTURE Each individual sees the world through Intro subjective lenses. Making sense of the Product Product world through her/his own Customer meaning system. Comm. Strategy

19. Ute Hillmer 08 A Bike! TECHNOLOGY MARKETING LECTURE Intro Product Product Customer Comm. Strategy

23. Ute Hillmer 08 A Bike! ? Blob TECHNOLOGY blob MARKETING Bla Blubber LECTURE ... bla ... Blub blubber.. blub. . Intro .. Product Product Customer Comm. Strategy

24. Ute Hillmer 08 A Meaning System Approach TECHNOLOGY MARKETING LECTURE “… is built around the idea that people develop beliefs that organise their world Intro and that give meaning to their experiences” Product Product DWECK 2000, p. xi Customer Different people hold different Comm. meaning systems. Strategy

25. Ute Hillmer 08 Marketing and Rationality TECHNOLOGY MARKETING „Good" is relative LECTURE - not immediately evident Intro - complex to understand - circumvented by the market Product Product - considered to be amoral Customer - difficult to implement  „Good“ ideas do not sell themselves, they need to Comm. Strategy be properly expressed and communicated

26. Ute Hillmer 08 Marketing and Rationality (2) TECHNOLOGY MARKETING LECTURE Most individuals perceive their actions as rational. Intro Lack of knowledge or inaccurate perception Product Product guide an individuals evaluation. Customer Comm. Strategy

27. Ute Hillmer 08 Status Aspects TECHNOLOGY MARKETING LECTURE Every innovation also has at least some degree of status conferral. Intro Product Product A motivation for many individuals to adopt is the desire to gain social status. Customer Comm. Strategy

28. Ute Hillmer 08 Special Forms of Advantages TECHNOLOGY MARKETING LECTURE A fad Intro Preventive technologies Incentives Product Product Mandates Customer Comm. Strategy

29. Ute Hillmer 08 A Fad TECHNOLOGY MARKETING is an innovation that represents a relatively LECTURE unimportant aspect of culture, which Intro diffuses very rapidly, mainly for status reasons, and then is rapidly discontinued. Product Product Customer Comm. Strategy

30. Ute Hillmer 08 Preventive Technologies TECHNOLOGY MARKETING LECTURE Preventive innovations are slower to diffuse because Intro • individuals have difficulties in perceiving their Product Product relative advantage • the rewards are uncertain Customer Comm. Strategy

31. Ute Hillmer 08 Incentives TECHNOLOGY MARKETING increase the degree of relative advantage of LECTURE the technology Intro • incentives increase the rate of adoption Product Product • incentives lead to adoption of an innovation by individuals different from those who would otherwise adopt Customer Comm. Strategy

32. Ute Hillmer 08 Mandates TECHNOLOGY MARKETING LECTURE incentives or penalties by law, tax etc. Intro • behaviour change that is desired by society but might not be desired by the individual can Product Product be mandated tax reduction for solar energy boost in Customer solar energy cell sales Comm. Strategy

33. Ute Hillmer 08 Favourable Characteristics of Innovations TECHNOLOGY MARKETING LECTURE Innovations perceived as having greater: Intro - relative advantage - compatibility - trialability - observability Product Product - less complexity - familiarity Customer will be adopted more rapidly than others Comm. Strategy

34. Ute Hillmer 08 Triability TECHNOLOGY MARKETING = Degree to which a technology can be LECTURE experimented with on a limited basis Intro • Technology is easier to adopt if it can be tried out Product in part, on a temporary basis, or easily dispensed Product with after trial. Customer • It„s a way to find out how it works under one's own Comm. conditions it gives meaning to a technology Strategy

35. Ute Hillmer 08 Complexity TECHNOLOGY MARKETING = Degree to which a technology is perceived as LECTURE difficult to understand and use. Intro • It is the perception of the end user that counts Product for achieving public adoption. Product • An innovation might look simple from the Customer viewpoint of the developer. Comm. Strategy

36. Ute Hillmer 08 Compatibility TECHNOLOGY MARKETING = The degree to which technology is perceived as LECTURE being consistent with existing values, past experiences, and needs of potential adopters Intro • Technologies that are incompatible with Product Product values and norms will be adopted much Customer slower because they require the adoption of Comm. a new value system. Strategy

37. Ute Hillmer 08 Familiarity TECHNOLOGY MARKETING LECTURE A combination of past experiences and social conformity. Intro Often, it is the compatibility of a new Product Product technology to familiar social and individual concepts and not to existing technologies Customer and processes. Comm. Strategy

38. Ute Hillmer 08 Naming a new Technology TECHNOLOGY MARKETING LECTURE A name affects its perceived familiarity and compatibility Intro Product Product  Customer research to name a new technology in each culture Customer Comm. Strategy

39. Ute Hillmer 08 Positioning a Technology TECHNOLOGY MARKETING LECTURE Positioning „co-designs“ a technology Intro Position a new technology in relation to already Product Product familiar concepts  familiarity! Potential adopters have relevant experiences with Customer which they associate the new innovation. Comm. Strategy

40. Ute Hillmer 08 Observability TECHNOLOGY MARKETING = degree to which the results of a technology are LECTURE visible to others Intro • Observing the advantages of a new technology increases the chance of adoption significantly. Product Product • After some adopt, observability improves the Customer diffusion effect, a critical component of technology transfer. Comm. Strategy

41. Ute Hillmer 08 Where in a TECHNOLOGY MARKETING LECTURE marketing plan do Intro the discussed areas Product Product belong? Customer Comm. Strategy

42. Ute Hillmer 08 Marketing Plan TECHNOLOGY 1. Objective 5. Marketing Communication MARKETING 2. Marketing Strategy Target Customer LECTURE Positioning Target Customer Key Message Compelling reason to buy Elements of the Communication Mix Intro 3. Key Issues Deliverables 4. Product Marketing Whole Product 6. Partner Marketing Product Product Features Service Partners & Allies Benefits 7. Key Account Marketing Pricing Customer Distribution Channels Competition Comm. Strategy

43. Ute Hillmer 08 Outbound Elements of Technology Marketing TECHNOLOGY MARKETING LECTURE Characteristics of technology Intro Customer profiles Communication content Product Technology decision process Customer Customer Communication channels / networks Comm. Strategy

44. Ute Hillmer 08 “Innovativeness” TECHNOLOGY MARKETING = degree to which an individual or a unit is relatively LECTURE earlier in adopting new technologies Intro Indicates overt Product Yes! behavioural No! Mmm... change, not just Customer Customer cognitive or attitudinal change Comm. Strategy

45. Ute Hillmer 08 Human Behaviour + Technology Marketing TECHNOLOGY MARKETING “… dramatically change past behaviour…” LECTURE and the typical human reaction: Intro – the majority of the market will hesitate to buy for a long time Product No !!! – when the new way of doing things gets Customer Customer accepted, everybody wants it right away Comm. Strategy

46. Ute Hillmer 08 Individual Adopter Categorization on the Basis of Innovativeness TECHNOLOGY MARKETING LECTURE Intro Product Marketsize size Market Customer Customer Comm. Chart based on Rogers 1962, 1995, p. 262 and Moore 1991,1999, p. 12 Strategy Time

47. Individual Adopter Categorization Ute Hillmer 08 on the Basis of Innovativeness TECHNOLOGY MARKETING Pragmatists: LECTURE Stick with the herd! Marketsize Conservatives: Hold on! Intro Visionaries: Skeptics: Techies:Get ahead! No way! Try it! Product Customer Customer Time Innovators Early Early Late Laggards Comm. Adopters Majority Majority Strategy Sources: Rogers Diffusion of Innovation; Moore; Crossing the Chasm

48. 2009 Category Life Cycle Ute Hillmer 08 Placement TECHNOLOGY •Mobile, web-based•HDTV MARKETING b-applications •Laptops (consumer) LECTURE Marketsize •Solar power •Virtual meetings •Tablet computers (enterprise) •Consumer games Intro •Social networking •Cloud computing •Social networking •Many web 2.0 (business) (consumer) applications •Smartphones •Laptops (enterprise) •Many “green” Product technologies Customer Customer Time Innovators Early Early Late Laggards Comm. Adopters Majority Majority Strategy Source: Chasm Institute 2008 LLC.

49. Ute Hillmer 08 Inventors: Techies Technology is their life TECHNOLOGY MARKETING Technology - Crazy LECTURE – Spend hours to get the product to work – Do everything to help the product Intro – Technology should be for free Forgiving souls Product – Don‟t mind lousy documentation and weird procedures to achieve functionality Customer Customer – Want technology first – no need for a sales channel Comm. Their role: they move technology forward but do Strategy not generate much diffusion

50. Ute Hillmer 08 Visionaries Technology enthusiastic businessmen, TECHNOLOGY driven by a dream MARKETING LECTURE Businessman first - driven to be the first Intro - new technologies are used to serve their own strategic benefit - don‟t want incremental but fundamental improvements Product - make business world aware of new technologies - not very price-sensitive, have project budget Customer Customer - live in the future - communicate with techies and other visionaries Comm. Strategy

51. Ute Hillmer 08 Visionaries (2) TECHNOLOGY MARKETING Take a risk LECTURE - love publicity Intro - risky projects - start projects from ground up, don„t want Product standards, want to develop them - buy by intuition Customer Customer - highly motivated, driven by a dream Comm. Strategy

52. Ute Hillmer 08 Visionaries (3) TECHNOLOGY Excellent communicators MARKETING LECTURE - charismatic; they fight for their project - like to serve as a reference Intro - network with techies and pragmatists - too many references demotivate visionaries Product - look for new ideas in communication with intelligent people Customer Customer Comm. Their role: they fund the product development Strategy

53. Ute Hillmer 08 Pragmatists Look for measurable, incremental improvement TECHNOLOGY Driven by business results MARKETING LECTURE - improved productivity Avoid risk Intro - risk is a negative term - want to work with market leader/ established firms Product - look for product quality, support, consulting, good interfaces, reliability Customer Customer - want standards, “save buys” - need references Comm. - live in the present Strategy

54. Ute Hillmer 08 Pragmatists (2) TECHNOLOGY Loyal customers MARKETING • are interested in company they buy from LECTURE • revenue and profit must grow steadily “stability” Intro • communicate within company and industry • the first mass market Product Their role: They hold the key to the mainstream market Customer Customer BUT: you need to be established in order for them to buy from you but you don‘t get Comm. established until they buy from you ! ? Strategy

55. Ute Hillmer 08 Pragmatists (3) TECHNOLOGY MARKETING Consequences out of this profile LECTURE One really needs to be familiar with the Intro processes and issues that worry these people Product  Offer a clear relative advantage to them Customer Customer Comm. Strategy

56. Ute Hillmer 08 Conservatives “I don’t have to like the product, even if I use it” TECHNOLOGY MARKETING LECTURE - They do what pragmatics do, but later Intro - Invest in technology to keep up with competition Product - Have low technical competence Customer Customer Comm. Strategy

57. Ute Hillmer 08 Conservatives (2) TECHNOLOGY MARKETING - predictable LECTURE - want everything faster, cheaper, improved Intro - are price sensitive - like bundles, pre-installed solutions Product - “if it isn’t broken, don’t fix it” - very interested in service and support Customer Customer Their role: huge mass market Comm. Strategy

58. Individual Adopter Categorization Ute Hillmer 08 on the Basis of Innovativeness TECHNOLOGY MARKETING Pragmatists: LECTURE Stick with the herd! Marketsize Conservatives: Hold on! Intro Visionaries: Skeptics: Techies:Get ahead! No way! Try it! Product Customer Customer Time Innovators Early Early Late Laggards Comm. Adopters Majority Majority Strategy Sources: Rogers Diffusion of Innovation; Moore; Crossing the Chasm

59. Ute Hillmer 08 The Chasm TECHNOLOGY MARKETING 1. Visionaries had their turn and new LECTURE visionaries chase new dreams (new technologies new visionaries) Intro 2. Pragmatists want to wait Product 3. Investors get nervous Customer NO MARKET!! ?? Customer Comm. Strategy

60. Ute Hillmer 08 Technology Adoption and Its Challenges TECHNOLOGY MARKETING From „change agent“ to LECTURE productivity improvement How much technical Marktvolumen competence is Intro necessary? Translate a hot technology into a business benefit Product Lack of appreciation Customer Customer Comm. Strategy Innovators Early Early Late Laggards Zeit Adopters Majority Majority Geoffrey Moore 1995, 1999

61. Ute Hillmer 08 Why is there a Chasm? TECHNOLOGY Techies and Visionaries talk MARKETING LECTURE Conservatives watch the Pragmatists before buying technology Intro BUT Visionaries and Pragmatists don„t respect each Product other Customer Customer customer references are there - but not the right ones! Comm. Strategy

62. Ute Hillmer 08 Why won‟t Pragmatists buy? TECHNOLOGY MARKETING 1. Pragmatic customers hold on to the old paradigm LECTURE 2. Customers see the benefit but they don„t have a pressing Intro reason to change 3. User and purchasing want to hold on to the old status Product quo Customer Customer the market reacts reluctant Comm. Strategy

63. Ute Hillmer 08 TECHNOLOGY MARKETING What can be done? LECTURE Intro Product Customer Customer Comm. Strategy

64. Ute Hillmer 08 Crossing the Chasm successfully TECHNOLOGY MARKETING „Concentrate a overwhelming power LECTURE on a small, focused target market Intro segment“ FOCUS Product Customer Customer Comm. Strategy

65. Ute Hillmer 08 Pragmatists want Observability TECHNOLOGY MARKETING “… be familiar with the processes and issues that LECTURE worry these people…” Intro  relative advantage Product  compatibility  trialability Customer Customer  observability Comm.  less complexity Strategy

66. Ute Hillmer 08 What does that mean for Marketing? TECHNOLOGY MARKETING LECTURE The previous key to success has to be thrown away! Everything has to be Intro changed: rework message and positioning Product new message: solve a core niche problem Customer Customer get references in this niche Comm. Strategy

67. Ute Hillmer 08 Positive Effects of the Focus TECHNOLOGY MARKETING LECTURE Effective marketing message Word of mouth (interpersonal networks) Intro 100% product solution is possible Product Focused investment of resources Customer Customer Usually no competition (not yet) Possibility for market leadership Comm. Strategy

68. Ute Hillmer 08 The 100%-Product TECHNOLOGY MARKETING LECTURE Standards Additional and Software Procedures Anything else Intro Additional Training Core- Hardware you would need and Support Produkt to achieve your Product compelling System Cables integration reason to buy Installation Customer Customer and Debugging Comm. Strategy

69. Ute Hillmer 08 Market leadership TECHNOLOGY MARKETING Pragmatists value stability and predictability LECTURE As long as there is no stability and predictability in the Intro market, they will not make a decision. They talk with each other, they watch and they wait. Product A pattern, stability and predictability develops as soon as there is a clear market leader Customer Customer This is the way to the mass market Comm. Strategy

70. Ute Hillmer 08 Focus – and then? Situation: TECHNOLOGY MARKETING Vendor has market leadership in a small niche + a 100% LECTURE product for a small niche. Intro Next step: New markets develop automatically, that are close to the Product focused niche because now there are: • relative product advantages that almost fit Customer Customer • credible references observability • word of mouth credible communication channels Comm. Strategy

71. Ute Hillmer 08 Recap: Marketing Plan TECHNOLOGY 1. Objective 5. Marketing Communication MARKETING 2. Marketing Strategy Target Customer LECTURE Positioning Target Customer Key Message Compelling reason to buy Elements of the Communication Mix Intro 3. Key Issues Deliverables 4. Product Marketing Whole Product 6. Partner Marketing Product Features Service Partners & Allies Benefits 7. Key Account Marketing Pricing Customer Customer Distribution Channels Competition Comm. Strategy

72. Ute Hillmer 08 Outbound Elements of Technology Marketing TECHNOLOGY MARKETING LECTURE Characteristics of technology Intro Customer profiles Communication content Product Technology decision process Customer Communication channels / networks Comm. Strategy Strategy

73. Ute Hillmer 08 Communication content TECHNOLOGY Two kind of information: MARKETING LECTURE Technology information Technology evaluation information What is it? What are the consequences? Intro How does it work? What are the benefits? Product Why does it work? Individual evaluation information Customer What might it do to me? How can I benefit? Comm. Strategy Strategy What will I loose?

74. Ute Hillmer 08 Who needs what kind of information and when? TECHNOLOGY MARKETING Pragmatists: LECTURE Stick with the herd! Marketsize Conservatives: Hold on! Intro Visionaries: Skeptics: Get ahead! No way! Product Techies: Try it! Customer Time Innovators Early Early Late Laggards Comm. Adopters Majority Majority Strategy Strategy Sources: Rogers Diffusion of Innovation; Moore; Crossing the Chasm

75. Ute Hillmer 08 Level of Concern over Time for the Mainstream TECHNOLOGY MARKETING LECTURE Intro Product Customer Comm. Strategy Strategy

77. Ute Hillmer 08 Technology Decision Process TECHNOLOGY MARKETING LECTURE Knowledge Intro Persuasion Decision Product Implementation Customer Confirmation Comm. Strategy Strategy

78. Ute Hillmer 08 Types of Innovation Decision TECHNOLOGY MARKETING LECTURE • optional innovation decision Individual‟s influence on the decision Intro • collective innovation decision Product • authority innovation decision Customer Organizational decision processes Comm. Strategy Strategy

80. Ute Hillmer 08 Communication Channels / Networks TECHNOLOGY MARKETING LECTURE Communication process in which participants create and share Intro information with one another in order to reach a mutual understanding. Product Communication Channels – connect the informed individual with the others. Customer – the means for the information exchange to communicate a new idea to one or several others. Comm. Strategy Strategy

81. Ute Hillmer 08 Communication Channels (2) TECHNOLOGY MARKETING LECTURE • Mass media channels Intro • Interpersonal channels Product Customer Comm. Strategy Strategy

82. Ute Hillmer 08 Role of Communication Channels TECHNOLOGY MARKETING • Technology is not evaluated in scientific studies of LECTURE its consequences (also they are not irrelevant to early adopters) Intro • People depend mainly upon subjective evaluation from other individuals like themselves Product  The core motivator is the modelling and imitation of opinion leaders and peers who have adopted Customer previously Comm. Strategy Strategy

83. Ute Hillmer 08 Technology and Cultural Change TECHNOLOGY MARKETING Technology adoption always brings about culture LECTURE change adoption decision is a change in the “rules for behaviour”. Intro Sometimes, social structure and culture must Product change considerably to adopt. The public requires assurances from opinion leaders to make such a change. Customer Comm. Strategy Strategy

84. Ute Hillmer 08 Mass Media Channels TECHNOLOGY MARKETING Rapid and efficient to inform about the existence LECTURE of an innovation = awareness creation Intro It also gives feedback to potential adopters about those who have adopted. Product Because they create awareness, mass communications place some pressure upon Customer opinion leaders to make decisions about the new technology. Comm. Strategy Strategy

85. Ute Hillmer 08 Mass Media Channels TECHNOLOGY MARKETING LECTURE are ….. Intro Product Customer Comm. Strategy Strategy

86. Ute Hillmer 08 Interpersonal Communication TECHNOLOGY MARKETING Interpersonal communications between experts and LECTURE the public, opinion leaders and the public, peers and among friends and family = persuasion Intro Equally as essential as mass communications. Product Knowing the viewpoints of close references (e.g., family and friends) and opinion leaders is a critical Customer element of the social comparison process leading to choice shift. Comm. Strategy Strategy

87. Ute Hillmer 08 Communication Channels TECHNOLOGY Effectiveness MARKETING LECTURE by decision stages Intro Mass media is more important at the knowledge stage Interpersonal channels are more important at the Product persuasion stage Customer Comm. Strategy Strategy

88. Ute Hillmer 08 Communication Channels Effectiveness (2) TECHNOLOGY MARKETING LECTURE by adopter category Intro Mass media channels are more important than interpersonal channels for early adopters; Product Interpersonal influence is less important to early adopters  Mass media channels early in a product life cycle; Customer interpersonal channels later Comm. Strategy Strategy

89. Ute Hillmer 08 Communication Channels Effectiveness (3) TECHNOLOGY MARKETING Interpersonal Channels and Adopter Profile LECTURE Intro Product Customer Comm. Strategy Strategy Source: Rogers, Diffusion of Innovations, p. 198

90. Ute Hillmer 08 Mass Media Communication Flow TECHNOLOGY MARKETING Transmission of facts alone limited success LECTURE Media presents positions of proponents and Intro opponents and opinion leaders are mediating the information higher success Product Mass media channels are primarily knowledge creators (awareness) Customer Comm. Strategy Strategy

91. Ute Hillmer 08 Interpersonal Communication Flow: Opinion leaders TECHNOLOGY MARKETING LECTURE Social systems have prestige hierarchies some persons / organisations are Intro more influential than others Focus upon wining opinion leaders. It will Product be opinion leaders who will persuade others to adopt. Customer Interpersonal networks persuade Comm. Strategy Strategy

92. Ute Hillmer 08 Communication Networks TECHNOLOGY Networks have a certain degree of MARKETING LECTURE structure, of stability. This structure is so complex, that even the members of the Intro system do not understand the communication structure of which they Product are part. 100 members: 4.950 links Customer 200 members: 19.900 links Comm. Strategy Strategy

93. Ute Hillmer 08 Interpersonal Communication Networks TECHNOLOGY MARKETING LECTURE • Interconnected individuals who are linked by patterned communication flows to a Intro given individual. Product • Individual behaviour is determined in part by information and influence that is Customer communicated through the individual's personal network. Comm. Strategy Strategy

94. Ute Hillmer 08 Interpersonal Networks (2) TECHNOLOGY MARKETING Interlocking personal networks LECTURE a network of individuals, all of whom interact with each other Intro Radial personal networks Product a set of individuals linked to a focal individual (opinion leader) but not interacting with each other. Such networks are less dense and Customer more open Comm. Strategy Strategy

95. Ute Hillmer 08 Interpersonal Networks (3) TECHNOLOGY MARKETING are… LECTURE Intro Product Customer Comm. Strategy Strategy

96. Ute Hillmer 08 Radial Personal Networks "the strength of weak ties" TECHNOLOGY MARKETING LECTURE Weak ties occur with individuals only marginally included in the current network Intro of contacts They allow the exchange of information Product with a wider environment Particularly important in the diffusion of Customer innovations because the links reach out to the entire system Comm. Strategy Strategy

97. Ute Hillmer 08 Radial Personal Networks “the strength of weak ties“ (2) TECHNOLOGY MARKETING LECTURE new information flows stronger in weak ties, because an individuals close Intro friends seldom know much more that the individual does not also know. Product Communication proximity: Customer the degree to which two individuals in a network have overlapping personal communication Comm. networks Strategy Strategy

98. Ute Hillmer 08 Similarity in Networks TECHNOLOGY MARKETING LECTURE individuals tend to be linked to others who are close to them in physical distance and Intro who are relatively homophilious = similar in social characteristics. Product Network links with similar individuals require the least effort (easy communication) and are Customer most rewarding (agreement on many terms). Comm. Strategy Strategy

99. Ute Hillmer 08 Similarity in Networks (2) TECHNOLOGY MARKETING Technology diffusion demands a certain LECTURE degree of heterophily to be effective Intro  If individuals want more information, they Product must break out of the comfort of close links and form more open and spatially distant network links. Customer Comm. Strategy Strategy

100. Ute Hillmer 08 Personal Networks and Thresholds TECHNOLOGY MARKETING A threshold is reached when an individual is LECTURE convinced to adopt as the result of knowing that some minimum number of other Intro individuals have adopted The threshold is an individual level. Product Customer Comm. Strategy Strategy

101. Ute Hillmer 08 Personal Networks and Thresholds (2) TECHNOLOGY MARKETING some people adopt late, but early within their LECTURE personal network - a lack of network exposure to the innovation Intro some people adopt easily within the entire system but late within their personal network Product  a person is more likely to adopt if more of the other individuals in his or her personal Customer network have adopted previously Comm. Strategy Strategy

102. Ute Hillmer 08 Technology-adoption Life-cycle - the Cycle in the Cycle TECHNOLOGY MARKETING LECTURE Marketsize Intro Product Customer Time Innovators Early Early Late Laggards Comm. Adopters Majority Majority Strategy Strategy

103. Ute Hillmer 08 Mainstream Behaviour number of adoptions Noncumulative TECHNOLOGY MARKETING LECTURE Intro Product Increasingly conforming behaviour Customer Innovators Early Early Late Laggards Time Adopters Majority Majority Comm. Strategy Strategy Chart based on Rogers 1995, p. 262 and Moore 1999, p. 12

104. Ute Hillmer 08 Individualistic Behaviour number of adoptions Noncumulative TECHNOLOGY MARKETING LECTURE Intro Product Increasingly individualistic behaviour Customer Innovators Early Early Late Laggards Time Adopters Majority Majority Comm. Strategy Strategy Chart based on Rogers 1995, p. 262 and Moore 1999, p. 12

105. Ute Hillmer 08 Group-Identities vs. Role-Identities During Technology Adoption TECHNOLOGY MARKETING number of adoptions LECTURE Noncumulative Multiple, coherent Group-Identity dominates group and role identities that Role-Identity dominates Intro balance the individual Product Customer time individualistic endorsement Comm. Individualistic behaviour conforming behaviour behaviour Strong ROLE-identityStrategy strong GROUP-identity Strong ROLE-identity “I am part of it” “I can and will change it” “I can change it”

106. Ute Hillmer 08 Recap: Marketing Plan TECHNOLOGY 1. Objective 5. Marketing Communication MARKETING 2. Marketing Strategy Target Customer LECTURE Positioning Target Customer Key Message Compelling reason to buy Elements of the Communication Mix Intro 3. Key Issues Deliverables 4. Product Marketing Whole Product 6. Partner Marketing Product Features Service Partners & Allies Benefits 7. Key Account Marketing Pricing Customer Distribution Channels Competition Comm. Strategy Strategy

107. Ute Hillmer 08 E-Learning Case Study TECHNOLOGY MARKETING Develop the key components of a marketing and LECTURE marcom plan for a product in the fast moving e- Intro learning (online learning) segment. Product Customer Comm. Strategy

108. Ute Hillmer 08 E-Learning Case Study 1 Your company is in the business of developing and marketing e- TECHNOLOGY learning software for the institutional or organisational market. A MARKETING LECTURE strategic move is to develop a software application, especially targeted at the academic online-learning market. You and your team are in charge to develop the market oriented part of the Intro business plan for, what is hoped to become a new, breakthrough software application within the next 2-3 years. Product At the end of the 4 days, your team is expected to present an outline of the marketing- and marcom-plan to the board, the VP of Customer R&D as well as the VP of sales and marketing in order to get their OK for the necessary funding and the time allocation of the respective teams necessary for the project. (Joint presentation at Comm. Strategy the end of the 4th day, each team member presenting about 5 minutes).