Bus 632 : The Commercialization

1
Bus 632 The Commercialization Marketing of
High Tech ProductsSession 2

• Instructor Paul Weber
• Office Schlegel Centre SBE 2218
• Phone [phone]
• Email paul_at_webercommunications.com

2
Agenda for Tonight

• Speaker Bill Scott, VP Operations, Navtech Inc.
• Discussion of Readings
• Understanding High-Tech Customers
• Six Chasms In Need of Crossing

3
Speaker Bio Bill Scott

• Current Role
• Vice President of Operations for Navtech Systems
  Support Inc., a world leader in providing
  software solutions to the aviation industry. .
• Bill is responsible for leading Operations
  Support, Installation Management, Technical
  Support, QA, Documentation, Training, IT System
  Admin. and Release Management
• Prior to Navtech
• VP Marketing, Checkfree I-Solutions
• Director of Marketing, Electrohome Projections
  Systems
• Product Management NCR
• Other
• Founding member of the High Tech Product
  Development P2P Group at Communitech
• Education
• Honours Business from Wilfrid Laurier University,
  

4
Reading 1 Understanding High-Tech Customers

• What factors influence a customers potential
  adoption of new technology?

5
Reading 1 Understanding High-Tech Customers

• Five Factors Affecting Customer Purchase
  Decisions
• Relative advantage
• Benefits of adoption vs.. The cost of adoption
• Compatibility
• The extent to which adoption is based on
  standards (how much change is necessary to
  adopt)
• Complexity
• How difficult is the product to use
• Ability to communicate product benefits
• How easy is it to communicate the benefits to
  prospective customers
• Observability
• How easy is it to see the benefits of use

6
Reading 1 Understanding High-Tech Customers

• What is the Chasm?
• Compare and contrast the marketing strategies
  that are necessary in the early market versus the
  mainstream market?

7
Reading 1 Understanding High-Tech Customers
Early Market Strategies Marketing to
Visionaries Require custom products and tech
support Pros - First customers cash flow -
Establish reputation - highly technical dont
expect or require whole product - best
product wins Cons - resources required to
support are not sustainable - takes the
company down many different paths - not
referencable for pragmatists
C H A S M
Mainstream Market Strategies Marketing to
Pragmatists Require a whole product end to end
solution Typically requires partnerships to be
able to provide
Whole Product / Solution Sale
Technology Sale
Technology Enthusiasts
Pragmatists
Conservatives
Laggards
Visionaries
8
Reading 1 Understanding High-Tech Customers

• What are the three phases of the pragmatist
  market (from Inside the Tornado)?

9
Reading 1 Understanding High-Tech Customers

• Main Street
• Growth stabilizes. Infrastructure is in place.
  Focus on selling extensions of products to
  current customer base.

• The Tornado
• Period of mass market adoption driven by a
  killer app or a technology based on a universal
  infrastructure.
• Swamps existing system of supply. Opportunity to
  develop distribution channels and requires strong
  partnerships

Alternative Customer Intimacy
Product Leadership
C H A S M

• Bowling Alley
• Focus on vertical niches and build niche specific
  whole product s, partner extensively and create
  de facto standard in the market

Technology Enthusiasts
Pragmatists
Conservatives
Laggards
Visionaries
10
Reading 1 Understanding High-Tech Customers

• What makes a good beachhead?

11
Reading 1 Understanding High-Tech Customers

• Things to consider when looking for a Beachhead
• Meaningful leadership to adjacent segments
• Leverage credibility in one segment into the next
• Compatibility between capabilities and whole
  product requirements
• A single, compelling reason to buy that maps
  closely to the capabilities of the firm.

12
Reading 1 Understanding High-Tech Customers

• How can marketers manage concerns migration paths?

13
Reading 1 Understanding High-Tech Customers

• How can you manage transitions between
  generations
• Withdraw the older generations soon as the new
  one launched, with no assistance to install base.
• Force migration
• Withdraw the older generation when the new one is
  launched but offer migration assistance
• Can be in the form of tech. assistance, trade
  ins, backwards compatibility. Customers can
  upgrade and maintain the old version or move to
  the new version later.
• Sell old and new generations together for a time.
• Customer can continue with installed version A,
  migrate to generation B or skip (Leapfrog) B and
  go directly to C.
• Sell both generations as long as the market
  desires

14
Reading 1 Understanding High-Tech Customers

• What issues drive the decision on which migration
  path to offer?

15
Reading 1 Understanding High-Tech Customers
16
Reading 2 Six Chasms In Need of Crossing

• What were the top things that you took away from
  this reading?

17
Reading 2 Six Chasms In Need of Crossing

• The six chasms
• Chasm or the Mind Chasm
• Gulf between established constructs and
  fundamental new paradigms
• The New Business Model Chasm
• The rift caused by business model change
• The Break-With-The-Past Chasm
• Fissure between current offerings and new and
  improved offerings that are not compatible
• The Disruptive-Technology Chasm
• Discontinuity between a new product that may not
  initially be seen as improved
• The Expedient-Fix / Strategic-Solution Chasm
• The breach between products that are temporary
  fillers and ones that are long term strategic
  offerings
• The Chasm Between Early and Mainstream Markets
• Geoffrey Moores gap between visionaries in early
  markets and pragmatists in mainstream markets

18
Next Week

• Session 3 January 20, 2004
• Topic Adoption of New Technologies The
  Customers Perspective
• Readings Royal Bank CRM Case
• Getting IT Spending Right This Time, The
  McKinsey Quarterly, 2003 Number 2
• Speaker Ted Brewer, Vice President, VP,
  Royal Bank (www.rbc.com)
• Rick Makos, President, Teradata Canada
• Petr Zima, Vice President, Teradata Canada
  (www.teradata.com)