Successful Marketing Strategy for High-Tech Firms (Artech House Professional Development Library)

274 Pages·1998·0.69 MB·English

by  Eric Viardot

Successful Marketing Strategy for
High-Tech Firms
Second Edition
Successful Marketing Strategy for
High-Tech Firms
Second Edition
Eric Viardot
Artech House
Boston • London
LibraryofCongressCataloging-in-PublicationData
Viardot,Eric.
Successfulmarketingstrategyforhigh-techfirms/EricViardot.—2nded.
p. cm.—(ArtechHouseprofessionaldevelopmentlibrary)
Includesbibliographicalreferencesandindex.
ISBN0-89006-854-2(alk.paper)
1.Hightechnology—Marketing. 2.Technologicalinnovations—
Marketing. I.Title. II.Series.
HC79.H53V5 1998
620’.0068’8—dc21 98-19225
CIP
BritishLibraryCataloguinginPublicationData
Viardot,Eric.
Successfulmarketingstrategyforhigh-techfirms.—2nded.
1.Hightechnology—Marketing 2.Hightechnologyindustries—
Marketing
I.Title
620’.00688
ISBN0-89006-854-2
CoverdesignbyLyndaFishbourne
©1998ARTECHHOUSE,INC.
685CantonStreet
Norwood,MA02062
Allrightsreserved.PrintedandboundintheUnitedStatesofAmerica.Nopartofthisbook
may be reproduced or utilized in any form or by any means, electronic or mechanical, in-
cludingphotocopying,recording,orbyanyinformationstorageandretrievalsystem,with-
outpermissioninwritingfromthepublisher.
Alltermsmentionedinthisbookthatareknowntobetrademarksorservicemarkshave
beenappropriatelycapitalized.ArtechHousecannotattesttotheaccuracyofthisinforma-
tion.UseofaterminthisbookshouldnotberegardedasaVectingthevalidityofanytrade-
markorservicemark.
InternationalStandardBookNumber:0-89006-854-2
LibraryofCongressCatalogCardNumber:98-19225
10987654321
Contents
Acknowledgments xi
Introduction xiii
References xv
1 What Is High-Tech Marketing? 1
1.1 Whatismarketing? 2
1.2 Whatisahigh-techproduct? 6
1.2.1 Thehigh-techsector 7
1.2.2 Characteristicsofhigh-techproducts 8
1.2.3 Governmentinvolvementinthehigh-techsector 14
1.2.4 Productdiversityinhightechnology 15
1.3 Whatishigh-techmarketing? 15
v
vi Successful Marketing Strategy for High-Tech Firms
1.4 Chaptersummary 17
References 18
2 Corporate and Marketing Strategy in the
High-Tech Industry 19
2.1 Corporatestrategyinthehigh-techindustry 19
2.1.1 Thecompany’smission 20
2.1.2 Strategicsegments:definitionandchoices 21
2.1.3 Identifyingcompetencies:thevaluechainanalysis 33
2.1.4 Allocationofresources 37
2.1.5 Developmentplansfornewbusinessactivities 48
2.2 Whatarethemarketingstrategyandthemarketing
planforhigh-techproducts? 57
2.2.1 Situationanalysis 58
2.2.2 Targetmarketandmarketingmixanalysis 59
2.2.3 Actionprograms 59
2.2.4 Monitoringprocedures 59
2.3 Chaptersummary 60
References 62
3 Knowing Customers and Markets 63
3.1 Determiningthecustomer’sbuyingbehavior 64
3.1.1 Purchasingfactorsforhigh-techconsumerproducts 64
3.1.2 Purchasingfactorsforhigh-techgoodsandservicesin
business-to-businessactivities 68
3.1.3 Specificpurchasingcriteriaforhigh-techproducts 72
3.2 Estimatingdemand 79
3.2.1 Concepttestsandprototypetests 80
3.2.2 Theopinionsofexperts 82
3.2.3 Samplinggroupsandtestmarkets 83
3.2.4 Usingaquantitativeanalysis 85
3.3 Chaptersummary 88
References 89
Contents vii
4 Understanding Competitors 91
4.1 Identifyingcompetitors 92
4.1.1 Identificationbymarketandbyproduct 92
4.1.2 Identificationofthecompetitiveforcesattheindustrylevel 95
4.2 Analyzingacompetitor’sstrategy 99
4.2.1 Strategicgroupingsofcompanies 99
4.2.2 Competitiveanalysis 100
4.3 Findinginformationaboutcompetitors 103
4.3.1 Externalsources 104
4.3.2 Internalsources 108
4.4 Organizingcompetitiveanalysis 109
4.4.1 Whoperformsthecompetitiveanalysis? 109
4.4.2 Performingthecompetitiveanalysis 110
4.5 Chaptersummary 111
References 112
5 Selecting Markets 113
5.1 Twomarketsegmentationmethodsforhigh-tech
productsandservices 115
5.1.1 Product-drivenmarketsegmentation:
thecustomer-groupingapproach 117
5.1.2 Market-drivenmarketsegmentation:
themarket-breakdownapproach 120
5.2 Evaluatingandselectingsegments 124
5.3 Thepositioningofthesolution 127
5.4 Segmentationandtime 131
5.5 Chaptersummary 133
References 134
6 Product Strategy 135
6.1 Managingthethreeproductcomponents 136
6.1.1 Managingaproduct’sessence 136
viii Successful Marketing Strategy for High-Tech Firms
6.1.2 Managingaproduct’sphysicalattributes 138
6.1.3 Managingaproduct’sshell 146
6.2 Managingaproductrange 148
6.3 Managingahigh-techproductaccordingtoitsproduct
lifecycle 151
6.3.1 Introductionstage 153
6.3.2 Salesgrowthstage 156
6.3.3 Maturityanddeclinestages 159
6.4 Controllingcomplementaryproducts 160
6.5 Chaptersummary 161
References 161
7 Pricing High-Tech Products 163
7.1 Determiningpricelimits 165
7.1.1 Evaluatingthepriceelasticityofdemand 165
7.1.2 Estimatingthecostslearningcurve 168
7.1.3 Takingcompetitorsintoaccount 169
7.2 Variouspricingtechniques 170
+
7.2.1 Cost profitmargin 171
7.2.2 Rateofreturnandbreak-evenpoint 171
7.2.3 Marketprice 172
7.2.4 Biddingprice 173
7.2.5 Comparisonwithsubstituteproducts 173
7.2.6 Valueperceivedbycustomers 173
7.2.7 Pricingbelowcosts 175
7.3 Adaptingapricepolicytodifferenttypesof
high-techproducts 176
7.4 Integratingtheotherdeterminantsofprice 178
7.4.1 Pricingaccordingtotheproductrange 178
7.4.2 Pricingaccordingtothecompany’spricingstrategy 178
7.4.3 Pricingaccordingtothereactionsfromothercompetitive
forcesinthemarket 179
Contents ix
7.5 Chaptersummary 179
References 180
8 Communication Strategy for High-Tech Products 181
8.1 Communicationforhigh-techproducts 182
8.2 Settingacommunicationbudget 182
8.3 Allocatingtheadvertisingbudget 183
8.4 Corporateadvertisingandpublicrelations 192
8.5 Managingpromotionaltools 193
8.6 Chaptersummary 195
References 196
9 Distributing and Selling High-Tech Products 197
9.1 Selectingdistributionchannelsforhigh-techproducts 198
9.1.1 Channel-designdecisionsaccordingtothesizeofthemarket 199
9.1.2 Channel-designdecisionsaccordingtothecostofthe
distributionnetwork 201
9.1.3 Channel-designdecisionsaccordingtotheproduct
characteristics 204
9.1.4 Channel-designdecisionsaccordingtothedegreeofcontrol
overadistributionnetwork 204
9.1.5 Channel-designdecisionsaccordingtotheflexibilityofthe
distributionnetwork 205
9.2 Managingdistributorsofhigh-techproducts 205
9.3 Sellinghigh-techproducts 209
9.3.1 Prospecting 211
9.3.2 Ateamworkapproach 213
9.3.3 Customerfollow-up 215
9.3.4 Supportactivities 216
9.3.5 After-salesmarket 219
9.4 Chaptersummary 221
References 222
x Successful Marketing Strategy for High-Tech Firms
10 The Position of Marketing Within
High-Tech Companies 223
10.1 Thepositionofthemarketingdepartmentina
high-techfirm 224
10.2 Theinternalorganizationofthemarketing
department 227
10.3 Thenecessarycooperationofthemarketing
departmentwithotherdepartments 229
10.3.1 Collaborationwithresearchanddevelopment 230
10.3.2 Collaborationwithmanufacturingandcustomerservice 236
10.3.3 Organizingcooperationamongdepartments 238
10.4 Chaptersummary 242
References 243
Appendix A: Key Success Factors of a Marketing
Department in a High-Tech Company 245
Appendix B: The Marketing Plan 249
References 253
About the Author 255
Index 257
Acknowledgments
This book is dedicated to all the marketing managers at high-tech
companies who agreed to share with me their professional
experiences. Iwouldliketothanktheemployeesatthefollowing
companiesfortheircooperation.
n ATOCHEM n FRANCETELECOM
n BAINANDCOMPANY n GSI
n BASFFRANCE n HEWLETTPACKARD
n BAYNETWORKS n IBM
n BOSTONCONSULTING n ICI
GROUP
n L’AEROSPATIALE
n CISCO
n McKINSEY
n DASSAULTSYSTEMES
n MICROSOFT
n DIGITALEQUIPMENT
xi