December 1, 2011Economic University Bratislava /SK
"Marketing Innovative High‐Tech Products: Research, Teaching and Practice"
Rainer HasenauerTechnology Marketing & High‐Tech Marketing,
Institute of Marketing Management,Vienna University of Economics and Business (WU)
AGENDA
1. Background & Motivation2. Social & Economic Viewpoints3. High‐Tech Innovation: Market Entry4. Marketing High‐Tech Products
4.1. Research4.2. Teaching4.3. Practice
5. Conclusions
1. Background & Motivation
40 years of experience with:High‐tech business developmentMultidisciplinary research projectsFounding & developing high‐tech companiesObserving bottleneck dynamics, e.g.:– Response to emerging markets– Market entry strategies– Financial means– Human resource development– IPR and innovation lead
Research
Teaching
Practice
AGENDA
1. Background & Motivation2. Social and Economic Viewpoints
1. High Tech Innovation: market entry2. Marketing for high tech products
4.1. Research4.2. Teaching4.3. Practice
5. Conclusions
2. Social & Economic Viewpoints
Societal trends
Technology trends
Bottleneck
Adapting demand
Adapting supply
Market
Bottleneck
Ex.: Technologies for storing electrical
energy for smart grids
Demand for innovation to overcome bottlenecks
Public subsidies for R&D to overcome bottlenecks
Basic & applied research & development
Behind each bottleneck exists a new market potential
AGENDA
1. Background & Motivation2. Social and Economic Viewpoints3. High‐Tech Innovation: Market Entry4. Marketing High‐Tech Products
4.1. Research4.2. Teaching4.3. Practice
5. Conclusions
3. High‐Tech Innovation: Market Entry
• Markets are formed by the convergence of supply and demand
• Behind each bottleneck exists a new market potential
Market uncertainty
Competitivevolatility
Technologyuncertainty
3.1. Conditions for Market Entry
Marketinghigh-technology
products and innovations
Latent demand
Latent supply
Emergent demand
Emergent supply
Real demand
Real supply
The Past The FutureTime Arrow Today
“Markets are conversations” (CluetrainManifesto, 1999)
Real markets are the result of societal and R&D driving forces that transform latent demand via emergent demand into real market demand
3.2. From Latent Demand to Real Demand
Convergence
3.3.High‐Tech Markets
Features: • Nearness to basic and/or applied research• Innovative => high‐profit, high‐risk business• Dynamic => high speed of market behavior• Fragmented => numerous small windows of
opportunity, hard to score• Shorter product life cycles BUT• Longer lasting technology life cycles.
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Missing Link in Innovation (Nokia 2005)
* MTB = marketing testbed
Phase 0Research
Phase 1Solution
Phase 2Prototype
Phase 3Pre-commercialproduct
Phase 4Market entry
“Innovation = no man’s land”
Market pullResearch push MTB*?
Remote from market MTB* Near to market
“Distance of understanding”
Innovator’sear
Customer’s voice
Markets are conversations
3.4. Implications of High‐Tech Innovations
Innovative?
Testable?Controllable? Compatible? Implementable?
Correctable?
Integrable?
Goals of thecustomer/user
Industrial standards
Acceptable? Assimilative?
Questions for the innovator: Voice of the customer
Assimila-tion gapWillingness
to pay
AGENDA
1. Background & Motivation2. Social and Economic Viewpoints3. High‐Tech Innovation: Market Entry4. Marketing High Tech Products
4.1. Research4.2. Teaching4.3. Practice
5. Conclusions
4. Marketing High‐Tech Products
Marketing management tasks for high‐tech start‐ups can be visualized as follows:
Competition?
Customize problem
solution! Innovation half life?* Extend innovation lead!
Time to market?Increase speed!
Chakravarthy, 1997
* Innovation half life = temporal stability of innovation lead compared with the best competitor known to the innovator
4.1. Research & Business: ProjectsTechnology acceptance, willingness to pay & marketing mix for:• Electric energy storage, sensors, functional materials, real time software,
robotic systems, satellite services, mobile augmented reality – & related start‐up companies
Interdisciplinary research in:• Safety & security devices for nuclear, military & civilian objects, threat
analysis algorithms for natural, technical & civil hazards• Multiobjective programming for eco‐technical systems• Research on latent & emergent technology markets for location‐based
services & value‐added services related to satellite navigation GALILEO• Technological compliance in robotic physiotherapy & emergency medicine
(user interface of defibrillators in the case of sudden cardiac arrest)• Applied measuring innovation lead (PACVD, CVD, V‐REDOX)• R&D of marketing testbed for high‐tech innovative products & services.
4.1.1. Competitive Innovation Half Life (C‐IHL)
How long does it take before 50% of the innovator’s innovation lead is consumed by the best competitor known to the innovator?
Time
Perceivedinnovation leadrelative to thebest competitor
A B C
50% limit
1x 3x 7xBest competitor
100% Innovation A, B, C
Research!
4.1.2. Stressors in High-Tech Marketing
RATIOS:Time to market stress: (Break-Even TTM)
Solution stress:(C-IHL)
Profitability stress:
(EBIT)
Available time for BE
Required time for BE > 1
R&D time for required innovation lead
R&D time for achievable innovation lead> 1
Required EBIT
Achievable EBIT> 1
If > 1, then stress caused by short resources
Research!
Currently under development, a marketing testbed is a platform for exploring and testing marketing mix measures under realistic market conditions. It differs from a technical testbed by focusing on:Marketing mix, technology & product acceptance, & willingness to pay per market segment
Another study that applies the marketing testbed method:
“This activity [establishing the marketing testbed] addresses the need of technology companies to validate the need for their product and its business case.“ http://www.imaworld.org/?CategoryID=187&ArticleID=511
C) Marketing testbeds for market entry of high‐tech start‐ups
4.1.3. Marketing Testbeds Research!
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Perceivedusefulness
Perceivedease of use
Attitude Behavioralintention
Usetest
Qualityof use
Perceivedusefulness
Perceivedease of use
Externalvariables
Current Period Next Period
TAM – Structural Equation Model (Davis, 1989)
4.1.4. Technology Acceptance Model (TAM)
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Perceived Ease of use
Perceived Usefulness
Social Influence
Facilitating Conditions
Behavioral Intention
User Behavior (Acceptance)
Gender Age Experience Voluntarinessof Use
Unified Theory of Acceptance and Use of Technology (UTAUT, Venkatesh et al., 2003)
4.1.5. Unified Theory of Acceptance & Use of Technology
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Company innovation
Outside-in knowledge flow:
Lead userAcademic units
R&D units
Inside-outknowledge flow: Externalizaton of
IPRs and knowledge
4.1.6. Community-Based Innovation (CBI)
: Multistage CBI Process with Online Community ( Füller et al., p. 4)
MTB Socialpercolationfield
Research!
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4.1.7 Microstructure of CBI for Cross-IndustryTechnology Acceptance Testbed
Scouts
Influencer Positive WOM
Influencer Negative WOM
Verifiers
Social Percolation FieldWOM = word of mouth
Current Period Next Period
Cross-industry
Perceived Usefulness
Perceived Ease of Use
AttitudeBehavioral Intention
Use Test
Quality of Use
Perceived Usefulness
Perceived Ease of Use
External Variables
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4.1.8 Marketing Testbed for Market Entry of High-Tech Innovation Start-ups (1 of 5)
• Cross‐border ETC project (AT‐SLK)• TU Vienna , EUB, WU, INiTS GmbH incubator• 3 years of collaborative research and teaching• Testbeds for
– Knowledge management through cloud computing
– Music recognition– Medical robots– etc.
Research!
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Marketing Testbed for Market Entry of Innovative High-Tech Products for Start-Ups (2 of 5)
• Experimental approach in B2B innovation marketing– Different aspects:
• Innovation nearness to market: (functional) prototype stage• Segmentation criteria, e.g. technological affinity, strain of
bottleneck (“economic strain due to lost opportunity to increase productivity”)
• Type of scale: qualitative vs. quantitative market research• Segment‐focused instance of marketing mix (4Ps)
– Integrating:• Community‐based innovation (CBI) and open innovation (OI)• Technology acceptance: perceived usefulness (PU) and perceived
ease of use (PEoU)
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State-of-the-Art Technology vs.Innovative Technology
• Controllability• Perceived usefulness• Perceived ease of use
Market Entry & Window of Opportunity* (3 of 5)
Criteria:
Testbeds formarket entries
Acceptance of Market Segment• Compatibility with industrial standards• Removed bottleneck strain / Benefit expectation• Technological compatibility• Societal compatibility• Environmental compatibility
* George S. Day
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WoO
Market Entry & Window of Opportunity (WoO) (4 of 5)
MarketResistance
Time for market entry
MarketReadiness
Minimum market readiness
Minimum readiness MTB
NewTechnology
MTB
WoO : Window of opportunityMTB : Marketing testbed
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4Ps Marketing Mix and Marketing Testbedsfor High-Tech Start-Ups (5 of 5)
PCI: Problem-centered interviewsMS: Market segment
Product
Promotion
Price
Place
Marketing Mix
Model
MS1
MS2
Marketing Mix
Testbed1
Marketing Mix
Testbed2
PCI
Feedback / ReconfigurationComplementary compound effects?Substitutional compound effects?
4.2. Design of Teaching Program (1)• Lecture on “Technology Marketing and High‐Tech
Marketing”• Seminar:
1 group consist of 3‐4 students 1 or 2 groups work for one high‐tech start‐up companyUp to 8 groups in one semesterStudents are coached by entrepreneur and lecturer Qualitative market research with early prospects (potential customers)Students’ work is used by the entrepreneur under real‐time conditions. Students learn to work with innovators.Written work and oral presentation.
4.2. Design of teaching program (2)• Actual examples of 2010/2011:
1. 2D laser scanner for safety & security systems
2. Printed foil sensors for MMI
3. Cellular functional material for automotive applications
4. Wireless strain gauge
5. Umidity sensor
6. Cloud computing services
7. Bendable Li‐battery
4.3. Research & Practice-Driven Teaching
Cross-border high-tech center: project structure
High-tech start-ups
Students
High-tech center (AT/SLK)
High-tech markets
Testbeds formarket entries &product launches
INiTS incubatorprocess model
TU-WU-EUBteaching program
Diploma thesis & certificates
New start-up companies
5. Conclusions• Market entry is the critical stage for
determining the success of high‐tech innovation.
• Marketing testbeds will systematically support the market entry of high‐tech start‐up companies.
• Students are welcome to join this research field.
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Contact:
Rainer HasenauerE‐mail: [email protected]
www.hitechcentrum.eu
www.hitec.at
www.wu.ac.at/mm