MARKET LEADERS FOR

HIGH-TECH PRODUCTS

S.DEEPHIKA
09AD06

April 16, 2010 1

 Definition of “High-Tech”
• A product that is an innovative
application of technology
• High tech products represent a
technological solution to a customer's
problem that is new and not even
considered previously.

April 16, 2010 2

 High-tech sectors
• Aerospace technology
• Artificial intelligence
• Biotechnology
• Energy
• Instrumentation
• Nanotechnology
• Nuclear physics
• Optoelectronics
• Robotics
• Telecommunications

April 16, 2010 3

 Industry name Total R&D-intensity

High-Technology

Pharmaceuticals 10.46
Aircraft & spacecraft 10.29
Medical, precision & optimal instruments 9.69
Radio, television & communication equipment 7.48
Office, accounting & computing machinery 7.21
Medium-High-Technology

Electrical machinery & apparatus 3.6

Motor vehicles, trailers & semi-trailers 3.51
Railroad & transport equipment 3.11
Chemical & chemical products 2.85
Machinery & equipment 2.2

April 16, 2010 4

 Common, Underlying Characteristics

• Market Uncertainty
• Technological Uncertainty
• Competitive Volatility
• Other Characteristics

April 16, 2010 5

 Market Uncertainty
• - ambiguity about the type and extent of customer
needs that can be satisfied by a particular
technology
• Consumer fear, uncertainty and doubt (FUD)
• Customer needs change rapidly and unpredictably
• Customer anxiety over the lack of standards and
dominant design
• Uncertainty over the pace of adoption
• Uncertainty over/inability to forecast market size

April 16, 2010 6

 Technology Uncertainty
• - not knowing whether the technology or the
company can deliver on its promise
• Uncertainty over whether the new innovation will
function as promised
• Uncertainty over timetable for new product
development
• Ambiguity over whether the supplier will be able to
fix customer problems with the technology
• Concerns over unanticipated/unintended
consequences
• Concerns over obsolescence

April 16, 2010 7

 Competitive Volatility
• - changes in competitors, offerings, strategies
• Uncertainty over who will be future competitors
• Uncertainty over “the rules of the game” (i.e.,
competitive strategies and tactics)
• Uncertainty over “product form” competition
– competition between product classes vs. between
different brands of the same product
• Implication: Creative destruction

April 16, 2010 8

 Characterizing the High-Tech
Environment

Market Technological
Uncertainty Uncertainty
Marketing of
High-
Technology
Products

Competitive
Volatility

April 16, 2010 9

 Other Characteristics Common
to High-Tech Markets
• “Unit-one” costs:
– when the cost of producing the first unit is very
high relative to the costs of reproduction
– Ex: development vs. reproduction of software
• Tradability problems
– Arise because it is difficult to value the know-how
which forms the basis of the underlying
technology
– Ex: How much to charge for licensing the rights
to a waste-eating microbe?

April 16, 2010 10

 Contd.,
• Knowledge spillover:
– Technological developments in one
domain spur new developments and
innovations in other areas.
– Ex: Human Genome Project

April 16, 2010 11

 "IF WE BUILD IT THEY WILL
COME"

“A lot of times, people don’t know what

they want until you show it to them”
- Mr. Steve Jobs

April 16, 2010 12

 MARKET LEADERS

April 16, 2010 13

 RANK COUNTRY AMOUNT
1 FINLAND 0.74
2 UNITED STATES 0.73
3 JAPAN 0.7
3 SWEDEN 0.7
5 KOREA, SOUTH 0.67
6 NETHERLANDS 0.63
7 UNITED KINGDOM 0.61
8 AUSTRALIA 0.59
8 CANADA 0.59
10 NORWAY 0.58
10 GERMANY 0.58
12 IRELAND 0.57
13 NEW ZEALAND 0.55
13 BELGIUM 0.55
15 AUSTRIA 0.54
15 FRANCE 0.54
17 ISRAEL 0.51
18 SPAIN 0.48
19 CZECH REPUBLIC 0.47
19 ITALY 0.47
April 16, 2010 14
 TOP HIGH TECH COMPANIES
• HEWLETT PACKARD CO
• INTERNATIONAL BUSINESS MACHINES CORP
(IBM)
• DELL, INC.
• MICROSOFT CORP
• INTEL CORPORATION
• MOTOROLA INC
• INGRAM MICRO INC.
• CISCO SYSTEMS INC
• APPLE INC
• ELECTRONIC DATA SYSTEMS CORPORATION

April 16, 2010 15

 Contd.,
• ORACLE CORP
• GOOGLE INC
• COMPUTER SCIENCES CORPORATION
• SUN MICROSYSTEMS INC
• TEXAS INSTRUMENTS INC
• EMC CORP
• SEAGATE TECHNOLOGY
• EASTMAN KODAK CO
• APPLIED MATERIALS, INC.
• SAIC, INC.

April 16, 2010 16

 Ansoff's Growth Strategy Matrix

April 16, 2010 17

 Expanded the Growth Strategy
Matrix

April 16, 2010 18

 MARKETING OF A
HIGH-TECH PRODUCT
• understand the needs of customers
• educate them about the product and its
underlying technology
• convince them that the new product
represents the best solution to their
problems.

April 16, 2010 19

 Contd.,
• It is better to be first at the risk of being wrong
than it is to be 100% perfect after two years.
• If customer demand changes, ask WHY?…
• Don’t perfume the pig: Don’t make something
appear better than it is.
• If there is a problem fix it. If you don’t, someone
else will.

April 16, 2010 20

 REASONS FOR FAILURE OF
HIGH-TECH COMPANIES
• Lack of Market Focus (Segmentation)
• Excessive Pace of Product Improvement
• Incomplete Products
• Undifferentiated Products
• Channel Mismanagement
• Failure to Establish the Right Competitive
Barriers

April 16, 2010 21

 Contd.,
• Using Price Alone To Drive Market
Transformation
• Improper Use of Advertising
• Misinterpretation of the Technology
Adoption Lifecycle Model
• Irrelevant Market Research

April 16, 2010 22

April 16, 2010 23