Pricing according to the reactions from other competitive forces in the market

The sales force, distributors, and dealers should be consulted prior to making final decisions on the pricing of a high-tech product, because they can react negatively when faced with a product that they consider to be too expensive. Finally, a government can have a restricting role on pricing, for example, when setting up monopoly regulation and antitrust policies and, furthermore, through price controls. This is the case in most countries for the biochemical industry where every new drug...

Key Success Factors of a Marketing Department in a High Tech Company

When asked for the key abilities that a marketing department must manage in order to be highly successful, experienced marketing managers of major high-tech firms gave the following answers (see Figure A.1, which was based on interviews that I conducted) 1. Knowledge of customers and assessments of their future needs are the first priorities, which perfectly corresponds to the marketing department's objectives the analysis of market needs. This first priority justifies marketing's existence and...

Preannouncement in the communication plan for hightech products

Managing communication activities is truly an art 10 . In the computer industry, IBM and Microsoft are masters of timing 11 . Most specifically, they are very savvy about the preannouncement of their product before they are ready for market. Preannouncement, sometimes disdainfully called vaporware 12 , is a kind of communication that aims to influence the perception and attitudes of the different market players (i.e., the customers but also the competitors, distributors, suppliers, and even...

Selecting segmentation criteria

The segmentation criteria that need to be considered are different when breaking down consumer markets and industrial markets. For consumer markets, two large categories of segmentation criteria exist criteria related to consumer characteristics and criteria related to their response to need (see Table 5.1). Because we discussed consumer characteristics at length in Chapter 3, here we focus on the behavior of consumers, because segmentation by response seeks to divide homogeneous consumer...

Case Study The Coopetition Between Microsoft Versus AOL

Microsoft and AOL have been bitter rivals for years. In the mid-1990s, AOL, the on-line service provider was worried about being marginalized on the desktop by Microsoft with its new service MSN Explorer, which had been launched in August 1995. In November 1998, AOL bought Netscape Communications, the leading Internet browser at that time and teamed with Sun Microsystems in order to create an alternate standard for servers and software for consumer-electronics devices to challenge Microsoft. In...

The technologies life cycles

Paralleling the concept of product life cycle is the concept of technology life cycle. Any technology will go through different steps, which are important to be understood by strategists and marketers. The concept of the technology life cycle characterizes the development of technology in a way that is similar to the evolution of organisms. Various forms emerge at the beginning then the rate of new development declines, extinction sets in, and only a few major alternative forms persist at the...

Managing distributors of hightech products

The decision to sell products through a distributor is only one step in the process. A distributor must be selected, directed, and evaluated. Again, the characteristics of high technology impose slightly different criteria compared to those of more traditional products. Every company that is looking for a distributor judges that distributor on its sales experience, financial situation, image toward customers of the target markets, the number and quality of its sales people, and the quantity and...

Managing technology as a core competence

Mapping technological resources allows top management to make some strategic decisions. The first choices concern protecting and leveraging the most valuable technology. The second ones are about financial investments. Every company must protect these assets through patents and licenses. Those patents are not only legal tools, but also provide sustainable competitive advantages, as well as important financial revenues 24 . For instance, through a careful and organized action plan to leverage...

Case Study Nokia Segmentation and Targeting Strategy

Nokia has built its success on its ability to target different niches for wireless telephones. Segmentation is so crucial to Nokia that in 2002 it broke its 24 billion mobile phone division into nine business units, each one focusing on different parts of the market. Six months later, Nokia had its first results from the reengineering among the 24 new products planned to be introduced in 2004 The Nokia 2100 proposes a functional photo insert cover, animated screensavers, and SMS chats, well as...

The physical and virtual value chain model

Virtual Value Chain Model

Value chain analysis helps to describe the various separate activities within a firm and to assess their performance when combined into a system in producing value for money solutions. According to the now-traditional model introduced by M. Porter 19 , there are five categories of primary activities and four categories of support activities. This model helps top managers to pinpoint the key activities of the firm and their interrelations with others to yield maximum value for customers in...

Monitoring procedures

Marketing Department Procedure

Monitoring procedures plan an evaluation schedule for the progress of the action programs, as well as of the results of the marketing strategy in terms of the sales and profit figures. The evaluation process must serve as a reference point for the marketing manager, who then has the opportunity to correct the company's marketing strategy. The evaluation process should not, however, become a restraining device that will keep it from adapting itself to the market. Bureaucratic companies do not...

Case Buy Now Pay Later Does It Work the Same Way for Computers and Cars

Inverted Marketing

In October 2002, IBM introduced a new financing plan called Total Usage Financing, designed to stimulate spending for its on-demand computing services from cash-strapped businesses. The plan spread the cost of technology purchases over several months and included a revolving line of credit. Like a pitch from a car manufacturer, IBM announced a triple zero financing package, that offered large and mid-sized businesses zero down, zero payments, and zero interest until 2003. Other technology...

The Irresistible Rise of High Tech Services

A revolution is at work in the high technology industry the irresistible growth of business-to-business high tech services. Consider the case of IBM. In 1983 hardware revenues represented 83 of the company's total turnover, while its service revenues were only a meager 2 , three times less than software revenues. In 2001, services contribute to 40 of the total revenues while hardware now represents only 38 of its revenue stream. During the same period, services revenues have grown from 8...