Knowing Customers and Markets

The weathered high-tech firms that have successfully survived the business whirlwind of this decade are all highly tuned in to the market. Actually, when demand is going down, it is a matter of life or death to know the customers, their needs, expectation, and wants, as thoroughly as possible. Only with this knowledge can a high-tech firm market the right product at the right time to the right client. Those companies have a talent for knowing the customer's expressed or latent needs before these needs can be transformed into a company's products and technology.

To know their customers inside and out, first companies talk to their customers and ask the right question. A good example is Lou Gestner, the former CEO of IBM, who managed to turn this technology-driven mastodon into a market-sensitive elephant. Unlike previous IBM executives before him, Lou Gestner spent half his time traveling around the globe visiting IBM customers. Routinely he asked his customers, "How can I serve you better as a vendor?" [1].

Also, high-tech winners know how important it is to understand customer value [2] for a given product. For example, laser discs and the use of digital sound technology have answered the call for a higher quality of sound. The need to communicate generated wireless networks and satellite connections. The need for greater reliability and performance in automobile assembly resulted in the use of robots for welding, painting, and manufacturing purposes.

According to the manufacturers of electronic measuring instruments, three out of four of their innovations come directly from customers' insights. In the semiconductor and printed circuit board industry, it is two out of three [3].

However, the high-technology sector is also characterized by an abundance of technical processes derived from research and development laboratories or individual researchers. In this case, a marketing manager must therefore be able to help transform these new ideas into products that are suited to the needs of the customer and the market. This preliminary step is necessary to assure the maximum amount of success when launching new products as a result of a newly developed technology in the company.

In both cases, a marketing manager must know how to estimate the level of market demand. He or she must have an understanding of the buying behavior of a company's actual and potential customers in order better to perceive the needs of the market, find ideas for new products, or test the compatibility between the applications of a new technology and the customers' needs.

A marketer must know not only the needs, but also the wants and the demands of target or potential markets. Needs are the basic human requirements, such as the need for food or shelter, but also the need for communication, entertainment, or education. The needs turn into wants when they are directed to specific categories of products that might fulfill the need. For entertainment, a male teenager will play with a video game while an adult will look for a movie on network TV, on cable, or even at the nearest video rental store. Wants are driven by different factors, which are detailed in the following section. Demands are wants that can materialize thanks to money and some purchasing power. Many western consumers want broadband with unlimited access to Internet connected to a sophisticated home cinema system. Only a few are able and willing to buy that.

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