Marketing Principles in Commercialization of High Technology

1. Marketing Principles in Commercialization of High Technology Session 1 Persuasion and Marketing

2. Session 1 Objectives • Describe the roles of marketing in the commercialization process • Describe the relationship between Jolly’s concepts of mobilization and the five subprocesses of commercialization • Develop a persuasive proposal that incorporates an understanding of the buying process, the persuasion process, needs, and features. • Compare and contrast the elements of a marketing plan vs. a persuasive proposal. • Describe the relationship between corporate mission and strategy and a marketing plan.

3. I. Executive Summary II. Marketing Situation Analysis III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls The Marketing Plan* *Year 1 of a 3-year strategic plan

4. Customers • Competitors • Collaborators • Company • Context/Macroenvironment 5 C’s

5. Segmentation S T P Targeting Positioning

6. Product Price Place Promotion 4 P’s Marketing Mix

7. Traditional View of Marketing • Helpful • Limiting • Customer “pull” vs. Technology “push”

8. Traditional View of Marketing • Helpful • Limiting • Customer “pull” vs. Technology “push” • Doesn’t address communication and persuasion during the “bridging/ mobilization” stages of technology commercialization.

9. The Process of Technology Commercialization Subprocesses1 Building the Value of a New Technology 3. Incubate to define commer- cializability 5. Demonstrate contextually in products and processes 7. Promote adoption 9. Sustain commercial-ization 1. Imagine the dual (techno-market) insight 2. Mobilize Interest and endorse-ment 4. Mobilize resource for Demo 6. Mobilize market consti-tuents 8. Mobilize complimen-tary assets for delivery Source: Jolly, Vijay. From Mind to Market, 1997

10. The Bridging Subprocesses • Critical activities are: • Reaching out • Interesting others • Influencing stakeholders and customers • Early bridges deal more with technology transfer • Later bridges deal with more explicitly with sales and distribution activities • One constant in each stage is marketing Bridges: Satisfying and Mobilizing Stakeholders at Each Stage (2, 4, 6, 8)

11. Bridge the Stages Advocacy activities . . . • Mobilize interest of stakeholders • Mobilize resources to continue the commercialization process • Mobilize market constituents • Mobilize complimentary assets for delivery

12. Bridging • “Human nature and psychology are as much parts of the calculus as objectively derived costs and benefits. Bridging involves taking the interests and the understandably different criteria of those whose help is sought into account while being evangelical. And it involves actively orchestrating the entire process by intervening across all the issues that matter…” Jolly, p. 335

13. The Role of the Commercialization Professional • Shepherd a new technology • from research, • through development, engineering, and manufacturing, • and ultimately to the customer. • Design a successful marketing/launch plan.

14. Stimulating Value RecognitionGetting someone to see the value in something • Determine: • their everyday problems and needs • how they are *currently* meeting those needs • competitive ideas/products/services meeting those needs • Demonstrate • how your proposition can meet their needs better than the current/competitor’s method

15. The Importance of Persuasion • External marketing: • “Persuading the masses to buy.” • Internal marketing: • Convincing management that a technology is worthy of continued support • Convincing a potential funder that the technology is worthy of funding.

16. Key Concepts in Persuasion • Structured thinking process • Debugging proposals (Linkages between sections) • Two principles • Fix responsibility • Structure messages with receiver in mind • Buying Process • Persuasion Process • Needs

17. Buying Process Need Recognition Search Evaluation of Alternatives Decision

18. Key Concepts in Persuasion • Structured thinking process • Debugging proposals (Linkages between sections) • Two principles • Fix responsibility • Structure messages with receiver in mind • Buying Process • Persuasion Process • Needs

19. Persuasion Process • (Audience definition) • (Statement of *your* objective) • Statement of audience needs (Conscious) • (Agreement on audience needs) • Plan • How it Works • Results • Next Step(s)

20. Unifying Concept: The Marketing Plan I. Executive Summary II. Marketing Situation Analysis III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls *Year 1 of a 3-year strategic plan

21. Corporate* Strategic Planning • Recall or revise the mission • Select strategic segments • Allocate resources • Choose among business development possibilities * or Entrepreneurial

22. Pillsbury Plus Bundt & Streusel Swirl Mushrooms & LeSueur Brownies 7 Majors Buffet & Specialty I. Executive Summary I. Executive Summary I. Executive Summary I. Executive Summary I. Executive Summary I. Executive Summary II. Current Marketing Situation II. Current Marketing Situation II. Current Marketing Situation II. Current Marketing Situation II. Current Marketing Situation II. Current Marketing Situation III. Opportunity and Issue Analysis III. Opportunity and Issue Analysis III. Opportunity and Issue Analysis III. Opportunity and Issue Analysis III. Opportunity and Issue Analysis III. Opportunity and Issue Analysis IV. Objectives IV. Objectives IV. Objectives IV. Objectives IV. Objectives IV. Objectives V. Marketing Strategy V. Marketing Strategy V. Marketing Strategy V. Marketing Strategy V. Marketing Strategy V. Marketing Strategy VI. Action Programs VI. Action Programs VI. Action Programs VI. Action Programs VI. Action Programs VI. Action Programs VII. Projected Profit-and-Loss VII. Projected Profit-and-Loss VII. Projected Profit-and-Loss VII. Projected Profit-and-Loss VII. Projected Profit-and-Loss VII. Projected Profit-and-Loss VIII. Controls VIII. Controls VIII. Controls VIII. Controls VIII. Controls VIII. Controls Corporate (Strategic Plan) SBU #1 Plan SBU #2 Plan SBU #3 Plan Refrigerated Dough Green Giant Baking Mixes Marketing Plans

23. I. Executive Summary II. Marketing Situation Analysis III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls The Marketing Plan* *Year 1 of a 3-year strategic plan

24. I. Executive Summary II. Marketing Situation Analysis Customers Competition/Industry 5 C’s Company Collaborators Context (macroenvironment) Plus: Market Potential and Demand III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls *Year 1 of a 3-year strategic plan

25. I. Executive Summary II. Current Marketing Situation III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls Opportunities/Issues Analysis • Analyze current situation (5 C’s) • Context (macroenvironment), Competition/Industry, Customer, Collaborators, Company • Identify opportunities/threats (external) • Identify organizational strengths and weaknesses that are related to those opportunities and threats (internal)

26. I. Executive Summary II. Current Marketing Situation III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls Objectives • Financial Objectives • Produce contribution of $1.8 million • Produce net profits of $.8 million • Marketing Objectives • Sell 100,000 widgets • Increase customer awareness from 15% to 30% • Achieve 10% share of the widget market

27. The Marketing Plan I. Executive Summary II. Current Marketing Situation III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy Segmentation, Targeting Differentiation, Positioning Marketing Mix (4 P’s) VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls

28. I. Executive Summary The Marketing Plan II. Current Marketing Situation III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs TACTICS (specifics and timing): Product Design details Pricing details Promotional details Place/distribution/alliance details VII. Projected Profit-and-Loss VIII. Controls

29. I. Executive Summary The Marketing Plan II. Current Marketing Situation III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss One Year Basic Financials Sales Units Sales Price and Gross Sales Cost of Goods Sold Gross Margin Marketing Expense SG&A Expense Net Margin VIII. Controls

30. I. Executive Summary The Marketing Plan II. Current Marketing Situation III. Opportunity and Issue Analysis IV. Objectives V. Marketing Strategy VI. Action Programs VII. Projected Profit-and-Loss VIII. Controls • Methods of tracking progress • Methods of evaluating progress • Contingency plans

31. Objective • Develop effective marketing strategy to: • “sell” an idea • license a technology • introduce a new product • support an existing product

32. Persuasive Proposal • Review: Key Elements of Persuasive Proposal • Understand your customer’s buying process. • Understand the persuasion process. • Reflect back now • A Marketing plan has two audiences • upper management, or a funding source • customer • Think through what you see as the similarities and/or differences between a persuasive proposal and a marketing plan.

33. Persuasion and Marketing • Determine audience (segments/target) • Collect information to turn into opportunities • stakeholder needs (customer) • competition, company, collaborators, context • Set objectives (communication, results) • Develop strategy • determine how I/P/S* meets needs (results) vs. competition • positioning = communicating how * idea/product/service

34. Market Research Overview

35. Sources of Information About Markets and Customers • Subjective information • intuitive prediction • Objective information • market research

36. Subjective InformationBenefits • Primary input during idea generation and screening for new product development. • Strategic advantage to introduce quickly.

37. The Average American Consumer Quiz % of consumers agreeing Sample questions % Male % Female 1. A nationally advertised brand is usually better than ________ _________ a generic brand 2. I went fishing at least once in the past year ________ _________ 3. I am a homebody ________ _________ 5. The government should exercise more control over ________ _________ what is shown on television 6. Information from advertising helps me make better ________ _________ buying decisions 7. I like to pay cash for everything I buy ________ _________ 9. I am interested in spices and seasoning ________ _________ (Note: not all questions included) Hoch (1988) Journal of Consumer Research

38. Predicting the Interests and Opinions of the American Consumer: Hoch (1988) Journal of Consumer Research

39. Sources of Information • Subjective information • intuitive prediction • Objective information • market research • data works better most of the time!

40. Market Research Uses • Technology Assessment • Product Development • Marketing (Launch) Plan

41. Market Research Uses • Technology Assessments • Initial quick assessment (Quick Look) • In-Depth • Product Development • Marketing (Launch) Plan

42. Market Research Uses • Technology Assessment • Product Development • Understand customer problems/needs • Concept testing • Assess potential market size • Market testing • Marketing (Launch) Plan

43. Market Research Uses • Technology Assessment • Product Development • Marketing (Launch) Plan • Situation Analysis • Macroenvironment • Industry/Competition • Company/Product • Customers • Collaborators • Setting Objectives • Developing Marketing Strategy

44. Market Research Uses • Technology Assessment • Product Development • Marketing (Launch) Plan • Situation Analysis • Setting Objectives • Estimating market potential • Estimating demand • Developing Marketing Strategy

45. Market Research Uses • Technology Assessment • Product Development • Marketing (Launch) Plan • Situation Analysis • Setting Objectives • Developing Marketing Strategy • Segmentation and Targeting • Differentiation and Positioning • Product • Pricing • Promotion • Place/Distribution

46. Pros Cons Primary Research • Surveys • Interviews • Focus Groups • Observation • Experimental

47. Secondary Research Sources • Internal Company Data

48. Fast (relatively) Inexpensive (relatively) Readily available May be high quality Could be out of date May not exactly address your question Secondary Research Pros Cons

49. Annual reports Trade associations Professional associations Statistical Abstract of U.S. National Trade Database Survey of Buying Power Trade/Consumer Publications Trade Shows & Professional Exhibits Directory WWW – Search Engines WWW – Research Sites Reference desk Secondary Sources of Information - External Library

50. Customers Benchmarking Partnerships Study trips Annual reports Patents/Licenses SEC filings (U.S.) Advertising agencies Trade Shows/Conventions Trade/professional associations Suppliers/subcontractors/distributors Sources of Information