Lecture 4. Marketing 1 October 9, Thank you Chris Halliwell

Transcription

1 Lecture 4 Marketing 1 October 9, 2014 Thank you Chris Halliwell

2 The Technology Adoption Model as the Basis for Segment Focus A measure of the rate of adop/on of a cluster of new technologies by a community over /me Where are you on this curve? 2

3 Consider adaptation of a new Personal Assistant Technology Age? Income? Geography? Education? Sex? 3

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5 Why should a customer adopt a new technology? Early adopter? Late majority? 5

6 Can corporate customers be characterized in a similar way? Are there companies who are leaders Are there companies who are followers? What determines whether a company will be aggressive in adopting a new technology? 6

7 Who are the Innovation leaders? Aviation Computers Hardware Computers software Biotech Energy Medical devices 7

8 Who are the Innovation leaders? Aviation Computers Hardware Computers software Biotech Energy Medical devices 8

9 Who are the Innovation leaders? Aviation Computers Hardware Computers software Biotech Energy Medical devices 9

10 Who are the Innovation leaders? Aviation Computers Hardware Computers software Biotech Energy Medical devices 10

11 Who are the Innovation leaders? Aviation Computers Hardware Computers software Biotech Energy Medical devices 11

12 Who are the Innovation leaders? Aviation Computers Hardware Computers software Biotech Energy Medical devices 12

13 Example: A new medical imaging methodology (MRI+) Top 100 Teaching Institutions Mass of US Hospitals What is the motivation of these customers? 13

14 Example: A new medical imaging methodology (MRI+) Top 100 Teaching Institutions Mass of US Hospitals Top 15 Luminary Medical Centers I love writing papers and Peer approval 14

15 Example: A new medical imaging methodology (MRI+) Top 100 Teaching Institutions Mass of US Hospitals Top 15 Luminary Medical Centers Can I build my practice by doing better surgery? 15

16 Example: A new medical imaging methodology (MRI+) Top 100 Teaching Institutions Mass of US Hospitals Top 15 Luminary Medical Centers Can I recover my Fees from insurer and keep my patients? 16

17 Example: A new medical imaging methodology (MRI+) Top 100 Teaching Institutions Mass of US Hospitals Top 15 Luminary Medical Centers I love writing papers and Peer approval Can I build my practice by doing better surgery? Can I recover my Fees from insurer and keep my patients? 17

18 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions 18

19 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions 19

20 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions 20

21 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions 21

22 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions 22

23 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions You get the point! 23

24 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions Presentation at large professional meetings and Publication in peer-reviewed journals; Sell to larger hospitals Reduce price, de-feature and sell to smaller institutions Globalize to Europe and Asia (typically lower cost) Move to service model of installed base 24

25 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions Presentation at large professional meetings and Publication in peer-reviewed journals; Sell to larger hospitals Reduce price, de-feature and sell to smaller institutions Globalize to Europe and Asia (typically lower cost) Move to service model of installed base 25

26 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions Presentation at large professional meetings and Publication in peer-reviewed journals; Sell to larger hospitals Reduce price, de-feature and sell to smaller institutions Globalize to Europe and Asia (typically lower cost) Move to service model of installed base 26

27 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions Presentation at large professional meetings and Publication in peer-reviewed journals; Sell to larger hospitals Reduce price, de-feature and sell to smaller institutions Globalize to Europe and Asia (typically lower cost) Move to service model of installed base 27

28 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions Presentation at large professional meetings and Publication in peer-reviewed journals; Sell to larger hospitals Reduce price, de-feature and sell to smaller institutions Globalize to Europe and Asia (typically lower cost) Move to service model of installed base 28

29 Thus for medical imaging equipment (MRI, PET, Ultrasound, X-Ray etc.) GE Strategy Target segment: a few luminary institutions Presentation at large professional meetings and Publication in peer-reviewed journals; Sell to larger hospitals Reduce price, de-feature and sell to smaller institutions Globalize to Europe and Asia (typically lower cost) Move to service model of installed base 29

30 Use www/library Data Base Sources to Determine: Major trends in technology, standards, regulations (Barriers and enablers) Drivers and barriers to growth- consider rate of market adoption Business model options and key players (competitors/ partners) at each layer of the food chain Size of segment, major sub-segments/rough distribution of market revenues/units Forecasts or prognostications of rate of segment growth Value chain, ecosystem and customer players 30

31 Use www/library Data Base Sources to Determine: Major trends in technology, standards, regulations (Barriers and enablers) Drivers and barriers to growth- consider rate of market adoption Business model options and key players (competitors/ partners) at each layer of the food chain Size of segment, major sub-segments/rough distribution of market revenues/units Forecasts or prognostications of rate of segment growth Value chain, ecosystem and customer players 31

32 Use www/library Data Base Sources to Determine: Major trends in technology, standards, regulations (Barriers and enablers) Drivers and barriers to growth- consider rate of market adoption Business model options and key players (competitors/ partners) at each layer of the food chain Size of segment, major sub-segments/rough distribution of market revenues/units Forecasts or prognostications of rate of segment growth Value chain, ecosystem and customer players 32

33 Use www/library Data Base Sources to Determine: Major trends in technology, standards, regulations (Barriers and enablers) Drivers and barriers to growth- consider rate of market adoption Business model options and key players (competitors/ partners) at each layer of the food chain Size of segment, major sub-segments/rough distribution of market revenues/units Forecasts or prognostications of rate of segment growth Value chain, ecosystem and customer players 33

34 Use www/library Data Base Sources to Determine: Major trends in technology, standards, regulations (Barriers and enablers) Drivers and barriers to growth- consider rate of market adoption Business model options and key players (competitors/ partners) at each layer of the food chain Size of segment, major sub-segments/rough distribution of market revenues/units Forecasts or prognostications of rate of segment growth Value chain, ecosystem and customer players 34

35 What about dealing with large industrial companies (e.g., OEMs)? Are all customers the same? Look for the Teacher customer Not always easy to find! Opinion Leader/Respected Early adopter of New Technologies In pain Influencer Inside company Within industry 35

36 The Teacher customer is necessary To teach you your value and your position in the market To provide credibility to investors, employees, partners To strongly influence other early adopters To co-create your product strategy, priorities and plans To generate early revenue from volume deployments To be patient with your failures 36

37 Finding the Teacher Customer 1. Talk to friends and friends of friends (Mentor(s), academics, experts) Network!! 2. Do your (secondary literature research) homework. Use Library and Internet. Consultant studies? Kristin can help get you started here. 3. Industry Groups, Publications can very helpful 4. Develop hypotheses and assumptions you MUST validate 5. Review literature to identify community influencers and potential Innovators Each segment has Innovator companies Every company has Innovator individuals (the go-to person) 6. Look for Scientific or Journal publications/ Contact author 37

38 Finding the Teacher customer 7. Talk to the wrong people to get to the right people 8. Assemble your interview tools: 60 second elevator pitch 2-pager on what it is Open ended questions Interviewee should do 90% of the talking 9. Say thank-you, follow-up and nurture the relationship as appropriate 38

39 Consider business ecosystems - A loose network Suppliers Distributors Outsourcers Related products Related services Technology providers Customers Consultants Regulators Banks and Financial

40 Consider business ecosystems - A loose network Suppliers Distributors Outsourcers Related products Related services Technology providers Customers Consultants Regulators Banks and Financial

41 Consider business ecosystems Like individual species in a biological ecosystem Each member of a business ecosystem ultimately shares the fate of the network as a whole Regardless of that member's apparent strength. -Marco Iansiti, Roy Levien

42 Ecosystems to Six Forces Consider how to measure Where your enterprise fits in the ecosystem Are you in a good spot?

43 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Power, Vigor and Competence of Existing Competitors Your Business

44 Examples of Highly Competitive Business

45 The intensity of competitive rivalry (known) number rate of industry growth intermittent industry overcapacity diversity of competitors informational complexity and asymmetry brand equity fixed cost allocation per value added level of advertising expense

46 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Power, and Competence of Suppliers Your Business

47 Examples of Businesses where the supplier dominates

48 The bargaining power of suppliers supplier switching costs relative to firm switching costs degree of differentiation of inputs presence of substitute inputs supplier concentration to firm concentration ratio threat of forward integration by suppliers relative to the threat of backward integration by firms cost of inputs relative to selling price of the product importance of volume to supplier Examples?

49 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Power, Vigor and Competence of Complementors Your Business

50 Complementor - Sells product that adds value to a mutual customer

51 The bargaining power of complementors Relative strengths Customer perception Future R&D Switching costs Trust ability to sideways integrate Anti-trust Competition for margin Examples?

52 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Your Business Power, Vigor and Competence of Potential Competitors

53 Businesses which should worry about potential competitors

54 Threat of new entrants the existence of barriers to entry Have a hub IP Gov license and policies Limited market R&D costs Economies of scale Factory Knowing market Barriers to exit Economics of product development Brand equity Customer stickiness switching costs Capital requirements Access to distribution Absolute cost advantages Learning curve advantages Expected retaliation

55 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Your Business Possibility that your business can be done in different way

56 Can your value be delivered in a very different way

57 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Your Business Power, Vigor and Competence of Customers

58 Customer rules the roost

59 The bargaining power of customers ratio of buyer concentration to seller concentration bargaining leverage buyer volume Buyer switching costs relative to firm switching costs buyer information availability ability to backward integrate availability of existing substitute products buyer price sensitivity price of total purchase Examples?

60 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Power, Vigor and Competence of Existing Competitors Power, and Competence of Suppliers Power, Vigor and Competence of Complementors Your Business Power, Vigor and Competence of Potential Competitors Possibility that your business can be done in different way Power, Vigor and Competence of Customers

61 Discussion Is it a good thing to have competition in your market? Existing New entries?

62 Six Forces Diagram to Determine how Competitive a Company is (after Porter) Power, Vigor and Competence Power, Vigor and Power, Vigor and Competenc of Existing Competitors Competence of Complementors of Suppliers Your Business Power, Vigor and Competence Possibility that what your Power, Vigor and of Potential Competitors business is doing can be Competence done in a different way of Customers

63 Six Forces Diagram to Determine how Competitive a Company is (with 10X disruptive force) Power, Vigor and Competence Power, Vigor and Power, Vigor and Competenc of Existing Competitors Competence of Complementors of Suppliers Your Business Power, Vigor and Competence of Potential Competitors Power, Vigor and Competence of Customers Possibility that what your business is doing can be done in a different way. Disruptively! Or can you be the disrupter?

64 The threat of substitute products buyer propensity to substitute relative price performance of substitutes buyer switching costs perceived level of product differentiation

65 The threat of substitute products

66 The threat of substitute products

67 The threat of substitute products

68 The threat of substitute products

69 The threat of substitute products

70 The threat of substitute products

71 Not that Sony didn t try...

72 How does your Industry look?

73 Secondary Research Where to find it? Google, Internet Patent search find alternatives, competitors Scientific Publications search Current Events related to technology Economist, newspapers Research key components separately Stock market/financial stmt analysis Industry journals Use Caltech Research librarian Kristen Buxton Check out imitators tag-along industries Company news release Consultant reports ask Library for help, reimbursement available

74 Primary research Network! Exploit the Caltech connection! Customers/Users of Technology Alumni contacts Family contacts Industry analysts Scientific/engineering/Industry Conferences and Proceedings Companies/Institutions involved in Technology (Research Labs) Competitive Technology Companies

75 Interviewing techniques How many people? At least 2 Try to have same team going to each one Break up roles: Recorder, also can record it Person asking questions Observer note body-language, come up with addtl questions Go in with a script questions want to answer Update based on results before next one How fast should you recap and write down conclusions Right away!

76 Interviewing techniques Inform them also what you want to ask about Work around their schedule Telephone interview or video conference also option Freeconference.com access Ask them who else you should speak to Follow up with thank-you , that evening You should start on arranging appts ASAP This is the rate-limiting step!