See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/330452182

Technology Marketing

Chapter · January 2009

CITATION READS

1 3,859

3 authors:

Jakki J. Mohr Stanley F. Slater

University of Montana Colorado State University
49 PUBLICATIONS 8,644 CITATIONS 94 PUBLICATIONS 33,312 CITATIONS

SEE PROFILE SEE PROFILE

Sanjit Sengupta
San Francisco State University
51 PUBLICATIONS 3,802 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Budgeting of Marketing Communications View project

Technology-enhanced Auditing View project

All content following this page was uploaded by Jakki J. Mohr on 17 January 2019.

The user has requested enhancement of the downloaded file.

 Technology Marketing
Jakki J. Mohr, University of Montana
Stanley F. Slater, Colorado State University
Sanjit Sengupta, San Francisco State University
Introduction 421
What Is Marketing? 422
General Marketing Overview 422
Marketing High-Tech Products 424
Core Competencies as the Foundation for
Successful High-Tech Marketing 425
Competencies 425
Core Rigidities 426
Marketing Competencies in High-Technology
Companies 426
Segmentation, Targeting, and Positioning, and
the Chasm in High-Tech Adoption 428
INTRODUCTION
Think about the origins of many high-technology com-
panies. Genentech pioneered drugs based on recombi-
nant DNA technology in 1976; Google’s breakthrough
search engine in 1998 was based on an algorithm that
ranked web sites based on their popularity and impor-
tance. Regardless of the specific industry—biotechnology,
telecommunications, information technology (either hard-
ware or software), consumer electronics—typically, high-
tech companies’ origins are based on their scientific or
engineering developments. Indeed, many high-tech com-
panies believe that the superiority of their technological
innovations will be sufficient to convince buyers to adopt
their new products. As a result, the role of (and need for)
marketing is often misunderstood or downplayed (Mohr,
Sengupta, and Slater 2010; Workman 1993). Yet, a robust
set of empirical studies demonstrates that technological
superiority alone is insufficient for ensuring the success
of high-tech products; rather, high-technology companies
must complement their technological prowess with a set
of marketing competencies in order to maximize their
odds of success (see Dutta, Narasimhan, and Rajiv 1999).
Effective marketing informs the development and
commercialization efforts of high-tech companies, which
in turn, enhances the odds that the new technologies will
achieve their potential. Indeed, given the high degree of
uncertainty in high-tech markets and the speed at which
these markets move, the margin for error in decision
making is likely smaller than for conventional markets
(Moriarty and Kosnik 1987).
Even high-tech companies that understand the impor-
tant role of marketing face uncertainty and complications
in marketing decision-making. They may lack marketing
expertise or relegate the role of marketing to second-class
status (i.e., beneath the role of engineering/R&D).
Moreover, technical people may have a hard time
understanding how to interact with their non-technical
customers. Marketing activities are sometimes either an
CH030.indd 421
Strategic Brand Management 430
Conclusion 432
Glossary 432
Cross References 433
References and Suggessted Readings 433
after-thought to, or are not accorded the same importance
as product/technology development. Cross-functional col-
laboration between engineers and marketers is a neces-
sity but is extremely difficult to implement well. A further
complication is that many people hired to do “market-
ing” lack an understanding of how to market in high-tech
industries. Even well known high-tech companies such
as Microsoft and Intel—perceived as being very sophis-
ticated marketers—have expressed publicly that they are
not sufficiently “market driven.”
Due to these and other complicating factors, the fail-
ure rates of more innovative products are higher than
the average failure rate of products in general (Gourville
2005). In the funding of high-tech startups, venture capi-
talists often follow a 4-3-3 rule for their technology invest-
ment portfolios. Out of ten investments, they expect four
to fail, three to break even, and three to generate prof-
its exceeding all the losses on the other seven projects
(LeBaron and Vaitiligam 2001).
This chapter highlights the critical need for marketing
competencies in high-technology firms—competencies
needed to sustain long-term success in these ever-changing
industries. A first step in developing proficiency at market-
ing high-tech products is clearly understanding the broad
scope of decisions, activities, and expenditures (invest-
ments) that “marketing” encompasses. Therefore, our first
section establishes the domain of marketing and a lexicon
to discuss marketing activities. In addition, it discusses
the unique environment of technology marketing and a
framework for high-technology marketing decisions, the
contingency theory of high-technology marketing.
Second, given the chapter’s emphasis on marketing
competencies, we situate those competencies relative to a
high-tech company’s technological competencies. As noted
previously, most high-tech companies’ origins can be
found in their break-through technological developments
and scientific know-how. Yet, paradoxically (as we explain
subsequently), these very technological competencies may
421
11/17/09 4:19:35 PM
 422 TECHNOLOGY MARKETING
make the development of marketing competencies more
difficult.
Third, certainly, the domain and scope of market-
ing is so broad that one chapter cannot do justice to all
possible marketing competencies. Therefore, we detail
two specific marketing proficiencies: segmentation, tar-
geting, and positioning (STP) and strategic brand man-
agement. Focusing on these marketing competencies
allows readers to thoroughly understand how a mar-
keting mindset, when infused throughout the company,
affects the functioning of the organization as a whole.
Moreover, the enhanced understanding of these market-
ing competencies and the role they play in a high-tech
company’s success hopefully will motivate the reader to
explore further other marketing competencies. Toward
this end, the chapter identifies a longer list of marketing
competencies and suggests resources related to those
competencies.
WHAT IS MARKETING?
General Marketing Overview
Ask three different people what “marketing” means,
and three different answers are likely. The most com-
mon of those answers would probably speak to the role
of marketing communications (advertising, brochures,
trade shows, and so forth) in the firm. Another answer
might address the role of sales in the organization, and
still another might speak to the role of product manage-
ment. Yet, each of these answers addresses only a part of
the domain of marketing; moreover, in high-tech orga-
nizations specifically, each of these answers about what
marketing means implicitly assumes that marketing
activities are undertaken after engineering (or Research
and Development, whatever label technical personnel in
the company carry) has developed the new innovations
to be marketed.
However, a well-developed marketing competency
helps to guide technical specifications, determine appro-
priate market segments, establish cost targets to meet
pricing objectives, and identify partners that will play
a critical role in delivering value to customers. In other
words, success in high-tech markets requires proactive
involvement of marketing in the innovation development
process, bringing the voice of the customer into the firm
from the outset.
The American Marketing Association defines market-
ing as the set of activities, processes and decisions to cre-
ate, communicate, and deliver products and services that
offer value to customers, partners, and society at large
(American Marketing Association 2008). The overarch-
ing purpose of marketing is to infuse the company with
an understanding of “the market”: customers, competi-
tors, and trends. Bringing the voice of the customer and
market-based information into the company allows deci-
sions more accurately to reflect customer needs (both
current and emerging), competitors’ offerings, and future
trends. Studies show that high-tech companies that base
their decisions on market-based information experience
higher levels of creativity and improved new product per-
formance (Im and Workman 2004). These decisions (such
as which customers to serve, which products to develop
CH030.indd 422
Table 30.1: Scope of Marketing Activities
Level Issues
Strategic Proactive decisions to identify the best
opportunities in the market and position
the company’s products.
In which market will we compete?
Which segments will we serve?
What will our competitive position in the
marketplace be (relative to the established
technologies and ways of doing things)?
Functional Decisions about the functional areas of
marketing, including product, price, place,
and promotion, as well as the product/
technology development function.
Cross-functional interactions between
personnel in different departments
(R&D, marketing, operations, customer
service, manufacturing/production,
product development teams, etc.) to make
functional marketing decisions.
Tactical Development and implementation of
marketing tools (brochures, collateral
materials, web site, trade shows, media,
and so forth); executed consistently with
strategic and functional decisions.
Source: Mohr, Slater, and Sengupta (2006).
and their specific feature set, how to position a specific
company’s products vis-à-vis competitors, how to develop
flexible plans for the future) fall squarely into the domain
of marketing.
Table 30.1 shows the scope and types of activities and
decisions that marketing encompasses at three levels:
strategic, functional, and tactical.
Strategic decisions proactively chart the firm’s direction
in the marketplace. Despite the need for strategic direction
in allocating the firm’s resources across customer market
segments and across product development efforts, many
high-tech companies do not proactively answer “which
market segments will we serve?” or “what should our value
proposition in those segments be?” When a company lacks
specific answers to these strategic questions, its efforts
are diffused across multiple market segments and prod-
uct development projects. Although a company may think
this diffused approach hedges its bets in the marketplace,
it typically is a recipe for disaster. Because of the lack of
focus, the company never truly understands customers’
needs in any one segment; as a result, it is less likely to
succeed than a company that has proactively defined a
clearly focused strategic direction (Moore 2002).
Given that the role of marketing is to create, com-
municate, and deliver products and services that offer
value to customers, high-tech companies should care-
fully attend to crafting their value propositions, a written
statement that captures the essence of why a buyer in
the target market should purchase a company’s product
11/17/09 4:19:36 PM
 WHAT IS MARKETING 423

Table 30.2: Three Types of Value Propositions

Description Example Pros/Cons

The “All Benefits” value proposition. “Dell’s retail customers benefit from Easiest to construct, but
Articulates the benefits a customer the increased flexibility and low costs reflects the least knowledge of
receives. associated with using standards-based customer needs and competitor
technologies.”1 capabilities. The company may
be claiming advantages for
features that actually provide little
benefit to the target customer.
The “Favorable Points of Difference” “When you demand more accuracy, Offers an improvement over All
value proposition. Contrasts the more productivity and more support, GE Benefits, but knowing points of
advantages of the seller’s product Magnetic Resonance Imaging delivers.”2 difference does not convey the
with the competition. value of the difference to the
target customers.
The “Resonating Focus” value “We’ll prove Windows XP and Office XP The most effective value
proposition. value!”3 Microsoft backs up this claim with proposition because it quantifies
Addresses the few elements that data from studies by BearingPoint Inc., the superiority of the seller’s
matter most to buyers in the target formerly KPMG Consulting, demonstrating offering. However, this is
market and documents the worth of the value to the enterprise of Windows XP very difficult to do in most
the superiority. Professional. For example, Windows XP markets and requires in-depth
Professional provided customers with an knowledge of customers’ needs
average return on investment of more than and competitors’ product
200 percent and an annual savings of from performance, regardless of the
$187 per desktop to $387 for mobile users market.
as calculated over a three-year period.
1
www.dell.com/content/topics/global.aspx/corp/pressoffice/en/2003/2003_01_13_rr_001?c⫽us&l⫽en&s⫽gen, accessed February 3, 2008.
2
www.gehealthcare.com/usen/mr/index.html, accessed February 3, 2008.
3
www.microsoft.com/presspass/press/2002/oct02/10-09symposiumpr.mspx, accessed February 3, 2008.

or use its service. The three main types of value proposi-
tions (Anderson, Kumar, and Narus 2007) are shown in
Table 30.2.
The ideal value proposition is concise and appeals
to the customer’s strongest decision-making drivers.
Companies pay a high price when customers don’t under-
stand the company’s value proposition.
With respect to positioning high-technology prod-
ucts, a firm’s value proposition should state clearly and
succinctly how its technology solves important customer
problems in a relevant fashion. Moreover, value proposi-
tions (either explicitly or implicitly) recognize that cus-
tomers have a choice about how to solve their problems.
Because competition often arises from other technologies
or products that serve similar product needs, effective
value propositions consider not only direct competitors,
but also indirect competitors (say, those that solve custom-
ers’ problems by using a different technological platform
or by providing services or non-technological solutions).
Crafting an effective value proposition is a vital task
in high-tech companies. The value proposition captures
the essence of how the company serves the selected cus-
tomers’ needs in a unique fashion; and it signals to cus-
tomers how the company’s products and services create
value and how the company is clearly differentiated from
competitors. As important, the value proposition serves
to align and harmonize employees’ efforts across various
departments, divisions, and initiatives.
Certainly, other strategic marketing questions exist
as well (such as placing a product in a market to keep a
competitor from entering the market, or pre-announcing
new products to keep customers from defecting to the
competition). Given the importance of segmentation, tar-
geting, and positioning (STP) as a marketing competency,
we focus on this topic later in the chapter, and defer explo-
ration of other strategic issues to the resources listed.
The functional level of marketing activities encompasses
what is traditionally known as the marketing mix, or “the
4Ps of marketing”: product, price, promotion, and place.
(Place decisions refer to the choice of distribution chan-
nels, say, using a company’s own sales force or indirect
resellers like value-added resellers). Product development
and product management are part of the functional level
of marketing. One critical issue in managing the market-
ing mix is consistency in decisions that support the prod-
uct’s position in the marketplace. For example, a product
positioned as high quality must have a price that conveys
that image, with high-end distribution channel members
providing appropriate levels of support, and an advertis-
ing strategy that conveys the premium image. Effectively
coordinating efforts across the four marketing areas to
deliver superior customer value is more successful than
optimizing individual decisions in a piecemeal fashion.
The tactical level implements specific marketing tools,
such as developing marketing brochures, collateral mate-
rials, and a web site, determining which trade-shows to

CH030.indd 423 11/17/09 4:19:36 PM

 424 TECHNOLOGY MARKETING
attend and where to place advertisements, and so forth.
Many high-tech companies equate “marketing” with only
these tactical considerations, and they relegate marketing
input to developing communications strategies after all
other issues (such as product development and market
segmentation) are set. Hence, the plea, “We need to hire
a marketing person,” essentially means hiring someone
to operate at the tactical level. Companies that operate
only at this tactical level likely have not made some of the
harder strategic decisions to guide the company’s efforts,
and in that sense, are less likely to be successful in the
marketplace (regardless of how effective their advertising
or trade-show strategies may be).
Success in high-tech markets comes from making proac-
tive decisions about where the best opportunities in the
market lie, how best to develop and position the company’s
products, and how to successfully launch and commercial-
ize the products. Companies minimize the inherent risks
in these decisions by proactively gathering, sharing, and
acting on market-based information. Paradoxically, tech-
nological innovations are more market-dependent than
other types of innovations (Drucker 1985). Because supe-
rior technology alone is usually insufficient for achieving
marketplace success for high-tech firms, careful analysis
of the needs and the capabilities of the intended user is
essential. Once that information is gathered, successful
high-tech firms work to disseminate and utilize that infor-
mation in collaborative cross-functional teams, between
not only marketing and development groups, but also
between other functional areas as well. And, the tactical
considerations are executed in a manner consistent with
the strategic foundation of the company.
Marketing High-Tech Products
In addition to the three levels at which marketing operates
(addressed in the prior section), companies must also be
cognizant of the complicated environment in which mar-
keting decisions are made. Marketing high-tech products
or services takes place in an environment characterized
by three types of uncertainty: market uncertainty, technol-
ogy uncertainty, and competitive volatility. Market uncer-
tainty is demand uncertainty due to the fear, uncertainty,
and doubt (FUD) that consumers experience in adopting
an unfamiliar product. Questions that arise include: is
there a consumer need for this product/service? Will it
solve the problem consumers are experiencing? Could
consumer needs change in the future? Will there be com-
peting industry standards around this new technology?
What’s the likely market size? Technology uncertainty is
supply uncertainty due to the limitations imposed by
science and engineering as well as the capabilities of
the company marketing the product/service. Questions
that arise include: will this product/service function as
promised? Will the company be able to provide enough
units within the required time frame as well as the high-
quality service that may be required? Will this product/
service render existing products/services obsolete? Are
there likely to be any unanticipated negative consequences
of this product/service to consumers, the environment,
or society at large? Finally, competitive volatility captures
the difficulty identifying existing or future competitors
CH030.indd 424
Market Technological
Uncertainty Uncertainty
Marketing of
High-Technology
Products and
Innovations
Competitive
Volatility
Figure 30.1: The Environment of High-Technology Marketing
and possible retaliatory strategies and tactics against the
launch of the company’s product/service. Managers need
to make realistic assessments of market uncertainty, tech-
nology uncertainty, and competitive volatility surround-
ing their product/service.
As Figure 30.1 shows, high-technology marketing
occurs in an environment characterized by high levels of
market uncertainty, technology uncertainty, and competi-
tive volatility. Some industries in which the convergence
of these sources of uncertainty are likely to be found, and
hence, would be characterized as “high tech” are: informa-
tion communications technology (ICT, such as computer
hardware, software, and telecommunications), as well as
consumer electronics, nanotechnologies, biotechnology,
robotics, and the range of new technological innovations
that are revolutionizing business and society.
Because of these uncertainties, high-technology mar-
keting often requires that standard marketing tools be
modified and adapted to the high-tech environment (Mohr,
Sengupta, and Slater 2010). More specifically referred to
as the contingency theory of high-technology marketing,
companies must match their specific marketing strategy
to the nature of the innovation being marketed.
On one hand, incremental innovations, developed in
response to known customer needs where customers gen-
erally have a good understanding of the uses of the tech-
nology, allow standard marketing tools and concepts to
work quite well. On the other hand, breakthrough innova-
tions, often developed by R&D personnel without a spe-
cific commercial market opportunity in mind, can require
different marketing strategies. These breakthrough inno-
vations often leapfrog existing technologies in their per-
formance, and customers may experience difficulty (fear,
uncertainty, and doubt) in their adoption decisions for
these innovations. As a result, not only does technology
marketing for breakthrough products require different
marketing techniques (say, novel types of market research,
see Leonard-Barton, Wilson, and Doyle 1995); technology
11/17/09 4:19:37 PM
 CORE COMPETENCIES AS THE FOUNDATION FOR SUCCESSFUL HIGH-TECH MARKETING
companies also stand to benefit disproportionately from
leveraging marketing competencies and establishing indus-
try standards in winner-take-all markets.
We explore the development and juxtaposition of mar-
keting competencies relative to technology competencies
in the next section.
CORE COMPETENCIES AS THE
FOUNDATION FOR SUCCESSFUL
HIGH-TECH MARKETING
Competencies
All firms’ strategies are built on a foundation of resources
(physical and intangible) that provide superior customer
value. Physical assets include such things as manufactur-
ing plants, information systems, distribution facilities, and
products. Intangible assets include brand equity, customer
loyalty, market knowledge, and the firm’s beliefs about
customer needs or their responsiveness to pricing, promo-
tional, or distribution changes. Other important assets for
high-tech companies, such as a company’s patent portfolio,
a large installed base of existing customers that generates
network externalities, and/or a well-developed partnership
base that offers complementary products, can provide
important sources of competitive advantage. Competencies
refer to the bundle of skills and capabilities that enable the
firm to compete effectively as markets evolve.
The juxtaposition of technological (engineering and
R&D) and marketing resources and competencies is of
critical importance for high-tech companies. Given that
the purpose of core competencies and competitive advan-
tage is to deliver value to customers, a company’s prod-
ucts, services, and technologies should be seen as vehicles
for value creation (a means to an end), not as something
that has intrinsic value (an end in and of itself). Explains
John Chambers, CEO of Cisco Systems, “I have no love
of technology for technology’s sake—only solutions for
customers” (Serwer, Gashurov, and Key 2000). In another
company, the first question from a very successful divi-
sional R&D manager in a Fortune 50 company whenever
an engineer brought up a new product concept was consist-
ently, “How will this create value for our customers?” Over
time, this simple question reoriented engineers to think
about customers first, instead of technology, thus bringing
much-needed discipline to the division’s R&D efforts.
As these two examples demonstrate, successful high-tech
companies complement their technological competencies
with marketing competencies. Marketing competencies
in high-tech firms include first and foremost, a customer-
driven perspective, which in turn is based on processes for
gathering, interpreting, and using market information. In
addition, marketing competencies encompass the ability
to manage customer relationships to maximize their value
over the long term, as well as other competencies noted
subsequently.
Core Rigidities
Although both technology and marketing competencies are
essential ingredients for success, many high-tech compa-
nies face a situation where their technological competencies
CH030.indd 425
425
actually inhibit their development of marketing compe-
tencies. In other words, the technological competencies
become core rigidities: well-established skills that become
so entrenched, they prevent a firm from developing new
skills or from seeing new ways of doing things. They are
straitjackets that can strangle a firm’s ability to change
and evolve over time (Leonard-Barton 1992). The high-
tech company faces at least two types of core rigidities.
The first relates to its underlying technological platform,
and the second relates to the development of marketing
as an organizational competency.
Rigidities in Technological Innovations: With
respect to the first type of rigidity, competencies in
current-generation technology can prevent development
of new technologies as markets change. Familiar skills
and capabilities—as well as investments in production
technology for current-generation products—may prevent
a firm from developing or using unfamiliar technologies.
For example, Sony, long the leader in the portable audio
device market with its Walkman tape and compact disc
players, was overtaken by MP3 players such as the iPod.
In 2004, Sony did not rank among the top five companies
in market share for digital audio players. Even when MP3
became the de facto industry standard for digital music,
Sony devices continued to play only files encoded with
its own proprietary Atrac music file format. Sony’s core
rigidity was its commitment to its own proprietary tech-
nological standards, with sometimes unhappy results.
Famously, Sony’s Betamax video recording format lost
out in the market to VHS in the 1980s. Sony’s proprietary
Memory Stick flash-memory technology has struggled to
gain support from device makers, keeping it boxed in a
niche (Guillemin, Labousset, and Shim 2004).
Due to the innovator’s dilemma, or the incumbent’s
curse, established companies experience difficulty both
introducing radical innovations and responding to dis-
ruptive innovations introduced by competitors for a
number of reasons. First, managers in these companies
perceive substantial financial risk since developing a
next-generation technology requires diverting resources
from pursuing incremental innovations that address
known customer needs in established markets to devel-
oping a new technology whose feasibility and benefits
are uncertain. Second, sales of a new product based on
a new technology may cannibalize sales of existing “cash
cow” products. Third, existing, large customers may
have a substantial investment in the infrastructure that
utilizes the existing technology. Those customers may
incur switching costs to move to the new technology.
Thus, those powerful customers may actively discour-
age radical innovation. All of these influences lead to a
bias towards incremental innovation in decision making
by managers in market-leading companies (Christensen
1997; Danneels 2002, 2004; Henderson 2006).
Rather than developing a steady stream of innovative
new products which have the potential to cannibalize sales
from current product lines, the success of market leaders
breeds a desire to protect the status quo. Slavish devotion
to old business models plagues many companies, leading
to suboptimal behaviors. Music industry executives sued
individuals for illegally downloading songs (copyright
infringement) rather than finding new business models.
11/17/09 4:19:37 PM
 426 TECHNOLOGY MARKETING
Ingrained routines, procedures, preferences, and opin-
ions, all of which can be related to underlying core com-
petencies, pose barriers to an honest assessment of new
market opportunities.
Thus, successful companies may be overly dedicated
to their existing business infrastructure as well as to
their existing customer base (Atuahene-Gima, Slater, and
Olson 2005; Narver, Slater, and MacLachlan 2004). The
upshot is that radical innovations may be more likely to
come from companies that don’t have the same degree
of technology lock-in and are looking for a way to leap-
frog the market leader. However, when market conditions
are changing, for example, when new technologies are
being developed by other firms in the industry, the mar-
ket leader must be able to make a realistic assessment of
a new technology’s viability and exhibit a willingness to
cannibalize its prior products (Chandy and Tellis 1998).
An alternative point of view is that incumbents do not
have to suffer an innovator’s dilemma; nor is a competitor’s
innovation more likely to be disruptive and successful.
Chandy and Tellis (2000) found that since World War II,
larger firms and incumbents are significantly more likely
to introduce radical innovations than small firms or non-
incumbents, especially in technology markets. Their view
is that innovators, incumbents, and disruptors all suc-
ceed (or fail) due to visionary leadership (or a lack of it)
(Tellis 2006). Visionary leaders focus on future emerging
markets and innovate relentlessly to cater to the needs
of those markets. They are willing to cannibalize their
current assets to realize future payoff and design autono-
mous, dynamic organizations that facilitate innovation.
Companies that decline do so because their leader-
ship does not have this proactive stance on strategy or
risk-taking.
Rigidities in Developing Marketing Competencies:
With respect to the second type of rigidity, core rigidities
that inhibit a firm from developing marketing competen-
cies include status hierarchies that give preference to, say,
technical engineers over marketers, and cultural norms
that relegate marketing activities to an afterthought to
technical development. This core rigidity can be mani-
fested either overtly or subtly, say, in the form of “jokes”
(see Workman 1993) such as:
• “What is marketing? What you do when your products
aren’t selling themselves.”
• “What is marketing research? When marketers go down
to engineering to find out what they’re working on.”
In other words, marketing may be viewed as super-
fluous—needed only when products aren’t good enough
to sell themselves—and marketing people need engineer-
ing to tell them what to do. Parenthetically, both of these
“jokes” represent the typical inside-out perspective that is
endemic to many high-tech companies, with no explicit
consideration of customer needs or market conditions.
Other manifestations of biased preferences for techno-
logical competencies over marketing competencies might
be exhibited in marketing being relegated to only a tactical
role, strategic marketing decisions being made by “tech-
nologists” who don’t have training in the process to make
such decisions, marketing decisions being undermined
CH030.indd 426
or even re-worked to reflect an engineer’s opinion, and
many other ways. In extreme cases, even with a formal
marketing function, the input of the marketing personnel
is sometimes neither solicited nor (if solicited) respected
by other personnel.
The prior paragraph is not meant to imply that tech-
nical personnel may not have useful knowledge and
insights about marketing decisions. Indeed, the research
on best-practices high-technology marketing highlights
that effective integration and collaboration between R&D
and marketing personnel is critical to realizing commer-
cial success (e.g., Atuahene-Gima 2005). Because one of
marketing’s tasks is to listen to the customer and define a
broad set of opportunities, a strong marketing capability
implies that marketing identifies a wide range of markets
and customer applications for the innovative technology.
The voice that marketing brings to the innovation proc-
ess must be joined with the knowledge that R&D brings
to develop an offering that effectively addresses customer
needs. When marketing is systematically downplayed
and disregarded, it is a red flag that the firm’s technologi-
cal competencies are preventing a marketing competency
from being developed and realized.
Marketing is as important as technical competencies
and must be fully developed. Forward-looking companies
have taken stock of their key resources and competencies—
both those competencies they have and those they lack—
and drafted a plan to develop the missing competencies.
Yet, ingrained preferences for technological skills can be a
core rigidity that prevents a high-tech company from fully
developing its marketing skill set. Relegating the marketing
skill set only to people who wear the title of marketing is
a grave mistake. The notion of marketing as a competency
must be infused throughout the high-tech company.
MARKETING COMPETENCIES IN
HIGH-TECHNOLOGY COMPANIES
Market-oriented high-tech companies think beyond
products and technology, and gain sophisticated insights
about customers’ business needs and problems. As Andy
Grove, the former chairman of Intel and one of technol-
ogy’s big thinkers, said, “You know that old saying that
‘railroads are not in the railroad business, they are in the
transportation business’? We are facing something simi-
lar to that” (Grove 1996). To bring technology solutions
to customers, high-tech companies must think in terms
of the underlying needs that customers have. They must
have an intimate understanding of their customers’ work,
their customers’ ways of doing business, and their cus-
tomers’ industries.
Other important marketing competencies include
selecting the appropriate target market, communicating
clearly the benefits the innovation offers relative to other
solutions, designing an effective/efficient distribution
channel, and developing solid relationships and alliances.
Table 30.3 provides a fairly thorough (although certainly
not exhaustive) listing of the range of marketing compe-
tencies that high-tech companies should develop, as well
as a sampling of resources for each competency. It cer-
tainly is a daunting list!
11/17/09 4:19:37 PM
 MARKETING COMPETENCIES IN HIGH-TECHNOLOGY COMPANIES 427

Table 30.3: Sampling of Marketing Competencies and Associated Resources

Marketing Competencies Suggested Resources

Strategic marketing Ryans, Adrian, Roger More, Donald Barclay, and Terry Deutscher. Winning Market Leadership.
planning process Toronto: John Wiley & Sons, Canada, Ltd, 2000.
Market research Leonard-Barton, Dorothy, Edith Wilson, and John Doyle (1995), “Commercializing Technology:
Understanding User Needs,” in Business Marketing Strategy. V. K. Rangan et al. (eds.), Chicago:
Irwin, pp. 281–305.
McQuarrie, Edward. The Market Research Toolbox. Thousand Oaks, CA: Sage Publications,
2005.
McQuarrie, Edward. Customer Visits: Building a Better Market Focus (3rd Ed.),
Armonk, NY: M. E. Sharpe, 2008.
Customer value Anderson, James C., James A. Narus, and Das Narayandas. Business Market Management:
management Understanding, Creating, and Delivering Value. Upper Saddle River, NJ: Pearson Prentice Hall,
2008.
Anderson, James, Nirmalya Kumar, and James Narus. Value Merchants: Demonstrating and
Documenting Superior Value in Business Markets. Boston: Harvard Business School Press, 2008.
Kordupleski, Ray. Mastering Customer Value Management. Pinnaflex Educational Resources,
Inc., 2003.
Customer relationship Gupta, Sunil, and Donald Lehmann. Managing Customers as Investments, Upper Saddle River,
management NJ: Wharton School Publishing/Pearson Education, 2005
Peppers, Don, and Martha Rogers. Enterprise One to One. New York; London; Toronto;
Sydney; Auckland: Currency Doubleday, 1997.
Peppers, Don, and Martha Rogers. Managing Customer Relationships. Hoboken, NJ: John
Wiley & Sons, 2004.
Understanding high-tech Moore, Geoffrey A. Crossing the Chasm. New York: HarperCollins, 2002.
customers Reddy, Allan C. The Emerging High-Tech Consumer. Westport, CT; London: Quorum Books, 1997.
Segmentation, targeting, Moore, Geoffrey A. Crossing the Chasm. New York: HarperCollins, 2002.
and positioning in high- Weinstein, Art. Handbook of Market Segmentation: Strategic Targeting for Business and
tech markets Technology Firms. Binghamton, NY: Haworth Press, 2004.
High-tech product Bowen, James E. Building High-Tech Product Companies: The Maelstrom Effect. Thomson
management South-Western, 2004.
Lehmann, Donald, R. Lehmann, and Russell S. Winer. Product Management (4th ed.). McGraw-Hill
Higher Education, 2004.
McGrath, Michael. Product Strategy for High Technology Companies. McGraw-Hill, 2000.
Crawford, C. Merle Crawford and C. Anthony Di Benedetto. New Products Management
(9th ed). McGraw-Hill/Irwin, 2007.
Marketing high-tech Sowter, Colin. Marketing High-Tech Services. Gower Publishing Ltd., 2000.
services
Pricing strategies Monroe, Kent. Pricing: Making Profitable Decisions. McGraw-Hill/Irwin, 2002.
Sales and distribution Friedman, Lawrence. Go to Market Strategy: Advanced Techniques and Tools for Selling More
considerations Products to More Customers More Profitably. London: Butterworth-Heinemann, 2002.

Strategic brand Aaker, David. Building Strong Brands. New York: Free Press, 1996.
management Keller, Kevin L. Strategic Brand Management: Building, Measuring, and Managing Brand Equity.
Pearson Prentice-Hall, 2008.
Managing corporate social Savitz, Andrew, and Karl Weber. The Triple Bottom Line: How Today’s Best-Run Companies Are
responsibility initiatives Achieving Economic, Social, and Environmental Success. San Francisco: Jossey-Bass, 2006.

General high-tech Davidow, William. Marketing High Technology. New York: Free Press, 1986.
marketing resources Mohr, Jakki, Sanjit Sengupta, and Stanley Slater. Marketing of High-Technology Products and
Innovations (3rd ed.) Upper Saddle River, NJ: Prentice-Hall, 2010.
Nesheim, John L. High Tech Start Up. New York: Free Press, 2000.
Ryan, Rob. Entrepreneur America. HarperBusiness, 2001.
Shanklin, William, and John K. Ryans, Jr. Essentials of Marketing High Technology. Lexington
Books, 1984.
Viardot, Eric. Successful Marketing Strategy for High-Tech Firms. Boston, London: Artech
House, 1998.

CH030.indd 427 11/17/09 4:19:38 PM

 428 TECHNOLOGY MARKETING
Effective decision making in each of the areas listed
uses a systematic process comprising a sequence of steps.
The resources listed in the table typically offer a process-
based approach to the particular marketing decision at
hand.
In addition, effective decision making in each of the
areas listed relies extensively on market research and
market-based data (see, for example, Mohr, Sengupta,
and Slater 2010, Chapter 6). Indeed, because high-tech
companies operate in highly volatile, uncertain environ-
ments, they stand to benefit disproportionately from effec-
tively gathering and using market-based information.
We reference additional resources in Table 30.3 regard-
ing this topic. Moreover, companies increasingly utilize
new media (such as Web 2.0/ social media) as a vehicle
for market research, offering insights on new product
development, market intelligence, and the needs and
attitudes of technology consumers. In addition, compa-
nies use new technology for customer-driven innovation,
allowing their customers to participate in the innovation
process.
Gathering, sharing, and using market research is key
to effective decision making within a technology-driven
firm (Mohr, Slater, and Sengupta 2006). With a shared
understanding about the value and use of market intel-
ligence—information about customers, competitors, and
other important stakeholders and trends—a company
gains a powerful knowledge-based competency that cre-
ates superior advantage in the marketplace. Simply put,
information about customers and their needs becomes
the beacon to guide the company through the messy,
oftentimes political, process of decision making.
Businesses that value and rely on market information to
guide strategic decision making are commonly described
as market oriented. Distilled to its essence, a market ori-
entation simply means gathering, sharing, and using
information about the market (customers, competitors,
collaborators, technology, trends, etc.) to make decisions
that lead to superior customer value. Some companies
use the terms “market oriented” and “customer focused”
interchangeably, referring to an organizational culture
that is solidly grounded in customer analysis and market-
based trends and that puts customers’ interests first
(Deshpande, Farley, and Webster 1993).
Certainly, a full exposition of the marketing competen-
cies listed in Table 30.3 is beyond the scope of a single
chapter; interested readers are referred to the many use-
ful resources listed in that table. In this section of the
chapter, we explore two important marketing competen-
cies: segmentation, targeting, and positioning (or STP),
as well as strategic brand management. Included in the
STP competency are the important issues of crossing
the chasm (explained subsequently) and crafting a value
proposition.
These two competencies were selected for two rea-
sons: first, because break-through technologies typically
can be used across a wide range of applications, compa-
nies struggle to focus. However, not focusing on a specific
target market typically diffuses efforts across too many
diverse segments and does not effectively address the
value requirements in any one segment. Second, despite
the high-profile examples of Microsoft, IBM, Nokia, and
CH030.indd 428
Intel, identified by BusinessWeek, in the top ten global
brands of 2008, Kevin Keller, an expert on strategic brand
management, states that many high-tech companies—
often managed by “technologists”—struggle with branding
(Keller 2008). Unfortunately, “many high-tech compa-
nies have learned the hard way about the importance of
branding their products and not relying on product spec-
ifications alone to drive their sales” (Keller 2008, 649).
High-tech companies need well-designed programs to
create brand awareness and a strong brand image.
Segmentation, Targeting, and Positioning,
and the Chasm in High-Tech Adoption
Segmentation is the process of dividing a market into dis-
tinct subsets (segments) of individuals or organizations
that share similar characteristics, which cause them to
behave in similar ways or have similar needs. The standard
process of market segmentation is shown in Table 30.4.
A unique aspect of segmentation in high-tech markets
is that early market adopters have different adoption
motivations than mainstream adopters; Geoffrey Moore
refers to the gap in adoption (and the resulting sales lag
it causes for high-tech companies) as the chasm (Moore
2002). The challenge for high-tech companies is to recog-
nize that the marketing strategies that resulted in their
initial market successes typically will not be effective
with mainstream adopters. We explore the reasons for
this, and the solutions to cross the chasm below.
Reasons for the chasm: As shown in Figure 30.2, the
market for any innovation comprises categories of adop-
ters who differ according to their buying motivations, as
well as their demographic and psychographic profiles.
The reasons for the chasm derive from critical differ-
ences between the early market (technology enthusiasts
Table 30.4: The Market Segmentation Process
1. Divide the market into groups, based on variables
that meaningfully distinguish between customers’
needs, choices, and buying habits.
• Demographics or “firmographics”
• Psychographics (values, activities, attitudes,
lifestyles, opinions) or organizational culture
• Behavior-based variables, such as the 80/20
rule, usage occasion, vertical markets, benefit
segmentation
2. Describe the typical customer’s profile within each
segment.
3. Evaluate the attractiveness of the various segments
and select a target market, based on: size of the
segment (purchasing volume); segment growth
rates; competitive intensity in the segment;
company’s competencies in serving the segment’s
needs.
4. Position the product within the segment selected.
Craft an effective value proposition; use tools such
as multi-attribute models and perceptual mapping.
11/17/09 4:19:38 PM
 MARKETING COMPETENCIES IN HIGH-TECHNOLOGY COMPANIES 429

Innovators Early The Early Late Laggards

Adopters Chasm Majority Majority
3.5% 12.5% 34% 34% 16%

Technology Visionaries Pragmatists Conservatives Skeptics

Enthusiasts
Fundamentally Bring real The bulk of all Pessimistic Not so much
committed to money to the technology about their potential customers
new technology: table; help to infrastructure ability to gain as ever-present
sooner or later, publicize purchases; do any value from critics; as such,
it is bound to the new not love technology the goal of high-tech
improve their innovation, technology for investments and marketing is not to
lives; take which gives its own sake; undertake them sell to them but
pleasure in a necessary believe in only under rather to sell around
mastering its boost to evolutionary not duress—typically them.
intricacies, early market revolutionary because the
“fiddling”; love success. products and remaining
to get their hands innovations. alternative is to
Figure 30.2: The Technology on the latest and let the rest of the
greatest world pass them
Adoption Life Cycle innovations; by; price
Source: Adapted from Geoffrey
typically the first sensitive, highly
Moore, Crossing the Chasm:
customers for skeptical, and
Marketing and Selling Technology
anything that is very demanding.
Products to Mainstream Customers
truly brand new.
(New York: HarperCollins, 2002).

and visionaries) and the mainstream market (pragma-
tists and conservatives). Visionaries are willing to under-
take high risk/high reward technology investments; they
will think and spend big. However, pragmatists are pru-
dent and want to stay within the confines of reasonable
expectations and budgets. Visionaries want to be first in
bringing new ideas to the market, but pragmatists want
to go slow and steady. The chasm arises because word-
of-mouth effects in the diffusion of the innovation break-
down: Visionaries see pragmatists as pedestrian, whereas
pragmatists think visionaries are dangerous.
Solutions to cross the chasm: Moore argues that in
order to cross the chasm, high-tech companies must:
• select a “beach-head,” or a single target market from
which to launch their marketing strategies for the
mainstream market;
• develop a whole product solution, an end-to-end solu-
tion that allows mainstream customers to simplify the
process of getting their technology purchase working.
A good beachhead is determined primarily by the prag-
matist customers’ compelling reason to buy technology:
purchase of the new technology must drastically improve
productivity on a well-understood, critical success factor.
In addition, a good beachhead should offer word-of-mouth
access to additional, related market segments. For exam-
ple, in targeting a mobile text message marketing solution
to real estate agents, Goomzee Mobile Marketing explicitly
considered the fact that real estate agents are embedded in
a larger industry network that involves construction com-
panies, bankers and mortgage providers, title and home-
owners’ insurance, home inspectors, and so forth. Given
these existing word-of-mouth relationships and Goomzee’s
knowledge of how the real estate industry worked, its sub-
sequent marketing efforts could offer similar text-alert
based systems to other players in the industry.
Many high-tech firms make the mistake of attempting
to pursue too many market segments at the outset. They
are enthusiastic about the potential their innovations can
offer to many different types of segments and are unwill-
ing to limit their potential market opportunities. However,
most firms simply do not have the resources to be effective
in multiple segments. They cannot develop the industry-
(customer-) specific knowledge and language they need to
be credible to customers in a particular segment, nor can
their fledgling marketing initiatives rise to a sufficiently
influential level. They end up spreading their resources
too thinly to be effective in any of the segments and,
as a result, fail. A firm must be ruthless in its paring of its
opportunities. Indeed, success in just one segment can be
the catalyst to succeed in other segments.

CH030.indd 429 11/17/09 4:19:38 PM

 430 TECHNOLOGY MARKETING
With respect to the whole product solution, visionaries
are willing to tolerate some incompleteness in the product
and will fill in the missing pieces. However, pragmatists
need the complete, end-to-end solution, or the whole prod-
uct. Identifying the whole product requires an exhaustive
analysis of what it takes to fulfill the reasons the customer
is buying. For example, in the computer industry, the
whole product includes hardware, software, peripher-
als, interfaces and connectivity, installation and training,
and service and support. In conducting electronic busi-
ness over the Internet, the whole product includes web
site design, hosting of the site on a server, connection to
the Internet, purchase of a domain name, security, finan-
cial transaction ability, search-engine optimization and
building site traffic, order fulfillment, and logistics, and
ongoing customer relationship management. The defini-
tion of the whole product may differ significantly across
segments and therefore should be done within the con-
fines of a single target market. A firm may either develop
or partner with other firms to provide the whole product
solution to the initial customers in the mainstream mar-
ket. Indeed, establishing partnerships with other industry
players to provide a whole product solution is critical so
that pragmatist customers are not overwhelmed by the
complexity of cobbling together a complete solution,
and to ensure compatibility across various aspects of the
solution. Firms that succeed in the mainstream market
have complemented their initially strong competencies
in technological development with equally strong compe-
tencies in partnering and collaborative skills.
Strategic Brand Management
Another critical but often overlooked marketing compe-
tency is strategic brand management. Some high-tech
companies may believe that branding is simply not appli-
cable to break-through scientific inventions, such as a
pacemaker for a heart patient or the use of DNA testing
in law enforcement. Discussing their innovations in the
language of branding may seem rather far-fetched. They
often see branding as simply naming their products. Yet,
in high-tech markets, where products change rapidly, a
strong brand name can be even more important than in
other industries. One study found that corporate images
associated with innovation and trustworthiness have
a greater positive impact on consumers’ product evalu-
ations when the perceived risk of the purchase is high
(rather than low); this implies that branding may be more
important for high-tech products and innovations—and
even more so for breakthrough innovations compared to
incremental innovations (Gürhan-Canli and Batra 2004).
The benefits of a well-developed competency in strate-
gic brand management are many. Well-known brands gen-
erally are priced at a premium, resulting in higher margins
to the companies that sell them. The financial results of a
strong brand are increased profitability and cash flows,
which, in turn, lead to a higher stock market valuation
(Madden, Fehle, and Fournier 2006). Strong brands are
used as a badge or emblem that bestows credibility; they
signal the quality level that customers can expect, and
the brand name usually connotes particular attributes
or associations. Brands can also attract attention in new
CH030.indd 430
markets, be it a new country, a new category, or a new
industry. Hence, brands can reduce the risks companies
face in introducing new products, because customers
trust that the new introduction will be consistent with the
company’s efforts in the past. Moreover, when enterprise
customers purchase high-tech products, they are commit-
ting to a long-term relationship. This is another reason
high-tech companies should establish a strong corporate
brand that will endure over time.
In addition, strong brands can attract higher quality
employees, elicit stronger support from channel and sup-
ply chain partners, gain additional licensing opportuni-
ties, and so forth. They make the salesperson’s job easier,
“warming up” prospects in advance.
What is “branding”? Although brands have legal and
accounting meanings, the marketing meaning refers to a
product that has a clear identity, a unique set of associa-
tions that establish a relationship between the brand and
the customer (Aaker 1996). From a customer’s perspec-
tive, strong brands serve as a heuristic, providing a short-
cut in decision making. The brand’s meaning frequently
transcends the functional or utilitarian benefits of the
product. A sizable segment of customers tends to migrate
to the familiar in a cluttered and confusing world.
Therefore, from a customer perspective, a brand is a
pledge or a promise that a product will perform in certain
ways and provide customers with consistent performance
across all “touch-points”—or moments of truth—with
the company (distribution channels, customer service,
pricing, warranties, and so forth). This point cannot be
emphasized enough: Regardless of which functional area
is involved, all personnel must understand that every sin-
gle touch-point that a customer has with a company—
whether it is for technical support, with a retail partner,
a billing question, or pre-sales inquiries—can either
strengthen or undermine the relationship. So, a “brand”
is not just a catchy logo and slogan; rather, the “brand” is
delivered by every employee in each and every interaction
with each and every customer.
By creating an implicit promise or pledge of quality to
customers, companies must keep their brand promises.
When problems arise that are inconsistent with the brand
promise, brand equity can erode, and the investments a
company has made are potentially wasted. For exam-
ple, BP (formerly British Petroleum, but “rebranded” to
imply “beyond petroleum”) has worked for the last few
years on creating a brand image of caring for the environ-
ment. Yet, leaks in pipelines and oil spills undermined its
brand-building efforts. Moreover, Dell had a brand prom-
ise to deliver the best customer service in the industry.
Yet, many customers have found the Dell customer sup-
port organization unwieldy and ineffective, resulting in a
backlash of negative publicity and blogging—embodied
in the phrase “Dell hell.” Although brands are supposed to
be a pledge of quality and commitment, companies that
encounter difficulties in fulfilling their promises under-
mine their investments in marketing and advertising.
Strategies Used to Develop a Brand: Many different
factors can affect a company’s brand image, of which some
are controllable and others are not. Branding strategies
refer to the specific activities that a firm undertakes in its
strategic brand management program, with the objective
11/17/09 4:19:38 PM
 MARKETING COMPETENCIES IN HIGH-TECHNOLOGY COMPANIES
Table 30.5: Strategies for Branding in the High-Tech
Environment
Branding • Rely on brand symbols or imagery
strategies with to create a brand personality
a clear tie to • Develop a brand hierarchy: Brand
“marketing” the company, platform, or idea
• Emphasize advertising (rather
than price promotions) to create
awareness
• Effectively harness Web 2.0
technology and new media
• “Influence the influencers” and
stimulate word of mouth
• Think strategically about corporate
social responsibility efforts
Branding • Create a steady stream of
strategies with innovations with strong value
implications proposition
for company • Engage in internal branding to
as a whole enlist the support of all company
personnel
• Effectively manage all points of
contact (“touch-points”) with
customers
• Work with partners (cobranding
and ingredient branding)
Source: Adapted from Mohr, Sengupta, and Slater (2005).
to create awareness and prominence in the market. As
shown in Table 30.5, branding strategies cover a wide
range of terrain and might include the choice of brand ele-
ments making up the brand (logos, symbols, slogans), the
marketing activities and supporting programs that create
strong, favorable, and unique associations for the brand,
and associations with other entities (such as cobranding,
sponsorship of events, and so forth) that help build the
brand. In addition, branding strategies must also include
a wide range of other issues (discussed below) that affect
the brand, such as a company’s innovation road map, its
internal communication with employees, and even its
investments in customer service and support.
Rather than detailing each of the strategies listed in
Table 30.5, this section highlights a few of the critical
issues.
Certainly, branding can utilize “traditional” marketing
activities, such as advertising and PR campaigns—as well
as the variety of new media and Web 2.0 tools—to gener-
ate strong brand name awareness. Moreover, images and
symbols may help establish a brand identity. For example,
the open source Linux operating system’s Penguin mascot
conveys comfort and contentment. The advertising mes-
sage must create the right brand associations to create
the brand image, based on a savvy positioning strategy
and value proposition.
Given the rapid obsolescence of high-tech products,
branding new products with new names can be quite
expensive, and makes it difficult for customers to develop
product or brand loyalty. Therefore, high-tech firms
CH030.indd 431
431
should consider the brand hierarchy, which includes the
company/corporate name (say, Microsoft), the particu-
lar technology platform (say, Windows), and then the
individual products within that platform (say, Windows
Vista). At the corporate level, high-tech companies ben-
efit from branding the company itself (Tickle, Keller, and
Richey 2003). The rapid pace of innovation in high-tech
markets puts a premium on a corporate or family brand
with strong credibility associations. Yet unfortunately,
many technology companies are so enamored with their
new product innovations that they brand the product
name to the detriment of a corporate brand identity.
Many high-tech companies rely on an “influence the
influencers” program to generate publicity and favorable
word-of-mouth endorsements among technology experts,
enthusiasts, and opinion leaders. Company personnel
must identify and court the experts that influence target
customers. For example, some companies give products
away for free or at substantially reduced prices to these
influencers, particularly journalists and bloggers who
specialize in reviewing technology products. Because of
their credibility, their reviews have a big impact on new
product sales. Third-party endorsements from top compa-
nies, leading industry or consumer magazines, or indus-
try experts may help to achieve the necessary perceptions
of product quality. To gain such endorsements requires
demonstrable differences in product performance, which
requires innovative product development over time. One
word of caution on this approach to creating a brand rep-
utation: In a Web 2.0 environment, industry “influentials”
pride themselves on their independence and their own
reputations must be beyond reproach. Hence, influenc-
ing the influencers must be used carefully. Moreover, in
a Web 2.0 environment, companies can no longer con-
trol their brand messages using one-way communica-
tion; they “share” their brand with customers, and listen
to what customers say on blogs, in chat rooms, and so on.
These new media can be useful for understanding what
the brand stands for in the customers’ eyes.
Best-practices business strategy in the twenty-first
century explicitly acknowledges the responsibility that
companies have to society; they balance economic profit
with what is known as “social and environmental profit,”
or engage in business strategies that benefit society and
the environment as well as the firm. Companies can use a
variety of strategies to “give back” to society and to dem-
onstrate their commitment to corporate social responsibil-
ity (CSR). The role of corporate social responsibility in
strategic brand management is to proactively leverage
investments in CSR to build brands. CSR should be used
strategically to create positive brand associations in key
target markets, and to differentiate the company from
competitors. It should enhance customer loyalty through
a point of differentiation that builds on product fea-
tures, yet is distinct from them. For example, salesforce
.com’s CEO Mark Benioff has literally written the book on
Compassionate Capitalism as a key foundation of his com-
pany’s value proposition (Benioff and Southwick 2004).
In addition to their marketing purposes with external
customers and constituents, branding strategies have
important ramifications inside the high-tech company
as well, with implications for the company’s innovation
11/17/09 4:19:39 PM
 432 TECHNOLOGY MARKETING
road-map, internal communications with employees, and
customer service and support initiatives.
First, customers expect marketers of strong brands
to supply a steady stream of innovations in exchange for
their loyalty. Moreover, strong brands must deliver the
value they promise. The price/performance ratio must be
perceived as equitable, for OEM, enterprise (business),
and mass-market customers. Keeping a brand’s products
and services relevant to its target markets is important in
fast-paced high-tech markets. Although advertising can
communicate the message, it ultimately is the user expe-
rience that delivers on the brand message. Research can
be help to track and fine-tune the user experience.
Second, all company personnel must be informed
about the brand message and campaigns prior to pub-
lic release. Everyone in the company must understand
what the brand stands for, and how to back up that brand
promise in every interaction with each customer. For
example, when Intel modified its logo and brand strategy
to the “Leap Ahead” in 2005, it accompanied its exter-
nal, public efforts with a multipage 11⫻17-inch color
brochure that was distributed internally to all Intel per-
sonnel. Successful strategic branding requires internal
marketing, with all company personnel informed about
their roles in executing the strategy.
This leads directly to the next important element of
a branding strategy: managing all points of customer
contact, also known as “moments of truth” (mentioned
previously). Customer service is as important in build-
ing a strong brand as any advertising campaign or new
product innovation initiative. If customers do not receive
high-quality service across all their touch-points with the
company, it negatively affects the brand.
This point cannot be overemphasized. Far too many
high-tech companies think they are ready for a brand-
building campaign. They invest significant sums of
money in creating a logo, generating a tag line, creating
expensive ads, buying media placement, and so on. Yet,
when customers go to a retail store for information, what
if they cannot find the product on the shelf? Or, what if
the retail salesperson cannot explain the new product’s
features adequately? What if a customer’s first Google
results are a negative blogger’s rants about the company?
What if the customer’s attempts to reach customer serv-
ice via an online inquiry go unanswered? Or, what if the
phone call to a 1-800 number results in a mechanized
routing system that creates frustration and more head-
aches than the original problem? A company should not
undertake a branding campaign until its internal house is
in order, meaning it has thought proactively about all the
touch-points that prospective, new, and existing custom-
ers will have with the company, and ensured that each
and every interaction will support the underlying brand
promise.
Finally, high-tech branding strategies must also con-
sider the role of partnerships and alliances. A branding
strategy is only as effective as a company’s partners, who
need to be informed and committed as well. For exam-
ple, a company that outsources its customer service must
ask whether its partner has the same commitment to
customer excellence as it expects. Will a channel partner
support the company’s brand promise? Working with
CH030.indd 432
partners means relying on another company to deliver
and execute effectively. This is also true in cobranding
initiatives in which two companies jointly brand their
product offering. The Intel Inside® co-branding initiative
is the classic example from the high-tech world.
CONCLUSION
Successful high-tech companies must remain highly
innovative, and they must infuse a marketing competency
throughout their organization. In addition to providing a
general overview of the domain of marketing, the chapter
discussed the unique environment of technology market-
ing and how marketing must be adapted and modified.
The chapter also highlighted the difficulties that
high-tech companies face in developing their marketing
competencies. Many high-technology companies, whose
origins are frequently found in their scientific or engi-
neering developments, mistakenly believe that marketing
is superfluous, that the superiority of their technological
innovations will be sufficiently compelling to convince
buyers to adopt their new products. Unfortunately, his-
tory is littered with the skeletons of many high-tech com-
panies that believed superior technology would allow
them to sustain their upward trajectory.
The role of marketing in high-tech companies is to
facilitate the successful commercialization of break-
through innovations, to enhance the odds that the new
technologies will deliver on their promises. The chapter
identified a broad range of marketing competencies, focus-
ing on two in particular: segmentation, targeting, and
positioning (STP) and strategic brand management.
Developing marketing as a competency requires knowl-
edge, resources, and tools to make effective marketing
decisions. Moreover, most—if not all—marketing deci-
sions have a major impact on internal employees and
functions. Indeed, many companies’ marketing failures
arise from the fact that they mistakenly believe that mar-
keting is an external communication tool, and they for-
get that delivering on the company’s value proposition
requires all people in the company to work in harmony to
achieve the company’s mission.
Marketing initiatives cannot be successful unless the
company’s internal culture values and supports the role
of marketing. With the development of marketing as a
competency, marketing becomes a customer-focused phi-
losophy shared by all personnel in the high-tech company
that underlies all decisions and the execution of those
decisions, ultimately contributing to a higher level of suc-
cess in the marketplace.
GLOSSARY
Brand: (1) A name, term, sign, symbol, or design, or a
combination of them, used to identify and differenti-
ate the goods and services of one seller from another;
allows a company legal protection (including trade-
mark protection) for its products, to protect against
counterfeiting. (2) From a customer perspective, a
pledge or a promise that a product will perform in
certain ways and provide customers with consistent
performance across all touch-points with the company
11/17/09 4:19:39 PM
 REFERENCES AND SUGGESTED READINGS
(distribution channels, customer service, pricing, war-
ranties, etc.); an expectation about the company and
its products.
Branding Strategies: The specific activities that a firm
undertakes for strategic brand management to create
awareness and prominence in the market; strategies
can include the choice of brand elements making up
the brand (logos, symbols, slogans, etc.); the marketing
activities and supporting programs (such as advertis-
ing and public relations) that create strong, favorable,
and unique associations for the brand; associations
with other entities (such as cobranding, sponsorship
of events, etc.) that help build the brand; as well as
a wide range of internal issues that affect the brand,
such as a company’s innovation road map, its internal
communication with employees, and even its invest-
ments in customer service and support.
Cobranding: Initiatives in which two companies jointly
brand their product offering.
Contingency Theory of High-Technology Marketing:
In order to successfully commercialize high-tech prod-
ucts, the nature of the marketing strategies must be
appropriately matched to the type of innovation.
Core Rigidities: Well-established skills and competen-
cies that become so entrenched, they prevent a firm
from developing new skills or from seeing new ways of
doing things; straitjackets that strangle a firm’s ability
to change and evolve over time.
Innovator’s Dilemma (Incumbent’s Curse): Situation
when established companies experience difficulty intro-
ducing radical innovations and in responding to those
introduced by competitors. Causes include failures in
product development as well as sunk costs that create
a bias in managerial decision making, excessive reli-
ance on a certain class of customers, and their existing
business infrastructure, and existing business models.
Market Uncertainty: Demand uncertainty due to the
fear, uncertainty, and doubt (FUD) that consumers
experience prior to their decision to adopt an unfamil-
iar product.
Marketing: The set of activities, processes, and deci-
sions to create, communicate, and deliver products
and services that offer value to customers, partners,
and society at large; includes strategic, functional, and
tactical considerations.
Marketing Mix (“The 4 Ps of Marketing”): Product,
price, promotion, and place (place decisions refer to
distribution channels); these areas comprise the func-
tional level of marketing.
Market Oriented (Market Orientation): Relying on
customer analysis and market-based information to
guide internal decisions; gathering, sharing, and using
information about the market (customers, competi-
tors, collaborators, technology, trends, etc.) to make
decisions that creates superior customer value. Also
known as “customer focused,” the idea of putting cus-
tomers’ interests first.
Network Effects/Network Externalities: Also called
demand-side increasing returns or a bandwagon
effect; direct network effects exist when the value of
the product increases as more users adopt it. Indirect
network externalities arise from the fact that as more
CH030.indd 433
433
users adopt a particular product (the installed base),
developers of related goods are more likely to create
complementary products, which in turn, creates even
greater value for each customer, developing a positive
feedback loop.
Segmentation: The process of dividing a market into
distinct subsets (segments) of individuals or organiza-
tions with similar characteristics and similar behavior
and needs.
Technology Uncertainty: Uncertainty over whether
the new technology will perform as promised, arising
due to scientific limitations, as well as the company’s
capabilities.
Value Proposition: A statement of the technical, eco-
nomic, or operational benefits a company provides
its customers that make it superior to competitors’
offerings.
CROSS REFERENCES
Consumer Behavior in the Realm of Technology; Consumer
Marketing of High Technology Products; Innovation
Management in Large Corporations; Marketing Research;
Marketing Strategy Analysis; New Product Development;
Strategic Management of Technology.
REFERENCES AND SUGGESTED
READINGS
Aaker, D. 1996. Building strong brands. New York: Free
Press.
American Marketing Association. 2007. New definition
of marketing. http://academics.communityzero.com/
elmar?go⫽1712138 (accessed January 10, 2008).
Anderson, J., N. Kumar, and J. Narus. 2007. Value mer-
chants. Boston: Harvard Business School Press.
Atuahene-Gima, K. 2005. Resolving the capability-rigidity
paradox in new product innovation. Journal of Market-
ing 69 (4): 61–83.
Atuahene-Gima, K., S. F. Slater, and E. M. Olson. 2005.
The contingent value of responsive and proactive
market orientations for new product program perfor-
mance. Journal of Product Innovation Management
22 (6): 464–482.
Benioff, M., and K. Southwick. 2004. Compassionate
capitalism: How corporations can make doing good an
integral part of doing well. Career Press.
Chandy, R. K., and G. J. Tellis. 1998. Organizing for radi-
cal product innovation: The overlooked role of will-
ingness to cannibalize. Journal of Marketing Research
35 (November): 474–487.
Chandy, R. K., and G. J. Tellis. 2001. The incumbent’s
curse? Incumbency, size, and radical product innova-
tion. Journal of Marketing 64 (July): 1–17.
Christensen, C. M. 1997. The innovator’s dilemma. Boston:
Harvard Business School Press.
Daneels, E. 2002. The dynamics of product innovation
and firm competencies. Strategic Management Journal
23 (12): 1095–1121.
Daneels, E. 2004. Disruptive technology reconsidered:
A critique and research agenda. Journal of Product
Innovation Management 21:246–258.
11/17/09 4:19:40 PM
 434 TECHNOLOGY MARKETING
Deshpande, R., J. Farley, and F. E. Webster, Jr. 1993.
Corporate culture, customer orientation, and innova-
tiveness in Japanese firms: A quadrad analysis. Journal
of Marketing 57 (1): 23–37.
Deshpande, R., and F. E. Webster, Jr. 1989. Organizational
culture and marketing: Defining the research agenda.
Journal of Marketing 53 (January): 3–15.
Drucker, P. 1954. The practice of management. New York:
Harper & Row.
———. 1985. The discipline of innovation. Harvard
Business Review 63 (May/June): 67–73.
Dutta, S., O. Narasimhan, and S. Rajiv. 1999. Success in
high-technology markets: Is marketing capability crit-
ical? Marketing Science 18 (4): 547–568.
Eisenhardt, K., and S. Brown. 1999. Patching: Restitching
Business Portfolios. Harvard Business Review 77 (May/
June): 72–82.
Gourville, J. T. 2005. The curse of innovation: Why inno-
vative new products fail. Marketing Science Institute
Working Paper #05-004, Cambridge, MA.
Grove, A. 1996. Only the paranoid survive. New York:
Currency/Doubleday.
Guillemin, C., P. Labousset, and R. Shim. 2004. Sony to
support MP3. cnet news.com, September 22, www
.news.com/Sony-to-support-MP3/2100-1027
_35377625.html (accessed December 19, 2007).
Gürhan-Canli, Z., and R. Batra. 2004. When corporate
image affects product evaluations: The moderating
role of perceived risk. Journal of Marketing Research
41 (May): 197–205.
Henderson, R. 2006. The innovator’s dilemma as a prob-
lem of organizational competence. Journal of Product
Innovation Management 23 (January): 5–11, quote on
p. 7.
Im, S., and J. P. Workman Jr. 2004. Market orientation,
creativity, and new product performance in high-tech-
nology firms. Journal of Marketing 68 (2): 114–132.
Keller, K. L. 2008. Strategic brand management: Building,
measuring, and managing brand equity. 3rd ed. Upper
Saddle River, NJ: Prentice-Hall.
LeBaron, D., and T. Vaitiligam. 2001. The ultimate
investor. Oxford, UK: Capstone Publishing Limited.
www.deanlebaron.com/book/ultimate/chapters/
venture.html.
Leifer, R., C. M. McDermott, G. C. O’Connor, L. S. Peters,
M. P. Rice, and R. W. Veryzer. 2000. Radical innova-
tions: How mature companies can outsmart upstarts.
Cambridge, MA: Harvard Business School Press.
CH030.indd 434
View publication stats
Leonard-Barton, D. 1992. Core capabilities and core
rigidities: A paradox in managing new product devel-
opment. Strategic Management Journal 13:111–125.
Leonard-Barton, D., E. Wilson, and J. Doyle. 1995.
Commercializing technology: Understanding user
needs. In Business marketing strategy, eds. V. K. Rangan
et al. 281–305. Chicago: Irwin.
Lynn, G., and R. Reilly. 2002. Blockbuster: The five keys
to developing great new products. New York: Harper
Business.
Madden, T. J., F. Fehle, and S. Fournier. 2006. Brands
matter: An empirical demonstration of the creation
of shareholder value through branding. Journal of the
Academy of Marketing Science 34 (2): 224–235.
Mohr, J., S. Sengupta, and S. Slater. 2005. Marketing of
high-technology products and innovations. 2nd ed.
Upper Saddle River, NJ: Prentice-Hall.
———. 2010. Marketing of high-technology products
and innovations. 3rd ed. Upper Saddle River, NJ:
Prentice-Hall.
Mohr, J., S. Slater, and S. Sengupta. 2006. Foundations
for successful high-technology marketing. In Managing
Technology and Innovation: An Introduction, eds.
R. Verburg, R. J. Ortt, and W. M. Dicke, 84–105.
London: Routledge.
Moriarty, R., and T. Kosnik. 1987. High-tech vs. low-
tech marketing: Where’s the beef? Harvard Business
School, case #9-588-012.
Moore, G. 2002. Crossing the chasm: Marketing and sell-
ing technology products to mainstream customers. New
York: Harper Business.
Narver, J. C., S. F. Slater, and D. L. MacLachlan. 2004.
Responsive and proactive market orientations and
new product success. Journal of Product Innovation
Management 21 (5): 334–347.
Serwer, A., I. Gashurov, and A. Key. 2000. There’s some-
thing about Cisco. Fortune, May 15, 114–127.
Shapiro, B. 1988. What the hell is “market oriented”? Harvard
Business Review 66 (November/December): 119–125.
Tellis, G. J. 2006. Disruptive technology or visionary lead-
ership? Journal of Product Innovation and Management
23 (1): 34–38.
Tickle, P., K. L. Keller, and K. Richey. 2003. Branding in
high-technology markets. Market Leader 22 (Autumn):
21–26.
Workman, J. 1993. Marketing’s limited role in new prod-
uct development in one computer systems firm. Journal
of Marketing Research 30 (November): 405–421.
11/17/09 4:19:40 PM