Marketing High Technology

1. Marketing is Civilized Warfare: Prepare to Fight

MARKETING IS CIVILIZED WARFARE.

Aggressive competition is constant. In the business world, competitors are always vying for market share, making marketing a continuous battle. Companies must be prepared to aggressively defend their positions and capture new territory. This requires a mindset of strategic engagement and a willingness to confront challenges head-on.

Triumph through crisis. Every company will face marketing crises, and the ability to overcome these challenges is crucial for sustained growth. Turning potential disasters into resounding victories can accelerate a company's momentum and demoralize the competition. The stories of marketing coups, like Iacocca at Chrysler, serve as inspiration for facing adversity with determination.

Operation Crush example. Intel's "Operation Crush" in 1980 exemplifies this combative approach. Facing a severe threat to its 8086 microprocessor family, Intel assembled a task force, set an ambitious goal to "crush the competition," and launched a comprehensive campaign that ultimately restored its market preeminence. This involved inventing a new "product" by bundling existing strengths, organizing the company for a unified effort, and executing a relentless marketing blitz.

2. The Strategic Principle: Invent, Dominate, Defend

Marketing must invent complete products and drive them to commanding positions in defensible market segments.

Focus on complete products. The core of successful marketing lies in creating comprehensive products that fully meet customer needs, not just technologically superior devices. This involves augmenting the core technology with services, support, distribution, and brand image. A true product is the totality of what a customer buys.

Commanding positions in defensible segments. Companies should strive to achieve a dominant market share in a well-defined and protected market segment. This requires a deep understanding of market segmentation and the ability to create barriers to entry that deter competitors. Avoid the trap of pursuing incremental positions in broad markets, which often leads to wasted resources and failure.

Market segmentation is key. The key to achieving a commanding position is understanding market segmentation. A market segment is a group of customers sharing common desires, needs, and buying patterns. By targeting a specific segment, a company can tailor its product and marketing efforts to maximize its impact and build a defensible position.

3. Slightly Better is Insufficient: Strive for Significant Difference

In marketing, I would much rather be significantly different than just a little bit better.

Avoid incremental differentiation. In crowded markets, being "slightly better" is a recipe for failure. Customers are unlikely to switch from established brands for marginal improvements. Instead, companies must strive for significant differentiation in ways that are important to the customer.

Create important differentials. Marketing's job is to create important differentials in products that are often little more than generic. This requires courage to be different and a willingness to challenge conventional wisdom. It also means understanding the customer's needs and tailoring the product to meet those needs in a unique way.

Intel's development system business example. Intel countered general-purpose tools by becoming Intel product specialists. They got their new simulation devices to the market as much as a year before their competitors delivered theirs. They also offered the customer more software options. The quality of the software products for Intel components was better. Finally, and maybe most important, they supported their customers with application engineers who took total system responsibility.

4. Service is a Strategic Imperative, Not an Afterthought

The newness associated with many technology companies and their product lines has shielded those firms from a service crisis.

Service as a competitive advantage. As industries mature, service becomes a critical differentiator. Companies that prioritize service can build customer loyalty, command premium prices, and create a significant barrier to entry for competitors. Neglecting service, on the other hand, can lead to customer dissatisfaction, lost market share, and ultimately, failure.

Serviceability must be designed in. Good service starts with high-quality products that are designed for maintainability and ease of use. This requires a commitment to total quality control and a focus on "fitness for use." It also involves building a robust service infrastructure, including training programs, spare parts inventory, and diagnostic tools.

Service is segmented. Different market segments require different service offerings. A large OEM customer will have different service needs than a small end-user. Companies must tailor their service strategies to meet the specific needs of each customer segment.

5. Great Products Make Great Salespeople: Empower Your Channels

If the products are easy to sell, sales productivity improves, and most salespeople, who are usually compensated by incentive schemes, will devote their efforts to them.

Salespeople are key to product success. Salespeople are the front line in the battle for market share. They are the ones who interact directly with customers, understand their needs, and persuade them to buy. Empowering salespeople with the right tools, training, and support is crucial for maximizing their effectiveness.

Distribution channels are specialized. Not all distribution channels are created equal. Each channel has its own strengths and weaknesses, and companies must carefully select the channels that are best suited to their products and target markets. A distributor who feels positively about a supplier company can do a great deal to steer an order to that company.

Support your sales channels. A sales force is the corporate army. Its mission is to assault competitive strongholds, defend the company’s turf from attacks by the enemy, gather intelligence, and capture new territory. The weapons it uses are product knowledge, customer knowledge, price, service, persuasion, and support. Just like any army, it will be effective only if provided with training, logistic support, and the proper equipment.

6. Great Promotions are Simple: Clarity and Consistency Win

Great promotions are acts of creativity, insight, and brilliance.

Promotions are more than just ads. Great promotions are not just about clever slogans or eye-catching visuals. They are about communicating the essence of a product and its benefits to customers in a clear, concise, and compelling way. They are also about inspiring employees and building a sense of shared purpose.

Customer benefits are the foundation. Good promotions begin with a deep understanding of customer needs and the benefits a product provides. The message should be simple, memorable, and relevant to the target audience. It should also be consistent across all channels, from advertising to sales calls to customer service.

Simplicity wins. The ideas expressed in each of those promotions are not complex. They are simple, logical, and appealing statements—ideas the customer will remember. Even when the copy is forgotten, the concepts will still endure.

7. Price on Value, But Understand the Market's Reality

Pricing is one of the most important functions a marketing department performs.

Pricing is a balancing act. Setting the right price is crucial for maximizing profitability and market share. Prices that are too high can deter customers and create opportunities for competitors. Prices that are too low can erode profits and undermine the perceived value of the product.

Value-based pricing. The ideal pricing strategy is to price on value, that is, to set prices based on the perceived value of the product to the customer. This requires a deep understanding of customer needs, competitive offerings, and the unique benefits of the product.

Market realities matter. While pricing on value is important, companies must also be aware of market realities. Factors such as competitor pricing, cost structures, and currency fluctuations can all influence pricing decisions. Companies must be flexible and adaptable in their pricing strategies to remain competitive.

8. Be International or Risk Failure: Global Presence is Essential

A LARGE PORTION of the market for most technology products is overseas.

Global markets are essential for growth. A significant portion of the market for most technology products is located overseas. Companies that fail to establish an international presence risk losing market share and becoming vulnerable to foreign competitors.

International markets offer unique opportunities. Participating in international markets provides companies with access to new customers, new technologies, and new perspectives. It also allows them to diversify their revenue streams and reduce their dependence on domestic markets.

Adapt to local conditions. To succeed in international markets, companies must be willing to adapt their products, marketing strategies, and business practices to local conditions. This may involve modifying product specifications, translating documentation, and establishing local manufacturing facilities.

9. Plan Products, Not Devices: Customer-Centricity is Key

Great devices are invented in the laboratory. Great products are invented in the marketing department.

Focus on the complete product. Technology companies often focus too much on the technical specifications of their devices and not enough on the overall product experience. A complete product includes not only the device itself but also the services, support, and distribution channels that make it useful and desirable to customers.

Customer-centric planning. Product planning should begin with a deep understanding of customer needs and desires. This requires talking to customers, observing their behavior, and gathering feedback on existing products. The goal is to create products that solve real problems and provide tangible benefits to customers.

Market segments demand complete products. To access a market segment requires an investment as unique as the segment itself. That investment may be small, such as changing the color of a product. Or it may be quite large. A product line may have to be redesigned to meet new performance requirements. A new channel of distribution may have to be found.

10. Great Products Need a Soul: Passion and Commitment Matter

The most important ingredients of great high-tech marketing aren’t taught in business schools.

Beyond strategy and tactics. While strategic planning and tactical execution are important, they are not enough to guarantee success. Great products also need a soul, that is, a sense of passion, commitment, and purpose that resonates with customers and employees.

Commitment and perseverance are key. Building a successful product requires a long-term commitment and a willingness to overcome obstacles. This requires a team of dedicated individuals who believe in the product and are willing to go the extra mile to make it a success.

Crusaders needed here. The word “manager” implies someone who manages something. It means getting things done through people. Unfortunately, to many people wearing the title it connotes clean hands rather than working in the trenches.

Last updated: April 8, 2025