December 1, 2011Economic University Bratislava /SK

"Marketing Innovative High‐Tech Products: Research, Teaching and Practice"

Rainer HasenauerTechnology Marketing & High‐Tech Marketing,

Institute of Marketing Management,Vienna University of Economics and Business (WU)

AGENDA

1. Background & Motivation2. Social & Economic Viewpoints3. High‐Tech Innovation: Market Entry4. Marketing High‐Tech Products

4.1. Research4.2. Teaching4.3. Practice

5. Conclusions

1. Background & Motivation

40 years of experience with:High‐tech business developmentMultidisciplinary research projectsFounding & developing high‐tech companiesObserving bottleneck dynamics, e.g.:– Response to emerging markets– Market entry strategies– Financial means– Human resource development– IPR and innovation lead

Research

Teaching

Practice

AGENDA

1. Background & Motivation2. Social and Economic Viewpoints

1. High Tech Innovation: market entry2. Marketing for high tech products

4.1. Research4.2. Teaching4.3. Practice

5. Conclusions

2. Social & Economic Viewpoints

Societal trends

Technology trends

Bottleneck

Adapting demand

Adapting supply

Market

Bottleneck

Ex.: Technologies for storing electrical

energy for smart grids

Demand for innovation to overcome bottlenecks

Public subsidies for R&D to overcome bottlenecks

Basic & applied research & development

Behind each bottleneck exists a new market potential

AGENDA

1. Background & Motivation2. Social and Economic Viewpoints3. High‐Tech Innovation: Market Entry4. Marketing High‐Tech Products

4.1. Research4.2. Teaching4.3. Practice

5. Conclusions

3. High‐Tech Innovation: Market Entry

• Markets are formed by the convergence of supply and demand

• Behind each bottleneck exists a new market potential

Market uncertainty

Competitivevolatility

Technologyuncertainty

3.1. Conditions for Market Entry

Marketinghigh-technology

products and innovations

Latent demand

Latent supply

Emergent demand

Emergent supply

Real demand

Real supply

The Past The FutureTime Arrow Today

“Markets are conversations” (CluetrainManifesto, 1999)

Real markets are the result of societal and R&D driving forces that transform latent demand via emergent demand into real market demand

3.2. From Latent Demand to Real Demand

Convergence

3.3.High‐Tech Markets

Features: • Nearness to basic and/or applied research• Innovative => high‐profit, high‐risk business• Dynamic => high speed of market behavior• Fragmented => numerous small windows of

opportunity, hard to score• Shorter product life cycles BUT• Longer lasting technology life cycles.

11

Missing Link in Innovation (Nokia 2005)

* MTB = marketing testbed

Phase 0Research

Phase 1Solution

Phase 2Prototype

Phase 3Pre-commercialproduct

Phase 4Market entry

“Innovation = no man’s land”

Market pullResearch push MTB*?

Remote from market MTB* Near to market

“Distance of understanding”

Innovator’sear

Customer’s voice

Markets are conversations

3.4. Implications of High‐Tech Innovations

Innovative?

Testable?Controllable? Compatible? Implementable?

Correctable?

Integrable?

Goals of thecustomer/user

Industrial standards

Acceptable? Assimilative?

Questions for the innovator: Voice of the customer

Assimila-tion gapWillingness

to pay

AGENDA

1. Background & Motivation2. Social and Economic Viewpoints3. High‐Tech Innovation: Market Entry4. Marketing High Tech Products

4.1. Research4.2. Teaching4.3. Practice

5. Conclusions

4. Marketing High‐Tech Products

Marketing management tasks for high‐tech start‐ups can be visualized as follows:

Competition?

Customize problem

solution! Innovation half life?* Extend innovation lead!

Time to market?Increase speed!

Chakravarthy, 1997

* Innovation half life = temporal stability of innovation lead compared with the best competitor known to the innovator

4.1. Research & Business: ProjectsTechnology acceptance, willingness to pay & marketing mix for:• Electric energy storage, sensors, functional materials, real time software,

robotic systems, satellite services, mobile augmented reality – & related start‐up companies

Interdisciplinary research in:• Safety & security devices for nuclear, military & civilian objects, threat

analysis algorithms for natural, technical & civil hazards• Multiobjective programming for eco‐technical systems• Research on latent & emergent technology markets for location‐based

services & value‐added services related to satellite navigation GALILEO• Technological compliance in robotic physiotherapy & emergency medicine

(user interface of defibrillators in the case of sudden cardiac arrest)• Applied measuring innovation lead (PACVD, CVD, V‐REDOX)• R&D of marketing testbed for high‐tech innovative products & services.

4.1.1. Competitive Innovation Half Life (C‐IHL)

How long does it take before 50% of the innovator’s innovation lead is consumed by the best competitor known to the innovator?

Time

Perceivedinnovation leadrelative to thebest competitor

A B C

50% limit

1x 3x 7xBest competitor

100% Innovation A, B, C

Research!

4.1.2. Stressors in High-Tech Marketing

RATIOS:Time to market stress: (Break-Even TTM)

Solution stress:(C-IHL)

Profitability stress:

(EBIT)

Available time for BE

Required time for BE > 1

R&D time for required innovation lead

R&D time for achievable innovation lead> 1

Required EBIT

Achievable EBIT> 1

If > 1, then stress caused by short resources

Research!

Currently under development, a marketing testbed is a platform for exploring and testing marketing mix measures under realistic market conditions. It differs from a technical testbed by focusing on:Marketing mix, technology & product acceptance, & willingness to pay per market segment

Another study that applies the marketing testbed method:

“This activity [establishing the marketing testbed] addresses the need of technology companies to validate the need for their product and its business case.“ http://www.imaworld.org/?CategoryID=187&ArticleID=511

C) Marketing testbeds for market entry of high‐tech start‐ups

4.1.3. Marketing Testbeds Research!

19

Perceivedusefulness

Perceivedease of use

Attitude Behavioralintention

Usetest

Qualityof use

Perceivedusefulness

Perceivedease of use

Externalvariables

Current Period Next Period

TAM – Structural Equation Model (Davis, 1989)

4.1.4. Technology Acceptance Model (TAM)

20

Perceived Ease of use

Perceived Usefulness

Social Influence

Facilitating Conditions

Behavioral Intention

User Behavior (Acceptance)

Gender Age Experience Voluntarinessof Use

Unified Theory of Acceptance and Use of Technology (UTAUT, Venkatesh et al., 2003)

4.1.5. Unified Theory of Acceptance & Use of Technology

2121

Company innovation

Outside-in knowledge flow:

Lead userAcademic units

R&D units

Inside-outknowledge flow: Externalizaton of

IPRs and knowledge

4.1.6. Community-Based Innovation (CBI)

: Multistage CBI Process with Online Community ( Füller et al., p. 4)

MTB Socialpercolationfield

Research!

22

4.1.7 Microstructure of CBI for Cross-IndustryTechnology Acceptance Testbed

Scouts

Influencer Positive WOM

Influencer Negative WOM

Verifiers

Social Percolation FieldWOM = word of mouth

Current Period Next Period

Cross-industry

Perceived Usefulness

Perceived Ease of Use

AttitudeBehavioral Intention

Use Test

Quality of Use

Perceived Usefulness

Perceived Ease of Use

External Variables

23

4.1.8 Marketing Testbed for Market Entry of High-Tech Innovation Start-ups (1 of 5)

• Cross‐border ETC project (AT‐SLK)• TU Vienna , EUB, WU, INiTS GmbH incubator• 3 years of collaborative research and teaching• Testbeds for

– Knowledge management through cloud computing

– Music recognition– Medical robots– etc.

Research!

2424

Marketing Testbed for Market Entry of Innovative High-Tech Products for Start-Ups (2 of 5)

• Experimental approach in B2B innovation marketing– Different aspects:

• Innovation nearness to market: (functional) prototype stage• Segmentation criteria, e.g. technological affinity, strain of

bottleneck (“economic strain due to lost opportunity to increase productivity”)

• Type of scale: qualitative vs. quantitative market research• Segment‐focused instance of marketing mix (4Ps)

– Integrating:• Community‐based innovation (CBI) and open innovation (OI)• Technology acceptance: perceived usefulness (PU) and perceived

ease of use (PEoU)

25

State-of-the-Art Technology vs.Innovative Technology

• Controllability• Perceived usefulness• Perceived ease of use

Market Entry & Window of Opportunity* (3 of 5)

Criteria:

Testbeds formarket entries

Acceptance of Market Segment• Compatibility with industrial standards• Removed bottleneck strain / Benefit expectation• Technological compatibility• Societal compatibility• Environmental compatibility

* George S. Day

26

WoO

Market Entry & Window of Opportunity (WoO) (4 of 5)

MarketResistance

Time for market entry

MarketReadiness

Minimum market readiness

Minimum readiness MTB

NewTechnology

MTB

WoO : Window of opportunityMTB : Marketing testbed

2727

4Ps Marketing Mix and Marketing Testbedsfor High-Tech Start-Ups (5 of 5)

PCI: Problem-centered interviewsMS: Market segment

Product

Promotion

Price

Place

Marketing Mix

Model

MS1

MS2

Marketing Mix

Testbed1

Marketing Mix

Testbed2

PCI

Feedback / ReconfigurationComplementary compound effects?Substitutional compound effects?

4.2. Design of Teaching Program (1)• Lecture on “Technology Marketing and High‐Tech

Marketing”• Seminar:

1 group consist of 3‐4 students 1 or 2 groups work for one high‐tech start‐up companyUp to 8 groups in one semesterStudents are coached by entrepreneur and lecturer Qualitative market research with early prospects (potential customers)Students’ work is used by the entrepreneur under real‐time conditions. Students learn to work with innovators.Written work and oral presentation.

4.2. Design of teaching program (2)• Actual examples of 2010/2011:

1. 2D laser scanner for safety & security systems

2. Printed foil sensors for MMI

3. Cellular functional material for automotive applications

4. Wireless strain gauge

5. Umidity sensor

6. Cloud computing services

7. Bendable Li‐battery

4.3. Research & Practice-Driven Teaching

Cross-border high-tech center: project structure

High-tech start-ups

Students

High-tech center (AT/SLK)

High-tech markets

Testbeds formarket entries &product launches

INiTS incubatorprocess model

TU-WU-EUBteaching program

Diploma thesis & certificates

New start-up companies

5. Conclusions• Market entry is the critical stage for

determining the success of high‐tech innovation.

• Marketing testbeds will systematically support the market entry of high‐tech start‐up companies.

• Students are welcome to join this research field.

3232

Thank you for your attention.

Questions?

Comments?

Ideas?

33

Contact:

Rainer HasenauerE‐mail: rh@hitec.at

www.hitechcentrum.eu

www.hitec.at

www.wu.ac.at/mm