Tuesday, February 22, 2005

Marketing High Technology

I recently read the book "Marketing High Technology" by William H. Davidow.

William H. David has many interesting stories to tell about his time at Hewlett Packard and Intel. When he writes about "Marketing High Technology", he means measurement/test-systems or microprocessors. But his ideas can be applied to other areas as well.

Sadly I can summarize this book in a few points:
- The Product is the device plus all services, the distribution channel, the perception in the market and what the product does for the customer
- "Plan products, not devices"
- If the distribution channel does not match your product, your product will fail
- Your device can be inferior, but your product may be better (E.g. it better does what the customer NEEDS)
- You need at least 15 % market share to survive in a market
- The market entry barrier is about 70 % of revenue of the biggest competitor in a market
- If you can choose between better and different, let your product be different
- In the end, it is all about customer satisfaction, not device features
- If you can't deliver the service that customers expect, you'll loose


Girl said...

".. let your product be different”. Why not better? It’s because better is easier to recreate than different or what?

t-mix said...

Simply being better is not enough. You have to be perceived better by the customer, you have to convince the cutomer that you are better. And when it comes to perception, your product might be better, but the competion can have better marketing (and better perception at the customer).

But when your product is different ("This product does X for you!"), that is a lot harder to reply. Your competitor has to say either "Our product does Y for you!" or it has to say "You don't need X!". If your competion does this, they acknowledge that you have something they don't have. Not a good move for them...

Apprentice said...

Worse than all that, capitalism allows for a worse product to do better than a better one, and worse-different is more successful than better-different. Look at soft drinks, all snack foods and chain store clothing for examples. Gap is a spectacular marketing-drven success, selling garments of increasingly lower quality and with less differentiation they are loosing the edge they once had. The technology sector is no different.

There is a quote and some refs and I will find them out of this strange insomniac episode. It is 02.50 here :)