Tutorial successful marketing strategy for high tech firms

Introducing This Ebook Tutorial Successful Marketing Strategy for High Tech
The pressure to keep on being successful is only increasing. In 1993, for example, the typical company in the high-tech top 100 (as measured by market value) of the Financial Times stayed there for 7 years; by the end of the decade, the average tenure had dropped to 3 years. A similar turnover in market leadership continues today.

Successful high-technology companies do share some key factors of success [5]. They tend to market two or three times as many new products as their competitors, and incorporate two to three times more technical innovations into each new product bringing actual value to their customers. Also, they introduce their products to the market two times faster than their competitors thanks to operational excellence [6], one of the main weaknesses of so many dot-coms that underestimated the importance of manufacturing and logistics. This helps them to adapt their business model quickly whenever there is a significant change in the environment. In addition, the geographical size of their markets is double that of their competitors. They have also created and leveraged great brands, which are reflected in everything the company does, especially those that impact the consumer [7]. not necessarily have the best product, but they do have the best marketing strategy.

With the burst of the technological bubble, the majority has been more concerned with cost control than expansion. Successful companies know that their future lies in the ability to create new wealth through innovation, entrepreneurialism, and development of new markets. In order to maintain profitability they need to have some special edge, either through significant patents, a very fertile R&D program, or an overwhelming market position [1]. Ultimately the key factor for achieving success is to grow and keep a loyal base of customers through an efficient marketing strategy. Many high-tech companies consider their technology and product to be the absolute best around, but this is not enough to make it in the marketplace. In order for a new technological innovation to make a significant impact, it should identify and satisfy a specific human need in a new and cost-effective way. According to Mario Mazzola, Cisco Systems chief development officer: "Innovation is more than just a new idea—it is

Since 2001, when the tech slowdown hit countries in the West, high-tech industries have experienced one of their most economically depressed periods. An upturn in all sectors began in late 2003, but the telecom industry and the computer industry were still lagging behind; their profitability owing more to cost cutting than to revenue expansion. The technology recovery is far from being solid and in any case, the projections of unlimited growth are over. Famous firms at the beginning of this decade, such as WorldCom, Qwest, Marconi, or NTL, or stellar dot-com companies, such as WebVan, 360networks, or Boo.com, have filed for Chapter 11 bankruptcy or imploded while thousands of lesser-known companies have disappeared from the market altogether. More or less, all of those high-tech companies had forgotten about the reality of the market and of their customers. Obsessed with technology, especially the Internet, they had unrealistic expectations about the market's acceptance of their products. Their business plans anticipated revenues and costs that were far too high for any company to attain or sustain. When sales failed to materialize, these high-tech firms were not able to cover their costs, and soon folded.vAt the same time, many customers, notably large corporations, havevstarted to take their revenge on high-tech vendors. They no longer acceptvinnovations or updates like they did in the 1990s. Now they wait to replacevexisting equipment in an effort to reduce their investment in technology.vConsequently, life has become very tough for a large majority of hightechvcompanies, whose revenues, profits, and number of employees havevplummeted.

However, in the middle of this economic storm, some firms have managed to survive and even thrive by exploiting their competitors' failures. Companies such as Nokia, IBM, Cisco Systems, Samsung, SAP, Yahoo, Vodafone, Amazon, eBay, and many others are stronger and in some cases even more profitable than before the Internet crash and the following downturn. The third edition of this book explains to the reader how these companies managed to survive and to grow in this hostile economic environment. To put it briefly, those successful high-technology companies do about taking a new idea and developing it into customer value and positive business impact" [2].

This is not a new concept. After all, Marconi invented the technology for wireless communication, but it was in the 1920s while leading RCA that David Sarnoff, an untaught immigrant, imagined how the new technology could be applied to transmit news, music, and other kinds of entertainment. However, the high-tech industry has a cemetery full of companies that thought they could win the world with their innovations. They failed because they did not have the marketing ability to connect their innovative offer with the actual needs of the markets. Just consider some examples of famous failures of high-tech firms, years before the Internet crash:

◗ EMI, one of Britain's leading defense companies, discovered the computer tomography technology that was the basis for a revolutionary medical tool, the CAT scanner, but EMI failed to protect its technology; archrival General Electric was able to produce this medical tool at lower cost and used superior marketing to develop strong connections with hospitals, the chief users of the technology. Between 1977 and 1979, EMI had a cumulative loss on computer tomography equipment and eventually withdrew from the market, selling its CAT scanner business to General Electric [3].
◗ In the 1980s the R&D division of Xerox invented ground-breaking technology, such as the graphical user interface and the laser printer [4]. However, Xerox lacked the marketing skills to make them a market success, which Apple did with the former and Hewlett-Packard with the latter.
◗ In the 1990s AMD created the K6 a faster chip than the one produced by Intel, but failed to penetrate Intel's market share because of being short of marketing and manufacturing skills.

Overall, these companies make marketing their main objective. They know their customers intimately and track their demand in real time. Their main concern is the market and not the product; this is the key to their success. All research and development activities, manufacturing, sales, and after-sales services aim to satisfy customers better and faster. Their other common characteristic is that they aim for profit. They invest wisely even when they spend money on marketing-oriented programs. They do not fund their customers in order to boost their sales, for instance, and always make sure that any major marketing program will have a positive impact on the bottom line. By keeping budgets tight and controlling cash, they never face bankruptcy.
Marketing plays a fundamental role in this process. Actually, its goal is to determine the needs of the market and to assure that the products manufactured by the company correspond precisely to these needs with a competitive advantage and at a profit.

This is probably the ultimate key to success and resilience [8] as testified by IBM, one of the oldest high-tech firms on the market. Pondering the ability of IBM to reinvent itself over and over again, its current CEO Samuel Palmisano reflects that "we never defined ourselves as a clock and scale company, or a mainframe company, or a typewriter maker, even when we were the undisputed leader in those markets. We simply committed ourselves to being the leader in inventing state-of-the-art technology and helping customers apply it to solve their problems. When technology and the nature of customer problems change, we do, too" [9]. Some claim that high-technology products are so specific that the classic rules of marketing used for selling detergents or yogurt cannot be applied. In reality, this argument is often used to justify the absence of actual strategies oriented toward markets and customer needs. For certain companies,

blinded by the mirage of technological innovation, it is easier to continue manufacturing a technical masterpiece, even on the brink of bankruptcy. Moreover, marketing managers of successful high-technology companies stress that there is not a large difference between marketing traditional products and high-tech products. They contend that the customer philosophy remains the same and that only the specific features of a high-tech product shape how the company markets it, and give it a distinctive twist. Such a statement is backed up by their ability to overcome the economic collapse of the recent years.

While the sky had fallen on the high-tech industry, smart marketing strategies helped them grow and prosper among the rubble. This book details some of their approaches, based on my consulting experiences with some of those firms, as well as on comments and documents from numerous scholars, consultants, and professionals. This book is addressed to all who wish to understand, set up, or better apply marketing principles in order to succeed in this fascinating and exciting world of high technology.

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