Marketing of High-Technology

Products and Innovations

Jakki J. Mohr
Chapter 4:
Market Orientation and
R&D/ Marketing Interaction in High-
Technology Firms
Jakki Mohr 2000
Market Orientation
Philosophy of doing business that emphasizes
shared gathering, dissemination, and
utilization of market information in decision
making.
Impact of market orientation on performance:
Firms which are strong technologically see a
greater impact of market orientation on
performance (than firms which are not strong
technologically)
Jakki Mohr 2000
Aspects of a Market Orientation

1
Gathers information
-About customers
-About competitors
-About market trends


2
Disseminates
information throughout
the company


3
Makes decisions cross-
functionally based on
use of information


4
Executes decisions
in a coordinated
manner and with
commitment

Jakki Mohr 2000
How market-oriented firms
use information:
Gather information
Current and future customers
Competitive information
Market trends
Disseminate information
Across functions and divisions
Utilize information
Across functions and divisions to enhance commitment
Execute decisions in coordinated fashion
Jakki Mohr 2000
Knowledge Management
Proactive management of firms bases
of knowledge to better share and use
information
Requires conscious oversight to
overcome natural boundaries (between
functions/divisions)
Jakki Mohr 2000
Barriers to Being
Market-Oriented
People hoard information
Core rigidities can cause people to disparage
information about/from users
Tyranny of the served market:
Listening only to current customers
Users inability to envision new solutions
Solving problems only with current technologies
Jakki Mohr 2000
Downside to Being
Market-Oriented
Listening to customers can inhibit
innovativeness
Customers may be inaccurate both in their
positive endorsement of new products as
well as in their rejection of new ideas.
Jakki Mohr 2000
Overcoming the Pitfalls in
Being Market-Oriented
Dont focus on what customers SAY; focus on what
they DO.
Empathic design
Match use of customer feedback to the type of
innovation:
For incremental innovations:
Customer feedback is vital and useful.
For breakthrough innovations:
Customers bounded by current solutions, and insights about new
technologies may be sketchy at best.
Jakki Mohr 2000
Overcoming the Pitfalls in
Being Market-Oriented (cont.)
Focus on future customers (and not just
existing customers)
Champion new ideas
Work in cross-functional teams
Jakki Mohr 2000
Effective Marketing/R&D
Interaction
1
Match nature of
interaction to the type
of innovation


2
Examine and overcome
core rigidity of elevation
of engineering over
marketing


3
Use formal and
informal interactions to
build bridges


4
Enhance
opportunities for
communication

Jakki Mohr 2000
Nature of Marketing/R&D Interaction
Matched to Type of Innovation
Break-through innovations
Success based on technological (R&D) prowess
Role of marketing: To provide market-related
feedback on
market opportunity areas,
market development,
feedback on product features/engineering feasibility
Marketing brings voice of customer and marketplace
into the development process
Jakki Mohr 2000
Nature of Marketing/R&D Interaction
Matched to Type of Innovation (Cont.)
Incremental Innovations
Because customers can provide useful feedback
for product development, role of marketing is
critical
Role of R&D:
Ensure marketing understands technological
capabilities
Assist with marketing efforts
Assist with understanding customers
R&D remains close to the customer
Jakki Mohr 2000
Barriers to
R&D/Marketing Interaction
Corporate culture/core rigidity that is
technology-driven
Elevates status of engineering over marketing
personnel
Engineering takes on important marketing tasks
Spatial distance in physical locations of
marketing and R&D
Justifies and institutionalizes disregard for market-
related information/feedback
Jakki Mohr 2000
Overcoming Barriers to
Marketing/R&D Interaction
Formalize systems to share/use information
from other groups
Use informal networks to build bridges
Co-locate marketing/R&D in close proximity
Understand and be able to communicate
articulately about the others domain, be it
products, technology, markets
Be effective at building consensus in a
nondirective fashion

Jakki Mohr 2000
Overcoming Barriers to
Marketing/R&D Interaction
(To be used in cases where engineering
systematically disregards marketing
input):
Form strategic coalitions with upper
management
Risk: May alienate peers
Bypass engineering to get the job done via
external partners
Jakki Mohr 2000
Overcoming Barriers to
Marketing/R&D Interaction (Cont).
Enhance opportunities for communication
Increased frequency of communication beyond
minimum threshold, but below overload
Formal, planned interactions have more
credibility than informal communications
Some conflict/tension is healthy
Jakki Mohr 2000
The Impact of Information Sharing
Norms on Marketing/R&D
Communication
Norms: expectations for extensive sharing
of information between functions
These norms are most useful when marketing
managers identify strongly with the organization
as a whole (vs. the marketing function
specifically)
Jakki Mohr 2000
The Impact of Goal Integration on
Marketing/R&D Communication
Integrated Goals: The organizations goals
are superordinate to either marketings or
R&Ds individual goals
Stressing integrated goals most useful when
marketing managers identify strongly with the
marketing function specifically (vs. organization
as a whole)
Risk: increases use of coerciveness in
communication by marketing

Jakki Mohr 2000
Caveat:
Effective marketing/R&D interaction
must be firmly grounded in an
understanding of customer needs and
wants.
Jakki Mohr 2000
Keeping the Customer In
R&D/Marketing Interaction?
Customer
Marketing
Engineering
Product Technology
Rock Pile
Would you
like a rock?
Sure
Heres a
blue rock?
OK

Find me a big, cheap,
fast, dense,
sharp...rock
Wrong
rock
Do you have a
red rock?
Whats wrong
with blue?
I can make a
purple one
OK, but only
if its square
We dont have
square ones