Startup University Hi-Tech Marketing How Markets Develop Market Development Strategy

Startup University

Hi-Tech MarketingHow Markets Develop

Market Development Strategy

Hi-Tech Marketing

Diffusion of InnovationsMarket Development Strategy

Hi-Tech Marketing

The Technology Adoption Life Cycle:Adapt strategy according to the stage in the life cycle

Innovators

Innovators

EarlyEarly

Adopters

Adopters

Early Early

Majority

Majority

LateLate

Majority

Majority

Laggards

Laggards

ChasmChasm

Source: Geoffrey Moore

• The Technology Adoption Lifecycle

• Selling to mainstream customers

Diffusion of Innovations

• The Technology Adoption Lifecycle– The Diffusion of Innovations is a social process


Source: Carnegie Mellon

University




University




University




University




University

• The Technology Adoption Lifecycle– Technology Adoption profiles

Technology Enthusiasts (Innovators)

Visionaries(Early Adopters)

Pragmatists (Early majority)

Conservatives (Late majority)

Skeptics(Laggards)



• The Technology Adoption Lifecycle– Technology Adoption responses

Technology Enthusiasts (Innovators)

Visionaries(Early Adopters)

Pragmatists (Early majority)

Conservatives (Late majority)

Skeptics(Laggards)

Try it!

Get ahead of the herd!

Stick with the herd!

Hold on!

No way!



• Selling to mainstream customers– The Chasm



• Selling to mainstream customers– Crossing the Chasm: Establish a beachhead segment



• Selling to mainstream customers– How Markets Develop

Early Market Bowling Alley


Tornado Main Street


• Selling to mainstream customers– Implications for Sales & Marketing

Customer goal: Competitive Advantage Solve problem Adopt the obvious Extend paradigm

Customer need: Complete solution Make safe choice Better valuePotential of technology

Vendor goal: Segment share Market share ProfitabilityValidate technology

Strategy: Show ROI Set standards Segment focusDemo the technology

Skills: Customer Intimacy Closing deals Relationship mgmt.Technology proficiency


Source: The

Chasm Institute

• Learn more– Everett Rogers, “Diffusion of Innovations”

– Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers”

– Geoffrey Moore, “Dealing with Darwin: How Great Companies Innovate at Every Phase of their Evolution”

– The Chasm Institute, “Chasm Methodology”


• Market Development Strategy

• Market creation variables

• Market attractiveness variables

• Market penetration variables


• Market Development Strategy– The Market Development Strategy checklist & stage in the TALC

1. Target customer

2. Compelling Reason to Buy

3. Whole Product

4. Partners & Allies

5. Distribution

6. Pricing

7. Competition

8. Positioning

9. Next Target

Source of money

To fulfill the compelling reason to buy

Function of whole product integration complexity

For the customer’s money

Next move

Source of demand

Needed for whole product

Function of all other factors

Relative to competition

Source: The Chasm Companion


• Market creation variables– Target customer

• Identified economic buyer, accessible to the sales channel, and sufficiently well-funded to pay the price for the whole product

– Compelling reason to buy• Economic consequences sufficient to mandate any reasonable

economic buyer to fix the problem

– Whole product• Ability (with the help of partners and allies) to provide a complete

solution to the customer’s compelling reason to buy



• Market attractiveness variables– Partners & allies

• Relationships with the other companies needed to fulfill the whole product

– Distribution• Sales channel in place that can call on the target customer and

fulfill the whole product requirements put on distribution

– Pricing• Price of the whole product consistent with the target customer’s

budget and with the value gained by fixing the broken process



• Market penetration variables– Competition

• Target a space that has not been occupied by another company

– Positioning• Establish credibility as a provider of products and services to the

target niche

– Next target customer• Potential to facilitate entry into adjacent niches



• Market Development Strategy

Target Customer: Visionary functional executive

Pragmatist dept. manager

Pragmatist technical buyer

End-users

Compelling Reason to Buy:

Fix a broken business process

Adopt new infrastructure

Better value with no risk

Dramatic competitive advantage

Whole Product: Standardized application

Standardized product

Differentiated product

Differentiated application

Partners & Allies: Recruited for specific product

Rationalize to reduce friction

Minimum required, ideally none

BPR/SI service providers

Distribution: Direct sales/VARs Higher-volume, lower-touch

Low-cost, high-touch

Direct sales

Pricing: Value-based, pain motivated

Competition-based, pain motivated

Competition-based, pain motivated

Value-based, gain motivated

Competition: Application vs. application

Company vs. company

Product vs. productCategory vs. category

Positioning: Niche market leadership

Market share- based leadership

Better experience for end users

Technology-based leadership

Next Target: Adjacent niche market

New platforms, channels, geographies

Next micro-nicheAnother visionary in a different industry



• Learn more– Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High-

Tech Products to Mainstream Customers”

– Geoffrey Moore, “Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets”

– Paul Wiefels, “The Chasm Companion: A Field Guide to Crossing the Chasm and Inside the Tornado ”

– The Chasm Institute, “Chasm Methodology”


Documents

Startup University Hi-Tech Marketing How Markets Develop Market Development Strategy