Marketing of High-Technology
Products and Innovations
Jakki J. Mohr
Chapter 5:
Marketing Research In
High-Tech Markets
Outline of Chapter : Gathering
Information in High-Tech Markets
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High-Tech Marketing Research Tools
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Empathic Design
Lead Users
Quality Function Deployment
Gathering Competitive Intelligence
Forecasting Demand
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Delphi method
Analogous Products
Information Acceleration
Jakki Mohr
© 2000
High-Tech Marketing Research
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Align marketing research tools with type of
innovation
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Incremental innovation:
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Breakthrough products:
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Rely on traditional marketing research tools—
Focus groups, surveys, conjoint analysis, etc.
Market intuition, future scenarios
Mid-range
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Empathic design, lead users
Jakki Mohr
© 2000
Aligning Market Research with
the Type of Innovation
Traditional
Market Research
Market Intuition
Empathic Design
Lead Users
Break-through innovation
(technical solution precedes
customer need,
"technology push")
Incremental
Innovation
(need known)
Jakki Mohr
© 2000
Empathic Design
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Because users may be unable to articulate their
needs, this technique focuses on observations of
customer behavior to develop a deep
understanding the user’s environment.
Types of insights
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Triggers of Use
Unarticulated user needs/coping strategies
New useage situations
Customization
Intangible Attributes
Jakki Mohr
© 2000
5 Steps in Empathic Design
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1. Observation
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Who should be observed?
Who should do the observing?
What behavior should be observed?
2. Capture the Data
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Less focus on words/text; more on visual,
auditory, and other sensory cues
Via photos, etc.
Jakki Mohr
© 2000
5 Steps in Empathic Design
(Cont.)
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3. Reflection and Analysis
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4. Brainstorm for Solutions
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Identify all customers’ possible problems
and solutions
Transform observations into ideas
5. Develop prototypes of solutions
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Tangible representation or role
play/simulation of ideas
Jakki Mohr
© 2000
Use of Empathic Design At Intel
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Success rate based on engineers’ idea only
20%
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Example: video phone
Team of 8 design ethnographers to find how
technology can help solve user problems
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Salmon industry
Business owners
Teenagers
Jakki Mohr
© 2000
Customer Visits
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Use cross-functional teams
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Engineering, marketing, sales account manager
Supportive corporate culture
Visit different kinds of customers:
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Competitor’s customers, lost customers, lead
users, channel intermediaries, internal personnel
Customer councils
Jakki Mohr
© 2000
Customer Visits (Cont.)
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Go to the customer’s site
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(versus bringing them on-premise for a
“dog and pony” show)
Ask probing questions
Ensure customer visits are
programmatic/systematic
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(not ad hoc)
Jakki Mohr
© 2000
Lead Users
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Some customers face needs before a majority of
the market place;
Their needs may be more extreme than typical
customers
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Ex: auto racers’ and military’s needs for better brakes
They stand to benefit by obtaining solutions to
their needs sooner rather than later
They tend to innovate their own solutions to their
needs (see Table 5-1)
Jakki Mohr
© 2000
Lead Users
Time
NUMBER OF USERS WITH NEED
FOR NOVEL PRODUCT
"LEAD USERS"
of later commercialized
modifications and enhancements
"LEAD USERS" of
novel products
Some Users Begin
To Experience/
Respond To Need
First Responsive
Commercial
Product Introduced
Jakki Mohr
© 2000
Market Growth
Lead Users in Market Research
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The lead user process can create
breakthrough products by
systematically identifying lead users and
learning from them.
Jakki Mohr
© 2000
Steps in Lead User Research
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1. Identify important trend
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Via standard environmental scanning
3M identified trend of detecting small
features via medical imaging, which required
higher-quality high-resolution images
Jakki Mohr
© 2000
Steps in Lead User Research
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2. Identify and question lead users
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Personal contacts with customers, surveys,
networking with experts, empathic design
Respect possible sensitivity of information
Ex:
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3M identified radiologists working on most challenging
medical problems, who had developed imaging innovations
to meet their needs
Networking to other fields in pattern recognition (the
military) and semiconductors
Jakki Mohr
© 2000
Steps in Lead User Research
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3. Develop the breakthrough product(s)
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Host a workshop for experts and lead users to
brainstorm
Ex: medical imaging, experts in high-resolution
imaging, and pattern recognition developed
ideas
4. Assess how well lead user data and
experiences apply to more typical users
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Gather market research from typical users
Jakki Mohr
© 2000
Benefits of the Lead User Process
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New insights from gathering and using
information in new ways
Cross-functional in nature
Collaboration with innovative customers
Requires corporate support, skilled
teams, time.
Jakki Mohr
© 2000
Example of Lead User Process:
3M Corporation and Infection Control
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1. Identify important trends in infection
control
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Travel to extreme situation: surgical
environments in developing countries
2. Identify lead users
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Veterinary hospitals, make-up artists in
Hollywood
Jakki Mohr
© 2000
Example of Lead User Process:
3M Corporation and Infection Control
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Develop the breakthrough ideas at a
workshop with experts and lead users
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Economy line of surgical drapes, hand-held
devices to apply anti-microbial substances to
skin, “armor” line to coat catheters and tubes
with anti-microbial protection, and upstream
containment of infection prior to surgery for
high-risk patients.
Jakki Mohr
© 2000
Quality Function Deployment
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What: A tool that provides a bridge
between the voice of the customer and
product design
Purpose: Ensure tight correlation between
customer needs and product
specifications.
Requirement: Close collaboration between
marketing, engineers, and customers
Jakki Mohr
© 2000
QFD Process
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Collect the “voice of the customer”
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Identify customer needs regarding desired product
benefits via customer visits or empathic design
Weight or prioritize desired benefits/attributes
Collect customer perceptions of competitive
products
Transform data into design requirements:
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“Customer requirements deployment:” identify product
attributes that will meet customer needs
“House of quality:” a planning approach that links
customer requirements, design parameters and
Jakki Mohr
competitive data.
© 2000
QFD—Using the Kano Concept
Satisfaction
One-dimensional
Attractive
Dysfunctional
Functional
Must-be
Know vs. Unknown
Spoken vs. Unspoken
Dissatisfaction
Jakki Mohr
© 2000
QFD—3 Types of Attributes
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1. “One-dimensional quality”:
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Increases in level of attribute linearly related to
customer satisfaction
Typically “known” attributes identified by
customer
EX: battery life in lap tops
Jakki Mohr
© 2000
QFD—3 Types of Attributes
(Cont.)
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2. “Must-be quality”:
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Increases in level of attribute has negligible effect
on customer satisfaction;
However, decreases in attribute has strong negative
effect on customer satisfaction
Because they are so basic to product functionality,
they are typically unspoken attributes: customer
expects product to deliver these
EX: ability of laptop to handle bumps and rough
handling
Jakki Mohr
© 2000
QFD—3 Types of Attributes
(Cont.)
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“Attractive Quality:”
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Increases in level of attribute associated with
exponential increase in customer satisfaction
But, because attribute is one that “delights” the
customer, its absence does not necessarily lead
to dissatisfaction
Typically unknown to customer at conscious
level
Ex: decompressable/expandable laptop
Jakki Mohr
© 2000
QFD: Summary
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Firmly grounds product design in
customer needs
Allows product development team to
develop common understanding of
design issues and trade-offs
Reveals friction points and enhances
collaboration
Jakki Mohr
© 2000
QFD and
Total Quality Management
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TQM grounded in customer knowledge and
ability to deliver customer value, which is
enhanced by:
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Customer excellence
Cycle-time excellence
Cost excellence
Cultural excellence
Jakki Mohr
© 2000
Customer excellence
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Tied to being customer-focused and
market-oriented
Knowledge of customer environment
and product useage
Jakki Mohr
© 2000
Cycle-time excellence
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Products late to the market suffer negative impacts
to profitability from two reasons:
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Long time-to-market cycles typically experience cost overruns
More importantly, products late to the market suffer loss
of market share
Lesson: Being fast to market is important, but only when
combined with ability to accurately deliver customer
requirements
 Therefore, link QFD with TQM
Jakki Mohr
© 2000
Relationship between Entries
in the Market and Quality
Attractive Quality
Model 3
ONE-DIMENSIONAL
QUALITY
Model 2
Model 1
Development
Overall Revenue
Incr. Revenue
New Models
Must be quality
Time
Jakki Mohr
© 2000
Does this approach to cycle
time excellence make sense?
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Bring higher levels of product functionality to the
market incrementally over time with successive
product iterations.
Yes!
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Striving for complicated set of features with initial
offering can lead to delays
 Delays mean that customer needs may have
changed or a competitor beats firm to the market
 Purchasers of first generation of new product
become installed base for later generations
Jakki Mohr
© 2000
QFD and TQM (Cont.)
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Cost Excellence
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Provide customer value and lowest possible cost
Use supply partnerships
Use downsizing cautiously, lest negative impact on
customer value
Cultural Excellence:
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Align goals of the organization and of personnel to
be able to capitalize on market opportunities
Ex: culture of innovation, effective marketing/R&D
interaction
Jakki Mohr
© 2000
Competitive Intelligence
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What: Information about competitors
Why: Provides information for better
decision making and improved strategies
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An early warning system
Jakki Mohr
© 2000
Effective Competitive
Intelligence Programs
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Affect decisions of top managers
Are proactive in reading the market
Look beyond existing market boundaries
Utilize the Web
Gauge potential for misleading signals
Jakki Mohr
© 2000
Forecasting Customer Demand
for High-Tech Innovations
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“Who the hell wants to hear actors talk?”
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Harry M. Warner (1927) reacting to addition of audio
technology to silent movies
“ “Television won’t be able to hold on to any market
it captures after the first six months. People will
soon get tired of staring at a plywood box every
night.”
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Darryl Zanuck, 20th Century Fox Films, 1946
“There is little reason for any individual to have a
computer in their home.”

Ken Olsen, president andJakki
founder
of the DEC
Mohr
© 2000
Corporation,1977
Qualitative Forecasting Tools
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Delphi method
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Analogous data
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Rely on a panel of experts
Rely on similar products
Information Acceleration
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Use “virtual” prototypes to obtain customer
feedback
Jakki Mohr
© 2000
High-Tech Forecasting Hazards
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Lack of historical data
Difficult for customers to articulate
preferences
Inflated projects from over-enthusiasm
Competition from incumbent
technologies
Don’t confuse confidence in the forecast
with quality of the information
Jakki Mohr
© 2000