Marketing of High-Technology
Products and Innovations
Jakki J. Mohr
Chapter 4:
Market Orientation and
R&D/ Marketing Interaction in HighTechnology Firms
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 crossfunctionally 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




Disseminate information


Across functions and divisions
Utilize information


Current and future customers
Competitive information
Market trends
Across functions and divisions to enhance commitment
Execute decisions in coordinated fashion
© Jakki Mohr 2000
Knowledge Management


Proactive management of firm’s 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

Don’t 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 marketrelated information/feedback

© Jakki Mohr 2000
Overcoming Barriers to
Marketing/R&D Interaction

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

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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 other’s 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 organization’s goals
are superordinate to either marketing’s or
R&D’s 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
Sure
Marketing
Engineering
Would you
like a rock?
Find me a big, cheap,
fast, dense,
sharp...rock
Wrong
rock
OK
Here’s a
blue rock?
Do you have a
red rock?
What’s wrong
with blue?
OK, but only
if its square
I can make a
purple one
We don’t have
square ones
© Jakki Mohr 2000
Product Technology
Rock Pile