How do Technology and Markets Affect Commercialization?

Marketing focuses on the needs of the customer, and therefore should begin with an analysis of customers’ requirements and attempt to create value of providing products and services that satisfy those requirements.
The marketing mix is the set of variables that are to a large extent controllable by the company normally referred to as the four Ps, product , price, place and promotion. All four factors allow some scope for innovation. Product Innovation results in new or improved products and services and may change the basis of competition. Product innovation allows some scope for premium pricing and process innovation which may result in price leadership innovation in logistics and may affect how a product or service is made available to customers including distribution channels and nature of sales point. Innovations in media provide new opportunities for promotion.
However, we need to distinguish between strategic marketing — that is whether or not to enter a new market – and tactical marketing which is concerned mainly with the problem of differentiating existing products and services and extensions to such products. There is a growing body of research that suggests that factors which contribute to new product success are not universal but are contingent upon a range of technological and market characteristics. A recent study of 110 development projects found that complexity novelty and whether the project was for hardware or software development affected the factors that contributed to success. Our own research confirms that different managerial processes, structures and tools are appropriate for routine and novel development projects. For example in terms of frequency of use, the most common methods used for high novelty projects are segmentation, prototyping, market experimentation and industry experts, whereas for the less novel projects the most common methods are partnering customers, trend extrapolation and segmentation. The use of market experimentation and industry experts might be expected where market requirements or technologies are uncertain, but to be common use of segmentation for such projects is harder to justify. However, in terms of usefulness there are statistically significant differences in the ratings for segmentation, prototyping industry experts, market surveys and latent needs analysis. Segmentation is the only method more effective from routine developments, projects and prototyping industry experts, focus groups a latent needs analysis are all the more effective for novel development projects. For example, IDEO the global design and development consultancy finds conventional market research methods insufficient and sometimes misleading for new products and services and instead favours the use of direct observation and prototyping.
Clearly, then many standard marketing tools and techniques are of limited utility for the development and commercialization of novel or complex new products or services and a number of weaknesses can be identified.
Identifying and evaluating novel product characteristics. Marketing tools such as conjoint analysis have been developed for variations of existing products or product extensions and therefore are of little use for identifying and developing novel products or applications.
Identifying and evaluating new businesses. Marketing techniques such as segmentation most applicable to relatively mature well understood products and markets and are of limited use in an emerging ill- defined market.
Promoting the purchase and use of novel products and services: The traditional distinction between consumer, a business and business marketing is based on the characteristics of the customers or users but the characteristics of the innovation and the relationship between developers and users is more important in the case of novel and complex products and service.
Therefore before applying the standard marketing techniques, we must have clear idea of the maturity of the technologies and markets.
Source: Managing Innovation

  • al fayed

    Good analysis.