startup university hi-tech marketing how markets develop market development strategy
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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
Diffusion of Innovations
Source: Carnegie Mellon
University
• The Technology Adoption Lifecycle– The Diffusion of Innovations is a social process
Diffusion of Innovations
Source: Carnegie Mellon
University
• The Technology Adoption Lifecycle– The Diffusion of Innovations is a social process
Diffusion of Innovations
Source: Carnegie Mellon
University
• The Technology Adoption Lifecycle– The Diffusion of Innovations is a social process
Diffusion of Innovations
Source: Carnegie Mellon
University
• The Technology Adoption Lifecycle– The Diffusion of Innovations is a social process
Diffusion of Innovations
Source: Carnegie Mellon
University
• The Technology Adoption Lifecycle– Technology Adoption profiles
Technology Enthusiasts (Innovators)
Visionaries(Early Adopters)
Pragmatists (Early majority)
Conservatives (Late majority)
Skeptics(Laggards)
Diffusion of Innovations
Source: Geoffrey Moore
• 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!
Diffusion of Innovations
Source: Geoffrey Moore
• Selling to mainstream customers– The Chasm
Diffusion of Innovations
Source: Geoffrey Moore
• Selling to mainstream customers– Crossing the Chasm: Establish a beachhead segment
Diffusion of Innovations
Source: Geoffrey Moore
• Selling to mainstream customers– How Markets Develop
Early Market Bowling Alley
Diffusion of Innovations
Tornado Main Street
Source: Geoffrey Moore
• 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
Diffusion of Innovations
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”
Diffusion of Innovations
• Market Development Strategy
• Market creation variables
• Market attractiveness variables
• Market penetration variables
Market Development Strategy
• 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 Development Strategy
• 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 Development Strategy
Source: The Chasm Companion
• 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 Development Strategy
Source: The Chasm Companion
• 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
Source: The Chasm Companion
• 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
Source: The Chasm Companion
Market Development Strategy
• 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”
Market Development Strategy
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