High Technology Marketing: Conceptualization and Case Study

Abstract

High technology products have certain salient characteristics that differentiate them from low technology consumer products. The marketers of the products of the latter type may adjust their marketing strategies to reflect relatively unchanging technological conditions. High technology companies, however, must recognize that both technological and market conditions are rapidly changing. This dynamic environment necessitates a greater consideration of both marketingand technology-related aspects. One of the major objectives of this paper is to explore the context in which the terms ‘high technology’ products/markets/industries have been used in the extant literature. Because of the focus of earlier studies on some specific elements and stand-alone issues in this area, this paper fills the gap for a broad overview of the marketing-specific issues in high technology area and relates it to the lessons drawn from practice. The theoretical results illustrate the following: Several definitional viewpoints and characterizations of high technology industries exist in the literature, namely (i) uncertainty, (ii) input-based, (iii) output-based, (iv) increasing returns and network externalities, and (v) techno-paradigm. One of the more popular views, uncertainty, characterizes the uncertainty in high technology industries in terms of (i) market, (ii) technology, and (iii) competition. Another popular techno-paradigm view refers to the set of all industries which conform to a certain set of paradigmatic trends such as enormous R&D expenditure, predatory competition, and substantial diversification and innovation waves. The high technology markets must focus on both demand-side and supply-side marketing. Several examples from the literature contradict the popular notion that the superior product will win out in the marketplace. A critical aspect particularly relevant to the high technology products diffusion is that there might be ‘cracks’ or ‘gaps’ in bell-shaped adoption curve (e.g., innovator-early adopter and early majority-late majority) also known as ‘chasm’ or the ‘valley of death’ for high technology products. Newer and different marketing research techniques, such as census approach, lead user study, and outcome-based techniques are more relevant for high technology products. The case study discussed in the paper suitably supports the theoretical results illustrating the following situations: A majority of the small-scale grey iron foundry units in India employ cupola furnace for melting using coke as fuel with inefficient combustion and higher energy consumption. The Energy and Resources Institute (TERI) set up a demonstration plant consisting of an energy-efficient cupola design called the divided blast cupola (DBC) at a foundry unit in Howrah. After successful demonstration, the challenge was to replicate the technology among other foundry units. The major barriers to adoption were: (i) prevailing practice, (ii) limited in-house technological capability, and (iii) investment. Future work by TERI envisages the need for adopting a philosophy of vendor development and conducting formal marketing research study.