For the past three years, we have researched and closely observed high-technology industries in the United States and abroad. From the outset, we sensed that there are marketing-related differences between high-tech companies and markets and those of basic industries. The more we studied the interworkings of high-tech markets, the more apparent those differences became.

Through our research, we identified 10 high-technology marketing “mega tenets.” We believe these principles represent significant commonalities among markets such as robotics, computers, biotechnology, fine ceramics, and other advanced technology industries, and define the uniqueness of those markets relative to more established fields.

1. Turbulence and change characterize high technology markets.

The concept of a product life cycle, whereby a new product is introduced commercially and thereafter proceeds through predictable life-cycle stages until it dies or is terminated, can be grossly misleading for high-technology products. Frequently, it isn’t apparent where such products are in their life cycles at any given time. For instance, while most observers would agree that biotechnology is currently in the introductory market phase, they disagree about semiconductors; that market has both growth and maturity characteristics.

In high technology, it is the technology life cycle that is crucial. A company must continually monitor and evaluate objectively how the technologies it employs are performing in the marketplace, and how they will perform against incipient substitute technologies. The impassive market does not show loyalty to a company’s past glories and investment in R&D. A competitive laboratory break-through can render a product or process obsolete virtually overnight as a new contender, even a start-up firm, vaults to industry prominence.

2. Corporate bigness is not necessarily competitively advantageous.

The need to build corporate visibility and credibility in high-tech fields cannot be taken for granted, even by companies with household-name familiarity. Firms that have made their marks in non-high-tech industries best not assume that their image is readily transferable to high-tech endeavors.


RYANS is Professor of Marketing and International Business, and SHANKLIN is Professor of Marketing, both at Kent State University.

Our findings are quite clear on that point. When we explored the importance of various advertising objectives with ad executives in some of the leading companies headquartered in the United States, some 77% of them said that corporate awareness was their most sought-after advertising mission. They considered objectives such as “communicating product attributes” and “announcing new products” important, but not nearly as important as awareness.

Bigness actually can create problems for companies in high-tech markets. Large size often inhibits competitive innovation and creativity. Experience repeatedly demonstrates that bureaucracy can cause a company to lose the mobility it needs to cope with the vagaries of high-tech markets.

3. Supply-side marketing dominates early market stages.

About 15 years ago, the classical economist Jean Baptiste Say proposed an idea that gave birth to a leading and remarkably resilient school of economic thought: supply of a product can create its own demand. Unit John Maynard Keynes came along. “Say’s law” was widely accepted.

Say’s proposition is contrary to the conventional marketing wisdom of identifying buyer and preferences, then devising offerings to fulfill them at a profit. So demand should precede supply – but there are notable exceptions to the rule and they are seen most often in high-technology markets.

In high-tech, Say’s law frequently appears to be right on target. Examples abound of products, services, and processes that have created market demand where none existed before. Consider three:

• Microcomputer technology progress enabled Apple, Commodore, IBM, and others to stimulate and exploit a demand for in-home personal computers.

• In biotechnology, or gene-splicing, many possible market-place applications confront companies with the problem of deciding which commercial opportunities they should pursue aggressively.

• Robotics is advancing so rapidly that new market applications and opportunities are forming at an unexpected pace.

To our knowledge, the infancy of every high-technology market has been characterized by

supply-side conditions in which the marketer’s job is to stimulate primary or basic demand for the product, process, or service at hand.

4. Opportunity prioritization is the high-technology company’s critical initial step.

Possible the ultimate frustration for many high-tech companies is deciding where to begin the commercialization process. Which products – in fact, which industries –should be pursued first becomes a standard question for high-tech firms when their products and processes have multiple applications.

European biotech producers have been roundly criticized by the Common Market Commission for failing to aggressively commercialize their patents and processes. Considering Europe’s relatively isolated and uncoordinated research centers, that is not surprising. But similar comments could be voiced in thee United States for the alternative energy research that has led so far to rather limited commercialization of wind and solar power technologies.

And, as we noted, biotechnology faces tough commercialization choices in deciding which markets to emphasize first. As a result, side a U.S. Department of Commerce report last year, America has the technology lead in recombinant DNA and cell culture technology, but other nations have the commercialization lead.

5. Major corporate entrants and industry shakeouts signal an evolution to demand-driven markets.

A widely held misconception is that a high-technology company must time and again be the early product or market leader to be successful in the long-term. Not so. Often, the pioneers end up as the ones with arrows in their backs. For example, Xerox has had all kinds of well-publicized setbacks commercializing its computers, not-withstanding that it brought out the very fist personal computer.

Eventually, supply-side market conditions begin to yield to demand-side conditions. Competitors seeking new markets and healthy profit margins inevitably challenge the pioneers. Subsequently, those markets evolve commercially, and marketing prowess determines who wins and who loses.

6. Buyer in security significantly influences demand.

The volatility of high-technology markets takes its toll on the demand-side as well. Unlike other business industrial markets where technically savvy purchase influences can properly evaluate a product, the high-technology purchaser may feel uncomfortable or even fearful about “what and when” to buy. There are many examples of major companies that have delayed purchases of products such as microcomputers because they were not certain whether today’s state-of-the-art market leader would be tomorrow’s follower, or would be made totally obsolete by a “break through.”

7. High technology triggers public reactions of hope and fear.

The great promise of major technological change is always balanced by public fear and sometimes protest. Today, while there is great hope that high-tech ventures wills generate enough new jobs to mitigate “smoke-stack” industry unemployment many people fear socioeconomic side effects such as structural unemployment- blue-collar workers who can never be retrained for the skilled jobs required by robotics and computers.

8. High technology attracts inordinate government attention and regulation.

Few areas of business face greater government control than do the high-tech industries. For reasons both practical (national security and economic growth) and nationalistic (giving up a state-of-the-art lead), the government and the public are ambivalent about disseminating advanced technologies.

In the U.S., industries such as biotechnology face great barriers to initial approvals, patents, and subsequent commercialization. Reports suggest, however, that European biotech researchers suffer even slower progress in harmonizing patent procedures.

History is on the side of regulators, and the trend will continue for high-tech marketers.

9. High technology has nationalistic overtones.

The “we or they” battle for high-tech supremacy has become an industrial version of the Olympics, with each nation in the game rallying the faithful to nationalistic fervor.

International cooperation doe occur often, but nationalism seems to reign. The European Economic Community Commission, beset with high-tech rivalry among its members, cities the U.S. and Japan as the rivals to beat. France plans to spend &20 billion unilaterally on its electronics industry over the next five years.

The battle lines are not solely in technological know-how or entrepreneurial spirit, however. Access to capital is critical, and perhaps America’s private venture capital mechanisms are the nation’s strongest weapon. They allow funds to flow on the basis of market opportunity rather than political patronage.

Yet governments worldwide are attempting to offer sufficient inducements for high-tech investment. Lining up to compete with the Silicon Valleys, Research Triangles, and Route 128 s of the U.S. are the Grenobles (France) and Peterboroughs (Canada), which want to become the industrial centers of the future. Interestingly, it may be that government involvement and the bureaucratic process will determine who will win many of the high-tech battles.

10. High-tech publicity overstates short-run market potential.

The claims surrounding each new high-tech break-through tend to vastly overstate their realistic near-term potential. For instance, robotics once captured the imagination with prophecies of workerless factories. Yet only 6,000 robots were in operation in the U.S. in 1983, more than 20 years after the first was installed. in the long-term, however, conservative estimates still call for the industry to have world wide sales of &10 billion by 1990.

Similarly, when Genetech went public in 1980, the public responded by tripling the stock price in a matter of hours. But no such clamor greeted equally-respected Biogen when it went public recently. Still waging their patent battles and finding few commercialization opportunities so far, the biotech firms have lost their luster even though all the industry’s remarkable potential applications are still there.

Regulation and rivalry, hype and hope – those and all the characteristics of the high-tech marketplace create the environment within which individual high-technology companies must operate. Marketers who avoid studying that environment and understanding its implications for their particular industries do so at their peril.