June 2008

"Open, distributed innovation is attacking a major structure of the social division of labor. Many firms and industries must make fundamental changes to long-held business models in order to adapt."

Eric Von Hippel, MIT

On May 23, 2008, Stoyan Tanev from Carleton University delivered a presentation entitled "Trends in Technology Marketing". This section provides the key messages from Dr. Tanev's lecture. Tanev's lecture discussed current trends in technology innovation and marketing by focusing on the evolution of traditional marketing concepts.

The TIM Lecture Series provides a forum that promotes the exchange of knowledge between university research and technology company executives and entrepreneurs. Readers outside the Ottawa area who are unable to attend the lectures in person are invited to view upcoming lectures in the series either through voice conferencing or webcast.
 

Core Marketing Concepts

The first half of the lecture concentrated on current trends in technology innovation and marketing and described the evolution of traditional marketing concepts. Marketing strategy is changing in response to higher customer information access and increased global connectivity.

Current marketing strategies and their associated business model implications are a result of the emerging paradigm of value co-creation networks. The design of offerings based on value co-creation is considered as the next practice in value creation.

Aspects of the evolving marketing trends include:

  • product support and company reputation are important for customers making buying decisions
  • product leadership and customer intimacy are important for crossing the chasm
  • the ambiguity in technology markets requires different marketing strategies
  • advertising should not communicate complex messages
  • a strategy that works in one stage of the product life cycle may not work in another stage; using the same strategy may result in failure
  • value chains can be parallel as well as serial

Co-Creation Paradigm

The second half of the lecture further explored the value that can be created through co-creation with one's user base. As in any value proposition, how to appropriate value isn't obvious. While technology plays a critical role in value creation, value is created not through a product's features but by its ability to get a job done. It is difficult for some marketers to grasp the new reality that value creation is made possible by cooperating with complementors and is enabled by transparency. It should also be noted that some vertical value chains have many layers and how you differentiate depends on the complexity of the value chain.

Traditional marketing techniques focus on planning whereas co-creation allows others to take advantage of opportunities. In other words, the new marketing trend is all about creating a path to your product via pull methods instead of push.This section also offered insights into customers:

  • customer satisfaction is multidimensional and based on experience rather than price
  • customer involvement builds trust in your brand
  • marketing can't satisfy a customer's need (promise vs. product)

There was some discussion regarding the phenomena that user experience does not necessarily mean co-creation. An example is a user that merely consumes Expedia's services as opposed to leaving comments--which creates value--for others to use. Even though there isn't direct value creation from a passive consumer, these types of consumers also provide value in that they represent traffic and exposure to one's services.

A final key message is that co-opetition can offer end-to-end services, something that is rarely achievable by one company.

Recommended Reading

Marketing in the 21st Century

Democratizing Innovation

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