Professional marketers are largely agreed that marketing in the IT industry is different from marketing in any other sector. All the elements ? customers, products, suppliers ? are very different from selling cars or cornflakes, at least until the point when they become commodities. As Mark Cavender, a principal of The Chasm Group, says: ?IT companies which fail often fail for the same reasons, and that usually has to do with the gap between product development and marketing.?
Formal strategies for marketing high technology products were sketchy until 1991 when Geoffrey Moore, previously a marketing consultant with Regis McKenna, and now president of the Chasm Group, published Crossing the Chasm. This was followed in 1995 by Inside the Tornado: the two books have become the IT marketing Bibles of the 90s.
Moore has taken a proven batch of philosophies and developed them into a cogent and persuasive strategy for IT marketing. That he has got it right can be seen by the success of companies which have adopted the principles ? Hewlett Packard, Apple, Lawson Software, Peoplesoft, AT&T, Oracle, Sun and Silicon Graphics.
?If it?s good enough for some of the most successful companies in the industry, it is good enough for smaller vendors, resellers and integrators too,? says Adrian Moss, marketing director of printer manufac? turer Tektronix.
Moss was one of those involved in the founding of Lotus Software in the early 80s, and he believes that a knowledge of Moore?s principles would have helped the company and changed IT history. ?The problem with those involved with Lotus is that developers develop for other developers, not for the users. We at Lotus were faced with the Microsoft Windows interface as market competition and we ignored it. We couldn?t imagine users would want something as crude as Windows, and thought that they were looking for quality of functionality. We were wrong.?
Jonathan Simnett, a director of the high-tech communications consultancy A Plus Group, says that much of the theory which Moore puts forward in his books has been available at an academic level for many years. He says: ?Product innovation theorists have studied the automotive and pharmaceutical industries and worked out models for product life cycles and so forth, but Geoffrey Moore put it all across in a buzzy format which appealed to IT marketers.?
Select Software provides handouts of summaries of Moore?s theories and copies of his books to its executives. Chairman Stuart Frost says: ?Moore talks about the importance of partnering and we have applied his theories fairly rigorously. It does work ? we grew by 150 per cent last year.?
Both Frost and Simnett agree the key to successfully applying Moore?s theories is not to think that they are going to be a silver bullet. ?They are just basic principles,? says Simnett. ?Every individual and company interpretation and implementation has to be different.?
?It?s like standing up in a canoe,? says Moss. ?You have to continually keep adjusting and moving slightly to stay upright.?
The value of Moore?s books, says Moss, is to make companies and individuals continually re-analyse their products, market position and objectives.
Keeping R&D and marketing aligned is the main message of Inside the Tornado, although there is no suggestion that marketing should lead development. ?The problem is that the technical people get carried away by the sexiness of their new products and lose touch with what it is that their customers really want,? says Moss.
?On the other hand, some of the most radical leading edge development has withered on the vine for lack of suitable marketing thinking and action. The IT highways are littered with many excellent high-tech products because their marketing was completely off beam.
Inside the Tornado helps marketers to think about the types of users and markets that they are trying to appeal to, and to mould their strategies appropriately. Moore has bequeathed several buzz-words to the IT marketing industry which are likely to be around for some time. The chasm, for example, is the gap between the early market visionaries and the mainstream market pragmatists, groups of customers that require totally different marketing mixes. Crossing the Chasm is a fundamental strategy for moving a product from one area to another, and Moore willingly attributes the early work on such marketing theories to Levitt, the Harvard lecturer.
As products cross the chasm they become involved in the ?bowling alley?, a period in which a product will get picked up by more and more niches as they gradually accept compelling marketing need. From the bowling alley, products then move to the ?tornado?, the period of mass-market adoption where many companies come unstuck because, even though they have been successful in creating market demand they fail to satisfy it.
There are several companies which observers say are in the tornado at the moment, such as SAP, which is fast developing a reputation for being unable to satisfactorily manage its customers? expectations.
Next in line for products and manufacturers is ?main street?, the aftermarket development when the base infrastructure has been deployed and the goal is to flesh out its potential.
This stage leads to ?end of life?, which Moore says can come all too soon in the high-tech sector. ?New products and paradigms come to market and supplant the leaders who have themselves only just arrived,? says Simnett.
Frost says that Moore?s rules on the way a company should approach its marketing should be taken up more widely throughout the industry, as they apply to all types of companies, products and services.
?It helps you understand the dynamics which you are facing and trains you to understand how you have to continually keep changing, trimming the sails all the time as you go forward,? he says.
Seeing new markets and niches as pins in a bowling alley is very helpful, he adds. ?The bowling alley represents that part of the life cycle when a new product gains acceptance from niches within the mainstream market but has yet to achieve general widespread adoption. The goal is to move from niche to niche, developing momentum. Each niche is like a bowling pin, something that can be knocked over but also something that can knock over more adjacent pins.?
What?s more, says Frost, sometimes the best strategy for knocking over bowling pins is to hit one of the pins at the side of the group rather than attack the group head on.
Moore?s book explains why IT marketers should focus on niches. Why not just leap straight into the tornado of the mass market? he asks. The answer is first that there is still plenty of appeal of the old products and paradigms, and the target markets are not going to switch immediately. Second is that the product and its marketing package has to be tailored for each niche that has to be developed, and that takes time.
Moss says: ?During the early stage of market adoption of a product, the majority of the user base does not take it up but will be exposed to it, which increases familiarity. It helps soften them up and they feel confident that they are making the right decision when they eventually make the transition.
?Niche markets help serve this feeling of growing confidence, and at the same time provide profitable repeatable business which businesses need to move out of expensive entrepreneurial start-up funding into cheaper venture capital.?
Frost says Select Software struggled for some time at the bowling alley stage, and found the Moore books invaluable. ?It is sometimes hard to keep focused on what you are doing and what your objectives are when so much around you keeps changing,? he says. ?You have to constantly redefine and modifying your strategies.?
Simnett says: ?Using the fundamentals that Moore puts forward is like receiving a basic education in marketing. Without any kind of training it is hard to make sense of the world out there. If you have some education then you have the language and the tools to cope. With a higher level education you can actually start shaping the world that you are in.?
There is no question, says Simnett, of the whole industry being taken over by ?Moore-speak? and entering into a ?feedback loop? in which participants become predictable because they are following the same model. ?Each implementation of the model will be different,? he says. ?There has been academic innovation theory for some time anyway,? he adds. ?It?s just that Moore has made it accessible to non-academic marketers.?
Frost believes that every marketing person starts with a blank sheet of paper in which they look at the same set of variables. ?Eventually everyone reaches the same set of assumptions,? he says. ?It?s just that by using Moore?s books, everyone gets to that stage far more quickly, with the advantage that it is all proven and everyone is talking the same language.?
If he has any criticism of Moore?s theories, Moss says that he is too simplistic. ?Models and variables are often a lot more complex than Moore makes out,? Moss says. ?Reading him, it is easy to overstress the importance of moving across the chasm when actually companies like ours are continually in the early market with visionaries as customers. For us, product life cycles are a series of small cycles a few months apart. Moving across to main street is something which we leave other companies to do.?
The challenge facing Tek- tronix, says Moss, is of installed base inertia in which a high-tech company can be left behind by the competition. ?We have to be schizophrenic,? he says. ?We have to continually be developing new products to keep us in front of the innovators but at the same time keep our existing customers happy. You have to know how to keep shifting your balance.?
The principles of Inside the Tornado and how to find your place in the market are invaluable, says Moss, particularly with the benefit of hindsight. ?With Lotus,? he says, ?it is easy to see how we should have been more focused, delivering reasons for niche markets to purchase, but we were focused on the market as a whole, just thinking that everyone would be bowled over by the quality of the development.?
With only slight reservations that Moore is over-simplistic, it is hard to find critics of his theories. Many companies have used his theories with great success. Resellers and integrators too can use them to help understand where you should be aiming your products and services, how to reach the target market, and why you should do what you do. That, in Simnett?s opinion, is the greatest value which can be gained from Moore?s books. ?Many marketers act intuitively and then wonder why they are suddenly getting it wrong,? he says. ?Marketing is a science and this is a text book.?
Inside the Tornado by Geoffrey A Moore, published by Harper Business , ISBN 0-88730-765-5.
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