Your product or service is on the cutting edge of technology, a game changer. Now you need to find the best way to get your breakthrough to market. This course will introduce you to the product life cycle of high-tech products and help you find the best way to enter the market and sell your product or service.
Duration of the course: 00:30:00
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1.2 Course Objectives
This course has five key objectives:
1. Identify marketing characteristics of high-tech products,
2. Describe reasons that high-tech products fail,
3. Identify the stages of the Product Life Cycle,
4. Explain the Product Diffusion Curve, and
5. Distinguish the elements of the marketing mix as they apply to high-tech products.
1.3 Course Topics
This course provides an overview of taking your high-tech product to market. Some of the topics covered in this course are:
• Characteristics of high-tech products
• Reasons why high-tech products fail
• The Product Life Cycle
• The Product Diffusion Curve
• High-Tech product considerations
• High-Tech product pricing considerations
• High-Tech product placement considerations, and
• High-Tech product promotion considerations
Many additional resources are identified to help you. Visit the resource icon in the course player or locate additional tools, templates, and mentors on SBA.gov once you finish the course.
Let’s get started!
1.4 Characteristics of High-Tech Products
High-tech means different things to different people. Over time, products once considered leading edge technology become standard or obsolete, replaced by the next big thing. For example, Compact Discs, or CDs, are a relatively recent development that is being replaced by electronic media such as MP3 files and streaming audio. Many products, such as kitchen appliances, incorporate some technology, or are developed using advanced technology, but are not necessarily considered high-tech. So, what makes a product high-tech?
High technology products typically allow the user to have a better experience than was available before, performing a function faster, cheaper, or easier. They may also provide either totally new functions or capabilities that consumers have not experienced before. As examples, the introduction of High Definition television provided a greatly-enhanced experience but functioned exactly the same as existing televisions, while smart phones such as the iPhone and Droid
function very differently from the flip-phones they replaced. The largest part of marketing your product will entail understanding who has the need for this innovation and communicating the benefits it offers.
1.6 Perceived Risks
Another characteristic of high-tech products, from the consumers’ point of view, is the inherent risk in purchasing an unknown entity. Highly innovative products often come with uncertainty about the market, the new technology, and the competition. Your marketing must address common consumer concerns such as functionality, reliability, and availability of technical support.
1.7 Life Cycle - Short Duration
High-tech products often have a short life cycle. No matter how innovative an idea may be, there is always usually someone else who finds a way to improve on it. Even high-tech products that continue to be in demand for a long time tend to undergo continuous updates and refinements to keep them at the forefront of technology. For example, the Apple iPad and Microsoft Xbox continually evolve with new features, faster speeds, and other advancements.
From a marketing standpoint, you often need to convince customers who are reluctant to part with their hard-earned money on a new, unfamiliar product that may be replaced with an updated, improved version a few months down the road. There may also be competing technologies that provide the same benefits in different ways. For example, Blu Ray and HD video required unique players, and both are now being replaced by streaming digital video.
1.8 Life Cycle - Marketing Challenge
Your challenge is to reduce or eliminate the customers’ perceived risk, convince your potential customers that the benefits of your product outweigh their perceived risks, and persuade them to try your product by offering an incentive. Your marketing efforts should demonstrate how your product fulfills the customers‘ needs by providing greater performance and convenience, lower cost, or totally new capabilities.
1.9 Research and Development Expenses
High Research and Development (R&D) expenses is another characteristic often associated with high-tech products. High R&D expenditures can lead to high consumer prices. Because many small businesses lack the capital needed for R&D, they are unable to see their innovative ideas come to fruition.
1.10 Question 1
The fact that advanced technology is continually being improved or replaced is an illustration of what characteristic of high-tech products? Choose the correct answer and then select Submit.
A. R&D Expense
C. Short Life Cycle
D. Perceived Risks
The fact that advanced technology is being continually improved or replaced is an illustration of having a short life cycle.
1.11 Product Life Cycle
To effectively market your product, it’s important to understand the life cycle of a product as it evolves from the cradle to the grave. Businesses must be able of recoup their expenses during a product’s longevity. The product life cycle is a model which reflects the estimated costs and profits of a product during each stage of its life cycle. Marketing strategies such as pricing and promotion are determined in large part by the life cycle stage occupied by the product.
There are some advantages to being a one-of-a-kind product entering the market. Since there is no competition at this point, you can set the price and gain a large part of the market. Being the first product of its kind may also help customers remember your product name. Similar products that follow are entering the market later in the life cycle, and may have a shorter overall life span.
There are four stages to the product life cycle: introduction, growth, maturity, and decline.
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