Contents

Chapter 1 - High-tech marketing illusion

There are two kinds of change:

• Disruptive, or discontinuous, innovation gets us to change our behaviour or the products we use.
• Sustaining, or continuous, innovation entails steady improvements and upgrades to products that don’t make us change our behaviour.

Within these broad categories, there is a spectrum of innovation, some requiring significant adaptation on our part, some not requiring much and some falling between the extremes.

Disruptive change is the price of modernization. Sooner or later it comes to every product; sooner or later all consumers must adapt their behaviour. Companies need to learn how to handle disruptive change. High-tech industries happen to have substantial experience managing disruptive change, and companies from other industries can benefit from this experience.

Technology adoption life cycle

The kinds of consumers that will buy a product exhibit a range of adaptability to novelty, divided into five categories: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

• Innovators (2.5%) seek out novel technology; it’s like a hobby for them. There aren’t many Innovators, and because they’ll try new things, they are important. Other people see them use new things and feel braver themselves about trying them.
• Early Adopters (13.5%) are quick to understand the benefits of new technology. Unlike the Innovators, they don’t love technology for its own sake. This group relies on its own intuition and vision to make buying decisions.
• Early Majority (34%) are practical minded consumers. If a product seems useful, this group will try it. The Early Majority are cautious of fads.
• Late Majority (34%) consumers wait for something to become well established. They don’t feel confident in their ability to deal with technology and often buy from big companies.
• Laggards (16%) are those consumers who, for personal and/or economic reasons, are not looking to buy new technology.

Most people fall into the Early and Late Majority categories, but understanding each group is crucial for marketing to them. Each of these groups has its own response to disruption. Each group has its own psychographic profile.

The High Tech Marketing Model uses this Technology Adaptation Life Cycle as a framework. Markets are developed according to the model, starting with Innovators and working down to Laggards. This process turns out to be harder, though, in real life than it is in theory. It isn’t a simple thing to sell to one group and then adjust one’s marketing to sell to the next segment down the line. Some groups are different from each other; the same strategies just won’t work.

There are cracks between each of the segments.

• The crack between Innovators and Early Adopters, for example, arises when there’s new technology that motivates the Innovators, but not the Early Adopters, because there aren’t any practical applications for the technology (and this group doesn’t know what to do with it).