Can FMCG marketing strategies work for hi-tech products?
The 'bell curve' of the product life-cycle is familiar to marketing people the world over. However successful a product may later become, its sales will build up slowly at first, then accelerate before beginning to slow down again as it approaches maturity. At this point the consumer goods marketer aims to maximise repeat sales in order to extend the top of the curve into a plateau. But the bell curve concept is by no means confined to the fast moving consumer goods (FMCG) sector. It is widely assumed to apply with just as much force in fields like personal computers, software and consumer electronics. The assumption is wrong, according to US marketing strategist Geoffrey Moore, and this is why so many technically sound products fail.
Hi-tech companies, like others, strive to find as many 'early adopters' as possible, to keep sales climbing until the more numerous mainstream buyers enter the market. (Early adopters are prepared to take risks with new products in the hope of gaining a competitive edge; mainstream purchasers are content to allow others to take the risks.) To maximise the number of early adopters, the companies attempt to give their products the widest possible appeal. But just at the point where sales might be expected to take off, the products unaccountably fail. 'Sales cycles become longer and longer as people hold back to see what everyone else is doing,' says Moore. 'Instead of a smooth curve the life-cycle has discontinuities.'
What the hi-tech manufacturer should do, Moore advises, is the opposite of what conventional wisdom dictates. 'Instead of broadening out your product's appeal by making it meet 80% of everybody's needs, make it meet 100% of somebody's need.' This kind of narrow focus, he believes, led to the success of Apple's Macintosh computer in the publishing industry, and of the Lotus 123 spreadsheet among accountants - creating beachheads from which these companies were later able to expand.
The thesis brought Moore an impressive list of clients including Sun Microsystems and Hewlett-Packard. It is set out in his book Crossing the Chasm published in the US in 1991, but so far unpublished in the UK where Moore and his work are little known - and failures are usually attributed to poor timing or misconceived products. Hi-tech marketing is 'very little different from FMCG marketing - and getting closer', observes Rosemary Drummond, a spokesperson for the innovation unit at the Department of Trade and Industry. In any case, she says, 'marketing is just one aspect of the (innovation) mix'.
But Moore does have his followers in the UK too. 'Moore has moved the whole debate on,' enthuses Steve Cuthbert, director general of the Chartered Institute of Marketing, conceding that before he read the book he was distrustful of the claims made for it - but no longer. 'The chasm concept is a significant advance,' he believes.
Or is it perhaps a minor refinement? Peter Stuart, marketing manager in the volume products division of ICL, is familiar with the argument but nevertheless mindful of the bell curve concept. 'The bell curve is there in the market,' he insists. 'But nobody can assume that he's going to be on the curve.'