Marketing in Technology-Intensive Markets: Toward a Conceptual Framework

George John, Allen M. Weiss, Shantanu Dutta
1999 Journal of Marketing  
Markets in which technology assumes a central role are becoming driving forces of the economy. The authors label these 'lechnology-intensive" (Tl) markets. Despite their importance, however, there is not a clear understanding of the features of a Tl market. Using scientific know-how as the foundational concept, the authors explore the nuances of know-how creation, dissemination, and use to identify eight features of Tl nnarkets. With a series of reputable empirical propositions, they also study
more » ... four marketing decisions, beginning with the most fundamental, that is, the vertical positioning decision (the firm's decision about what it sells). Product design decisions (both platform and modularity), transfer rights decisions (incorporating both price formats and licensing restrictions), and migration decisions (whether and how to move customers through an ongoing stream of technological innovations) round out the set. Although work in marketing and allied fields has improved considerably our understanding of TI domains (e.g.. Capon and Glazer 1987) and large numbers of analytic models have been developed for particular topics such as compatibility and network externalities, empirical evidence is scarce. Thus, it is difficult to sort through these competing views about the nature of marketing decisions in these markets. In short, our current understanding of TI markets is sparse, disparate, and without consensus. These disagreements carry over into the public policy and antitrust arena. The argument is often made that the dynamic business aspects of technology-driven markets render conventional business and strategy analysis useless. However, consider the contrasting view offered by a deputy assistant attorney general: "rapid technological progress hardly implies that antitrust enforcers should sit on the sidelines ... our job is to ensure that incumbent firms do not use their power to block technological progress" (Shapiro 1996) . Our goal is to offer a framework that can motivate empirical research. Scientific know-how is the foundational element of our framework. The sheer intensity of scientific know-how in TI markets endows them with a set of characteristic features. We identify four marketing issues that become salient in these circumstances: vertical positioning decisions, which represent the firm's decision of what it sells; platform positioning decisions; transfer rights decisions; and migration decisions over overlapping generations of technological innovations. We articulate linkages between the features and these marketing decisions as a series of testable propositions that researchers might find useful in conducting empirical work. Know-How and Tl Markets So many different lay meanings are already attached to the word "technology" that an attempt to generate an inclusive definition would only add to the confusion. Instead, we de-
doi:10.2307/1252103 fatcat:7xgvzz7l5bednlpkniezktgdom