The University of Texas at Austin

McComb’s School of Business — TEMBA

MKT382 - Industrial Marketing Management

Strategy and Implementation for Technology-based Products

Kevin Williams Spring 2003 GSB 3.104 6:00pm—10:00pm Tuesdays

Overview and Objectives:

Many of an enterprise’s strategically important decisions involve marketing issues:
understanding how to properly segment the market and target the right customer(s),
differentiating the product/service offerings, formulating pricing and distribution channels,
forming the alliances and network relationships necessary for dynamic, global marketplaces.
This course focuses on these issues for companies selling technology-based products and
integrates the impact of strategic marketing decisions on the financial performance of the
enterprise. Specific objectives:
• Highlight the differences between consumer goods and industrial marketing.
• Understand the difference between breakthrough technology (brave new world) vs.
incremental improvement (better, faster, cheaper) and the impact on marketing decisions.
• Provide decision making frameworks for managing the marketing process, e.g.
o Technology diffusion models,
o Economic value pricing,
o Lifetime value of a customer.
• Integrate marketing frameworks with financial results and business models.
• Focus on the balance of growth, risk and profitability when evaluating strategic
marketing alternatives.
• Relate the creation of customer value to shareholder value.
• Look at the importance of intangible assets (intellectual property) to sustainable
competitive advantage.
• Examine the interplay of internal efficiency (supply chain management) and external
relationships (customer, distributor, partner relationship management).
Format and Performance Evaluation:
The course will emphasize case discussion, although short lectures, additional readings and guest
speakers will also be used. The emphasis will be on integration of skills and concepts through the
thorough analysis and examination of cases.
Grading will be based on class participation, an individual written case analysis and a group case
analysis/presentation, as follows:

• Individual class participation 25%

• Written case assignment 35%
• Group case assignment/presentation 40%
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Class Participation
An important part of this course is the opportunity to interact with other students and to further
develop management skills such as reading, thinking, listening, judging, communicating, reacting
and persuading. Class participation grades will be based on a number of factors, involving both
the content and the process of your participation:
• Attendance – as Woody Allen said, 90% of life is just showing up. Given the limited
number of class sessions, students are expected to attend EVERY class. Also, given the
small class size, EVERY student should plan to participate in EVERY class session.
• Analysis – do your comments reflect in-depth analysis of the cases? Did you think
about the issues or are your comments just gut reactions? Are your comments based on
evidence, facts, supportable assumptions and relevant experience?
• Relevancy – are your comments timely and linked to the comments of others? Do your
comments add value to the discussion and move it in a constructive direction? Are you
just “lobbing in” a canned response?
• Risk-taking – are you willing to participate? Take a contrarian’s viewpoint? Test new
ideas? Question assumptions? Or, are all your comments “safe”?
• Clarity – Reaching class consensus is not necessarily important. But, conceptual clarity
and focused debate, based on intellectual rigor and powers of persuasion are critical.
• Peer evaluation – toward the end of the course we will evaluate each other and I will
consider this peer input as an important part of the participation grade.
I will usually start class by asking for a volunteer, or “cold calling” on someone to open the
discussion. That person will be expected to give a quick summary of the relevant issues and
critical facts in the case. Everyone will have read and analyzed the case so a rehash of the general
situation is not necessary.
Notes on Case Analysis
Each case is, of course, a different set of facts, opinions, analysis, issues and management
problems. There never seems to be enough information and often the issues are elusive, much
less the “answers.” I suggest the following approach:
1. Skim the case quickly, preferably several days in advance to just get a feel for it. Set it
aside and let the questions begin to form in your mind.
2. Read the case slowly and carefully noting the key issues, critical facts and assumptions.
3. Prepare your analysis considering the company’s strengths, weaknesses, objectives,
specific problems, etc. What are the market conditions? What do the economics look
like? Use any analytical tools that seem relevant, e.g. Porter ICA, SWOT, breakeven,
real options, DCF, etc.
4. Develop a set of recommendations. What alternatives are open to the company? What
assets are available or required? What changes to the business processes might be
considered? What are the financial implications? What will the competitive response be?
5. For class discussion purposes I suggest that you write yourself an executive summary
outlining the above.
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Written Case Assignment

Everyone will analyze the same case and provide a comprehensive written analysis at the
beginning of class on February 25, 2003. There is no prescribed format for the report but it
should balance thoroughness, clarity and brevity.

Group Case Assignment/Presentation

By the fifth class session students should take the initiative to form teams for the final case
assignment. Teams should consist of no more than four people and they should have a mix of
skills and backgrounds. The case assignments will be made by about the eight or ninth class
session.
Teams will prepare their case and present to the class. Prepared slides and discussion should not
take more than 45 minutes and then the class will have 20-30 minutes to ask questions and
challenge the team on its recommendations. A 2-3 page executive summary, with
recommendations should be prepared for me.
Peer evaluation: I will provide forms for the class to use in evaluating the team presentations.
These will be used in grading.
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Course Schedule: Topics and Assignments

Session 1—January 14: Introduction to the course and the analytical frameworks.
• Positioning organizations for growth
• Linking business assets, processes, competitive advantage and financial performance.
• Using customer value to drive shareholder value
• Balancing growth, risk and profitability
Readings: “Inside the Tornado,” Geoffery A. Moore, 1995, Harper Collins Publishers.
Cases: None.

Session 2—January 21: Understanding technology-based markets and value creation.

Readings: “High-Tech Marketing: Concepts, Continuity, and Change,” Rowland T.
Moriarty and Thomas J. Kosnik, Sloan Management Review, Summer 1989.
“Market-Based Assets and Shareholder Value: A Framework for Analysis,”
Srivastava, Shervani and Fahey, Journal of Marketing, 62 (January 1998)
“Corporate Imagination and Expeditionary Marketing,” Gary Hamel and C. K.
Prahalad, Harvard Business Review, Jul/Aug 1991
Cases: Microsoft 1995 (HBS Case #9-795-147)
Ecton, Inc. (HBS Case #9-699-018)

Session 3—January 28: The value of customer input, strategic alliances and value networks.
Readings: “Ignore Your Customer,” Justin Martin, Fortune, May 1, 1995
“Note on Strategic Alliances,” Harvard Business School, Note #9-298-047,
November 12, 1997.
“Establishing a Standard: Competitive Strategy and Technological Standards in
Winner-Take-All Industries,” Charles W.L. Hill, Academy of Management Executive,
11(2), 1997, pages 7-25.
Cases: Innovation at 3M Corporation (A) and (B) (HBS Case #9-699-012 and 9-699-013
AOL-Time Warner Merger (HBS Case #9-701-036)

Session 4—February 4: Launching new technologies and designing new products.

Readings: “Time Pacing: Competition in Markets That Won’t Stand Still,” Harvard
Business Review, March-April 1998, 59-69 (HBR Reprint 98202)
“Disruptive Technologies: Catching the Wave,” Joseph L. Bower and Clayton
M. Christensen, Harvard Business Review, Jan-Feb 1995, 43-53.
Cases: NTT DoCoMo: The Future of the Wireless Internet? (HBS Case #9-701-013)
Research in Motion Ltd. (A) Richard Ivey School of Business Case #9A99A036
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Session 5—February 11: Channels of distribution, pricing and branding strategies.

Readings: “Manage Customers for Profits (Not Just Sales), Shapiro et al., Harvard Business
Review, Sep-Oct 1987 (Reprint #87513)
“Challenges and Opportunities Facing Brand Management,” Shocker, Srivastava
and Ruekert, Journal of Marketing Research, 1994
“Precision Pricing for Profit in the New World Economic Order,” Sharpiro,
Harvard Business School Reprint #9-999-003.
Channel Change: The Impact of the Internet on Distribution Strategies, Business
Horizons Article, BH036
Cases: Dell Online (HBS #9-598-116)
Lotus Development Corporation Channel Choice: Direct vs. Distribution, (HBS
#9-587-078)
Session 6—February 18: Competitive analysis, positioning and response, segmentation,
differentiation.
Readings: “Discovering New Points of Differentiation”, Ian C. MacMillan and Rita Gunther
McGrath, Harvard Business Review, Jul-Aug 1997 (HBR Reprint #95101)
“Customer Intimacy and Other Value Disciplines, Treacy and Wiersema,
Harvard Business Review, Jan-Feb 1993
Cases: Rambus Inc., Commercializing the Billion Dollar Idea (A) (HBS 9-701-124)
Rambus Inc., Commercializing the Billion Dollar Idea (B) (HBS 9-701-125)
Rambus Inc., Commercializing the Billion Dollar Idea (C) (HBS 9-701-126)
Session 7—February 25: Customer Value, Shareholder value and financial performance
Turn in Written Case Analysis of Du Pont Kevlar Aramid Industrial Fiber, (HBS 9-698-
079).
Readings: “Customer Profitability and Lifetime Value,” Elie Ofek, Harvard Note 9-589-102
“Premarket Forecasting of Really New Products,” Journal of Marketing, 60(1)
“Marketing, Business Processes, and Shareholder Value: An Organizationally
Embedded View of Marketing Activities and the Discipline of Marketing,” Journal of Marketing,
Special Issue 1999.
Cases: Deere & Co.: Sustaining Value, (HBS 9-899-001)
Discussion of Du Pont case
Session 8—March 25: Financial performance and customer value (cont.)
Readings: “Strategy as a Portfolio of Real Options,” Leuhrman, HBR, Sep-Oct 1998
“Unbundling the Corporation,” HBR, Mar-Apr 1999
“The Options Approach to Capital Investment,” HBR, May-Jun 1995
“Sustaining Value,” Robert J. Dolan, HBS Note 9-501-045
Cases: Customer Value Measurement at Nortel Networks--Optical Networks Division
(HBS 9-501-050)
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Session 9—April 1: Intellectual Property, Software and Information Products

Readings: “Versioning: The Smart Way to Sell Information,” Carl Shapiro and Hal R.
Varian, HBR Nov-Dec 1998
“Discovering New Value in Intellectual Property,” Kevin Rivette and David
Klein, HBR R00109
“Protection of Intellectual Property in the United States,” Myra Hart; Howard
Zaharoff, HBS Note 9-897-046
Cases: Surface Logix, HBS 9-802-050

Session 10—April 8: Marketing management and ethics.

Readings: “What’s A Business For?” Charles Handy, HBR Onpoint Article, 239X
“Tocqueville Revisited: The Meaning of American Prosperity” Charles Handy,
HBR R0101C
Cases: Monsanto: Technology Cooperation and Small Holder Farmer Projects, HBS
Case # 9-302-068

Session 11—April 15: Communications, Leadership and Change

Readings: “We Don't Need Another Hero” (HBR OnPoint Enhanced Edition) 7702
“The Power of Talk: Who Gets Heard and Why” Deborah Tannen, (HBR
OnPoint Enhanced Edition) 9977
“Leadership: Sad Facts and Silver Linings” Thomas J. Peters, HBR R0111J
Cases: Lonestar Electronics, Inc. (A) (BP272A) Steven C. Brandt
Lonestar Electronics, Inc. (B) (BP272B) Steven C. Brandt
Lonestar Electronics, Inc. (C) (BP272C) Steven C. Brandt

Session 12—April 22: Summing up

Readings: “Having Trouble with Your Strategy? Then Map It,” Kaplan and Norton, HBR
Onpoint Article, 5165
Cases: Documentum, Inc. HBS 9-502-026

Session 13—April 29: Team presentations

Readings: None
Cases: Collabrys, Inc.: The Evolution of a Startup, HBS 9-603-064
Hewlett-Packard Imaging Systems Division: Sonus 100 C/F Introduction, HBS
9-593-080
GenRad, Inc., 1990 (B): The VXIbus Standard, HBS 9-593-005
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Session 14—May 6: Team presentations

Readings: None
Cases: BOC Group: Omnimedia (A), HBS 9-587-080
Green Marketing at Rank Xerox, HBS 9-594-047
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Kevin Williams Bio

Kevin Williams is a Venture Partner with ARCH Venture Partners, joining the firm in early 2000.
He has been active in the Austin entrepreneurial community as a consultant, an investor, and a
principal since 1992. He has helped numerous companies refine their business plans, raise capital,
develop strategic marketing plans and partners, implement operations, and fill key management
positions. He has also helped develop and implement merger and acquisition strategies.

Previously, Mr. Williams was the COO of Sandefer Capital Partners, LP (a $500 million private
equity investment fund associated with Ziff Brothers Investments). He took an active role in deal
evaluation, due diligence, negotiation of terms, and the management of all portfolio companies.
Prior to that, Williams was founder and CEO of Zeoponics, Inc., a NASA biotechnology spin-off
and tenant of the Austin Technology Incubator. Preceding his entrepreneurial and investment
activities, Mr. Williams spent 14 years in various marketing and business development positions
with Rockwell International and Texas Instruments.

He holds an M.B.A in Technology Management and Entrepreneurship from the University of

Texas at Austin and a B.B.A. in Information Systems and Accounting from the University of
North Texas. Mr. Williams is also a Business Fellow with the Center for Customer Insight at the
McCombs School of Business, University of Texas at Austin where he teaches technology
marketing and strategic performance.