Snow Affects the January SAO Marketing SIG “Create Instant Success for Your New Product”
By Kate McPherron, technology evangelist
EDITOR’S NOTE: The surprising snowfall on the morning of January 16th prevented many from attending the first Marketing SIG breakfast of 2007. Because less than half of the planned audience was present, the event has been rescheduled for May 15, 2007. Those who did attend were treated to a shorter, informal discussion of the same subjects. Below are notes from this talk and the Questions and Answers that followed.
Moderator:
Paul Abel, managing partner, Blue Research Inc.
Speakers:
Kerry Krause, marketing director, Intel RFID Operation
David Parker, director of product marketing, Serena Software Inc.
Introduction
Paul Abel: How do you get products out into the market? One approach that David Parker will discuss later in this article is demonstrated by the recent Apple iPhone announcement. This week, everyone’s heard of it, but we sure didn’t hear much about it before the show where it was announced. David will discuss this “big bang” approach. Kerry will discuss a different approach: “rolling thunder.”
Kerry Krause
Background on the product
The RFID Operation is a part of the New Business Initiatives incubator, a part of Intel Capital. For those who don’t know, RFID stands for Radio Frequency Identification. In RFID there is a reader and a tag. There are a variety of types of RFID – LF, HF, UHF and microwave. Intel is developing a product for UHF RFID readers. The tag is like a wireless bar code with a unique ID. Also, instead of requiring line-of-sight like a barcode, tags can be read through stuff, such us reading all of the tags on cases of merchandise on a pallet. In the retail supply chain example, when a pallet of merchandise goes by a reader, all of the tags are read and the tag data is sent across the enterprise network to the ERP system to initiate a transaction such as receiving the merchandise into inventory. We’re about six weeks away from product launch.
How extensive is RFID? One example is Wal-Mart. They are now mandating that suppliers use RFID as well as barcodes. Hence, when merchandise moves from a supplier to their distribution center, or the distribution center to a store, or from the backroom at the store to a shelf, they can track it along the way. There are a lot of errors from relying on barcodes. The value proposition of RFID for Wal-Mart is inventory control: merchandise is always on the shelf, always being replenished when needed.
There are a wide range of usage models, outside of retail. One is anti-counterfeiting, because the tag has a unique ID number. Companies that need these to prove authenticity include pharmaceutical companies and high-end fashion such as Nike shoes or designer handbags. Hospitals are using RFID for asset tracking, allowing them to easily locate everything from mobile machines to wheelchairs.
How we approached our new product launch
We started by studying the RFID “ecosystem”: end users, reader OEMs, tag manufacturers, systems integrators, standards organizations and others. Out of all of those we found four constituents that were key: 1) end users, whose demands we’d need to meet 2) reader OEMS, whom we’d need to sell into, 3) software vendors, who would need to integrate with our products, and 4) standards bodies, who develop the industry specs, which have been in flux.
The challenge with all of these audiences was skepticism because Intel was new to the market. So we had to tailor messages to each of the constituents, which meant learning their needs.
- For end users, issues like lower cost, compatibility, and security.
- For hardware OEMs, the advantage of aggregating end-user demand and broad support from different software vendors. Also, we had to prove that we would create demand with the end user.
- For software vendors, we had to address the problem of customization to support a wide range of reader vendors who have historically had unique APIs. Our message was that if they supported Intel, they would be supporting many reader vendors.
NOTE: this was sort of a bluff, since we needed buy-in from both the hardware and software sides for this to work. We had to do it this way, since we couldn’t wait. We created a “demand spiral” to create rapid adoption.
- For standards bodies: Electronic Product Code Global (EPCglobal) is the leading standards body in RFID. Intel is not a full participant in EPCglobal, so we have not had direct access to the changing spec. To overcome this, I have worked with the other three areas of the ecosystem to verify that we were compatible with the spec.
Summary
I used this ecosystem approach as an indirect way to overcome some of the challenges I faced in entering a new market. I think there is a generic key learning that can be taken away. Take the example of trying to win a customer’s business. The direct approach is to focus on your product or service features, schedule, price, performance, etc. Another approach would be to understand the customer’s ecosystem and look for opportunities to provide additional value through those relationships.
David Parker
Introduction
Serena Software is based in San Mateo, CA, with a local office in Hillsboro. The company focuses on change governance, managing change in IT and software systems such as might occur when upgrading or updating production applications.
The difference in types of releases, plusses and minuses
Since we’re a pure software company, we have a very different take than Intel. To explain this, consider the kinds of product releases: 1) patches, 2) maintenance releases, which are just groups of patches, and 3) new product launches. Each release has a different audience: patches might go to a single customer or maybe a small number of customers, maintenance releases go to all customers, and enhancement releases are announced to the market at large.
At Serena we look at two kinds of product launches for the major feature releases – “big bang” and “rolling thunder.” In a “big bang” approach, launch activities are focused right at the product delivery, or GA, date. In a “rolling thunder” style, launch messaging occurs throughout the development phase and a series of communications lead up to the launch. This is ideal for markets you’re testing, where you need to build a pipeline and grow revenue fast after the release. The downside is that it’s risky for large launches; if the product is late, you risk losing credibility. For products that are mature with a pipeline in place, it has the potential to delay purchases.
The “big bang” methodology takes a different approach. There is little or no market communication before the actual launch. Instead, the launch activities are concentrated close to the actual release date. The “big bang” approach has positive and negative aspects. On the negative side, the “big bang” approach requires a concentrated marcom spend at a single event or time. Second, it might disrupt sales that are in process. Customers that are in the sales pipeline might decide to reconsider their purchase.
Choosing which approach to use – “big bang” or “rolling thunder” – one must take into account numerous factors. Things like the maturity of the market, the maturity of the product, the competitiveness of the situation and other factors come into play. An emerging trend in software engineering is that of Agile development techniques. “Agile” development is an incremental, iterative approach that breaks the release into discrete iterations called sprints. These sprints might be set up for something like a month, and at the end of each sprint the team has a beta quality software it can demonstrate. Agile development might lend itself to a “rolling thunder” release methodology because it facilitates incremental communication to the market at large leading up to the launch.
“Waterfall” development methodology is the traditional method of developing software. In a waterfall model, the application specifications are clearly defined up-front. R&D takes those specifications and works toward a single delivery date. Such a methodology lends itself to the “big bang” approach to product launches.
A case study was Serena’s September release of a major new release of its flagship tool, Dimensions. Because of a variety of factors, our launch was largely a “big bang” approach where we rolled out the release at our annual user group meeting. This release required a great deal of lead-up activities such as building the demonstrations; training the salesmen, sales engineers and support people; getting messages out to analysts and the press; and running an effective beta program with select customers. The beta program is important. It helps ensure the success of the release by providing positive customer and analyst quotes. At Serena we treat beta programs as more than just extensions to our internal quality assurance. Beta programs are essential marketing tools, lending credibility and validation to the messages we deliver during the launch.
For the release of Dimensions, we created and localized into critical languages about 20 pieces of marketing collateral, as well as presentations and demonstrations.
Summary
We released Dimensions last September at our user group meeting, following up with two campaigns to drive lead generation. The results were an exponential jump in the pipeline, and an increase in interest in the product in the market in general.
Questions and Answers
Q: How do you address the problem of training the sales force ahead?
DP: Indeed, tell them too much and they tend to sell futures at the expense of what they have right now. With our Dimensions launch, we configured the company from one focused on integrated ALM (application lifecycle management), to the overarching umbrella of change governance. So, our initial training was theoretical, on the broad-based umbrella approach and change governance. But closer to the release date, we made it practical, showing them how the new release works to achieve this.
Q: You may bring in sales for customer interactions early, but how do you offset the risk if you don’t go back often enough to tune the messaging to be sure it’s working?
DP: Our marketing group has a formal liaison with sales to be sure we get the messaging right; we don’t want them to be surprised.
Q: You’ve got an engagement strategy and a marketing plan for “big bang,” then engineering has a glitch and needs half of the marketing budget to finish. What do you do?
KK: First, how bad is the problem? There’s always a question when you are about to launch: do you announce when the product is available and tested, or “in the next 90 days”? It’s tough to pick the right venue, but you have to pick these events ahead of time. In our case, we’re launching in mid-March and thought the product would be available, but now we know it’s only going to be a prototype, and will be ready in 90 days.
DP: We always try to announce the product with the general availability of the product. In our case, there was a delay in R&D and one feature was not in on time. One of the most important things you have to make sure of is the migration paths. The missing feature involved one of the migration paths from a legacy system. We needed to tune our launch messaging to reflect this change.
Q: Regarding RFID, what are the tactics to keep a big customer like Wal-Mart engaged?
KK: They were identified as an early adopter, so we made frequent trips to Arkansas. In person, we learned the areas of their dissatisfaction with current offerings: incompatible, difficult to manage, not secure enough to integrate with the mainframe.
So we worked with them to say how it could be done. Thus, we created demand for Intel processors that are more secure, manageable, and easier to integrate. We earned their trust by getting close. Intel engineers met with their IT people, working to really understand what they meant by “secure.” Wal-Mart told us who their key reader OEMs were, which meant we started to create demand with them, under the premise, ‘if I understand Wal-Mart’s needs, I can help you.”
Q: How do you decide how wide or narrow a beam to shoot?
KK: For us, the target customers were easy to identify, and all our potential customers and our competitors, they all knew we were there – it was the worst-kept secret. So when we actually launch, we know exactly who to talk to. There will still be some surprise vendors, especially internationally, so we’ll be at some shows aimed at those groups. But we don’t need to go to shows to gain recognition.
DP: The kind of people we’re marketing to with the change governance message are high-level executives at the CEO level. Developers, even the director of development, are less interested in change governance. The message resonates with senior management at Fortune 1000 companies and our messaging is targeted to them. We also have the advantage of having a large customer base and we market into that. General, broad marketing activities are limited. For example, we participate in only a few trade shows, including ones on mainframe and Gartner shows. We also do online forums, banner ads and Google searches.
Q: How are you getting customer feedback?
KK: A lot of face time, the old-fashioned way. It’s a new product, so we have a lot to learn, have to pay attention to other products, product roadmaps. Will we be ahead, behind, or just competitive when we enter the market? Through 2006, RFID was almost 95 percent consumer supply chain versus 5 percent “other.” By the end of 2007, I expect the huge growth in “other” will make that ratio about 50/50. So we need to go and see how it works in those areas, like manufacturing, learn their pain points.
DP: We have no shortage of feedback; the problem is taking the data and turning it into information and from there, a set of requirements that we can act on. We do have a formal program for visiting key customers. We also do on-site surveys (we use Survey Monkey) so that we are not overly influenced by the largest customers. An interesting thing you get after doing online surveys a few times is the ability to spot trends, such as the adoption of Microsoft Vista.
Q: How do you quickly get customers to adopt?
KK: Enabling customers while developing the product, the agile way, by doing early revs of software and boards, and a liberal sampling strategy to help them get started. We accelerate every step of the chain to create demand and support that coincide with the launch, orchestrating the players.
DP: Crisp, crisp messaging as it relates to the new release. This messaging will help define your launch tasks. You can choose what mix of tasks you want to deploy for a particular launch, but you have to know what business problems it’s going to address.
Speaker Bios
Kerry Krause, marketing director, Intel RFID Operations
Kerry Krause is marketing director for Intel's RFID Operation, which is a start-up business in Intel Capital's New Business Initiatives incubator. Kerry has 18 years of marketing and business management experience, including 10 years at Intel and 8 years as a Supply Officer in the US Navy. Positions he held prior to joining the RFID Operation include: product marketing manager for Intel's Pentium® and Celeron® processor product lines and product line manager for Intel's Web Tablet.
David Parker, director, product marketing, Serena Software, Inc.
David Parker has over 19 years’ experience in software change management and application lifecycle management in the international arena. Presently he is director of product marketing for Serena Software. In this capacity, Mr. Parker defines development priorities, go-to-market strategies and marketing programs. Mr. Parker joined Serena following the acquisition of Merant, where he spent more than 10 years in Asia as director and regional vice president in Singapore. Prior to that, Mr. Parker established and managed channels in EMEA, based in London. In addition to his experience in the software industry, Mr. Parker holds a Bachelor’s Degree in International Economics from Emory University in Atlanta, Georgia and a Master’s Degree in International Management from the American Graduate School of International Management in Glendale, Arizona.
Paul Abel, managing partner, Blue Research, Inc.
Paul Abel, PhD, is founder and Managing Partner of Blue Research, the region’s only market research consultancy focused on technology and health care. For over 14 years, Paul has been conducting research helping companies find new market opportunities, as well as define successful products, services, and marketing strategies. Blue Research services include focus groups, executive interviews, online and offline surveys. Paul is also professor of marketing at OGI/OHSU where he teaches “Health Care Marketing.” Paul holds a PhD in Neuroscience/Psychology from the University of Washington, and a BS from UCLA.
About the Author
Kate McPherron, a technology evangelist, has helped technology and industrial firms manage and market their products and services for the past 20 years. She can be reached at klm54@cornell.edu.
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