Marketing High Technology

Gives practical advice on developing and marketing products in the technology industry, looks in detail at Intel's marketing campaign against Motorola, and stresses the importance of commitment to a successful campaign

Auteur

William H. Davidow is a general partner with Mohr Davidow Ventures in Menlo Park, California. Before forming this venture capital firm, he was senior vice president of sales & marketing for Intel Corporation and shepherded the renowned Intel 8080 and 8086 to success. Prior to joining Intel he was a marketing manager for Hewlett-Packard's computer group. Davidow graduated summa cum laude from Dartmouth College and holds a Ph.D. in electrical engineering from Stanford University.

Texte du rabat

Marketing is civilized warfare. And as high-tech products become increasingly standardized-- practically identical, from the customer's point of view -- it is marketing that spells life or death for new devices or entire firms.

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Chapter 1: Crush the Competition

Marketing is civilized warfare. If you find that metaphor too brutal, or if you are not prepared to fight, you should not enlist. As long as aggressive competitors exist -- and in this rich and dynamic world they always will -- you will be under attack. Your competitors' job is to capture business and then defend that new perimeter. So is yours.

Now, a lot of marketing is creative. It's strategic. Cerebral. But eventually you must make a move -- and then the fighting begins. Even the most brilliant campaigns suffer occasional setbacks, and it is during those moments of crisis that the true mettle of the marketing team is tested.

MARKETING CRISIS

Every company faces marketing crises at intervals throughout its history. A company that fails to surmount one can slow to a halt, even atrophy, for many years. Just surviving such a test usually means only a return to the status quo ante.

But to triumph over such a crisis, to turn possible disaster into a resounding victory, can accelerate a company's growth in a burst of sustained business momentum. Meanwhile, such an unexpected turnabout can demoralize the competition or -- at the very least -- cause considerable discomfort.

Winning, beating the odds, converting defeat to victory -- that's the point of marketing. The stories of such marketing coups are our business legends -- what Iacocca did at Chrysler and what Townsend did at Avis. It is what Apple is trying to do right now in office automation.

And it is what Intel had to do in 1980. I know, because I was there. My career depended on a single victory.

Intel Corporation was founded in 1968 by Robert Noyce, the inventor of the integrated circuit, Gordon Moore, a legendary high-technology scientist and business strategist, and Andrew Grove, a now famous manager and executive.

Intel owed its success (Ben Rosen once called it the most important firm in America) to inventive genius, an ability to convert ideas into products (such as the famous microprocessor), Grove's dynamic management, and, not least, a talent for developing new markets for its new products. All those factors combined to give Intel one of the most remarkable starts in American business history.

But not all of Intel's success derived from intrinsic strengths. For a long time the company had also benefited from the benign neglect of more powerful firms in the same industry. Like many hot young electronics firms, Intel had focused on new markets, pursuing a path the industry giants had no interest in following. But the day of reckoning had come. By the mid-1970s Intel's achievements had become an embarrassment to its competitors and the target for most of the largest semiconductor manufacturers in the United States, Europe, and Japan. The list of competitors poised for attack was more than a little daunting: Texas Instruments, Motorola, National Semiconductor, Philips, Siemens, Nippon Electric Corporation (NEC), Hitachi, and Fujitsu, among others -- the Billion Dollar Club of the semiconductor industry.

Intel still prospered but was losing ground in some important markets and was threatened in others. Intel once had been the leading supplier of 1,024-bit "dynamic" RAMs (random access memory) chips, but had lost that leadership to a start-up company. We had been unable to regain that momentum. A number of companies also had jumped into the EPROM (erasable programmable read only memory) chip market and were applying pressure. Finally, by 1979, Intel's strong position in the microprocessor market, though relatively intact, had suffered inroads from a start-up company named Zilog, and from Motorola, the latter a number of times Intel's size.

By late 1979 Intel was under full siege. Such attacks were nothing new to Intel, and the company had won more than its share of battles. But this threat was different in one very important way: The product line in dispute, the model 8086 16-bit microprocessor family, was the linchpin of the entire corporation. A number of multimillion-dollar Intel businesses depended on its success.

In particular, the sale of every Intel 8086 and its companion chip, the 8-bit 8088, pulled along large numbers of peripheral, memory, and controller chips worth in total ten times as much as the 8086. Whenever an 8086 sale was lost, the departing customer would frequently turn to the new supplier for those ancillary products. On top of that, Intel had two very profitable systems businesses dependent upon the success of the 8086.

Les Vadasz and I had been co-general managers of the microprocessor division in 1976 when the 8086 was being planned. At the time we decided to make the product an extension of the then-successful 8080 family. That created some design problems, but they were more than counterbalanced, in our opinion, by the resulting access to a large existing software library.

The 8086 was introduced to the market in 1978. As the first high-performance, fully supported 16-bit microprocessor, it had quickly gained the top position in the market, capturing the lead from older and less capable products supplied by Texas Instruments and National Semiconductor. In response, Zilog and Motorola prematurely announced their own "paper tigers" (products that existed only on paper). Customers loved the features of the proposed products and were not too happy about some of the compromises Intel had made, so it was obvious that when and if those microprocessors ever emerged from the drawing boards, they would be a serious threat.

Meanwhile, as Intel had grown, the management had reorganized, and I left the microprocessor business to become the general manager of one of Intel's microprocessor-based systems businesses. Needless to say, any success I would have in my new role would be vitally dependent upon the survival of the 8086. So I remained in close touch with the 8086's marketing effort.

The 8086 marketing and sales group was suffering from apathy brought on by shattered morale. It was demoralizing to have one customer after the next lecture you about your employer's failures and your competitors' strengths. Many customers actually relished the opportunity to stick it to the famous Intel.

Some of the younger marketing people couldn't take the humiliation. It was easier to work on other projects. Being abused by customers -- and even Intel's own sales force -- wasn't fun.

Management encouragement had been ineffective at correcting what was becoming a destructive situation. In late November Don Buckout, an Intel field engineer on Long Island, sent management an incisive and desperate eight-page telex. The discussion of Buckout's telex at the executive staff meeting the following Tuesday couldn't have been more unpleasant. By the end of it I had either volunteered or been asked by Grove to run a marketing task force charged with solving the 8086 problem.
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