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Who Is Going To Buy The Darn Thing?
 

Who Is Going To Buy The Darn Thing?
Invest More In Marketing Than In Engineering To Find Out!

Institute of Electrical and Electronic Engineers (IEEE)
Proceedings of the IEEE Electro International
By Ralph E. Grabowski

 
Table of Contents

   Abstract
1 The evidence is in
2 Who needs Marketing?
3 Exactly how much is "more" Marketing?
4 Avoid the pitfalls of the flaming failures
5 Do what the super successes do
6 Go for it!
7 Implications for technology-based enterprises
8 Summary
9 References
   Figures
   About the author

   PDF reprint -  28 pages, 0.7 MB
   PDF 2-page abstract with summary of the data - 0.3 MB

 

invest more in market research than in engineering
  6 - Go for it!
Invest more in marketing than in engineering.
 

Go for it!  Invest more in marketing than in engineering.  Divide the logarithmic scale of the Marketing/Engineering Investment Ratio™ into three zones.  Stay in the "GO" zone, above 1.  Avoid the CAUTION and WARNING zones below 1.  See Figure 8, for the GO, CAUTION, and WARNING zones of the M/E Investment Ratio™:

 

invest more in market research than in engineering
  GO   Invest more in Marketing than in engineering, M/E >1  
  CAUTION   Invest more in engineering than in Marketing, 0.1 < M/E < 1  
  WARNING   No investment in market research, M/E Ratio™ <0.1  
 
Figure 8, 
the GO, CAUTION, and WARNING zones of the M/E Investment Ratio™

M/E Ratio™ above 1 - GO

In this zone, the strategy is to invest more in marketing than in engineering.  Management attention and investment commitment is devoted to decisive, up-front marketing.  The evidence is in.  Super successes in this survey invest more in marketing than in engineering.  They invest up front.

M/E Ratio™ between 0.1 and 1 - CAUTION

In this zone, the strategy is to invest more in engineering than in market research.  Here, marketing is being done, but below threshold.  The results tend to be indecisive, neither clear success nor clear failure.

M/E Ratio™ 0.1 or less -WARNING

In this zone, the strategy is to not invest in marketing.  Engineering is the priority.  Compared with engineering, little, if any, marketing is accomplished.  What marketing is done tends to be later, rather than up-front, or is performed after the engineering is complete.  All the flaming failures in this study are in this zone.

 

Be bold. Becton Dickinson raised their M/E Ratio™ by a factor of four hundred in six months!  BD more than tripled their market share rapidly, became profitable, and hired more engineers.

Learn from the experience.  Jack Derby learned as one of the middle managers during BD's turnaround, "Very avant-garde, wonderful stuff!  I remember a very high [4] M/E Ratio™ and the 'task team.'  I learned the value of marketing from that success.  When I became President of the successor operation, Litton Medical Systems, I raised the Marketing/Engineering Ratio™ even higher, to about 9."(100)

Thinking Machines may be learning.  They hired a new Chief Executive, Bob Doretti, who asserts that he will be giving management attention and investment commitment to marketing.  In a quotation specifically for this research, Bob states, "We intend to significantly increase our investment in marketing.  We expect significant growth in our marketing staff.  We are trying to turn an engineering oriented company into a business oriented company."(101)

Have courage.  David Brock describes Keithley's reaction to their failure, "We changed from a product focus to a marketing focus in June of 1993.  We changed from a product strategy to a marketing strategy.  We are creating a new project process that has a significantly higher M/E Ratio™, an order of magnitude higher, than has been our tradition.  This order of magnitude higher M/E Ratio™ may be the way that we need to be across the board."

However, David continued, "I am concerned that we are not going high enough, that we are not investing enough in marketing, even at a M/E Ratio™ of 0.5 - 1.  I am also concerned that we have the courage, and management foresight, to maintain even that level of marketing investment without getting the marketing funds diverted into engineering."(102)

Don't backslide.  Optra's M/E Ratio™ slumped, and their project slid from "almost a success" to "on hold."  President Jim Engel traced their semiconductor metrology unit's descent, "Since the end of 1993, we have spent a lot more on engineering, and very little on marketing.  As a result, our cumulative M/E Ratio™ slipped from 0.7 to 0.5.  It's on hold.  It's the living dead!"(103)

 

 
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