Match Marketing to Your Company's Maturity

Rohit Khare (
Wed, 16 Apr 1997 12:06:36 -0400 (EDT)

[Guess where W3C is -- and where it could be...]

t h e n e w c h a s m

Match Marketing to Your Company's Maturity

By Geoffrey Moore
January 01, 1997

In Geoffrey Moore's new column for Upside, "The New Chasm," the author
of Crossing the Chasm and Inside the Tornado advises fast-growing
companies and those that aspire to growth on how to reach the next
level of success.

You're Bob Frankenberg, and you just came in as CEO of Novell. Despite
dominant market-share leadership with NetWare, Microsoft's Windows NT
is howling at your door, and everyone's saying you have a marketing
problem. So you hire experienced marketing help, who initiate a
high-visibility marketing-communications campaign reasserting your
leadership. But your customers shrug, your partners and allies shake
their heads, your competitor chortles with glee, and the analysts turn
to one another and say, "Clueless."

What's wrong with this picture?

Simply put, in high tech, when people outside your company tell you
that you have a marketing problem, it never means you need a new
brochure, new PR or a new logo. What has happened is a shift in power
in the market, and you are on the losing end. You must do something
structural to change the outcome of the competition--target new or
different customers, refocus your distribution-channel strategy,
dramatically change your pricing models--anything to create new,
more-defensible segments.

So why do high-tech executives often have trouble decoding this
message? Marketing is a slippery concept in our culture, a single word
that can stand for up to five different ideas. We think you can assess
an organization's marketing maturity by its working definition of the
concept. Here's the model we use:

7 Level 1: Marketing means sales promotions. Engineering designs
products, manufacturing makes them, sales sells them, and marketing
paints the boxes. Dysfunctional relationships abound, with marketing
the scapegoat for the other organizations. Countless startups fit this

7 Level 2: Marketing means managed communications. The focus is on
influencing the influencers and positioning yourself effectively. When
your company is a startup riding a hot trend, this is the most
effective way to increase your market power. Steve Jobs, Jerry Kaplan
and Trip Hawkins are charismatic evangelists who do this well, though
their companies may falter later. In the later stages of market
development, the focus is branding. For technologies that are stable,
brand images create consumer loyalty.

7 Level 3: Marketing means product and channel marketing. The focus is
on the tactical struggle of day-to-day competition. This is about
power, but only as it relates to immediate competition. If a bigger
trend goes against you, you can't address it from this vantage
point. Nonetheless, this is the appropriate level for any company
acting as a "strong player" in an established market. Compaq, Intuit,
Gateway 2000 and Claris come to mind.

7 Level 4: Marketing means industry marketing and strategic
alliances. The focus is market domination by segment, the required
level to sustain leadership in an evolving high-tech market. Lotus
Notes has successfully dodged what appeared to be a direct hit by
realigning its alliances to support the Web instead of competing with
it. Confronted with swift retaliation from Microsoft, Netscape has
retreated from Level 5 to this level to secure its future prospects.

7 Level 5: Marketing means The Grand Game. The focus is on creating
and dominating whole industries, the sort of thing Bill Gates, Andy
Grove and John Doerr have their eyes on. IBM was the original
champion--it invented the computer industry. Today, we are living
under the Microsoft hegemony, although, as Gates has correctly
foreseen, the Web threatens it at its roots. The Web will be the
playing field for the third Grand Game, as yet undecided.

Most of the miscommunication about marketing comes from executives who
mix one or more of these definitions. Novell's mistake was to take a
Level 2 approach to a Level 4 problem. In other cases, we find
entrepreneurs with Level 5 visions who have failed to execute at Level
2 or Level 3, and so like astronomers with their eyes on the stars,
they end up falling into a ditch (dare we mention "pen-based

And in mature companies, we often find people hunkering down into an
"old guard" Level 4 alliance mentality, letting a new set of players
get the jump with a "new guard" alliance--most of the proprietary
minicomputer franchises have been guilty of this.

So what is the best strategy? Try to build marketing maturity one
level at a time. Begin with Level 2 for early market ventures, go to
Level 3 while crossing the chasm of accelerating growth, and then move
to Level 4, first in niche markets and later mass markets. Level 5
results from history, not design.

Remember, higher levels are not always better. It depends on the
maturity of the market as much as that of the organization. The
primary goal should be to get key stakeholders on the same page. That
way, you can either win with your current strategy or realize together
that you need to change it.