SENSORS/MEMS MARKETING: OXYMORON OR OPPORTUNITY

Sensors Insights by Roger Grace

Since this article series is a “tutorial”, I have taken the liberty of providing you with a definition of marketing from the American Marketing Association: “marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large.”  While I am a major advocate of marketing, I do not fully agree with the Silicon Valley pundit, Regis McKenna, who is the author of the Harvard Business Review Article…”Marketing is  Everything” [1].  In my opinion, marketing may not be everything but marketing is vital to the successful commercialization of goods/services and needs to be integrated and coordinated with the design, test. and manufacturing functions as noted in the MEMS commercialization process [2].

The MEMS commercialization process relies significantly on marketing….the front end uses market research to determine the customers’ unfulfilled needs, competition and internal competencies.  The back end supports promotion, positioning and branding to cr
The MEMS commercialization process relies significantly on marketing….the front end uses market research to determine the customers’ unfulfilled needs, competition and internal competencies.  The back end supports promotion, positioning and branding to create awareness and excitement in the market and differentiate the organization’s offerings against those of its competitors.  Courtesy: Roger Grace Associates. 

I began my professional engineering career over 40 years ago as an RF design engineer working in the military/aerospace industry; first in the greater Boston area with Avco Missile Systems and Raytheon and then in Silicon Valley at Ford Aerospace.  Each of these organizations had a limited number of customers, primarily from the US DOD. “Marketing” was not considered a critical element in their business strategy. 

When I took a position with Avantek (now H.P.) in Santa Clara as a Senior Marketing Engineer, I had my first taste of marketing.   This “on the job training” was supplemented by my attending the University of California Berkeley Haas Graduate School of Business in the evening.  At Avantek, we designed, manufactured, and sold low noise amplifiers (LNAs), RF ICs, and YIG oscillators to the military and commercial markets.   One of my responsibilities was to “listen to the voice of the customer” and attempt to convince my engineering team that we needed to support the customer’s needs and requirements for their application.  Selling the in-house engineering team was quite frequently more challenging than selling the customer.  Since that time, I have been a major disciple of listening to the voice of the customer as a critical element of a successful marketing program. 

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The most significant experience I have had to date on this topic occurred when I was the newly appointed marketing manager in 1980 at Foxboro/ICT in San Jose, California, a true pioneer in the MEMS industry.   One of my responsibilities was to assess the opportunities for various application sectors for our pressure sensors.   As a result of my listening to the voice of the customer and convincing management to pursue the opportunity, we were most successful in developing a disposable blood pressure sensor which was one of the first large volume applications of MEMS at an annual volume of 30 million units.

Listening to the voice of the customer will be one of many topics that I will address over the next several months on an every-other-week basis.   If you did not read last week’s article by Mat Dirjish, which served as an introduction to this eight-part tutorial series entitled Sensors/MEMS Marketing: Oxymoron or Opportunity, I will address many important topics on the subject including:

  • Putting the “S” back in MEMS…the challenges
  • The funding process and marketing’s critical role
  • Insider tips on developing winning marketing strategies
  • Market research…past failure and future opportunities
  • And several others…

Over many years of consulting with a broad sector of high tech clients, I have come to realize, especially in MEMS/sensors, that a superior product from technical perspectives, while very important, is not sufficient to create a successful product in the market.  There are many case studies where great products fail…and the majority of these are because they do not uniquely address the customers’ unfulfilled needs [3].  And it has been very difficult at times, for me to convince my clients that “it is not what we have to sell but what the customer wants to purchase”.  

The question then becomes… how we determine this. The answer I give is “ask and listen.”

Many of you may have heard or even participated in my annual “MEMS Industry Commercialization Report Card” market study.   The Report Card [4] addresses 14 critical success factors for MEMS.   Marketing and Market Research are two of the subjects addressed (see figure 2). However, and sorry to say, both of these subjects have received lackluster grades since its inception in 1998.

The annual MEMS Industry Commercialization Report Card market study has shown that the grades for marketing have been lackluster since its inception in 1998. The most recent grade is B, gradually increasing from C in 2009 with a standard deviation of 0.92
The annual MEMS Industry Commercialization Report Card market study has shown that the grades for marketing have been lackluster since its inception in 1998. The most recent grade is B, gradually increasing from C in 2009 with a standard deviation of 0.92. Courtesy: Roger Grace Associates.

The methodology that I have adopted to gather information on the topic consisted of conducting in-depth personal interviews with over 15 high-level and very experienced MEMS/sensor industry executives where I have asked them for their opinions on the various topics integral to marketing.  I have provided the names and affiliations of these individuals at the end of the article. 

The collaborative experience of these individuals is greater than 300 years in sales, business development and marketing.  This information, blended with my own 35 years of experience and opinions has created the content of this series.  Most importantly, these comments come from the real world, pragmatic, and highly practical experiences of the interviewees.  Having stated this, “let’s play ball” as the saying goes.

Listen To The Voice OF The Customer (VOC)

I refer to the type of marketing that many of my clients employed prior to my relationship with them as “inverse marketing”.  I can recall how several of them asked me to find new spec requirements, targeted price, and potential applications for their existing products after the product had been designed and been securely introduced into the manufacturing process and after spending millions of dollars in R&D.  I believe that this approach is total folly! 

The overwhelming opinion of the interviewees was that it was mandatory to conduct rigorous market research with potential users to help define the offering and to maximally fit the needs of the customer; commonly referred to as listening to the voice of the customer (VOC).  This process can be accomplished internally employing the organization’s sales and marketing team or vis-à-vis a marketing firm such as Roger Grace Associates.  Many forms of market research have been available for many years that can effectively accomplish this task and some of the most popular ones include:

  • In-person or telephone interviews
  • Web-based questionnaires e.g. Survey Monkey
  • Focus groups

I am a major advocate and user of focus groups for my clients to best understand the VOC.  However, it has been my experience that they are currently not as popular as interviews and web-based approaches. I believe that this is because marketers are not fully aware of the unique benefits of this tool and also because of the cost of planning and conducting such a process.

Focus groups are a process by which between eight to 12 individuals who have knowledge on a specific topic of interest are convened in a room and lead by a moderator.  There are several marketing organizations that specialize in this process.  I have had the best luck organizing the process myself and working with publications to provide a list of potential participants and providing their technical editors as moderators.  The attendees are asked to provide their opinions on certain product topics asked by the moderator.  The questions are co-developed by the marketing research team, the moderator and the client. 

Participants are seated around a table and the market research organization and client are seated in a room behind a two-way mirror from which they monitor progress of the moderator and send in questions via a “runner”.  The key to success in a focus group is in the recruiting of the participants.  They must represent the potential target audience and be familiar with the product’s application and be willing to share their opinions and answer questions posed by the moderator.

I believe that concept of listening to the VOC is in total contrast to the old adage…”build it and they shall come” to which many sensor/MEMS companies ascribe and risk valuable time and money in their product development process. I believe that this adage only works in Hollywood where Robert Redford built his baseball field in the “Field of Dreams”. 

Juan Figueroa (NSF) said, “to be successful in product development, you must listen to the VOC and the best was to accomplish this is to ask them questions vis-à-vis a well-planned and executed market research program.  You need to clearly understand the unfulfilled needs of the customer and use this information to help guide the product development process.  Suppliers need to either have in-house product marketing professionals who can successfully plan and execute this task or hire an outside group”.   Benefits of hiring an outside group are that there is no bias from inside company politics and that the process can be conducted anonymously and therefore also not biased and shelter the identity of the client. 

Keith Myers from TE Connectivity said, “at TEC, we spend a great deal of time talking to our customers on a one-on-one basis and we find this is the best way to determine how we are doing and what their unfulfilled needs are.   In another aspect of this, we continually conduct post-conference surveys with our booth attendees to determine their experience in visiting our booth and how we can make their next interaction with us even better.” 

Paul Pickering from Micralyne said, “at Micralyne, we provide our customers with information on their customers’ needs …this helps us manage our customers’ expectations and provides us with an opportunity to add value to our solution.”

Brian Kinkade at Positive Impact reports, “People suggest listening to the VOC, but you might also want to know the voice of the customer’s customer and the value they represent to the market.”

In the end, the product/solution you define must contain some distinctive competence that has value in the “value chain” you are participating in.  Some call this the Unique Value Proposition and this is one of your competitive advantages. 

You might also want to follow the money.  When considering market segments, I usually sequence them from low volume to high volume:

  1. Government/Defense
  2. Industrial
  3. Medical
  4. Building
  5. Automotive
  6. Consumer/Smartphone

The volumes represented by consumer and automotive applications help to explain the focus of available market research reports.  What is interesting is that the low price expectations in those markets may not make them profit maximizing.

In conclusion, I recommend that all organizations interested in selling products take a close look at the benefits derived for embracing a well-planned and resourced marketing plan which includes marketing research in the front end and integrated marketing communications (iMARCOM) in the back end.   More on these specific topics will be provided in future articles in this series.

The next topic to be addressed will be the funding process and marketing’s critical role. I encourage all of you to seize the opportunity - carpe diem - and email me with questions that you may have on the topic of sensors/MEMS marketing.   I will make every effort possible to answer these questions directly and/or address them in future articles in this series.

 

REFERENCES

  1. R. Mc Kenna, Marketing is Everything, Harvard Business Review, Jan./Feb.1991.
  2. R. Grace; MEMS Commercialization: From the Lab to the Fab; MEMS Technology Review; Issue 2, No. 1; Mar. 2012.
  3. R. Cooper, Winning with New Products/Accelerating the Process from Idea to Launch, Perseus Publishing, 2001, 425 pp.
  4. R. Grace, MEMS Industry Commercialization Report Card, Sensors Online, Series of articles from Sept. 2014 to Feb. 2015.

 

ACKNOWLEDGEMENTS

The author would like to sincerely acknowledge the contributions of the following individuals who were interviewed for these articles and who provided valuable and helpful information to their creation. Thank you all so very much. The names provided are in alphabetical order by last name.

  • Sandeep Akkaraju, President /eXo Imaging (Formerly: CMO Jyve)
  • Robert Andosca, Ph.D. CEO Inviza (Formerly: CEO microGen)
  • Matt Apanius, General Manager, Smart Microsystems
  • Janusz Bryzek, Ph.D., CEO/eXo Imaging (Formerly: CEO Jyve)
  • Juan Figueroa, Ph.D. CEO/Abenaki Connect (Formerly: SBIR Program Manager/National Science Foundation)
  • Brian Kinkade, Founder, Positive Impact
  • Mark Laich, CEO/Laich Advisory Group, (Formerly: VP Sales and Marketing/ MEMSIC and V.P. Business Development /Qualtre)
  • Keith Myers, V.P. Marketing/ TEConnectivity
  • Steve Ohr, Semiconductor Industry Analyst and Reporter (Formerly: Semiconductor and Sensors Analyst/Gartner)
  • Kurt Petersen, Ph.D., Member/Silicon Valley Band of Angels (Formerly: CEO/SiTime)
  • Paul Pickering, V.P. Business Development /Micralyne
  • Swaminathan (Swami) Rajaraman…, Ph.D., Assistant Professor/University of Central Florida
  • Paul Werbaneth, Director of Marketing/Intervac
  • Steve Whalley, Whalley Consulting (Formerly: MEMS and Sensors Industry Group/Chief Strategy Officer)

 

About the author

Roger H. Grace is president of Roger Grace Associates (RGA), a Naples Florida-based marketing consulting firm specializing in high technology, which he founded in 1982. His background includes over 40 years in analog circuit design engineering, manufacturing engineering, application engineering, project management, product marketing, and technology consulting. He can be reached at 239-596-8738, [email protected].