Successfully commercialising technology requires a basic decision

By our News Team | 2023

Before positioning a product or services relative to competitors, managers must decide in what form the innovation will go to market.

Much research has focused on the new product development process and its subsequent commercialisation. However, one fundamental decision regarding technology commercialisation remains relatively unexplored: In what form do we sell the innovation in the market?

According to the American Marketing Association, which publishes the peer-reviewed Journal of Marketing, Apple’s co-founder Steve Wozniak has suggested that the company’s initial plan was to sell circuit boards incorporating its microprocessor chips.

Business Strategy

Image by Gerd Altmann from Pixabay

However, that ambition took a different turn when Steve Jobs and Wozniak created the first personal computer in 1976, the Apple I. With its successor, Apple II, Apple became the pioneer in the personal computer industry. So much for being a seller of circuit boards.

A new Journal of Marketing study explores the ‘what to sell’ question that companies and investors need to answer regularly. 

Before they decide how to position products or services relative to competitors, managers at both established firms and new ventures must consider whether their innovations should be sold as:

  1. know-how (intellectual property),
  2. components (intermediate goods), or
  3. a system (final goods).

This product-form strategy (PFS) decision is deeply embedded within many firms’ product development and commercialisation processes. The PFS decision is linked to other fundamental questions of interest to marketers, including ‘Who is our direct customer?’ and ‘Who are our direct competitors?’

For early-stage ventures seeking to enter a market for the first time, getting their go-to-market strategy right in terms of the product-form and the associated revenue model may be their best chance for survival.

Using data from various sources, the researchers found that the resulting choice of PFS is due to three primary drivers:

  • the difficulty of technology mix-and-match,
  • the availability of marketing capabilities to sell the technology to end users, 
  • the difficulty of safeguarding the know-how against imitation.

“Our research discovers that when technology is difficult to mix-and-match and safeguard, decision-makers will choose to sell systems over components and components over know-how,” explain the researchers from the American University and universities of Arizona, Texas-Arlington and Texas Tech.

Assessing the firm’s marketing capabilities is a crucial element

“Marketing capabilities will also increase the likelihood of marketing systems over components and components over know-how. We also find key interactions among these drivers on the product-form decision,” they add.

The findings suggest that considering the technology market and the firm’s ability to protect its technology (against theft by supply chain members and competitors) is critical and that strategic deliberations about what to sell must include examinations of the wider environment and the firm’s own capabilities. 

Unlike much of the literature about business models that often conflates the ‘what to sell’ and ‘how to sell’ questions for business strategy, this study finds that PFS is a unique decision that comes before the ‘how to sell’ question is answered.

Product managers, entrepreneurs, and angel investors need to consider how these alternative product forms may increase the costs associated with selling one product form over another. 

Additionally, established firms mulling a market entry decision for a new technology should have commercialisation discussions at the technology level and choose the product-form that is the most desired for that technology, regardless of how their other product lines are strategically positioned.

You can find out more about the research A Theory of Product-Form Strategy: When to Market Know-how, Components, or Systems? here.

Dr Kin Kariisa

Group CEO - Next Media

Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

  • Other current and previous roles played by Dr Kin Kariisa:
  • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
  • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
  • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
  • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
  • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.