High-Tech's Future Lies with Consumers

Brandweek, Jan 25, 1999 by John Bissell

John Bissell is managing partner of Gundersen Partners, a New York and Detroit marketing consultancy/executive search firm.

When reporters asked Steve Jobs to pick his favorite computer, he didn't say, "I like the 233 MHz G3 model with 32 MB RAM, the 4GB hard drive, 24x CD and 56K modem." Instead he smiled and simply replied, "Strawberry."

That's because, as just about everyone now knows, the new Apple iMac machines are not sold on the strength of their speed and capacity (though they boast both). The iMac is instead branded by its sense of simplicity and style. Steve Jobs telegraphs his marketing strategy by offering the iMac not in colors but flavors--grape, blueberry, tangerine, lime...and his beloved strawberry.

This is high-concept marketing, a dramatic nod to consumer understanding that apparently is baffling to much of that elite corps, otherwise known as "the digerati." Silicon Valley analysts predictably dumped all over iMac's hi-fashion approach to high-tech. "There is a reason that computer companies have made all their machines beige," sniped one industry observer in The New York Times. The thinking goes that having so many colors poses an inventory management problem for retailers. It's a mindset that unfortunately recalls the Henry Ford, you-can-have-any-color-as-long-as-it's-black school of consumer focus (Ford's "consumer-centric" rationale was that black paint dries quickest).

The really painful part is that almost nothing about what the high-tech industry regards as differentiation is relevant to the typical consumer. Most consumers cannot tell you the difference between a USB and SCSI port, much less get excited over having the choice. Heck, the majority of consumers is not even sold on having Internet accounts as yet.

No one would argue over the incredible success the high-tech industry has achieved by catering to technophiles. But that doesn't take away from the fact that the industry's future growth will come from confused and bewildered, technophobic folks (like me, for example). We may not be card-carrying Luddites exactly, but neither are we the techno-savvy, early adapters who have made such huge successes of the Microsofts and Amazon.coms of the world.

High-tech is an industry pioneered, of course, by really brilliant technical people who made their way by developing amazing technologies and then were lucky enough to stumble upon built-in markets for them. That worked for an industry in its infancy, but will not suffice in the future. The next phase of opportunity and growth for high-tech will be dominated by those companies that dig into what consumers really want, the companies that inhale marketing.

Michael Sievert, vp of marketing for E*Trade, a leading Internet investment brokerage firm, sees a marketplace parallel to the late 1980s. "There was a point when people stopped asking you if you had a fax machine and instead just asked for your fax number," he says. "The same thing is starting to happen now with e-mail and the Internet, where people simply assume you have access."

It's not that none of the high-tech companies are trying to put on a marketing face. The January issue of Marketing Computers, a Brandweek sister publication, profiles several companies that are actively cultivating convergence between technology and marketing--Sprint PCS, Gateway, MindSpring, E*Trade, Priceline and, yes, Apple, among them. They are the exceptions.

Ed Tazzia, formerly of Procter & Gamble and IBM and currently a colleague of mine at Gundersen Partners, says the issue lies in one basic question: whether what you are doing serves consumer needs or simply offers a technical solution that happens to solve a problem. "If what you have is really just a technical solution," he says, "the challenge is how to change from a product to a consumer focus."

High-tech companies often tend to confuse marketing and sales because their fortunes have been fueled by sales organizations adept at dealing with sophisticated business customers. That's not the same thing as having a strategic marketing team, however. It's essential that any high-tech company seeking a "newbie" consumer audience have people on board who truly understand the marketing issues.

These are not points you'd likely have to explain to Steve Jobs, who says he looks forward to the day when people are more interested in the color of their computer than in the content of its motherboard. In fairness, the iMac is not the picture of user-friendliness, either. It lacks basic features like an on-off switch and the notoriously absent floppy drive. The fact remains, though, that the iMac is the fastest-selling computer in today's fastest-moving marketplace. Perhaps most telling, over 30% of iMac consumers are first-time computer buyers.

If a battered and bruised brand like Apple can yield results like that, imagine what more robust companies can do. A huge, untapped high-tech market awaits the marketing savvy.