Marketing Mix of Industrial Property in Modern Conditions

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1 National Academy of Sciences of Ukraine G. M. Dobrov Centre for Scientific and Technological Potential and Science History Studies Marketing Mix of Industrial Property in Modern Conditions PhD Project Summary Supervisor: D. of Science in Economics V. Solovyov Researcher: Post-graduate student Yuriy Moyseyenko 2008

2 Starting point The starting point for the research presented in this summary is an attempt of analysis of applicability of Marketing Mix model to intellectual property rights as product. In the research Yuriy Moyseyenko analysed the structure, consistence and evolution of Marketing Mix model. By the result of mentioned analysis the researcher made an attempt to apply Marketing Mix model for such specific products as intellectual property rights (inventions, designs, trademarks) due to the EU legislation by the method of synthesis of legislation and 4P s (Product, Price, Place, Promotion). Among other things, the lifecycles characteristics of the product, innovation and technology were taken as fundamentals for conclusions. The research problem is as follows: What are the role and main aim of marketing manager in industrial property marketing under modern conditions?

3 The Marketing Mix Model The function of the Marketing Mix model is to help develop a package (mix) that will not only satisfy the needs of the customers within the target markets, but simultaneously to maximize the performance of the organization. Product Price Place Prom otion Historically, the thinking was: a good product will sell itself. However there are no bad products anymore in today s highly competitive markets. Plus there are many laws giving customers the right to return products that they perceive as bad. Therefore the question on product has become: does the organization create what its intended customers want? Define characteristics of your product or service that meets needs of your customers. How much are the intended customers willing to pay? Here we decide on a pricing strategy do not let it just happen! Even if you decide not to charge for a service (a loss leader), you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach. Available at the right place, at the right time, in the right quantities? Some of the revolutions in business have come about by changing Place. Think of the internet and mobile telephones. (How) are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory advertising, selling, sales promotions, public relations, etc. While the other three P s have lost much of three meaning in today s markets, promotion has become the most important P to focus on. Functionality, quality, appearance, packaging, brand, service, support, warranty. List price, discounts, financing, leasing options, allowances Locations, logistics, channel members, channel motivation, market coverage, service levels, internet, mobile Advertising, public relations, message, direct sales, sales, media, budget

4 SIVA Marketing Model

5 SIVA Marketing Model as specific MMix Model for industrial property rights. PRODUCT PRICE PLACE PROMOTION Customer value Consumer cost Convenience Communication SOLUTION VALUE ACCESS INFORMATION IP rights for invention, utility model, design, trademark International, European and national valuation standards National patent offices data bases: information about IP rights existing Firms communication policy

6 Industrial property rights as product, customer value and solution Invention rights as product, customer value and solution Effects of the Community patent are the solution precisely mentioned in the research as product. The Community patent confers on its proprietor the right to prohibit, without his consent: the direct use of the invention, in particular making it, offering it, putting it on the market, importing it, etc.; the indirect use of the invention, through supplying it, etc. Annual fees must be paid to the Office to renew Community patents. The amount of these fees will be fixed by means of an implementing regulation on fees, which will be adopted by a regulations committee. The Community patent is valid for twenty years, calculated from the date of filing of the application. The patent will lapse if the renewal fee or any additional fee has not been paid on time. European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step [Art. 52]. An invention shall be considered to be new if it does not form part of the state of the art [Art. 54]. An invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art [Art. 56]. An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture [Art. 57].

7 Industrial property rights as product, customer value and solution Trade mark as product, customer value and solution A Community trademark may consist of any signs capable of being represented graphically(particularly words, designs, letters, numerals, the shape of goods or of their packaging) provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings. A Community trade mark confers on its proprietor exclusive rights which are the solution precisely mentioned in the research as product. The proprietor is entitled to prohibit all third parties from using in the course of trade: any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community TM is registered; any sign for which there exists a likelihood of confusion on the part of the public in relation to another trade mark; any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, if the sign is used to exploit the reputation or distinctive character of the trade mark. The Community trade mark is registered for ten years from the date of filing of the application. Registration is renewable for further periods of ten years. Necessitaty the payment of an application fee and, where appropriate, one or more class fees. An application for a Community trade mark must involve two searches, conducted by OHIM and the national industrial property offices, in respect of existing Community or national trade marks or trade mark applications.

8 Industrial property rights as product, customer value and solution Design rights as product, customer value and solution To qualify for protection, designs must be new and have an individual character (they must be different from existing products). The right to the Community design is vested in the designer or his successor in title. The Regulation provides for two types of protection of designs directly applicable in each Member State, i.e.: without any formalities, as an "unregistered Community design" (is protected for a period of three years from the date on which the design was first made available to the public within the EU ); As a "registered Community design", if it is registered with the OHIM (is protected for a minimum of five years and a maximum of twenty-five years). The difference in the degree of protection conferred is that a registered design is protected against both systematic copying and the independent development of a similar design, whereas an unregistered design is protected only against systematic copying. A registered design thus benefits from more formal and more comprehensive legal certainty

9 IP valuation models and tools as pricing, consumer cost and value IP valuating is a complex procedure taking into account economic, technologyrelated as well as juridical factors. the most commonly used methods in order to provide users with a general overview on that issue: a) The market based method It is devoted to asses IPR market value by reference to comparable market transactions. Such methods imply serious problems mostly when comparable transactions cannot be found with regard to the relevant IPR. b) The cost based method This method assumes a direct impact of costs on the IPR value. It is based on the analysis of costs necessary to replace the IPR concerned, as well as on costs that have been invested for the development, application, maintenance and commercialisation of IPR, and on a consideration of costs which may have been avoided by establishing IPR such as royalties for licensing-in a related technology. c) The profit based method Such method is the most comprehensive one as it aims at determining the IPR potential for market revenue growth, the profit to be expected by the future commercialisation of the IPR concerned. This method analyses the nature of the asset, its legal status, its related marketability as well as market conditions, likely performance and potential, and the time value of money. It is illustrative, demonstrating (or not) the cash flow potential of the property and is highly regarded and widely accepted in the financial community.

10 Access to industrial property rights as convenience (Place in 4P s) Access to industrial property rights as convenience (Place in 4P s) National patent offices data bases have information about industrial property rights which are in force in one or another country. The consumer can not buy industrial property rights anywhere, but only in countries where such rights exist (anyway consumer can buy it in case of non-patent license but the level of guarantees is much lower comparatively with usual industrial property licenses). Only in countries where holder has protected his industrial property rights the patent license can be given with all state protection guarantees in case of infringements. A Community industrial property may be licensed for the whole or part of the Community. A license may be exclusive or non-exclusive. The consent of the right-holder is essential. In the case of licensing clearly define the right relationship and terms for the licensing of your IP in a licensing agreement. Register the license agreement, if needed. Many countries require that a license be recorded with the national IP office or other government agency.

11 Information about industrial property right as promotion and communication The role of e-infrastructures Continuous investments in e-infrastructures and ICT provide competitive European advantages and serve as excellent examples of how coordination and cooperation on a European level, paired with major research infrastructure advances, can dramatically change the way research work is being conducted.

12 Product lifecycle

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14 Technology, industrial property and product lifecycles

15 What is the role of marketing manager in industrial property marketing under modern conditions? It means that after their time of being in force (invention for 20 years, design 25 years) any person or company can use it for free without any payments to their holders. That s why it is very important to prepare industrial property rights for sale in period of licenses maximum profitability. The role of marketing manager is to predict correctly the most successful period for industrial property licenses selling taking in account innovative technology, industrial property and product lifecycles.

16 Science, technology and innovation in Europe 2008 edition The enterprises surveyed were asked to evaluate the importance of four different effects of organisational innovation: reduced time to respond to customer or supplier needs; improved the quality of goods or services; reduced costs per unit output; improved employee satisfaction and/or reduced rates of employee turnover.

17 In the Community Innovation Survey 2004 the enterprises surveyed were asked to evaluate the importance of reduced time to respond to customer or supplier needs. By the result between 21% (Luxembourg) and 1% (Portugal) of the innovative enterprises considered reduced time to respond to customer or supplier needs a highly important effect of organisational innovation. In general, this effect is not so important because only eight out of the 20 countries in Figure 5.59 reached the 10% mark. Most innovative enterprises seem to regard time savings more as a positive collateral effect of innovation which do not play a large part in the enterprise s overall innovation strategy

18 Marketing innovations Marketing innovations cover significant changes in how an enterprise markets its goods and services, including changes to design and packaging. Marketing innovations do not include: routine or seasonal changes, such as clothing fashions; advertising, unless based on use of new media for the first time. Innovative design & packaging Novel designs of existing products, such as flash card memory sticks designed to be worn as jewellery; New designs for consumer products, such as appliances designed for very small apartments; Adapting packaging to specific markets (e.g. different covers and typeface for children's and adult versions of the same book). New sales methods Bundling existing goods or services in new ways to appeal to market segments; Developing trademarks for new product lines; Targeting marketing on sub-populations using personalised information. This information can be collected from individuals who visit websites for information or join frequent user or buyer reward schemes; Product seeding via opinion leaders, celebrities or particular groups that are fashion- or product trend-setters; First use of product placement on television, in books, films, etc.; Media programming for a specific institution, such as closed circuit television for hospitals that contain educational programming to stimulate sales of specific products; In-store sales accessible only to holders of the store s credit card or reward card.

19 What are the main aims of marketing manager in industrial property marketing under modern conditions? Marketing researches on technologies, innovations, intellectual property, goods markets; Making a correct choice of countries where industrial property should be protected; Searching methods of patents, technologies, innovations; Internal industrial property valuation; Preserve control over the commercial use of firm s intellectual property rights.

20 CONCLUSIONS Industrial property Marketing Mix Model consists of 4P s: Product: exclusive rights to industrial property (patents, designs, trademarks); Price: valuation models and tools; Place: abilities for license relationship; Promotion: spreading information methods.

21 THANK YOU FOR ATTENTION!