Mark Frantz, president of the rapidly growing Frantz Medical Development Ltd., comments, “Our business is built on the fact that so many companies do not involve their inventors in the final development of the product and the marketing side of the business.” Frantz’s company obtains promising medical patents and, with the inventor acting as product champion, produces and markets these innovations. Companies competing in the same industry forming a cooperative R&D venture. “As the project proceeds, project status information is available to both groups, and in-house quality and functional testing, beta-test site testing, and product-user manual reviews are also joint activities. Marketing Delivers Value Not only does marketing deliver value to customers, but also that value translates into the value of the firm as it develops a reliable customer base and increases its sales and profitability. Harvard Business Publishing is an affiliate of Harvard Business School. In respect of expanding the adoption of health information technology, the HITECH Act applies to healthcare organizations and medical practices that benefit from the Medicare and Medicaid programs. Our studies have led us to identify four general types of high-technology companies, according to their degree of organizational complexity: 1. These efforts can help create new markets by applying lab breakthroughs to largely unperceived buyer needs. In addition to fines for business associates, HIPAA-covered entities could also be fined for violations of HIPAA Rules by their business associates. Similarly, in the medical field, customer-service people are sometimes part of the marketing team and the linkage activity. Later, as high-tech markets mature, more normal demand-side conditions begin to prevail. Although sometimes considered poor substitutes for about or concerning, the phrases as regards, in regard to, and with regard to are standard and occur in all varieties of spoken and written English, especially in business writing: As regards your letter of January 19. The Health Insurance Portability and Accountability Act (HIPAA) was signed into law in August 1996, and was updated by the HIPAA Privacy Rule in 2003 and the HIPAA Security Rule in 2005, but how did the Health Information Technology for Economic and Clinical Health (HITECH) Act change HIPAA and what is the relationship between HITECH, HIPAA, and electronic health and medical records? The HITECH Act introduced a new requirement for issuing notifications to individuals whose electronic protected health information was exposed in a security breach if the information was not encrypted. Except as discussed below, any communication that meets the definition of marketing is not permitted, unless the covered entity obtains an individual’s authorization. This example of a company taking advantage of corporate-research separation highlights the need for ongoing top management attention to the linkage problem. These 3 sample plans can help. This time too the company is doing the same. Moreover, they see product planning as both an R&D and a marketing function. The HITECH Act has several goals. In effect, market-driven research for the military and space programs is innovation-driven when it comes to consumer and industrial markets. These four variables help the firm in making strategic decisions necessary for the smooth running of any product / organization. To build the team orientation needed, the two activities merged, as Frankel explains. In market planning, R&D can guarantee that marketing does not lose sight of R&D’s vision for the product. Mobile marketing is growing. The business requires a strong scientific-technical basis. HIPAA Journal's goal is to assist HIPAA-covered entities achieve and maintain compliance with state and federal regulations governing the use, storage and disclosure of PHI and PII. Before this industry’s shakeout began, technological capability was the main success criteria; technological expertise and reputation carried Texas Instruments (TI) along for several years in home computers. Their managers place little stock in the mathematically based methods of marketing research that more mature companies use—methods requiring an abundance of data from a representative sampling for drawing statistical inferences. The corollary is that marketers can offer parameters for the researchers’ efforts. “High tech” has become a buzzword to describe everything from the space shuttle to the electric frying pan. Our inquiries reveal that applications support personnel are directly represented in the selling efforts of more than three-fourths of the robotics companies. Formal marketing research, typical to consumer and industrial markets, is helping high-tech managers guide R&D. Several examples offer evidence of the ways revolutionary changes can occur in high technology. We collected the data for this article via in-person and telephone interviews, questionnaires, and studies of specific marketing areas, such as personal selling, distribution channels, and advertising in high-technology companies. Breach News Apple Computer’s president, John Sculley, is right on target; he has mandated that Apple’s top management pay close attention to product development so that more disciplined market strategy will result. Ostensibly, then, marketing and R&D managers have little reason to fail to communicate effectively with one another. Marketing must deliver the necessary information to the buyer. The following example of Allied Corporation illustrates a cross-pollination effort: Top management at Allied Corporation is seeking to eliminate the historical barriers between R&D and marketing. Start studying HITECH & Breach Notification. The HITECH Act has several goals. TRW’s situation is not unusual. The high-tech marketers surveyed register strong dissent to the notion that the R&D people’s involvement with a new product ends when it is turned over to marketing; 85% encourage a continuing role for R&D. The company-specific study focused on the high-tech business-to-business sales force of a single, but premier, comprehensive computer producer-marketer. See more. 2. HIPAA Advice, Email Never Shared “High tech” has become a buzzword to describe everything from the space shuttle to the electric frying pan. The composition may vary by high-tech industry. We directed the industry-specific inquiry to robotics (more than one-forth of the major U.S. manufacturers in this industry provided data). FBI Issues Warning About Increasing Egregor Ransomware Activity, Lake Region Healthcare Recovering from Ransomware Attack, Vulnerabilities Identified in Innokas Yhtymä Oy Vital Signs Monitors, TigerConnect Acquires Critical Alert to Add New Capabilities to CC&C Platform, Federal Task Force Says SolarWinds Supply Chain Attack Likely Russian in Origin. Also, a competitor’s technological discovery or improvement, even one made by a start-up company, can make obsolete the leader’s technology and the products or processes on which it is based. Innovation-driven high technology offers a marked contrast, as R&D provides the stimulus and marketing officials must find applications or simply sell the product. […]. Cancel Any Time. Not necessarily. For strategic reasons, the company may have placed the high-tech group in a research environment (Silicon Valley, Route 128, or Research Triangle), or an attractive site (Aspen or Austin, for example), or at some distance from headquarters’ distractions. Marketing-R&D linkage between and among divisions as well as within divisions can stimulate ideas for new products and commercial applications. The interface needs of innovation-driven high-technology companies are different. Messages can be targeted with a laser focus to very specific groups offering them relevant content. Often a company’s headquarters, by design or through acquisition, is located some distance from its high-tech unit or subsidiary. How Should You Respond to an Accidental HIPAA Violation? It is important to note that, although HITECH mostly focuses on information technology, HHS can still take enforcement action against a Covered Entity or Business Associate when a breach unrelated to technology occurs. A few high-technology companies, such as Apple Computer, have even looked to consumer-goods marketing professionals to provide marketing leadership. from the University of Liverpool. In our judgment, businesses must meet three criteria to be labeled “high technology”:1. GDPR has changed the way marketers communicate with their customers. Certainly, few businesses would have bet that such diagnostic tests would lead to a major new medical market so soon. The pandemic has given B2B marketing organizations an opportunity to embrace innovation. Establishing realistic expectations early on mitigates cross fire later between R&D and marketing about “who is at fault” when a project fails to yield products that are readily marketable. Price coversthe actual amount the end user is expected to pay for a product. In contrast, Aircraft sells aircraft wheels, brakes, and brake-control systems to both commercial and military aircraft manufacturers. By contrast, for innovation-driven high-technology companies, what customers need or want is residual. Google has found that about 50% of B2B queries today are made on smartphones. We hear repeatedly that the lack of integration of marketing and R&D is a major obstacle to market success in high technology, and where an interface does exist, it is an inherently adversarial situation in which lab jockeys and pitchmen do not mix. A continual threat exists that a giant (e.g., AT&T or Exxon) will enter into its industry or market niche. For example, companies of all types and sizes are currently giving attention to biotechnology. 1. “Creativity in Modern Industry,” Omni, March 1981, p. 6. Yet, once sophisticated marketing abilities became indispensable in the home computer market, companies dependent mostly on technological strengths were no match for IBM, Apple, and others. In the area of robotics, for instance, new steps often occur from customer suggestions. New technology can quickly make existing technology obsolete. HITECH also prohibited the sale of PHI except in limited circumstances and closed the marketing loophole, prohibiting providers from receiving compensation in return for making treatment recommendations. In the early 1970s, Defense Systems transferred integrated circuit technology to Aircraft. The technical skills and acumen that served the president so well before have been much less relevant to the different demands in a market-driven milieu. Some 20 years later, another property of this original nose cone material—its transparency to radio signals—permitted an extension of its consumer application as an ideal cookware for microwave ovens. And primary data from traditional interviews of prospective buyers or users are of dubious value in answering questions about possible products or applications resulting from new technologies. R&D or marketing prowess taken singularly, or even coexisting in the same organization, will not necessarily translate into financial success. In its 1982 annual report, German-based Nixdorf Computer stated candidly, “[Nixdorf] maintains two technology centers [Silicon Valley and Tokyo] which monitor…trends in fundamental research and user-oriented technology and assess their potential benefits for Nixdorf’s own R&D efforts.” Thus the company uses the marketplace and competitor developments to provide its window on technology. 8. As DeVilbiss Company robotics division marketing executive Timothy Bublick explains, “You develop a robot spray-gun attachment to paint for a specific customer and then it [the modification] becomes a product adaptation to the current state of the art.”. As described below, HHS has modified the proposed approach to require authorization for almost all treatment and health care operations R&D’s reaction (dotted arrow) comes in the form of guidance on what is technically feasible and ideas from scientific circles. How a product is priced will directly affect how it sells. They had little marketing experience; indeed, they were contemptuous of marketing activities and refused to commit any funds to explore consumer sentiment, potential market demand, and possible advertising themes. These companies fall into one of two groups: R&D advances move deliberately as competitors turn modifications and improvements in existing technology into incremental advantage. A high-tech division in a diversified corporation may be able to give a sister division in a different industry or in a different market the technology it needs to develop new market niches or entire markets. Supply-side markets are associated with what we refer to as innovation-driven high technology. Title II of HIPAA includes the administrative provisions, patient privacy protections, and security controls for health and medical records and other forms of protected health information (PHI). Also we find that high-technology marketing people have a predominately scientific background. So, with few exceptions, marketing and R&D are members of the key development decision-making team. Moreover, it gives solid direction to the marketing research people who seek the strongest commercial applications for a technological advance. Exhibit Conceptualizing the high-technology marketing-R&D interface. While this in itself was a major breakthrough, the late R. Lee Waterman, former CEO of Corning, saw a different and unique application for this material (trademarked PYROCERAM). This arrangement prevents duplication of each other’s research efforts. Market planning that explicitly recognizes and accounts for the strategic distinction between market-driven and innovation-driven research goes a long way toward yielding better corporate performance. In 1950, our company marketed a tape recorder. As new technologies come on stream, their applications create or revolutionize markets and demand. Over 90% of the executives in our study find that concept testing is helpful in forecasting the success of potential new products. Top management must carefully orchestrate these first steps to ensure that the linkage has the appropriate priority. If followed exclusively, such a deliberate approach could result in delays in technological breakthroughs. A high-technology division or subsidiary that is but one of several or many such units in a company. Intense infighting for control between AT&T’s marketing people and its technically oriented Western Electric group has become so bitter that the company has already lost key members of its cadre of marketing executives. In the semiconductor field, the industry’s ability to find ways to cram more transistors into a single chip may forestall advances in optics. Our research finds that R&D’s actual involvement in formulating marketing strategies and tactics is best off limited to a technical-consultative role. Nobody thought about recording speeches or using a tape recorder to learn languages… In the case of an entirely new product, a market must be created.”1. To avoid later misunderstandings, both R&D and marketing should agree on and write the goals and objectives of the marketing plan. As briefly mentioned in the introduction, promotion is the communication aspect of the marketing mix. Managers of high-technology companies like to think of themselves as being market-driven. We can differentiate further between market-driven and innovation-driven companies. A traditional consumer or industrial enterprise with one high-tech division or subsidiary. What form might R&D involvement on the marketing side take? Micom, a microcomputer company formed in 1980, has grown from $5 million to $83 million in annual sales. But that entails rethinking professional development plans. Essentials of Statistics for Business and Economics (Book Only) (7th Edition) Edit edition Problem 57SE from Chapter 2: Google has changed its strategy with regard to how much and ... Get solutions The approach of Micom Systems, Inc. illustrates. 2. In fact, some 85% of the executives in our research report using focus groups to qualify new products. Schering-Plough delicately balances a heavy R&D effort with a practical view of how it will position each scientific breakthrough to meet the company’s specific long-run objectives. The marketing rule prohibits the use of testimonials and endorsements in an advertisement, unless the adviser satisfies certain disclosure, oversight, and disqualification provisions: Disclosure . The three most significant ways in which the HITECH Act affects HIPAA are the introduction of the Breach Notification Rule, the inclusion of Business Associates among who can be held accountable for data breaches, and the powers given to HHS to facilitate enforcement action. 4. The HITECH Act, which was published on January 25, 2013, made several changes to HIPAA and introduced new requirements for HIPAA-covered entities with notable changes for business associates. But geography and product line differences are not insurmountable obstacles if a company works at linkage. Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. Digital marketing has also greatly increased relevancy. Additionally, the top executive in the perceptive high-tech company stays involved in every major development decision. When we asked executives in a broad spectrum of high-technology companies for their opinions, more than three-fourths think that most companies make some effort to link marketing and R&D. Turbulence of this kind makes high-technology competition different from that in most other businesses. In fact, one day’s leader, perhaps an Osborne Computer, can become the next day’s Chapter 11 or state-of-the-art victim. Being the first person at WordStream to take the lead on customer marketing, I had to build the role from the ground up…seriously, we had zip, nothing, nada! One way to improve understanding of high-tech markets is to divide them into either supply-side or demand-side markets. Clearly, R&D’s efforts do not end once the selling begins. Once these are answered, the types of linkage guidelines appropriate for market-driven high technology apply to innovation-driven high technology as well. The Marketing mix is a set of four decisions which needs to be taken before launching any new product. “The newer and more innovative a product is, the more likely it is that the public might not appreciate it at the beginning. In this market-driven kind of situation, R&D’s task is to respond to the specific market needs identified by marketing, R&D, top management, and others. Product management is one of the best non-programming roles in the tech industry, and tech is one of the most attractive industries to work in. Middlemen, such as industrial distributors or agents, may also be involved in the robotics companies’ linkage efforts. For the first three years, Micom followed the all-too-usual corporate path of not linking marketing and R&D, and according to Steve Frankel, vice president of marketing and development, R&D and marketing were competing. Through the give-and-take of setting objectives, R&D and marketing can agree on the target market, priorities, expectations, and timing. Within each SBU, either a market-driven or an innovation-driven interface is appropriate, but the creative linkage process should not end there. Besides R&D officials, who else is on the interface team during the selling stage? In total, we examined over 125 companies. However, he had sold the company producing the product while it was still in the innovation-driven stage of market development, and thus he had never directed a company in a competitive environment. (EHR) and the supporting technology in the United States. Time will tell how the enforcement regime will change post the HITECH Act, but certainly the Act contains language that implies lax enforcement may be ancient history. What is the Relationship Between HITECH, HIPAA, and Electronic Health and Medical Records? For high-technology companies, becoming effective marketers is often a matter of starting from scratch. While the HIPAA Privacy Rule gave patients and health plan members the right to obtain copies of their PHI, the HITECH Act increased those rights to include the option of being provided with copies of health and medical records in electronic form, if the covered entity maintains health and medical records in electronic form and the information was readily producible in that format. The makeup of the marketing-R&D team often depends on whether the product or application is in development or being sold. They were also required to agree to adhere to certain provisions of the HIPAA Security Rule, including the implementation of administrative, physical, and technical controls to safeguard the confidentiality, integrity, and availability of PHI. Although company-specific recommendations are needed, possibilities might include both the establishment of a conventional corporatewide marketing-R&D committee or project team and a more experimental approach such as in-house trade shows for the company’s SBUs to demonstrate and publicize otherwise proprietary knowledge and offerings to one another. Finally, consider the linkage needs of the multidivision major corporation with market-driven and innovation-driven interface demands and, perhaps, a portfolio of high-tech and low-tech strategic business units (SBUs). Some of the key updates to HIPAA by HITECH are detailed below: The HITECH Act required business associates of HIPAA covered entities to enter into a business associate agreement (BAA) with HIPAA-covered entities and agree not to disclose PHI other than for reasons permitted by the HIPAA Privacy Rule. The consumer is usually looking for the best price and As shown in the Exhibit, in market-driven high technology, the main direction for R&D is from marketing. 3. HIPAA Journal provides the most comprehensive coverage of HIPAA news anywhere online, in addition to independent advice about HIPAA compliance and the best practices to adopt to avoid data breaches, HIPAA violations and regulatory fines. HITECH News As the organizational complexity of a company increases, the possibilities for linking marketing and R&D in profitably innovative ways become more intriguing. Another example of market specificity is Genetic Systems Corp.’s approach in writing lucid market goals guiding its R&D efforts over the short-, intermediate-, and long-term. As we have emphasized, large multiple division companies need to develop systems that ensure consideration of all possible applications of new technology. Already on the market, for example, in Pizza Time Theatres, are video games that use laser technology; the fruits of Singer Aerospace research are in its sewing machines and handheld power tools. Once agreement is made, however,…the marketing activity proceeds with the classical marketing functions while the engineering team begins the engineering process. General Electric sends out design engineers to obtain customer opinions on GE’s electronic wares.5 Further, many companies consider the introductory sales stage a quasi-test market and use the resulting feedback from customers to modify the product. 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