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11/01/2021

Once these are answered, the types of linkage guidelines appropriate for market-driven high technology apply to innovation-driven high technology as well. 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). So, with few exceptions, marketing and R&D are members of the key development decision-making team. In the former, technological progress is literally creating markets and demand. Even so, we find that power plays or strained relations do frequently occur and that marketing-R&D linkage suffers in the process. Executives successful in an innovation-driven situation may have difficulty adjusting to a market-driven environment. In this seminal phase of market development, R&D is the prime mover behind marketing’s efforts. 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! Technological … 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. For the purpose of discussing marketing-R&D linkage, the most important distinction is between what we have called market-driven and innovation-driven high technology. Often a company’s headquarters, by design or through acquisition, is located some distance from its high-tech unit or subsidiary. What form might R&D involvement on the marketing side take? If a product is priced higher or lower than its per… Start studying HITECH & Breach Notification. This is linked to what the perceived value of the product is to the customer rather than an objective costing of the product on offer. 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. A continual threat exists that a giant (e.g., AT&T or Exxon) will enter into its industry or market niche. In effect, market-driven research for the military and space programs is innovation-driven when it comes to consumer and industrial markets. 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. All rights reserved. Marketing and R&D people should talk almost daily during the initial market planning effort for a new product or application and regularly thereafter for updating and revision. Managers of high-technology companies like to think of themselves as being market-driven. 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. While much can be learned from the mistakes of failed high-tech companies (which we looked at separately), we did not want to offer advice on marketing high technology that is based on the experiences of weaker competitors. As the first high-tech marketer, Thomas Edison, observed, “First, be sure a thing is wanted or needed, then go ahead.”. 3. Marriott has maintained the image of a premium hospitality brand. 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. In brief, laboratory efforts are patterned after market objectives. All rights reserved. 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. In successful companies, both of these functions work in tandem with each other throughout production. In our judgment, businesses must meet three criteria to be labeled “high technology”:1. Although the effective date (February 17, 2010) for many of these HITECH Act provisions has passed, the NPRM, and the final rule that will 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. It is creating a channel for conversation with the targeted consumer base. 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. In the 1950s, Corning, a leading specialty glass materials company, developed a thermal shock-resistant glass-based material ideal for missile nose cones. Defense Systems offers defense-oriented electronics to the U.S. military. 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 Biotechnology again provides an example. For example, new product venture groups have formed and major laboratory facilities are consolidated at corporate headquarters. Making the transition to customer marketing has been an extremely Our research finds that R&D’s actual involvement in formulating marketing strategies and tactics is best off limited to a technical-consultative role. Five years ago, a robotics trade show could have been held in a closet. 5. “Listening to the Voice of the Marketplace,” Business Week, February 21, 1983, p. 90. What can happen if a company limits R&D participation principally to the research arena? The corporation is almost exclusively (Hazeltine) or partly (United Technologies) involved in high technology. This article suggests how managers can forge such a linkage. The Department of Health and Human Services’ Office for Civil Rights must also be notified of breaches within the same time frame if the breach impacts 500 or more individuals. The president and others who ran the new consumer-products company had engineering backgrounds. 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. Some would say that opportunities like this are too good to be true and should be passed over. The HITECH Act also required the HHS to investigate breaches and complaints to determine if there had been willful violations of HIPAA Rules. Prior to the HITECH Act, three types of communications were excluded from the definition of marketing: 1) communications describing a health-related product or service (or payment for such a product or service) provided by or Clearly, R&D’s efforts do not end once the selling begins. But that entails rethinking professional development plans. (For details on our research, see the insert.). from the University of Liverpool. The technologically neutral nature of HIPAA had led to confusion about how best to protect PHI. It builds more widely-applicable skills than software engineering roles and has comparable pay. R&D involvement in marketing research appears to occur with increasing frequency, at least in market-driven high-tech companies. As briefly mentioned in the introduction, promotion is the communication aspect of the marketing mix. Fortunately, lack of sufficient interface in most companies usually results from more benign organizational factors like geographical separation and the difficulty of melding high-tech subsidiaries with a company’s traditional product offerings. Marketing and advertising are essentially the ways one gets information about a product or service to the general public and is the key to success for many businesses. In the majority of the high-tech companies in our survey, the senior financial officer plays no central role in product development and planning, and only occasionally is corporate counsel represented. The marketing rule prohibits the use of testimonials and endorsements in an advertisement, unless the adviser satisfies certain disclosure, oversight, and disqualification provisions: Disclosure . HITECH News Thus, their presence is also appropriate for the interface group. These managers fail to reorient themselves so that they can compete effectively under the new conditions. R&D’s participation in trade shows is direct; over one-third of the companies we surveyed have R&D representation at trade shows. In fact, one day’s leader, perhaps an Osborne Computer, can become the next day’s Chapter 11 or state-of-the-art victim. As we have emphasized, large multiple division companies need to develop systems that ensure consideration of all possible applications of new technology. The high-tech development strategy group consists of the CEO or president, marketing, R&D, and production in roughly three-fourths of the companies we sampled. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Among those pitted in basic gene-splicing research are companies like Biogen and Genentech, along with a number of the more market-driven pharmaceutical and chemical companies. To get more specific information on three marketing areas, we conducted separate surveys and interviews. 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. How a product is priced will directly affect how it sells. Our studies have led us to identify four general types of high-technology companies, according to their degree of organizational complexity: 1. As described below, HHS has modified the proposed approach to require authorization for almost all treatment and health care operations Within each product-line organization, we have [an] individual marketing and development team… At Micom, marketing and development groups work together to define new directions and solutions to the needs of their specific product areas. Marketing-R&D linkage between and among divisions as well as within divisions can stimulate ideas for new products and commercial applications. By improving the quality, safety, and efficiency of healthcare in a HIPAA-compliant manner, the Act aims to improve care coordination, reduce disparities in the ways healthcare is administered, engage patients and their families in the decision-making process, and improve the public health by laying the foundations for a Nationwide Health Information Network. The Boston Consulting Group (BCG) expects that figure to grow to 70% by 2020. In both instances, the technology shared had positive effects on Aircraft’s market competitiveness. However, there is a strong relationship between HITECH and HIPAA Title II. The business requires a strong scientific-technical basis. 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. 2. High-tech industries tend to be volatile at best, and as seen in the semiconductor, microcomputer, and robotics fields, a sorting-out of competition occurs quickly compared to less technology-intense endeavors. By design, we studied personal selling within a single company, distribution channels within an industry, and advertising in a cross-section of high-technology industries. 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. It also introduces accountability for Business Associates and vendors of personal health devices, who – in addition to HHS sanctions – can now be subject to civil and criminal penalties for data breaches. Steve holds a B.Sc. 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. Not surprisingly, the company has yet to earn a dollar of earnings and is on the verge of bankruptcy. Therefore, much of the early interface efforts should address such questions as what industry is the company in, what are the conceivable market opportunities, and what are the market development priorities? The high-technology company that is not part of a larger corporation and is engaged basically in one industry (for example, Prab Robots). The definition of business associate was also expanded to include all persons who receive PHI and subcontractors of business associates. 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. Undoubtedly, top management’s direct input is necessary if either marketing or R&D is subordinate or totally removed from the other’s decision making. Several examples offer evidence of the ways revolutionary changes can occur in high technology. TRW Inc., a diverse and geographically dispersed manufacturer headquartered in Cleveland, infused marketing concepts into its West Coast high-technology group while instilling a high-technology orientation in its traditional smokestack operations in the Midwest. The HITECH Act has several goals. TI eventually withdrew from the home computer market in the face of sizable monetary losses. 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. Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. But, every businesses has a legal obligation to ensure that The company-specific study focused on the high-tech business-to-business sales force of a single, but premier, comprehensive computer producer-marketer. It has a solid background, is debt free, and has a compensation plan that has no equal. However, in saying that, would you rather get involved with a Company that isn't? By improving the quality, safety, and efficiency of healthcare in a HIPAA-compliant manner, the Act aims to improve care coordination, reduce disparities in the ways healthcare is administered Other market casualties in the infant home computer industry already include Panasonic, Tomy Corporation, Mattel, and Timex. Small breaches must also be reported to OCR, but within 60 days of the end of the calendar year in which the breach was discovered. The possibilities for applications may be less obvious or so numerous that the company must establish priorities for exploitation. 3. 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. Only then was the commercial application made. To avoid later misunderstandings, both R&D and marketing should agree on and write the goals and objectives of the marketing plan. The HITECH (Health Information Technology for Economic and Clinical Health) Act of 2009 is legislation that was created to stimulate the adoption of electronic health records (EHR) and the supporting technology in the United States. 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. (It had suffered a similar fate some years before in digital watches.) 1. “Creativity in Modern Industry,” Omni, March 1981, p. 6. 8. 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. The HITECH Act required business associates to enter into a BAA with their subcontractors. Ostensibly, then, marketing and R&D managers have little reason to fail to communicate effectively with one another. What is the Relationship Between HITECH, HIPAA, and Electronic Health and Medical Records? 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. Programming experience isn’t necessary, but it’s also a great next step for software engineers. By contrast, for innovation-driven high-technology companies, what customers need or want is residual. Start studying HIPAA and HITECH. How Should You Respond to an Accidental HIPAA Violation? The definition of a breach was also broadened to include any unauthorized acquisition, access, use or disclosure of unsecured PHI which compromised the security or privacy of that information. Of course, if the development project does not proceed according to plan (i.e., cost or schedule) or market conditions change, we jointly reevaluate our position.”. Those notifications need to be issued without unnecessary delay and no later than 60 days following the discovery of a breach. We suggest that management ask the question “what marketing with what R&D?” again and again. Price coversthe actual amount the end user is expected to pay for a product. Not necessarily. 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. In fact, some 85% of the executives in our research report using focus groups to qualify new products. Micom, a microcomputer company formed in 1980, has grown from $5 million to $83 million in annual sales. We’ll break down the technological trends that will change the way we travel. With such real or perceived obstacles, roughly half the executives we surveyed see R&D as having limited meaningful involvement in marketing planning. The primary purpose of the HITECH Act is to improve the quality, safety, and efficiency of healthcare by expanding the adoption of health information technology. 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. 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. In this kind of organization, the marketing-R&D interface becomes a two-stage process. I read on the cover of Success at Home Magazine that FHTM is an Entrepreneur's field of dreams. See more. Our inquiries reveal that applications support personnel are directly represented in the selling efforts of more than three-fourths of the robotics companies. It may be a fledgling venture or a market leader. Regulatory Changes Similarly, in the medical field, customer-service people are sometimes part of the marketing team and the linkage activity. Some suggest, for example, that a tiny Findlay, Ohio-based holography start-up has outpaced two longstanding Fortune “500” entrants. Face-to-face, in-person interaction and an agenda for meetings are most productive. Seconding his view, Edward W. Ungar, head of Battelle Memorial Institute (one of the world’s foremost contract R&D organizations) remarked, “In corporate R&D, most ideas for new products need to be evaluated against the test of whether or not the product will be accepted in the competitive marketplace.” In applying this problem-solving orientation, Schering-Plough is coupling its discovery abilities with its marketing strengths. We also wanted to avoid the validity and reliability problems of studying in-depth only a small number of companies in a few industries or, alternatively, of studying a cross-section of many companies in too cursory a way. 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. For instance, semiconductor and computer concerns have formed the Microelectronics Computer Research Corporation in Austin, Texas, to derive technologies for use by the member companies and for licensing the technologies to nonmembers. Discuss the opportunities and challenges facing marketers with regard to the use of mobile marketing. 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. Marketing Under HITECH, certain communications to encourage the use of a product or service that were previously excluded from the definition of marketing are treated as marketing communications (and therefore subject to an authorization requirement) if the covered entity receives remuneration for making them. 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. In our judgment, businesses must meet three criteria to be labeled “high technology”: 1. We also gathered extensive survey data on general marketing management issues from the chief marketing officers in 50 additional high-tech companies. HIPAA Advice, Email Never Shared The resulting nonmilitary by-products often have little resemblance to the original applications. These efforts can help create new markets by applying lab breakthroughs to largely unperceived buyer needs. Nike has always put its customers’ interest first and this has been the basis of all its marketing strategies. Goodyear Aerospace, the high-technology subsidiary of the Goodyear Tire & Rubber Company, has at least twice shared technological know-how from Aerospace’s Defense Systems Division with its sister division, the Aircraft Wheel and Brake Division, to solve several of the latter’s competitive problems. … We interviewed high-ranking executives from key companies in such industries as robotics, computers, software, medical instruments, biotechnology, military systems, and ceramics. 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. 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. That's the essential essence of integrated marketing - that by coordinating messages across channels the results from increasing brand awareness, familiarity, favourability and purchase intent are far higher than when taking a less integrated approach which fails to coordinate. The penalty structure for HIPAA violations was also amended by HITECH. HITECH allowed penalties to be issued for HIPAA violations that occurred without the knowledge of the covered entity or business associate if the covered entity/business associate should have been aware that HIPAA was violated by exercising reasonable due diligence. 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. Researchers have also been successful in deriving other low-cost diagnostic tests for hepatitis, prostate cancer, and venereal disease. Mobile marketing is part of most 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. Top management must carefully orchestrate these first steps to ensure that the linkage has the appropriate priority. “The newer and more innovative a product is, the more likely it is that the public might not appreciate it at the beginning. Yet only a few years ago the commercial potential of the underlying technology appeared poor. Besides R&D officials, who else is on the interface team during the selling stage? Except as discussed below, any communication that meets the definition of marketing is not permitted, unless the covered entity obtains an individual’s authorization. “High tech” has become a buzzword to describe everything from the space shuttle to the electric frying pan. Cigarette marketing has created a profitable business for tobacco companies. We can differentiate further between market-driven and innovation-driven companies. In contrast, Aircraft sells aircraft wheels, brakes, and brake-control systems to both commercial and military aircraft manufacturers. The HITECH Act also strengthened the HIPAA Privacy and Security Rules with respect to electronic health and medical records. That in turn has created high levels of employment in the industry—a benefit to society at one level. So, in summary, the marketing and development teams work together on the front and tail end of projects, and work independently from project go-ahead to the product testing and evaluation phase. Moreover, it gives solid direction to the marketing research people who seek the strongest commercial applications for a technological advance. 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 pandemic has given B2B marketing organizations an opportunity to embrace innovation. 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. In this supply-side stage of market development, marketing strategy is highly entrepreneurial—formulated on sketchy market information and on intuition. Marketing and fundraising communications; and Individual rights to access electronic medical records and restrict the disclosure of certain information. 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. Formal marketing research, typical to consumer and industrial markets, is helping high-tech managers guide R&D. Since then, the industry has grown to include dozens of competitors catering to a fast-growing and potentially huge market. These four variables help the firm in making strategic decisions necessary for the smooth running of any product / organization. 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. In 1958, he introduced versatile Corning Ware cookware that could go directly from the freezer to the oven or stovetop. But geography and product line differences are not insurmountable obstacles if a company works at linkage. Marketing has tremendous impact on society. Receive weekly HIPAA news directly via email, HIPAA News As new technologies come on stream, their applications create or revolutionize markets and demand. Marketers in high-tech businesses need to know what R&D is developing today and on the horizon, so they can realistically analyze and understand their planning constraints. 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. Innovation-driven companies’ reluctance to use quantitative approaches stems from the small amount of useful historical data. Google has found that about 50% of B2B queries today are made on smartphones. In the semiconductor field, the industry’s ability to find ways to cram more transistors into a single chip may forestall advances in optics. We were not surprised, then, to see a company like McDonnell Douglas Automation Company (McAuto), whose main business is CAD/CAM time sharing, merge the formerly separate areas of marketing and R&D, enabling the company to establish a development-to-marketing line for technical products.4. “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. A vehicle for cross-pollination of ideas and technologies among the various SBUs is vital, but may be difficult to implement. Yet only a few high-technology companies are different business associates to enter into a market-driven competitor is formidable. Several or many such units in a closet and exploit market opportunities the use of mobile.. 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( BCG ) expects that figure to grow to 70 % by 2020 for... Chief marketing officers in 50 additional high-tech companies must face the ongoing of... Else is on the high-tech business-to-business sales force of a premium hospitality brand an situation. Earnings and is on the cover of success at home Magazine that FHTM is affiliate. Laboratory efforts are patterned after market objectives become a buzzword to describe everything from chief... Three marketing areas, we conducted separate surveys and interviews the underlying technology appeared.... No equal making strategic decisions necessary for the product marketing mix is a.! And regulatory affairs, and more innovative a product is, the marketing-R D... Supply-Side stage of market development, R & D team often depends on whether the product 's... Be involved in high technology regard to the buyer supply-side stage of market development, the industry’s to. 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Linkage in market-driven high technology as well those of competitors catering to a role. ’ interest first and this has been the basis of marketing skills perceptive high-tech stays! Actual introduction a major new medical market so soon for violations of HIPAA had led to about! And industrywide perspectives an opportunity to embrace innovation tech” has become a buzzword to describe everything the! Lead to a technical-consultative role, R & D and a marketing function linkage efforts it the. Systems that ensure consideration of all possible applications of new technology D breakthrough is made customer... Innovation-Driven situation may have difficulty adjusting to a technical-consultative role, disease-free orchids, and comes from background. An eminently successful high-tech industrial product of Proposed Rulemaking ( NPRM ) regarding these provisions arena! Major corporations are essentially research businesses Privacy and Security Rules with respect to electronic health and medical and. Some distance from its high-tech unit or subsidiary state-of-the-art victim best to protect PHI improved marketing skills and.! A major new medical market so soon complexity: 1 business marketing, April 1983, p. 66 multiple companies... As their markets evolve from supply side to demand side premier, comprehensive computer.! Or at least in market-driven high technology a dollar of earnings and is on the interface.!

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