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Content:
Starting point________________________p. 1 Industrial property rights as product, customer Objectives of the Study and Research Topic, value and solution____________________p. 9 Research data and method, Benefits of the Industrial property valuation models and tools Study______________________________ p. 2 as pricing, consumer cost and value_____p. 11 The Marketing Mix mode______________ p. 3 Marketing strategy based on Marketing Mix Model_____________________________p. 4 Submission of 4Ps by 4Cs in Marketing Mix Model for creative products____________p. 5 SIVA Marketing Model as specific Markeing Mix Model for industrial property rights__p. 8 Access to industrial property rights as convenience (Place in 4Ps)___________p. 12 Information about industrial property right as promotion and communication_________p. 13 Conclusion________________________ p. 14 References_________________________p. 16
Starting point The Marketing Mix model (also known as the 4 Ps) can be used by marketers as a tool to assist in implementing the Marketing strategy. Marketing managers use this method to attempt to generate the optimal response in the target market by blending 4 variables in an optimal way. It is important to understand that the Marketing Mix principles are controllable variables. The Marketing Mix can be adjusted on a frequent basis to meet the changing needs of the target group and the other dynamics of the Marketing environment. 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
2 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 4Ps (Product, Price, Place, Promotion). Among other things, the lifecycles characteristics of the product, innovation and technology were taken as fundamentals for conclusions. Objectives of the Study and Research Topic The objective of this research is to investigate the role of Marketing Mix of industrial property as tool of innovation policy. The study belongs mainly to the field of economics of intellectual property and innovative marketing. The objective is to examine characteristics of industrial property as product in Marketing Mix and its pricing, placement and promotion specifics. The research problem is as follows: What are the role and main aim of marketing manager in industrial property marketing under modern conditions? The researcher problem will be solved by answering the following research questions: 1. Marketing Mix evolution (analysis): 4 Ps (product, price, place, promotion); 4 Cs (customer value, consumer cost, convenience, communication); SIVA model (solution, value, access, information). Industrial property rights as product, customer value and solution; Industrial property rights valuation methods as price, consumer cost and value; Access to industrial property rights as convenience (Place in 4Ps); Information about industrial property right as promotion and communication.
3. The role and main aim of marketing manager in lifecycle of industrial property rights. Research data and method This research is based on official and unofficial issues of European Commission (incl. statistical data) and the World Intellectual Property Organisation. The main methods of research are analysing Marketing Mix Model and its synthesis with industrial property rights. Benefits of the Study The aim of this study is to offer new knowledge which can be used in the development of the Marketing Mix Model Theory and generating new business ideas in industrial property marketing. This knowledge may also be useful for managers in innovation marketing activities. The results of the research can be applied in any country of the World but the national legislation should be taken in account.
Price
Place
Available at the right place, at the right time, in the right Locations, quantities? Some of the revolutions in business have come about logistics, channel by changing Place. Think of the internet and mobile telephones. members, channel motivation, market coverage, service levels, internet, mobile Advertising, public relations, message, direct sales, sales, media, budget
Promotion (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 Ps have lost much of three meaning in todays markets, promotion has become the most important P to focus on.
There have been many attempts to increase the number of Ps from 4 to 5Ps in the MM model. The most frequently mentioned one being People or Personnel. Booms and Bitner have suggested a 7-Ps approach for services-oriented companies [1].
Source: Marketing, Concepts and Strategies. Dibb, Simkin, Pride and Ferrell, 4th ed. Houghton Mifflin, 2001, p. 656.
Ross, Goran, Stephen Pike & Lina Ferstrom (2005), Managing Intellectual Capital in Practice, London: Elsevier
6 versions or windows products or consider new distribution channels, such as performances in neighborhood. When the growth rate slows, often to the point where managers are working harder just to maintain past years customers level, the organization has entered the stage of maturity. It can try to expand its number of users by converting nonusers, by encouraging more frequent use among current users, and by increasing the amount of use per occasion. The organization can also stimulate demand by modifying the product. This can take the form of quality improvement, usually by investing more heavily in production values, or feature improvement, such as offering. The marketers should also consider what modifications should be made to non-product elements to stimulate demand. Could new appeal be built with new branding and positioning strategies? A difference between life cycle in our domain and mainstream life cycle is that usually creative products do not know phases of decline but of disappearance that can be very fast after maturity. But sometimes they re-appear some time after, usually in a new marketing perspective. - Consumer cost more than Price [3, p. 14] Creative companies marketers need to consider the costs incurred not only by the organization presenting a production but also by the consumers using the product or service. It is difficult for creative organizations to clearly identify productivity gains, moreover productivity gains experienced by the rest of economy. Since the early twenty, century, increases in efficiency in our technology-oriented, for-profit economies have been continuous and cumulative. But the references are totally different for many creative industries since they are in advance on this reference. Furthermore, many of these companies have to incur substantial expenses for financing sunk and fixed costs that must be met without knowing the number of consumers. This calls for pricing strategies starting from the possibilities of the various consumers segments rather than on the organization costs. Organizations depend on contributed income to come for the difference between the companys expenses and' its income, yet garnering adequate subsidies is a perpetual struggle. In such a perspective, they have to consider the costs supported by the consumers and not only the cost of the product. They must consider value for time as much as value for money. They must take into consideration that customers have very different perceptions of value for money and then adapt their pricing policy.
7 Since the success of creative products is submitted to bandwagon and network effects, they have the choice between two objectives that have to be sequenced within time: maximizing the number of customers; maximizing the income. These objectives are not mutually exclusive and marketers have to meet these two goals either simultaneously or successively. - Convenience more than Place [3, p. 14] In the digital area, place has taken a very flexible content. For example information and distribution take forms independent of specific places. But the main point here is the fact that the time of consumption has to use the digital perspective. Many companies still are opposed to too much flexibility here, fearing processes such as illegal downloading and copying. But they have to take into consideration these new perspectives. - Communication more than promotion [3, p. 14] Communication is perception. The recipient message, not the sender, is central to communication. The transmitter can only make it possible for a recipient, or percipient, to perceive. Moreover, perception is based on experience, not on logic, so one can perceive only what one is capable of perceiving. Therefore, in order to make communication possible, a creative company must first know the recipient's language and experience, knowing that this latter responds best to communications that fit in with its aspirations, values, and motivations. If the message does not correspond with these qualities it is likely not to be received at all or, at best, likely to be resisted. Marketing is a matter of influencing behavior - either behavior or preventing it from changing. In order to influence behavior it is crucial to understand where the customer is coming from. If a message is not designed to address target interests, needs, and mind-set, it will not be effective. Once the marketer has developed an understanding of targeted market he may develop messages and use media that inform, and educate people in compelling ways. All advertising, public relations efforts, personal selling, and sales promotion tactics are intended to persuade. Unfortunately, much marketing copy is filled with hype, exaggerating consumer expectations or causing people to be skeptical of the claims. Here, a major source of dissatisfaction is not inferior quality but exaggerated expectations. Disappointment can be avoided if the organization uses only but realistic methods of persuasion [3, p. 15]. Like all other enterprises, creative enterprises must produce an economic value. It enables them to cover their production costs, make investments for the future and remunerate their shareholders. It also brings out the interdependence between potential needs and actual supply.
8 To produce this economic value, enterprises have to organize their resources, suppliers, distributors and consumers in a coherent manner. In this contribution, we analyze the environment and the foundations for answering these challenges. We start by looking at the specificity of the so-called creative enterprises vis--vis mainstream enterprises. Then we identify three main logics for creating value and show that creative enterprises have specific challenges to solve (1). Then we analyze the specific drivers for creating these values (2). Various business models can be considered then, and the versioning model will be considered more in detail (3) [3, p. 15].
SIVA Marketing Model as specific MMix Model for industrial property rights.
The SIVA Model provides a demand/customer centric version alternative to the well-known 4Ps supply side model (product, price, place, promotion) of marketing management. The four elements of the SIVA model are [4]: - Solution: How appropriate is the solution to the customers problem/need - Information: Does the customer know about the solution, and if so how, who from, do they know enough to let them make a buying decision - Value: Does the customer know the value of the transaction, what it will cost, what are the benefits, what might they have to sacrifice, what will be there reward? - Access: Where can the customer find the solution? How easily/locally/remotely can they buy it and take delivery. Table 2. Siva Marketing Model [4]
9 This model was proposed by Chekitan Dev and Don Schultz in the Marketing Management Journal of the American Marketing Association, and presented by them in Market Leader - the journal of the Marketing Society in the UK [4]. Due to industrial property rights characteristics SIVE Marketing Model is the most convenient variant of Marketing Mix Models for industrial property rights marketing strategy planning. Table 3. Industrial property Marketing Mix Model PRODUCT PRICE PLACE PROMOTION
Customer value
SOLUTION IP rights for invention, utility model, design, trademark
Consumer cost
VALUE International, European and national valuation standards
Convenience
ACCESS National patent offices data bases: information about IP rights existing
Communication
INFORMATION Firms communication policy
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
10 date of filing of the application. The patent will lapse if the renewal fee or any additional fee has not been paid on time [5]. European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step [6, Art. 52]. An invention shall be considered to be new if it does not form part of the state of the art [6, 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 [6, 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 [6, Art. 57]. The European Patent Convention guarantees rights of utility models and utility certificates and applications for utility models and utility certificates registered or deposited in the Contracting States whose laws make provision for such models or certificates [6, Art. 140]. Trademark rights as product, customer value and solution A Community trade mark 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 trade mark 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 [7]. 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"; As a "registered Community design", if it is registered with the OHIM.
11 The characteristic feature of the protection granted to an unregistered Community design is that it is short-term: it 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 (the product was put on sale through marketing or prior publication measures). This form of protection may be useful in sectors which produce large quantities of designs intended for products which frequently have a short economic life. The provisions of the Regulation will thus allow them to qualify for a certain level of protection without having to go through a longer procedure. In the case of the registered Community design, the protection is 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 [8].
Industrial property valuation models and tools as pricing, consumer cost and value
As a manager, a chief executive officer, a research director, an accountant, an investor, a corporate finance professional, an academic or a student, you probably need to be aware of the value of IPR within your activity. There are a few of scopes involved in IPR valuation: Marketing of IPR Stating the possibility to independently sell IPR owned by firms, an IP valuation could provide the right information needed for a successful exploitation of intangible assets. The sale or the purchase of IPR could thus represent an important resource for the firm in order to obtain financial support or to allow further research activities. Licensing In order to make an agreement to license IPR, a business must know as accurately as possible the real value of the IPR concerned. An accurate IP valuation allows licensor and licensee to estimate the financial terms of their licensing agreement addressing the specific needs of both parties [9, p. 1]. IP valuating is a complex procedure taking into account economic, technology-related as well as juridical factors. The heterogeneity of the factors concerned and the specific purposes addressed in every valuation do not allow adopting one generally-accepted standardised IP valuation model, but there is a variety of different models and tools comprising different approaches. Moreover, it is important to consider that the elements which should be included in valuation mostly depend on the specific IPR involved. In that respect, we are to explain the most commonly used methods in order to provide users with a general overview on that issue [9, p. 2]. a) The market based method It is devoted to asses IPR market value by reference to comparable market transactions. The method basically consists of assessing prices and/or profits achieved by third parties in
12 comparable market transactions, such as mergers and acquisitions as far as the IPR assets are concerned, IPR sales or the grant of IPR-related licenses. An itemisation of such model is the relief-from royalty method that takes into account only previous licensing royalties prices determining the value of related IPR. 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. The disadvantage of this method is that, not considering IPR market indicators, it does not allow to establish a fair relationship between IPR costs and related IPR real market value. 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 concerned1. 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. Like tangible assets, IPR can be used, sold, or otherwise commercialised in the market depending on the firms strategy, and frequently represent the crucial element for drafting business plans, building up IP portfolios, negotiating technology transfer agreements, managing business partnerships, setting up start-ups or spin-offs, or for receiving or granting financial investment [9, p. 2]. IP valuation consists of an interdisciplinary work drawing upon the understanding of technology, law, economics, finance, accounting, and investment. IPR nature, operating context as well as the high number of elements concerned, make it difficult to create a unified method for assessing the value of IPR, however different models are currently used by professionals and academics which allow a successful strategic management and commercialisation of IPR [9, p. 2].
Within this method according to the discounted cash flow analysis potential future profits and thus expected cash flows are discounted by a discount rate to their actual current value. The projection of market revenues such as future licensing profits as well as any avoided payments for licensing-in a technology from third parties is a critical step in the valuation [9, p. 3].
13 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. The license agreement that covers the merchandising activity should include at least the following [10]:
a detailed description of the specific IP rights and other elements which the licensee is the specific types of products/services the licensed IP rights will be used for, and the
authorized to merchandise;
information on whether the agreement extends to the manufacture and/or distribution and sale of those products and to the corresponding packaging and advertising materials;
the countries in which the products or services will be sold or provided; the indication of the period during which the agreement applies, and the information on
whether the agreement can be prolonged after that period or, on the contrary, terminated before that period under certain conditions (such as failure to manufacture and/or distribute, defaults in payments and, in general, any breach of the conditions of the agreement), including the consequences of such early termination;
a requirement for the licensee to keep the licensor informed of any third party an indemnification clause which states that the licensee will protect the licensor from any the financial terms (advance payment against future royalties, royalty percentage, basis of the indication that the license is exclusive or non-exclusive; the indication whether or not the licensee may grant sub-licenses; the indication that the licensee should obtain the licensors prior approval with respect to Register the license agreement, if needed. Many countries require that a license be
the manner in which the IP is used on or in connection with the products or services.
14 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. High-performance communication networks such as GANT and its global extensions, distributed (Grid) computing, web-based data resources and virtual presence tools enable and accelerate the construction of collaborative communities of researchers. e-Infrastructures are both catalysts for scientific cooperation and act as integrating mechanisms, effectively providing what can be regarded as the glue between the different scientific disciplines [11, p. 24]: - Many research efforts require massive computing resources to tackle, for example, the environmental rand challenge on global warming or research in the biosciences and bioinformatics, both of which must integrate research efforts across scientific disciplines - Modern research is impossible without permanent access to high-quality e-infrastructure: computers, networks, on-line library resources, research data, the software tools to support collaborative research (known as middleware) and to find and access data, and applications to process and present research activity. - Good access to and management of scientific data is a growing requirement. More and more data is created in digital format only and can be saved for future shared use. Eventually there will be a layer of scholarly and academic information resources, readily available to the research and education community (and much of it to the public at large). This will enable and facilitate crossborder, crossinstitution and cross-discipline access to other researchers data. The e-Infrastructures are to a large extent financed by the Member States, and connected and interlinked together through powerful global networks that, together with computing and simulation facilities, enable and promote the use of virtual models to simulate, visualise and solve complex research problems. The European Commission support is essential for sustaining the advances in high-performance networking and computing, tools and applications to develop international research communities, and the management and creation of research information resources [11, p. 24].
CONCLUSIONS
Industrial property Marketing Mix Model consists of 4Ps: 1) Product: exclusive rights for industrial property (patents, designs, trademarks); 2) Price: valuation models and tools;
15 3) Place: abilities for license relationship; 4) Promotion: spreading information methods. The main aims of marketing manager in lifecycle of industrial property rights are the following: Making a correct choice of countries where industrial property should be protected; Marketing researches on technologies, innovations, intellectual property, goods markets; Internal industrial property valuation; Searching methods of patents, technologies, innovations. Preserve control over the commercial use of firms intellectual property rights.
According to characteristics of industrial property Marketing Mix Model lets analyze the marketing manager role in industrial property lifecycle. Except trademarks, industrial property rights are not renewable. 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. Thats 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 as on figure 1. Figure 1. Technology, industrial property and product lifecycles [12]
Innovative technology based on a novel invention protected as industrial property rights is shown on Figure 1 as value curves. Till the moment of first sales transaction of innovative product the values of technology and industrial property rights usually are valuated by the cost-based
16 method. After first innovative product units selling we can start evaluate technology and IP rights value by the profit based method. With each month of product lifecycle industrial property rights value will exceed and gain its maximum sum just right before active growth period starting. This period is the most successful for license selling (shown by the letter T). But this period is not so long because of new competitors patents appearing which make innovative technology better as whole. Thats why the main role of marketing manager is to predict the moment of competitors inventions appearing and to sell during the most suitable period the most expensive licenses. This money is the capital for new R&D. From the other hand in the Community Innovation Survey 2004 (CIS 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 enterprises overall innovation strategy [13, p. 147].
References:
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