Rich, (et al,) let me explain marketing from a software developer's
perspective. I've fallen off this horse a few times myself... despite the
fantastic products many of our customers really did say were "better than
sliced bread! And then some!" Heaving Loam (or loans,) on good
development without marketing is suicide.
> > How is that unethical? It apparently does sell products, or vendor
> > shows would have faded away years ago. Companies that don't pass all
> > of their costs along to their customers are called "hobbies."
>
> It is unethical, IMHO, to attempt to bullshit people into buy your products,
> and then to hit them *again* by charging them for the cost of doing so.
> (I view this as a different issue from charging people for the cost
> of developing a product, QC'ing it, updating it, and so on.)
Well, if you don't spend money marketing a product, you will not have
anything to pay for developing the product. Marketing is often far more
expensive, and harder to do, than development. (It isn't that it is more
expensive in and of itself, it is that money is cheaper than brains, and
far more reliable, especially more reliable than creative genius.) Why is
money so important?
> As a consumer, I am outraged that companies waste money on dancing girls
> and stupid giveaways and all the other nonsense that happens at shows
> like Comdex instead of spending the money on improving their products.
FIRST, you have to get a potential dealer/wholesaler/customer's
attention. Even if you have a product that is better than sliced bread, as
we did with the first browser, if you don't get their attention, you don't
get to square one! Zip! Dead! Kaput! Finished!
Second, you have to show your features in simple comprehensible
sloganizable ways. What, connect computers? View files? Connect files?
Link files? "Presentation Manager?" "Hypertext??" "Ergonomics of
memory"??? What are you talking about??? Files is files. You use a word
processor to use files, you don't link them or browse them.
Incomprehensible product! Next!
Third, you have to get them to try it. The few who did, raved about
what we had! Yes, "better than sliced bread"! But Few. Very, Very Few!
And at $49.95, half of those who bought, never opened it... (We did a
market survey. They didn't understand it from the packaging... and must
have forgotten what we showed them at the show. More bought at $89.95 and
more of them opened it... they thought it was worth something because it
cost a significant chunk of money.)
Fourth, AND MOST IMPORTANT, you have to show retailers that they can
make a ton of money selling the stuff. What, $49.95? "That is not enough
profit to even bother stocking your product! Get out of my store!" "Sell
it for $2500, give the salesman a $200 spiff, and we will gladly carry
it." "What, make the computer so easy to use?? You are destroying my
training business GET OUT OF MY STORE NOW OR I WILL THROW YOU OUT!!! GET
*** OUT!!!"
(Note: I was too stupid to up the price... imbecile that I was!
This retailer would have loved me!)
Whether something makes it in the retail trades has little to do with
what it does for the end user. Yes, it has to help the end user. But
LONG before it gets to do that, it has to pay for the retailer, the
wholesaler, and the corporation. If it does not make it through the gate,
it won't reach the end user. PERIOD!!!
(I mean, Netscape and Mozilla had to be given away... They were
concepts that just didn't seem to sell very well. But they sold other
things... CREATING a market that directly and indirectly DID profit the
entire computer industry.)
(Freeware is the only thing that is reaching, and that is because the
web IS cutting the retailer and wholesaler out of the picture in SOME
cases. Not enough cases to attract solid venture capital unless you have
an absolutely dynamite product with a high enough retail price tag.)
(Red Hat Linux, you say? Ahem... Intel wants to sell chips. They
don't care what the software costs, as long as people have it. Their view
is "it sells chips", so it is a marketing investment that chip sales will
pay for, not Red Hat. As to what Red Hat is Really selling, is
convenience, not Linux. And that convenience IS worth A LOT!)
One of the other things the shows do, is to show retailers and
wholesalers how much financial resources and marketing resources a company
has. And maybe how much sense it has, too. Some over-spend vs retail
profitability. What does that have to do with it? Everything! We picked
the losers in some of the early trade shows a year or two before they hit
the dust. They over-spent. We could see it. And we could ALSO see those
who under-spent. Many of them died too! It is a ratio thing, not a
numbers thing.
Retail/Wholesale Inventory costs money to acquire. If you invest in
inventory, as you have to in the trade, that inventory has to produce a
good return on your investment. You will participate, read Invest, in
promoting that product at your market level.
If that new company does not look like they have the resources to
stay in business for a couple of years, they are a bad bet to to stock on
the retail shelves and the wholesale shelves. Why? Product returns! If
you can't return what does not sell, you are out on a limb. Lots of
product returns!!! While the channel fills, it produces a false flow into
an empty pipe. When it hits the end, you get the retail equivalent of
Water Hammer. It has killed a lot of companies in many trades!
Some guys did a study on it for a Ph.D. in economics. The study even
made "Science News" some years ago, when they won some kind of renowned
economics prize for the study! By analyzing a number of failed businesses,
wholesalers, etc., they showed that "Inventory Hammer" is the number one
killer of small companies with good products in any field! New product
seems to move like wildfire, so every retailer and wholesaler stocks up on
anticipation and initial sales. When sales slow before the second surge,
most of the product is returned. If the company lasts through that... the
consumer demand continues to grow at a slower pace.
So do you bet your cash on ABC corp, or MS? You know MS will be
there. You know MS has a steady demand, and will take returns. And if ABC
and MS are reaching the same market, you know ABC won't be there. Thus,
you conclude that investing in some ABC inventory is not a wise choice. As
a wholesaler or retailer you will make more money with MS products in that
spot.
And let us face it, retail and wholesale are businesses of trying to
squeeze as much money as possible out of every square foot of floor space.
It does not matter if the product is memory chips, or product boxes; at
the end of the week and the end of the month, you look at Return on
Investment, how much money you get back for every dollar you put in.
Because if you don't get back enough to pay your rent, electricity,
staffing, etc., you are out of business!
Look at it from their point of view. You ask:
What will get me the most dollars per dollar invested?
What will get me the most dollars per square foot of space?
What will bring more customers who will buy more other things?
For those, satisfaction of customer needs is only PART of the
equation.
> Happily, the OSS movement bypasses all of this, and I hope that it will
> continue to do so. It's my fond wish that many of the companies who
> have lavished attention on their presentation instead of their products
> will be blown out of the water by competing OSS, will fail miserably,
> and leave the world a better place by ceasing to exist.
OSS will only work in some areas -- areas where a bunch of techy
geeks (like me) get together and toss up new ideas, working for the sheer
joy of it! I love that kind of stuff!!! But... I can only do that when I
have other sources of income, like a day job.
So these days, my first questions when I run across one of those, is
"What kind of marketing plan do you have?" "How much experience does
your marketing team have in selling stuff vaguely like this?" I don't
care if I am joining as a consultant, employee, or co-conspirator.
All the guys and girls on the team, be they in development,
marketing, or dancing, have to eat. If they can't eat, they can't do the
stuff they need to do to bring you that new tomorrow you want.
(And some of them even have kids reaching college age... I wasn't
that lucky. My 1982-1986 hypertext browser fling kind of killed off all
my potential kids, home, and normal life... Marketing! Don't heave loam
without it!)
(Now, if you are trying to fertilize and market web pages... see my
keyword site. http://www.mall-net.com/se_report/ )
- [EMAIL PROTECTED] -----------------------------
-------- MS asks "Where do you want to go?" -------
------- Linux asks "What do you want to do?" ------
-- It is doers, not goers, who built this world! --
--------- Member: http://www.svlug.org/ -----------
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