The Use of Market Information to Determine and Establish Product Values
The Cheshire cat said to Alice, “if you don’t know where you are going any road will get you there – and when you get there, there’s no there, there” – Lewis Carroll, Alice in Wonderland
The Cheshire cat could have been talking to some embedded vendors.
Historically, new and more forceful markets that redefine economic demand replace markets that create economic downturns. Today we are at a transition point in our economic recovery that will redefine markets, and we are currently witnessing an irrevocable upheaval in the marketplace for software design and development tools, components and services. There will be winners and losers. How then does an embedded vendor mitigate against uncertainty and find direction? We believe that market intelligence is the antidote to market uncertainty.
Let me suggest from the get-go that the true value of market intelligence is to assist companies in recognizing emerging (and disruptive) markets as they begin to crystallize. I hope that the following will make my case and affect your thinking. Whether you are a developer, a manager or a company executive, the survival and growth of your company is a priority. It is sometimes difficult for those of us trained in science to relate to non-deterministic market dynamics – yet, like it or not, we live in a market driven world – not a technology driven one.
Competitive markets are defined and exploited by matching product features to customer requirements. What is seldom recognized is that when competitive products exceed what the market demands, customers can no longer base their choice on which is the higher performing product.
This is when disruptive technologies take root, only to emerge later when they completely change the product landscape. Remember Hayes modems? Remember DEC/Compaq/HP? Remember Motorola Computer Group? It happens to small companies all the time – we just don’t read about their demise. They all read a lot of self-serving market research (which validated their view of the industry – not the realities) yet they are all gone now.
I am shocked more than amused when vendors wishing for me to write favorably about what their product can do fail to answer my question of “what do your customers think they actually need?” I am usually told that “once they see how cool our product is they will change their minds” or “we ran this past a couple of our customers”. Many, many moons ago in a universe far away (that’s 1969 for you young-ins) I built several medical companies and I ran clinical research and marketing. Every time a physician told me what he/she wanted I asked for a PO. We got really good feedback that way.
I was recently at a breakfast which included very senior industry representatives and industry analysts. I was given the opportunity to set the initial discussion and I spoke to the challenges that major reductions in DoD discretionary funding would create within the mil/aero marketplace. I was politely ignored while others gushed about the exciting future for their industry -offering glowing growth estimates as high as 20%.
As I was leaving a kind gentleman approached me and said “Jerry, you won’t sell any of your research if you continue to be so negative”. I was very taken back by the remark which he intended as a helpful hint. The role of market intelligence is a two way street. The supplier and the user have to have the same goals and define the appropriate questions that need to be answered.
This brings me to the point of this discussion. The real question that market intelligence needs to answer is how can vendors of embedded products minimize risk while enhancing their prospects? And how does solid market information support this?
The full analysis can be found in the Embedded Market Intelligence blog article.