Consider a product X from your rival company. A similar product from your company is named Y. The market shares of the products are as follows: X:90% & Y:10%. Clearly, product X enjoys more market share because it is the better of the two.
You want more market share for your product and so you start a marketing campaign consisting of advertisements in the mass media. Whenever a citizen views one of your ads, he becomes interested in the product. If he really needs the product, he will do a little more research and he finds out about the best product in the category: Product X.
He becomes a customer of your rival company. In essence, you advertise for your competitors.
What is the solution for this problem? Build a better product than the competition. Otherwise you are wasting a big percentage of your marketing budget.
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Matt Hanson
[...] Read the article at Diovo: The Advertiser’s Dilemma [...]
Thanks Matt.
Looks like you are posting the same comment to many other blogs. Some may call you a spammer (especially akismet). Anyway, thanks for coming by.
I think it’s important to note that there are various forms of advertising. Brining knowledge about an industry, about a type of solution, “brand” awareness, about other options in the industry, etc, etc.
It is hardly true that the companies with the most advertising are the most technically brilliant.
And although some people will see a product offered then analyse the competitors, it is hardly true in most indutries [maybe in software it sometimes is].
For example when purchasing bottled water it is mostly about “trust” and “convenience”.
In software it definitely comes down to trust, where trust is “brand trust” not exactly product trust.
I think in software it is important to not only have a well-written reliable product, but have a team behind it that is constantly active, and an ‘active’ presence in the market. I.e. if you drop away, then you are likely to be less trusted, as people forget about you, and no matter how good your work is; it will only be used by those technical enough to know about it.
Silky,
I like your take on it.