Direct Competition

Through the revenue it received from every DOS and Windows operating system sold, Microsoft has been able to fund other software development in a way everyone else can only dream of (wonderful for Microsoft, but death to competition).

Very few competitors could begin to compete on price, let alone quality. Yet many program writers thought they could emulate Microsoft's marketing. Some of them developed fine programs, but on a scale set by Microsoft, could they sell them at a profit? Sadly, no. In the end, they could only sell their companies to other greenhorns who thought themselves smarter.

With the eclipse of the 21st century, this era is coming to a close. Software and software companies are growing up. So don't compare your product with Microsoft unless you are really in their league. Don't be pressured to price your goods to align cost-wise with theirs. Think about your own situation, what you are offering, and what your customers should be paying for your product. Price your product accordingly. Then figure out how to sell it at that price. Otherwise, it's back to the drawing board.

On the other hand, if you are entering a market sector where customers think your competitors are pricing their software realistically, you have got to be able to put your product on a shelf alongside them.

Directly competitive prices need to be judged with precision, quantified very carefully. Whose features are the telling ones? Whose company is better known? Whose brand is strongest? Whose reputation stands higher? People always pay a premium for features they deem to be plusses.

Don't be tempted to copy earlier entrants slavishly. No developer becomes a market leader by following in a competitor's footsteps.

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