Unfortunately, the logic breaks down when several companies play the game at once. Prices spiral downward more quickly than expected, and profits follow downward. Makers of semiconductor memories have fought this type of pricing battle several times -to no one`s advantage.
Positioning based on specsmanship has similar problems. Companies tha position their products as the “fastest” or the “most powerful” often run into trouble. Technological leads are usually short-lived. Research labs develop new technologies every day, and new startups rush to commercialize them. Products move from “leading edge” to “obsolete” more quickly than ever before. As a result, companies that live by specsmanship often die by specsmanship.
There is another problem: Companies that use specsmanship as a positioning lever often ignore the market environtment. They see product positioning as an analytic process of product comparisons. They make huge charts showing that product A can store fifty more kilobytes than product B. Or perhaps product A can perform certain tasks five nanoseconds faster than product B. These comparisons have some value. But they are only the beginning of the positioning process, not the end.
In fact, most customers are not that interested in narrow technical differences between products. Very few people buying personal computers understand the technical differences between one machine and the other 150 on the market. Moreover, they really don`t care. Rather, customers are much more influenced by intangible factors. Intangible factors include things such as technological leadership and product quality, service and support. It`s not easy for a company to position a product in terms of intangible factors. The company must build a certain aura around the product. But if it succeeds, it can attract customers and charge premium prices.
Tags: customer, intangible, positioning, products, specsmans