Why do companies announce before ready?

C

combatentropy

Veteran
This post is about two distinct practices:

1. Announcing a product before it's for sale. "A new camera! (Shipping this fall.)"

2. Announcing an announcement. "In one week, we will announce a new camera! (Shipping this fall.)"

Why?

There is no question that it gets my attention. But so would the announcement of the camera when it's ready.

There are only two reasons I can think of.

1. It will build more excitement than if they had just announced it when it was ready --- sort of like playing rubber band with my feelings. That metaphor makes clear the discomfort such practices cause. The thing is, I still don't see the advantage for the company. I have a hard time believing I would pull the trigger on a multi-thousand-dollar purchase just because some pre-announcement announcement got me all amped up. I'm still going to let it settle down for a moment, compare it to the other cameras out, and probably buy the same camera I would have otherwise.

2. To make me wait, in case I was just about to buy a competitor. This makes more sense, but only for announcements months in advance. It doesn't explain announcements just a week or so in advance, like Red often does.

But such practices seem to carry more disadvantage than advantage.

1. Backlash. The camera often disappoints. The less information that you give, and the more time that you give, the higher the imagination goes, as we've all seen on many a thread.

2. Distrust. Although it's hard to fight the excitement, we know that we're being manipulated. If we think that we're not getting treated with respect, a relationship withers.
 
They are just fighting for you money every possible way and yes its getting stupid and ridiculous especialy when they promise they will never ever tease againg and than they cant help themself and teas anyway.
But we love teasing, dont we? :D
 
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combatentropy said:
This post is about two distinct practices:

1. Announcing a product before it's for sale. "A new camera! (Shipping this fall.)"

2. Announcing an announcement. "In one week, we will announce a new camera! (Shipping this fall.)"

Why?
Click to expand...

FUD. That is, Fear, Uncertainty, and Doubt. The point is to keep you from acting until their new gadget is available. Marketeers do it because it works.
 
combatentropy said:
This post is about two distinct practices:

1. Announcing a product before it's for sale. "A new camera! (Shipping this fall.)"

2. Announcing an announcement. "In one week, we will announce a new camera! (Shipping this fall.)"

Why?

There is no question that it gets my attention. But so would the announcement of the camera when it's ready.
Click to expand...

Well... you just answered your own question early on in.... it got your attention! And then it will get your attention AGAIN when it is announced! ;-) Win for the company. And if it stops you buying a competitor in the mean time... BONUS WIN!

Yes there are possibly downsides, but clearly they do not come close to the upsides, otherwise they wouldn't do it. As they're people with massive expensive running multi million dollar companies, I'm going to assume here they at least kinda know what they're doing here.
 
A product is pre-announced to build interest. Clients then turn to dealers to ask about the product and then the dealers in turn place orders for the product with the manufacturer. That way going into manufacture there are orders to be filled and no one ends up with inventory just sitting on the shelf. It is very expensive for a manufacturer to build a lot of inventory and have it sitting, and it is very expensive for a dealer to invest in inventory and have it sitting.

This is not necessarily about "hype" or "FUD" or other derogatory terms. It is modern business practice. The ideal formula has the manufacturer and the dealers just slightly ahead of client demand at all times, but this rarely happens and it is always difficult to gauge demand over time with great precision. Nothing nefarious here.
 
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Mitch Gross said:
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This is not necessarily about "hype" or "FUD" or other derogatory terms. It is modern business practice. The ideal formula has the manufacturer and the dealers just slightly ahead of client demand at all times, but this rarely happens and it is always difficult to gauge demand over time with great precision. Nothing nefarious here.
Click to expand...

Blood letting also used to be modern medicine, but that didn't mean it worked or was the best thing for the patient in the end. ; )
 
Mitch Gross said:
Clients then turn to dealers to ask about the product and then the dealers in turn place orders for the product with the manufacturer. That way going into manufacture there are orders to be filled and no one ends up with inventory just sitting on the shelf.
Click to expand...

Thanks, Mitch. I can appreciate this to a degree. If you put in an order for 100 of something, it's a lot more expensive per item than if you order 100,000. Blackmagic designs their camera, and then they have to ask a factory to start making them. Question: Do they tell the factory to make 1,000 or 10,000? It could make a difference in whether the factory charges $1,000 or $2,500 per camera to make them (I'm making up numbers here), which makes a difference in Blackmagic's profit per camera, which may make in a difference in whether they have to lay off staff or how much they can invest in their next camera. Blackmagic doesn't really know for sure how many cameras it will sell. The landscape's constantly changing, and people are fickle. The problem is, they have to set a price on the camera before they know how many they will sell. I can see a tough balance.
 
In our case, Convergent Design designs and assembles its own products in Colorado Springs, CO. There are huge lead times to ordering parts, getting circuit boards stuffed, having custom parts like a magnesium casing cast, etc. We need to have fairly good projections as to demand in order to plan properly, and frankly in order to decide whether to make a product or not (lots of stuff dies on the drawing board that way). Once that machine starts cranking, the company has committed a huge investment and we want to see returns as soon as possible. Start making the product and having it stack up in the warehouse does us no good. So we pre-announce to build interest so that clients talk to their dealers and we start getting orders beforehand. That way we can ship them out as soon as we make them and our dealers can sell them as soon as they get them.

Not sure about the earlier blood-letting comment. Why don't you please tell me how this is a bad thing and should be discontinued and then we can talk?
 
I agree. I've been feeling down lately. . .obviously a demon has my humours out of balance, and I shall need to have the local medico bleed me.
 
If I need something, I need it now. It seems to me the current manufacturers strategy is counter productive. They lose a lot of customers who would buy immediately but if they have to wait, cool off then don't buy at all. Long pre-announcements also gives competitors an opportunity to examine the flaws in the product then make their own announcement - if people have waited a long time already they probably won't mind waiting a bit longer for something better. Manufacturers should have a better way of estimating demand or confidence in their product (apologies for returning to topic).
 
Sorry, but that's simply not how manufacturing functions, especially in a business as small as our industry. Yes, it really is tiny with a bunch of little companies. Some of the companies you may think of as vast corporate entities are a dozen people in a small building. Some are just two guys staying up late every night just to try to make things work. Our company is a bit larger than many others, but we're not exactly a huge industrial complex. We are not the only industry like this. Many businesses announce a product, drum up orders and then fulfill the orders over time.

You seem to believe in an Amazon consumer mentality, where we have thousands of units of inventory stocked on the shelves and when you want it you can simply order it up and it is handed over. If I'm making a hammer that will be stocked at Home Depot then that model can work, but this is a different business.

When Toyota announces a new model car, they show it off at trade shows, market it all over the place and build up consumer interest. A dealer will have ordered a few for the lot, but if you want it in blue with the leather seats you're going to have to place an order and you might get your car in six weeks. Try ordering a custom sofa from a showroom. This standard model ships within 30 days. Want one in that other fabric? That'll be five months. And these are VERY established product categories in extremely mature industries. I know that this is a bit different that the pre-announce concept we're talking here, but the analogy is that no manufacturer really knows what will be a big seller. Even Apple sometimes gets it wrong. But if you're an Apple or a Samsung or other huge corporate entity, you can float a hell of a lot more expenditures than any little professional motion picture equipment company can. If Samsung releases a product that doesn't do well they can write it off, but if some guy making a little widget for a camera gets it wrong then he's out of business.

When Convergent Design announced the Odyssey7Q it was another 8 months before it shipped. We wanted it to be more like 4 but there were a few snags, plus once we announced we received a lot of important feedback from our client base that led us to make some changes so that the product would better serve the end users. Atomos announced the Shogun and they had a similarly long delay until release for whatever reasons I'm not privy to, but I can imagine and they were likely akin to ours. But then when CD announced the Odyssey7Q+ we shipped the next week and when Atomos announced the Ninja Assassin they had them waiting on dealer shelves. That's because these models were evolutionary versions of existing products. Both companies knew what the demand was for the next product because there was little change so could comfortably step directly into manufacture with little risk.

So if you want every new product to be safe, gradual, evolutionary steps with very low risk and little change ("The new Oldsmobiles are in. They put chrome trim on the dashboard this year."), then manufacturers will all know how many people will likely buy this next step version. It will all just be commodity items, like buying AA batteries at the corner store. But if you want to see some risk taking with interesting new products that try to push the envelope even a little, then be prepared for the manufacturer to want to drum up a little interest in the product before it ships. All that work costs a huge investment in development and manufacture, and even if the product is great if it takes too long to catch on then that little company might just go belly up waiting for the orders to come in.
 
I side with Mitch here. It is easy to forget how small the pro video segment is. Manufacturers have a small audience and a very complex product. The only negative thing I would say is this extension of the pre pre announcement time period followed by a fail. This is seen as a negative by the consumer and makes everybody look like they are guessing (which maybe they are !) Sony seems to be on top of their products and production these days with decent lead times.
 
this is pretty much normal practice in all markets. It's the same way with computers (latest greatest CPU coming out next year that does x and y 25% faster while using just 80% of the power!), automotive market (seeing the 2016-17 models already being reviewed), pretty much anywhere someone has something to sell. It creates anticipation and excitement. It also will have a greater contrast to what is currently available than what will be available at release in many cases. If something is announced a year out, vs a week out, chances are there is another product that was developed in that time frame that is greater than what was available a year ago. The fact is the consumer gets excited about new features when comparing to a current product, and therefore wants the new product. That is an instinct of human nature. Additionally, when it DOES get released, you do not have to research the product and see if its something of interest. You are already familiar with it and ready to click BUY.
 
Trust me when I say that none of us announce a product expecting there to be an enormous lead time. Sometimes problems arise like a crazy firmware bug or a part from a sub-manufacturer not performing as promised. When Blackmagic announced their first camera I totally knew they would likely miss their dates big time because they had never made a camera before, and sure enough they hit all the pitfalls that tripped up others before them. Now they've learned so much. It's the same story with dozens of products.

No one wants to announce too early because if the product is delayed then it gives other manufacturers a chance to counter with their own products. But wait too long and there's not enough interest built up to generate the orders needed for a successful business model. It's a tricky balance, and one every manufacturer debates internally with each new product -- When do we announce?

And with that, I'd like to declare here that I will soon announce that we will announce that we are soon announcing something. TBA.
 
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