ExpertsOn™ Book Review

The Product Marketing Handbook
for Software

by Merrill R. Chapman

Available ONLY from the author - click here to order or for more information

Who Should Use This Handbook?

The Handbook can be used by any size organization. Larger software publishers can use it as a workbook for their product managers and as a tool to manage the marketing cycle and boost sales. Several major software publishers, such as IBM and Lotus, use the Handbook in just this way.

Start-up companies will find the Handbook is an invaluable educational tool and a blueprint for marketing success. Too many new publishers make basic mistakes - improperly positioning their product, creating category conflicts, or printing poorly-designed collaterals that cost them thousands of dollars and precious time.

Using the Handbook as your guide, you will shorten your marketing cycle, sell more product, and avoid making these mistakes.

The Software Industry Today

Since the publication of the first two editions, the U.S. software industry has continued its dynamic growth. The entire market now comprises over $94 billion, including retail, direct, and embedded applications. Growth in all these markets has been steady, in spite of recessions and problems in any one segment or company.

US Software Applications Market

As the software market has grown, so have competitive pressures and public awareness of the industry and its impact on their lives. Microsoft, for example, has gone from being an obscure software power to an international colossus, respected by many and feared by some. Its founder and leader, Bill Gates, has undergone the transformation from rich but unknown nerd to international celebrity and seminal figure in American business history, a man worthy of the fame and notoriety accorded earlier giants like Carnegie, Rockefeller, and Ford.

In an industry already driven by the relentless prod of technological innovation, the rapid growth of the Internet has acted on the market like a shot of steroids in a weightlifterâs biceps. The promise of the information age delivered by the World Wide Web (hereafter referred to simply as "the Web") to every home has caused the home market to grow faster than the business market. This, in turn, has sparked ruthless competition among manufacturers, resulting in steeply decreasing prices at the same time that speed, storage, and memory is increasing and graphic displays grow ever larger.

This relentless growth has caused a flood of new categories and titles to come market. But the gods of success have not smiled equally on everybody. Apple has stumbled to the brink of oblivion (again). Former hardware and software giants like Commodore, Ashton-Tate, and WordPerfect have disappeared. The Internet superstar Netscape was purchased by AOL. Even mighty IBM has been humbled by changing times.

The reasons for failure have not changed since the first two editions of the Handbook. In many cases, companies have stumbled or failed not because of poor technology, but because they didn't understand the marketing process. The U.S. software market is a demanding one. Its consumers are prosperous, knowledgeable, and fickle. They have little interest in dealing with wrongly-positioned products, confusing pricing, and badly-conceived collaterals. The need to understand and properly execute marketing basics has never been more important

The Handbook is designed to help you understand that process and assist you in the critical tasks of positioning, launching, and sustaining products in todayâs ultra competitive software arena. It describes, in detail, the different tasks marketing managers in the software industry must accomplish. In turn, each task is broken down into a series of goals and steps that must be completed for your product to be successful.

There are usually two things that stand between a software product and the market.

The first is the product itself. If the publisher has misread the market's desire to purchase the product, if the product cannot perform up to market expectations, or if the product is fatally flawed technically, then no expert or theory can help. Only you, or your company, know the truth about your product.

The second is the execution of a successful marketing plan, which incorporates these fundamental tasks:

Positioning: The clear description to the market of a productâs functionality and purpose, both in relation to itself and its competition. Your product positioning drives every aspect of your marketing.

Launching: Releasing the product to the marketplace.

Distributing: Making the product available to buyers.

Sustaining: Maintaining sales and market share through marketing, advertising, and sales promotions.

The principles of successful marketing are well known. There are no secrets, no "magic marketing bullets," that guarantee success. While there are many books that describe various marketing theories and concepts, what has been missing is a book that assists marketers in executing programs and evaluating results.

The 3rd edition of The Product Marketing Handbook for Software fills that gap. Written and researched by software industry experts, its focus is on the bottom line and the successful strategies that will enable you to manage effective marketing campaigns. The Handbook's checklists help you plan the nuts and bolts of a product launch, and evaluate and deploy the different marketing, advertising, and promotional programs used by successful software marketers.

Organization

The Handbook is divided into the following sections:

Positioning, Pricing, and Naming
Channel Distribution
Collaterals
Public Relations and Product Review Programs
Advertising
Sales Promotions
Direct Marketing
Bundling
Internet and Electronic Marketing
Trade Shows

Each section contains detailed descriptions of the specific marketing tasks, focus stories, and checklists. The focus stories recount actual marketing situations, including major and minor mistakes and disasters. Read them carefully. By learning from these stories, you can start earning your advanced degree from the "See What They Did? Now Don't Do That" school of marketing!

The Checklists

We have chosen to use checklists to categorize marketing tasks because they are easily and quickly adapted to different needs. Many different programs exist that fit marketing activities into some form of predefined process. If you are currently using such a program, the checklists can provide added benefit and value to your system. If you are not, then the checklists can serve as the foundation for creating your own system.

The Handbook uses two types of checklist: the Objectives/Evaluation Checklist and the Success Checklist. In the preparation/planning phase of your marketing activities, review the Objectives portion of the specific checklist(s) and decide which objectives best fit your marketing plan. For each objective chosen, enter a specific target goal÷ generally a number or a percentage. This is the "what you will do" part of your plan, and should include measurable and quantifiable objectives.

After you determine your objectives, you then use the Success Checklist to implement your plan, stepping through all the activities that promote a successful effort in the particular marketing area. This is the "how you do it" part of your plan. After implementation, revisit the Objectives/Evaluation Checklist(s) and use the Evaluation column to record what was actually accomplished, evaluating how well you did with respect to your initial objectives.

Tracking the success (or failure) of your marketing activities will help you build a marketing "bible" of what does and doesnât work for your product and company. Over time, you will possess an "at-a-glance" record of your marketing performance and be able to quickly identify areas of critical weakness and repair them.

The checklists are very comprehensive. How you use them depends on the structure of your company and its individual resources. Regardless, each relevant task on a checklist must be completed. Your goal is to complete them as efficiently and cost-effectively as possible. The Handbook will help you do just that.

The Disk

To further assist you, all of the Handbook's checklists are contained on an accompanying disk in 7-bit ASCII format. Any text editor, word processing application, or business-presentation package can read it. The checklists can be quickly printed out as is, or edited and converted into overheads, handouts, etc. You can alter them to meet your particular needs and strategies.

Endorsement

"Simply put, this is the definitive guide for sales and marketing professionals who need to successfully navigate the tricky and tumultuous waters of the computer and software industry. In the 18 years I've worked in sales and marketing for billion dollar companies such as IBM and Hewlett-Packard, major software firms such as Ashton-Tate and Lotus Development, and in the two companies Iâve started from the ground floor (Lyriq International and now Miacomet, Inc), the one thing you quickly learn is that our business changes every three years. You must constantly challenge yourself and your assumptions or face failure. If you donât start with an approach and methodology that promotes excellence, you will not get a second chance. The Handbook provides that start.

"It does so by discussing and illuminating proven marketing principles and methods that lead to sales success and by providing the tools you need to succeed. Its combination of checklists, templates, case studies, and methodologies are invaluable to understanding not just how companies succeed (and fail), but why. Many successful companies, including my own, use The Product Marketing Handbook for Software to consistently get results.

"Whether you are just starting out in this industry, or a scarred marketing veteran, you will gain insight and invaluable knowledge from the Handbook. I have not seen anything that is better written or more thorough in presenting all aspects of the industryâs sales and marketing process. Good luck and good selling!"

Randy Hujar
CEO Miacomet, Inc.

To find out more and to order from the author

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Table of Contents
of the book

Preface xv
Introduction xvii
Chapter 1 Positioning, Pricing, and Naming 1
Key Elements of Positioning 2
Positioning Mistakes 9
Focus Story: What's In a Name? 9
Marketing Overview 10
Recovering From Positioning Mistakes 12
Repositioning Strategies 12
Re-price 13
Resign 13
Re-categorize 13
Go Somewhere Else 13
Facade 14
When to Use Facade 14
Sweep the Board 15
Brands and Brand Building 15
Pricing 21
Focus Story: Death By Hyundai 24
Naming Products 30
Warp Speed! Enga·err, Let's Toke On This 31
Positioning, Pricing, & Naming Objectives/
Evaluation Checklist 36
Positioning, Pricing, & Naming Success Checklist 37
chapter 2 channel distribution 41
New Trends in Distribution 41
The Internet and the Channel 44
Push vs. Pull 45
One vs. Two-tier Distribution 45
Distributors 46
Resellers 46
Key Channel Relationships 54
Reseller Authorization Programs 56
Gaining Access to the Channel 60
The Distributor and Reseller Selection Process 61
Demonstrating Product Demand 62
Distributor Marketing Development Funds Programs 63
Reseller Marketing Development Funds Programs 68
Evaluating Your MDF Participation 72
The Channel Danger Zone 73
Focus Story: The Art of the Deal 75
Alternative Channels 79
Affiliate Label Distribution 82
Channel Distribution Objectives/Evaluation Checklist 84
Channel Distribution Success Checklist 86
chapter 3 collaterals 91
The Corporate Identity Program 91
End-User Collaterals 92
Channel Collateral 102
Merchandising Collateral 104
Promotional Collaterals 105
Focus Story: Too Many Cooks Spoil the Collateral 109
Conclusion 111
Packaging 112
Focus Story: The Bad, The Really Bad, and the Extremely Ugly 119
Documentation Trends 121
Collaterals Objectives/Evaluation Checklist 122
Collaterals Success Checklist 124
Chapter 4 public relations and product
review programs 131
In-house vs. Outside PR Services 132
PRSpecialties 132
PR Basics 133
Establishing the PR Process 138
The PRCycle 138
Pre-Announce Phase 139
Announce Day Phase 140
Post-Announce Phase 141
Product Reviews 142
Focus Story: IBMâs OS/2 Press Mess 143
Managing a Product Review Program 147
Laying the Groundwork 149
Important Reviews 150
Managing Bad Reviews 151
Measuring Your Reviews 152
Public Relations and Product Review Programs
Objectives/Evaluation Checklist 153
Public Relations and Product Review Programs Success Checklist 155
Chapter 5 Advertising 159
Does Advertising Work? 159
The Impact of the Internet on Advertising 162
The Advertising Framework 162
Ad Types 162
Corporate or Brand Identifier 168
Traditional Advertising Model 168
The Ad Space Model 170
Focus Story: "The Worst Software Ad of All Timeâ 175
Where to Advertise 176
Channel Advertising 177
Ad Costs 177
Advertising Objectives/Evaluation Checklist 181
Advertising Success Checklist 182
Agency Performance Checklist 186
Agency (Vendor/Supplier) Performance Review Summary 187
Client Assessment of Agency Performance 188
Account Representation and Service 190
Creative Services 191
Media Services 192
Research Services 194
Financial and Administrative Services 195
Chapter 6 Sales promotions 197
Reasons for Sales Promotions 198
Types of Sales Promotions 198
Sales Promotion Offers 201
Elements of a Successful Offer 201
Implementation Tactics 203
Focus Story: Bentley Systems: Have a Happy J Day! 206
Promotional Aids 211
Promotions and the Channel 212
Qualifying Channel Promotional Programs 212
General vs. Lighthouse Promotional Strategies 213
Contract Field Services 213
Measuring Channel Promotions 214
Promotions and the Retail Selling Terrain 214
Integrating Promotions 214
Testing Promotions 215
Executing Promotions 216
Sales Promotions Objectives/Evaluation Checklist 218
Sales Promotions Success Checklist 220
Chapter 7 direct Marketing 227
Who Buys Direct? 228
What Direct Marketing Can Accomplish 228
High-End Direct Marketing 229
Mailing and Lead Lists 230
List Brokers and Warehouses 232
Card Decks 232
Direct Fax 234
Home Shopping Clubs 235
Infomercials 236
Focus Story: Cher Sells Software! Infomercials Come to Software 241
Telemarketing vs. Telesales 245
The Offer 249
Common Mistakes 250
Direct Mail Costs 252
Production Planning 253
Fulfillment 253
Testing 255
Focus Story: Doing It Right 255
Direct Marketing Objectives/Evaluation Checklist 258
Direct Marketing Success Checklist 260
Chapter 8 bundling 269
Types of Bundles 269
Focus Story 276
Bundling Objectives/Evaluation Checklist 279
Bundling Success Checklist 280
chapter 9 Electronic Marketing 283
Why Use Electronic Marketing? 283
CD-ROM Distribution 285
Kiosk Systems 286
Bulletin Board Systems (BBS) 286
The Internet 287
Internet Components 288
The Internet and the World Wide Web 289
Focus Story: From Box to Content 293
Web Site Development Issues 298
Web Site Design, Navigation, and Writing 300
Web Search Engines 302
Web Site Legal Issues 304
Web Site Advertising 305
Electronic Direct Marketing (EDM) 310
EDM Types 311
Electronic Software Delivery 315
Focus Story: ESD, Plain and Simple 318
Electronic Marketing Objectives/Evaluation Checklist 321
Electronic Marketing Success Checklist 323
Chapter 10 Trade Shows 329
Types of Trade Shows 329
Why Go to Trade Shows? 330
Other Trade Show Activities 331
Trade Show Expenses 333
Booth Personnel 333
Lead Generation at Trade Shows 335
Intelligence Gathering at Trade Shows 336
Your Location at a Trade Show 336
Trade Show Installation 337
The Press and Trade Shows 338
Reseller Shows 338
Show Specials 339
Show Selling 340
Focus Story: How Much for That Key Chain in the Window? 340
Trade Shows Objectives/Evaluation Checklist 342
Trade Shows Success Checklist 343
Appendix a Basic product marketing
concepts and Organization 349
The Technology-Driven Company 349
The Sales-Driven Company 349
The Market-Driven Company 350
The Finance-Driven Company 350
The Product Marketing Process 355
appendix b product marketing cost matrix 359
Appendix c marketing resource directory 369
Advertising 370
Bar (UPC) and ISBN Codes 370
Channel Contacts 371
Distributors 372
Software-Only Resellers 373
Storefront Resellers 373
Superstores 374
Design and Graphics 374
Direct Marketing 375
Electronic Direct Marketing 376
Infomercials 376
Telemarketing 377
Documentation Services 377
Duplication and Manufacturing 378
Fulfillment 378
Industry Associations 379
Manufacturerâs Representatives 379
Marketing Consulting Services 380
Merchandising and Detailing 381
Publications 381
Public Relations 382
Research 383
Support 384
Trade Shows 384
Web Services 384
Web Sites 385
Appendix d Software marketing Pipeline 387
Positioning, Pricing, & Naming 388
Channel Distribution 388
Collaterals 389
Public Relations & Product Review Programs 390
Advertising 391
Sales Promotions 392
Direct Marketing 393
Bundling 395
Electronic Marketing 396
Trade Shows 398
Glossary 401
Index 413

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