Quite often businesses resort to announcing products way before they are ready to ship and sometimes even before they have started making them. For example Microsoft is known to announce and show off technology demonstration months or even years before the product ships.
So, why do they start beating drums so early? Here are a 6 reasons why :
- To avoid loosing existing customers: Customer who are using your existing products want to be re-assured that you have something exciting right around the corner. In the age of global competition and unlimited choices keeping the customer engaged is more important now than ever before.
- To gauge the demand: This is primarily used by startups to gauge demand for a particular product idea to get an understanding of whether it’s worth building and developing a business model around it.
- To help define & tune the product: Announcing your product early helps business engage potential customers, gather feedback and help define & tune the current product or enable the business to create follow-on products derived from the one they just announced.
- To line up partners & enable the ecosystem: Certain products heavily rely on having partners (including developers) sign-up. E.g., Windows operating system needs developers to update their apps and make new one way ahead of the product is available. Announcing a product early will help gather the attention of partners & engage with them early on in the product cycle to be successful.
- Competition is making noise : News is a form of advertising. When competition announced something compelling and is making a lot of noise – often business respond with their own announcements to counteract.
- Financial returns : For public companies product announcements have a impact on the market value of the company and certain times companies do resort to using this to the advantage of the shareholders.
Pre-announcing products does not always work and can easily backfire if used without understanding as covered in the article Knowledge@Wharton.
What is your take on companies pre-announcing products?
Update: 02/22/2013: Here is a good example of Beating Drums. Sony hosted a press conference this week announcing PS4 and it was all talk not even a single image of the PS4 was shown. http://storify.com/networknewsdesk/sony-launch-of-playstation-4-ps4