A recent article on How the tech parade passed Sony by analyses the fall of this once mighty corporation and attributes it to internal infighting and an inability to foresee a changing market. As we had examined in our thought paper on the hidden barriers to innovation, internal silos with business working on divergent goals and projects prove lethal for companies.

While Sony has fared disastrously in the consumer electronics space it once dominated, the company is still seen as a force to reckon with in one market – its PlayStation continues to be big in the gaming devices market.

Yet, Sony’s current position in game consoles is a good example of a market position that looks secure but is actually very jittery. Winning in the gaming market is no longer just about who makes the best devices. Marketers have to do a fundamental rethink on who exactly the consumer is.

Devices such as Nintendo and Playstation appealed to a particular kind of consumer – gaming aficionados, often young, usually male and prepared to spend large sums of money for something they were passionate about. The rise of games on the Internet and mobile devices has brought in large swathes of new consumers – who may not be obsessed with gaming and who are much more diverse in terms of age and gender. With the growing adoption of tablets and smartphones, the number and variety of games now available is mind-boggling.

Until recently, gaming console manufacturers have worked under the assumption that their core audience would not be impacted by the availability of these low-cost games. Sales figures show otherwise with Apple and Google already stealing a part of the market.

Is it possible that a significant number of consumers, who would otherwise have paid big money for a gaming console and expensive games, are now happy with their $1 games that fit on to multipurpose smartphones? These may not be the ‘gaming-obsessive’ user persona that console manufacturers catered to, but there certainly seem to be enough consumers who find the quality of the cheaper games adequate and will now – find gaming consoles highly overpriced, as Sony is beginning to find. The challenges are on multiple fronts – telecom companies such as Vodafone want a share of the pie too and have begun to share greater value with VAS providers to build a 1000+ game archive for subscribers.

Sony’s future is clearly not in delivering $1 games, but the company will find that unless it is able to crack the mobile devices market soon, its gaming business too will be sharply affected. At a time when entertainment, work and connectivity are all converging towards each other, no company can afford to treat each of these problems as a distinct one.

Not just Sony, but other companies such as Nokia, Motorola and Kodak are realizing it too - a realization too late in the case of Kodak, which had to shut down its iconic camera business.

If you take a linear view of the product development and management processes, you may answer this as product planning followed by product development and then by product marketing.

While product planning should be a starting point (read our thought paper on market-centric product planning), marketing does not need to wait until the development is finished and the product ready for rollout. In fact, if you’ve waited this long, you’ve been waiting too long.

Product marketing can and should begin while product planning and development is in progress, and this applies as much to software products or B2B technology products as to any B2C product.

Product marketing strategy

The most important reason to start marketing early is marketing is not just implementation of sales programs. Product marketing includes evaluation of the market and developing the right market strategy. It is critical for the product marketing team to prepare a good business case that defines the specific market segment for which a product is being developed.

When business cases are prepared post product development, they end up force fitting segments to the product, which may or may not exist. Starting with a clear picture of the right market segment and how the product will be positioned towards that market ensures that at a later stage, the marketing resources are not wasted on segments that don’t have a strong and current need.

Shorter sales cycles

Very long sales cycles exist precisely because most of the time, we are shooting in the dark as to who our real prospects are. The real prospect has a need that the product meets, and can afford to buy it, at this point in time. Early marketing by meeting potential customers and understanding their needs and readiness to buy helps save time on identifying true prospects.  This can make a difference to everybody’s sales cycle, but it can mean the difference between success and closing shop for anyone with a low budget.

Permission based marketing

Early product marketing is also a great way to do permission based marketing – by finding out which of the potential customers are actually interested in learning more about your product or service when it launches, rather than spamming everybody in the vicinity. This also applies to potential vendors, dealers or any other partners.

Perhaps the most important reason to start product marketing early on in the process is that it makes the product development more aligned to the market. Early feedback from potential customers can save you from adding on features that customers don’t need and ensure that the product development stays on course to fulfill the real needs.

Finally, starting your product marketing early also helps you gauge the interest levels in the market and assess whether you are likely to meet your short-term sales and revenue goals and by when.

Snapdeal, Koovs, MyDala, Crazeal (the erstwhile Sosasta now acquired by Groupon), Dealsandyou, LivingSocial – these are only a few of the players in the growing number of group buying and deals-based sites in India.

With low entry barriers, a host of sites with little differentiation have sprung up. Is the online deals market headed for a shakeout?

Yes, and the answer is – a shakeout is imminent and not just because of the number of players in the market. The truth is that with VC monies enabling heavy promotion, many e-commerce sites in India and especially deals-based sites are focusing purely on acquiring customers in numbers, than on the quality of the transactions or on building relationships.

This has already happened to deals sites in other markets such as the US and in China, but we don’t seem to be learning from it.

Deals-based sites hinge on customers’ love for bargains, but once a bargain is made, what is there to keep customer X from shopping around at another site for an even better one? Moreover, most of the deals being touted on these sites are for discretionary purchases, with the bargain being purely notional; after all, how many ‘marked-down-from-an-inflated-price’ spa treatments can one purchase?

Sooner or later, consumer saturation and merchant fatigue is bound to set in, and some of this competition will fail to make it. The consolidation has already begun, and with Amazon’s entry, some e-commerce players, including in the deals space will get acquired by other – or fold up.

For those who want to stay the course, building relationships is essential to get repeat customers – and incentivize merchants to keep offering good deals.

Building relationships online

Building relationships online is not about having a Facebook page or a Twitter account. For a start, here are some things we would like to see deals sites (and other e-commerce sites) doing on their journey:

- Integrate selling with social activity or recommendations to help users sift the good deals from the bad.

- Invest in a deep understanding of individual customer preferences to deliver intelligent, customized deals.

- Invest in setting up best-practice customer service procedures and teams.

- Develop an expertise in specific categories and become a destination for these.

- Act as the “curator” who will direct people to lesser known/ unique/ hard-to-find products. Tap into the desire of consumers to be ‘different’.

- Add in an element discovery by broadening the merchant base and letting users “find” surprises when they visit.

- Understand that relationship is not the same as spamming users. Build intelligent content that makes users want to visit you.

When companies build relationships, deals happen as a consequence. The common understanding with deals-based sites is that they are selling with price as the first and only variable, but a logical result of that will be that very soon, consumers will be willing to pay no price at all. The dive to the lowest possible price is going to benefit no one in the long run.