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Mman

Economy and shareware market

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I''m just wondering what effect today''s poor economy has on the shareware market. Are shareware sales going down? I think that it effects it a bit, but not much because people from countries other then US are buying as well. What is your opinion?

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Many ASP members have been discussing this in the private ASP newsgroups. Summer is typically a slow period for certain types of software, such as business and educational software, and with the slow economy, it can get pretty bad. I know some developers who''ve seen their sales drop by 80-90% during the past year.

But a slow economy has its upside too. Advertising prices have dropped like a rock, so in the six months follow Sep 11, 2001, we actually tripled our marketing budget. A slow economy can be a great time to focus on building market share, since some of the competition will die off. When people fear that sales will fall, the natural tendency is to panic and to try to cut costs... often developers decide to cut back on marketing, seeing it as an expense instead of an investment. This is sometimes a fatal mistake that creates a self-fulfilling prophecy.

I think that when the economy is slow, it''s a good time to focus on fundamentals. Keep putting out new products, and keep doing your marketing. When the economy improves, many of your competitors will not have survived, and you''ll be in much better shape.

Another thing you can do is to alter your marketing to fit the economy. For instance, during a slow economy, we can position our games as a half-price alternative to retail. I also find that our bundles are selling even better now, since people are looking for more value. By sticking to the fundamentals, we''ve seen our sales continue to grow this year. In fact this month is our best sales month ever.


Steve Pavlina
Dexterity Software
www.dexterity.com

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