Will Saturation Kill Innovation?

Increasing Consumer Choice And Control Will Require Customized Market Insight Strategies To Manage The Flood Of New Features, Says Article From Ipsos Insight

6 December 2005

New York, NY - The future of the technology marketplace will be driven--or inhibited--by consumer preferences and what they think is believable, not by what is technically possible and accessible, according to "Cultivating Desire: Investing in Market Insights to Reap Digital Content Profits," written by digital music analyst Matt Kleinschmit and technology trend spotter Todd Board.

The essay and complimentary webinar examines how tech sector marketers can address the shift in market drivers from the supply side to the demand side and appears in the latest issue of Ipsos Ideas, the magazine published by the Ipsos Group, a leading global survey-based market research company.

The authors show how consumer preferences in digital music acquisition and pricing strategies were anticipated by primary consumer research.

In 2002, TEMPO, Ipsos' quarterly research program that tracks American consumer digital music behavior, used predictive choice-based conjoint modeling to simulate the music downloading market conditions and uncover emerging consumer preferences for online music acquisition. "Research conducted nine months prior to the release of Apple's iTunes Music Store suggested that a low-cost transaction-based music service that offered flexible usage rights, portability, and burning would have a significant impact on the market," said Kleinschmit.

"In an environment of increasing consumer choice and control, it is critical to unpack the mental model--how consumers make purchase decisions and brand choices and perceive benefits," added Kleinschmit. "Demand-side understanding monitoring demand-side developments is more valuable than ever."

"Monitoring markets over time does not necessarily forecast outcomes, but it does frame the big issues and help anticipate key market insights," said Board. "We've used strategic market intelligence to help tech firms and marketers manage the flood of features endemic to the sector and pursue the opportunities with the greatest ROI potential."

"One example is how research is helping tech companies and marketers understand the emerging Digital Den--the use of media hubs and media servers to connect digital content around the home. Our research shows there is some growth in the Digital Den marketplace, albeit slow so far, along the sequential growth path outlined in the mental model framework. Comparing the results of our 2004 survey with the most recent wave has identified areas of opportunity in this developing field."

Kleinshmit and Board have contributed other tech-related articles to Ipsos Ideas, including "The Hype is Back! Online Music and the Rise of the Empowered Music Consumer," and "Crouching Confusion, Hidden Hassles Spotting and Managing Market Barriers to New-To-Market Technologies."

Ipsos Ideas delivers the insights and ideas that Ipsos has gleaned from each of their research specialty practices: advertising, customer loyalty, marketing, public affairs, and forecasting, modeling, and consulting. The complete text of the article and previous tech-related articles and white papers are available at Ipsos Ideas or by electronic subscription.

For more information, please contact: Todd Board SVP, Technology & Communications Practice Ipsos Insight 415.597.4013 [email protected]

Matt Kleinschmit VP, Technology & Communications Practice Ipsos Insight 312.665.0529 [email protected]

Ipsos in North America Ipsos is one of the fastest growing market research companies in the U.S., market leader in Canada, and among the most trusted research brands in North America. With more than 1,300 professionals and support staff in the U.S. and Canada, Ipsos offers a suite of survey-based services--guided by industry experts and bolstered by advanced analytics and methodologies--in advertising, customer loyalty, marketing, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos companies offer a complete line of custom, syndicated, omnibus, panel, and online research products and services.

Ipsos conducts polling on behalf of the Associated Press, the world's oldest and largest news organization.

In 2004, Ipsos generated e605.6 million ($752.8 million U.S.) in total revenues, of which 35% came from its North American operations. The Paris-based company was founded in 1975 and has been listed on the Paris Stock Exchange since 1999.