It's official: Products don't mean jack and you're not spending enough.

Paul Miller posted some stunning data this week in his blog.  I've reported for many years that companies in the semi industry (and yes, that include EDA) underspend in marketing, but I had no idea how low it had gotten.  

An Outsell report stated that most B2C companies are spending 4 percent of revenues on marketing while B2B companies spend 2.6 percent.  Semi's on the other hand spend less than one percent.  Since most surveys on the subject show that successful companies always spend between 5 and 10 percent, that explains our economy in a big way.  The report also said that companies are not doing enough to differentiate themselves (What? You mean calling yourself an industry leader isn't enough?)

Now, combine that with an EE Times survey Paul references that "technology leadership and great products" don't drive sales.  What does is service, support, cost and availability and that is something no one in the semi industry does well... if at all.

I talk to a lot of marketers and sales execs in semi and every one of them says the same thing: They know who the customer is and what they want, and what they want is cutting edge tech.  Most refuse to consider that they might not know their customer base well... if at all.  And all the companies are investing 20 to 30 percent of their revenues on R&D for products that their customers don't really want.

How do we fix this?  Maybe it's time to invest in a market conversation.

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