Newspaper article The Christian Science Monitor

Consumer Electronics Industry: Competing for Customer Dollars New Products and Services Must `Steal' Revenue from Other Markets

Newspaper article The Christian Science Monitor

Consumer Electronics Industry: Competing for Customer Dollars New Products and Services Must `Steal' Revenue from Other Markets

Article excerpt

IN the Wild West, settlers had their pick of the land.

But in the consumer electronics industry, land is scarce and competition fierce. To stake their claim, companies investing in the electronics market have to know who their customers are and how much they spend.

A new report by Decision Resources Inc. in Waltham, Mass., called "The Electronic Consumer: Evolution of New Products and Services," describes who the players are and when, where, and how they should position themselves in the marketplace based on consumer preferences, behavior, and spending habits.

"People who offer new products and services are going to have to fight very hard for a piece of the pie," says Martyn Roetter, vice president of Decision Resources. Mr. Roetter co-authored the report with Patricia Martin of Decision Resources and Harvey Cohen and Dennis Boyce of The Technology Applications Group.

There are no "untapped pools" of consumer money waiting to be spent, Roetter says. Except for an increase in consumer spending in the 1980s on entertainment products and services (spurred by an increase in cable subscriptions and video rentals), the amount of money consumers spend on entertainment, communications, and information will remain fairly stable, he says.

That means the influx of new products and services flooding the market will create tremendous competition for consumers' disposable dollars. To survive, new products and services will have to "steal" revenue from existing markets.

The average household will spend about $500 a year on entertainment consumer electronics products, about $600 for communications (telephone services), and $160 for information (reading products).

But a decline in real income, coupled with rising taxes, health care, and education costs, may make consumers leery of spending more money on new interactive products and services or on higher-priced substitutes.

In the United States, 20 million households are headed by people 35 to 54 years old with children over six years old living at home. The report indicates that these households spend more than any other US demographic group on entertainment, communications, and information consumer electronics. …

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