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The Basement
Copyright, Patent, General Intellectual Property Discussion (Branch from M32 Thread)
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<blockquote data-quote="John Roberts" data-source="post: 116023" data-attributes="member: 126"><p>Re: Copyright, Patent, General Intellectual Property Discussion</p><p></p><p></p><p></p><p>It has been fairly argued that for control intensive products like mixers with a lot of knobs, form generally follows function. While generally there is a world of difference in the details and this is the work of professional industrial designers, to make the same look different, with what is generally called trade dress (colors, shapes of knobs, panel graphics, etc). Sometimes those ID professionals work to make different look same. :-( Trade dress IP while real is difficult and expensive to protect. Some may be amused to speculate about the shoe potentially being on the other foot, I will not go there. </p><p></p><p>Speaking in general for a new brand to have success and gain market share from established brands, there needs to be a merchantable advantage to compel the customers to risk their money on an unknown. Over the decades I have seen this competitive advantage take different forms and morph over time with changing market dynamics. </p><p></p><p>Years ago Peavey enjoyed a rock solid limited dealer distribution with a strong grip on their local markets. This dynamic was upset by millions of dollars spent on advertising some new must have mixer feature, effectively pre-selling the consumers and blunting the influence of local dealers. This pre-selling to diminish the dealer' influence later got upset by competing with similar look and features but manufactured offshore for a compelling ten's of percent cost discount. Consumers suspend a lot of fear for tens of percent cost. </p><p></p><p>I can not predict where the next major market shift (for value products) will come from. Now with all the majors building products in China, their manufacturing costs are comparable (certainly not tens of percent apart) so there is no compelling cost gap to mine. While costs are increasing in China we are running out of new undeveloped labor markets to tap (they are building new car factories in Africa). In fact technology has dramatically reduced the (human) labor content in modern electronics manufacturing to the point where the Chinese cost advantage may eventually fade away. In my judgement the manufacturing advantage there is not as much about the labor costs, as aggregation of support industries. The raw component manufacturers have gravitated to where the world factories are to reduce lead times. Even if you could assemble a product as cheaply in the west, having to buy the raw components months in advance is a huge friction diminishing cost efficiency and response time to changing market dynamics.</p><p></p><p>I would not completely discount a threat from below but Behringer has not raised their prices to the point where there is much room for serious competition from below. The future has not happened yet so who knows what will come next? While it is safe to assume that the future will always be different. </p><p></p><p>JR</p><p></p><p>PS: For another historical observation, I recall for years being approached at trade shows by representatives of small third world factories trying to sell us their idea of a merchantable power amp. They were typically cheap enough to get the sharp pencil crowd excited, but were crude and embarrassingly low tech to even get a value brand like Peavey interested. I even spent time with a top Chinese CM (actually based in Hong Kong) and even their idea of high tech was based on licensed (or would have to be) western technology. It wasn't until QSC manufactured a low cost amp over there, that overnight the more relevant amp technology became available. There is a bad joke about factories having side doors, but there is no doubt we always risk control of technology when we build goods overseas. There is a classic case with a major company's low cost value model guitar amp that was being built in Korea. They decided to move that manufacturing to India to save a few won, and guess what? That Korean factory owner decided that he did not want to close up his shop. So instead he cut a deal with some large US mail order retailer and there was almost overnight a new even cheaper value brand guitar amp (that didn't completely suck), that the western company had taught them how to make. Oooops. The moral to that story is beware of unintended consequences when dealing with unprotected proprietary property. That guitar amp company's product design obviously had marketplace value, as they learned the hard way when they found themselves competing with their own designs. Their idea to save a few won by building the amps for rupees instead, was not their brightest decision.</p></blockquote><p></p>
[QUOTE="John Roberts, post: 116023, member: 126"] Re: Copyright, Patent, General Intellectual Property Discussion It has been fairly argued that for control intensive products like mixers with a lot of knobs, form generally follows function. While generally there is a world of difference in the details and this is the work of professional industrial designers, to make the same look different, with what is generally called trade dress (colors, shapes of knobs, panel graphics, etc). Sometimes those ID professionals work to make different look same. :-( Trade dress IP while real is difficult and expensive to protect. Some may be amused to speculate about the shoe potentially being on the other foot, I will not go there. Speaking in general for a new brand to have success and gain market share from established brands, there needs to be a merchantable advantage to compel the customers to risk their money on an unknown. Over the decades I have seen this competitive advantage take different forms and morph over time with changing market dynamics. Years ago Peavey enjoyed a rock solid limited dealer distribution with a strong grip on their local markets. This dynamic was upset by millions of dollars spent on advertising some new must have mixer feature, effectively pre-selling the consumers and blunting the influence of local dealers. This pre-selling to diminish the dealer' influence later got upset by competing with similar look and features but manufactured offshore for a compelling ten's of percent cost discount. Consumers suspend a lot of fear for tens of percent cost. I can not predict where the next major market shift (for value products) will come from. Now with all the majors building products in China, their manufacturing costs are comparable (certainly not tens of percent apart) so there is no compelling cost gap to mine. While costs are increasing in China we are running out of new undeveloped labor markets to tap (they are building new car factories in Africa). In fact technology has dramatically reduced the (human) labor content in modern electronics manufacturing to the point where the Chinese cost advantage may eventually fade away. In my judgement the manufacturing advantage there is not as much about the labor costs, as aggregation of support industries. The raw component manufacturers have gravitated to where the world factories are to reduce lead times. Even if you could assemble a product as cheaply in the west, having to buy the raw components months in advance is a huge friction diminishing cost efficiency and response time to changing market dynamics. I would not completely discount a threat from below but Behringer has not raised their prices to the point where there is much room for serious competition from below. The future has not happened yet so who knows what will come next? While it is safe to assume that the future will always be different. JR PS: For another historical observation, I recall for years being approached at trade shows by representatives of small third world factories trying to sell us their idea of a merchantable power amp. They were typically cheap enough to get the sharp pencil crowd excited, but were crude and embarrassingly low tech to even get a value brand like Peavey interested. I even spent time with a top Chinese CM (actually based in Hong Kong) and even their idea of high tech was based on licensed (or would have to be) western technology. It wasn't until QSC manufactured a low cost amp over there, that overnight the more relevant amp technology became available. There is a bad joke about factories having side doors, but there is no doubt we always risk control of technology when we build goods overseas. There is a classic case with a major company's low cost value model guitar amp that was being built in Korea. They decided to move that manufacturing to India to save a few won, and guess what? That Korean factory owner decided that he did not want to close up his shop. So instead he cut a deal with some large US mail order retailer and there was almost overnight a new even cheaper value brand guitar amp (that didn't completely suck), that the western company had taught them how to make. Oooops. The moral to that story is beware of unintended consequences when dealing with unprotected proprietary property. That guitar amp company's product design obviously had marketplace value, as they learned the hard way when they found themselves competing with their own designs. Their idea to save a few won by building the amps for rupees instead, was not their brightest decision. [/QUOTE]
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