Market research revealed several factors contributing to price inelasticity. Most importantly, Ancient's competitors were far larger competitors that raised financial viability concerns for Ancient in sales deals. Further, competitors offered bundles of software products that were far large than Ancient's database and data integration line. Some of Ancient's prospects had expressed that they were fearful that a lower price meant that the product was inferior to more expensive offerings even though Ancient did not believe that there were major differences in functionally between its data integration product and those of the competition.
Given its initial poor market reception, Ancient is now repositioning the SnapTogether solution for small and medium sized enterprises (SMEs). This time it believes it will have more luck. Ancient believes that smaller companies will be...
Unlike the crowded enterprise market, Ancient's competitors avoid selling to smaller companies, leaving Ancient one of the few players in a relatively untapped market. Although the integration needs of smaller companies aren't as great as those of larger enterprises, Ancient believes that it can price its product in such a way that will still make it attractive for SMEs to purchase a product rather than to build the capabilities themselves. And, Ancient has developed a channel strategy to replace its direct sales force, an approach that should increase profit margins.
In the world of product introduction nothing is ever certain. But, this time around Ancient is optimistic that it has uncovered a good market opportunity. Launch of the new market strategy is slated for March, 2005. Stay tuned
