In this video we will see how important it is to know your target market and what this information might mean for you. So, to know the target market is important because that means you can win over influential adopters. Because as we know influential adopters, early adopters, can have a major impact on the process of adoption of a new technology. So they may influence others via prestige or via social effects. By being influential they also enhance product visibility and awareness. And large adopters may also provide critical mass just on their own. Another way of using the target market, using the market to your own advantage, is to give winks to pirates. Because early on in the diffusion process as we know, one of the difficult aspects is to achieve enough of a network size. And in that case, network size doesn't matter where it comes from. It may come from legitimate consumers or it may come from pirates. And in that case, network size might actually be more valuable, more profitable, than making sure you hold on to your property rights. So, therefore, firms may just ignore pirates because they also contribute to the installed base. So, a software company might allow students to have and use their own illegal copies rather than having no adopters at all or for the students not to purchase any copy of the software at all. After network consolidation, after the network has basically become large enough, then of course, the firm has an incentive and will want to consolidate, will want to enforce property rights to protect their own revenue streams. So as an example, let's take Windows Mobile. This was a new mobile operating system for Windows. There were indirect network effects between consumers and the developers of apps for the Windows operating system. So, Microsoft offered discounts and support for early app developers, which made it more profitable, more attractive to develop apps for Windows Mobile. Microsoft even claimed that the developer "Rovio" had a version of Angry Birds, of course a super popular game for Windows Mobile, which was actually not true by the time of announcement because "Rovio" only released Angry Birds for Windows Mobile in June of 2011. So, pre-announcement of course here was designed to actually raise expectations about the Windows Mobile operating system and the number of complementary goods and the number of consumers that would eventually end up using it. So after an in-video quiz, let's move on to the next video. So, what's next? Well, I've noticed that we haven't talked about strategic pricing in relation to network markets yet. [BLANK]
