The $93,960 difference in cost is advertisement in Machine Design, a fortnightly periodical with “…the greatest share of total, electronics, and exclusive advertisers of the design engineering publications…” (cf. Honeywell case).
Although the use of fiber optics was already demonstrated in the early 1940s (Wikipedia) the fiber optics industry was in its infancy in 1981 (see Honeywell case), but by this time, most industry forecasters were predicting a high rate of growth - $1.9 billion by 1990 from $100 million in 1981, an average annual growth of over 38%. The perceived use of the fiber optic cable was in computers and control systems.
At this time (1981) the principal players are Corning Glass Works, ITT, and AT&T – Western Electric Division, but industrial giants such as General Electric, AMP, Motorola and Amphenol “…pursuing the fiber optics component and system markets…” while IBM, DEC and Sperry-Univac were developing their own fiber optics technologies. Because of the prospects seen by industry, competition was very active, stressing technological advantage and low cost. No firm has laid claim to market leadership.
Spectronics, a company producing computer and control systems for information management was acquired by Honeywell, Inc. in 1978, making it a division. It is thus well-positioned for the new technology (fiber optics).
Moreover, its marketing manager, Gary Null, is quite innovative as manifested by his concept of selling “solutions” instead of products. He says, “Our people are actually problem solvers in the truest sense… We work closely with design engineers…”
Spectronics has adopted a strategy of projecting an image of industry leadership. To accomplish this, a promotion program has been proposed, the main component of which is advertising as may be seen from Exhibit 9 of the case. The targeted potential market is the group of North American computer and control systems original equipment