Originally Posted by Happy Pappy:
As odd as it may sound. I honestly feel that the last person who really did care died many years ago.... Rest In Peace, JLC
I think Richard Kughn did as well, I don't think he bought Lionel from General Mills because he was looking to make a fortune at it, he already was well off, but simply seemed to love the trains (read a really great case study about Lionel under his realm when I was in Grad school, sad to say I don't have it). Not going to knock the present manufacturers, but to them it is a business where they are trying to maximize profits, Mike Wolf/whoever owns MTH, Jerry Calabrese and the private equity firm who own it are in it as a business more than as hobbyists.
The answer to your question is marketing 101, how do you read what the customers want/need, and how do you translate that into a product that sells yet doesn't break the bank? It is one of the hardest things to do, because as can be seen on these boards, as Allen alluded to, customers often claim they want X,Y and Z, but really need A. Plus there is also the unreality factor, many on here grumble about the cost of things like command control, that it is too expensive, but what they would want, a scale engine with something like PS3/Legacy that costs under 200 bucks, is not financially viable for a firm more than likely.
So what it comes down to is a variety of factors, and others have hit on them. They go to places like York and gauge reaction, they float a trial balloon in the form of pre-orders and wait to see if critical mass happens. They probably do read e-mails and look at posts on websites, the fact that people look at websites tells them interest. They look at what competitors are selling and gauge reaction to it as well,they also look at past interest (for example, something like the Legacy Hudson or the BB are based on what others have bought). They probably also look at the scale world (aka also known as alternate markets), to see what goes on there to a certain extent.
Then, they look at trends in other things. Given the mobile world that is blossoming out there, it doesn't take a marketing genius to realize that mobile control is something quite common...on the other hand, they also realize that a lot of us in the hobby may not be 20 something who eat this stuff up, so they also have to be careful how they go forward, believe me they know the people who see command control and say "feh" (haven't decided that one myself yet. They don't want to alienate whatever their base is, but they also want to attract new people, too, so sometimes they go out on a limb; sometimes it works, they kind of did that with TMCC (which might not have happened, to be honest, if Lionel was still under General Mills, it happened from what I know because Kughn, an enthusiast, was approached by Neil Young, another one). Whichever of the firms introduced integrated track a la fasttrack, while that kind of track was common in HO and N, took a risk...and sometimes you end up with stuff that doesn't sell, the demand wasn't what they expected, and they have to discount it to get rid of it (and potentially, they also probably analyze why it didn't sell...if it was that it was perceived as too expensive, they might find a way to produce something similar a lot cheaper, for example, or might say "hmm, not many people really want a scale model of <pick the most boring, ugly engine in history> and pay 1500 bucks for it".....
And yes, this market being relatively small makes it even more difficult. It is a lot easier to customize in a big market, take a look at cell phones and the variety of offerings is pretty huge, because there are so many users. Car companies can offer a wide range of cars and levels of time, because generally there are enough customers that they can sell it; but when you talk toy trains it is such a small market, with relatively small production runs and demand, that they can't try and come out with a swath of products to please everyone...It is a straddle to do it.