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FINAL ASSESSMENT JANUARY TRIMESTER 2019/2020
MKT7101 MARKETING MANAGEMENT
DIRECTED CASE STUDY (100 marks)
The Microsoft case provides a background for the company as it was written some times in 2014. Nevertheless, Microsoft has significantly embarked on its marketing operation with notable achievements especially in embracing technologies from the fourth industrial revolution (IR4.0) especially with the introduction of 5G.
- Make use of what you learnt from the course as a whole and in particular the team case study and marketing plan assignments to analyse the Microsoft
- All responses should relate to relevant theories and/or concepts of marketing learnt from the course. Ensure to cite all resources use in your responses and that the resources are from credible
- Apart from text, other resources such as images and infographics are strongly encouraged.
- As had been emphasised throughout the course, original thoughts are particularly expected in analysing your selected firm as your case
Microsoft Case Study
Microsoft is the world’s most successful software company. Bill Gates and Paul Allen founded it in 1975 with the original mission of having ―a computer on every desk and in every home, running Microsoft software.‖ Today, Microsoft is the fifth most valuable company in the world and has a brand value of $61.2 billion.
In the early 1980s, Microsoft developed the DOS operating system for IBM computers. The company leveraged this initial success to sell software to other manufacturers, quickly becoming a major player in the industry. Initial advertising efforts communicated the company’s range of products, from DOS to Excel and Windows, and unified them under the Microsoft brand.
Microsoft went public in 1986 and grew tremendously over the next decade as the Windows operating system and Microsoft Office took off. In 1990, Microsoft launched Windows 3.0, a completely revamped version of its operating system, including applications like File Manager and Program Manager that are still used today. It was an instant success; Microsoft sold more than 10 million copies of the software within two years, a phenomenal accomplishment in those days. In addition, Windows 3.0 became the first operating system to be preinstalled on certain PCs, marking another major milestone for the industry and for Microsoft.
Throughout the 1990s, Microsoft’s communication efforts convinced businesses not only that its software was the best choice but also that it should be upgraded frequently. Microsoft spent millions in magazine advertising and received endorsements from the top computer magazines in the industry, making Microsoft Windows and Office the must-have software of its time. The 1998 slogan ―Where Do You Want to Go Today?‖ promoted not individual Microsoft products like Windows 98 but rather the company itself, communicating that Microsoft could help empower companies and consumers alike.
During the mid-1990s, Microsoft entered the notorious ―browser wars‖ as companies struggled to find their place during the Internet boom. Realizing what a good product Netscape had in its 1995 Navigator browser, Microsoft launched its own, Internet Explorer later the same year. By 1997, Explorer had grabbed 18 percent of the market.
Over the next five years, Microsoft took three major steps to overtake Netscape. First, it bundled Internet Explorer with its Office product, which included Excel, Word, and PowerPoint. This meant that consumers who wanted MS Office automatically became Internet Explorer users as well. Second, Microsoft partnered with AOL, which opened the doors to 5 million new consumers almost overnight. Third, Microsoft used its deep pockets to ensure that Internet Explorer was available free, essentially ―cutting off Netscape’s air supply.‖ By 2002, Netscape’s market share had fallen to a meek 4 percen.
Microsoft’s fight to become the browser leader was not without controversy; some perceived that the company was monopolizing the industry. As a result, Microsoft faced antitrust charges in 1998 and numerous lawsuits based on its marketing tactics. Charges aside, the company’s stock took off, peaking in 1999 at $60 per share. Microsoft continued to release new products, including Windows 2000 in 2000 and Windows XP in 2001. It also launched Xbox in 2001, marking its entrance into the multibillion-dollar gaming industry.
Over the next several years, Microsoft’s stock price tumbled by more than $40 a share as consumers waited for the next operating system to be released. During this time, Apple made a strong comeback with consumer friendly products like Mac computers, iPods, iPhones, and iTunes. Apple also launched a successful marketing campaign titled―Get a Mac‖ that featured a smart, creative, easygoing Mac character alongside a geeky, virus-prone, uptight PC character. Apple’s campaign successfully converted many consumers and tarnished Microsoft’s brand image.
In 2007, Microsoft launched the Vista operating system to great expectations; however, it was plagued by bugs and problems and the company’s stock and image continued to slide, helped by the worldwide recession of 2008–2009. In response, Microsoft created a campaign titled ―Windows. Life Without Walls‖ to help turn its image around. Its new message—that computers with Microsoft software were more cost- effective than the competition— resonated well in the recession. Microsoft also launched a series of commercials that boasted, ―I’m a PC‖ and featured a wide variety of individuals who prided themselves on being PC owners, hoping to improve employee morale and customer loyalty.
In 2009, Microsoft launched Windows 7, an improved operating system, with the campaign ―Windows 7 was my idea.‖ Four years later, it was operating more than 30 stores like Apple’s across the United States and Canada. Jonathan Adashek, general manager of Communications Strategy, explained, ―We’ve welcomed more than 15 million customers and counting so far, and have learned a lot from them. Having this direct connection to our customers has really helped us better understand their tech needs.‖ Travis Walter, general manager of Microsoft’s International and New Store Formats, agreed, ―In person, you get a very different experience and it’s one we’ve been very delighted to provide. When you see our technology in person—when you can touch and feel it—a light goes off.‖
After the recession came to an end, Microsoft’s image and stock started to recover, thanks to the success of its retail stores, effective marketing, and a wide range of new product launches. Microsoft went after Google’s dominant position in the search marketplace, for instance, with a search engine called Bing, and it entered the growing mobile industry with its Windows Phone mobile operating system. The company’s 2011 expansion into smart phones surprised many analysts, but Microsoft hoped the smart phone and Windows Phone mobile OS would forge a strong connection with its consumers around the world. It continued its innovation momentum in 2012 with the launch of Windows 8, Windows 8 Phone, and a computer called Surface Tablet. The tablet impressed consumers with a detachable keyboard that also served as its protective cover.
Today, Microsoft offers a wide range of software, mobile, and home entertainment products. Its most profitable products continue to be Microsoft Windows and Microsoft Office, which bring in approximately 80 percent of its $86 billion in annual revenue.
Source: Kotler, P., & Keller K.L. (2016). Marketing Management (15th Edition). Essex: Pearson Education Limited, pg 116-117
Question 1 (40 marks)
5G is the fifth generation of wireless communications technologies supporting cellular data networks. Large-scale adoption began in 2019 and today virtually tech provider in the developed world is upgrading its infrastructure to offer 5G functionality. Discuss the potentials of such new opportunities that 5G technology enables Microsoft in relation to customers’ expectations on the values being offered.
Question 2 (30 marks)
As Marketing Director for Microsoft Asia evaluate why Microsoft’s failed its expansions into smart phones, Microsoft Mobile. Relate this failure to the concept of Competitive Advantage (Porter, 1980). Comment on Microsoft use of Nokia Brand Positioning strategy against Apple Inc. Compare the Points-of-Difference and Points-of-Parity of both companies. Suggest THREE (3) good areas of growth for Microsoft? Justify your answer.
Question 3 (30 marks)
Apple has spent the past 10 years trying to convince everyone that the iPad and its vision of touch-friendly computing is the future. The iPad rejected the idea of a keyboard, a trackpad, or even a stylus, and Apple mocked Microsoft for taking that exact approach with the Surface. Apple finally admits Microsoft was right about tablets after the successful introduction of Microsoft Surface Pro. Discuss using segmentation, targeting, and positioning (STP) strategies learnt so far why Microsoft Surface Pro is more successful than Apple Ipad Pro. Justify your arguments.
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