Product Modification

Microsoft has a foothold in the gaming console industry with its Xbox video game. Its competitors Sony, and Nintendo also have very popular games. With the releases of the Playstation 2, Nintendo game cube Microsoft released the Xbox which was a good contendor. But to be more efficient and have the cutting edge advantage over their competitors they had to modify and upgrade the Xbox, which brought life to the Xbox 360. Microsoft then displayed Product Modification and planned obsolence. The Xbox 360 made the xbox obsolete and became the game console of the world.

Recently, the console war between Microsoft, Sony, and Nintendo has escalated, and it’s all thanks to the Xbox. The original Xbox was designed to compete directly with Sony’s highly popular Playstation 2 and the Nintendo Game Cube, recently emerging in the consumer’s awareness. With the Xbox 360’s launch, the console war climbed to new levels of competition, though it can be said that the Xbox 360 was the clear winner for a full year after its release.

Sony and Nintendo had no intention of simply lying down, and they both quickly released their own seventh generation gaming consoles, the Playstation 3 and the popular Wii. This time it was harder for gamers to pick between one or the other since each console came with its own strengths and weaknesses. To simply things, this article will compare the Xbox 360 and its two competitors in terms of games, controls, and graphics.

Product Concepts

In this blog i will discuss a convenience product Microsoft has put into commerce recently. A convenience product is a relatively inexpensive that merits little shopping effort. It is usually referred to as candy, soft drinks, aspirin but in the case of Microsoft a company who sells software and hardware its convenience product is introduced differently but is a product of convenience for its customers.

In 2007 Microsoft was touting the advantages it would have in search as a result of its ability to integrate its engine into its own online properties and products.

(Microsoft execs referred to this kind of search as “convenience search.” Going to a search engine and typing in a query there is what they called “destination search.”)

Cut to July 9, 2009. Today, Microsoft announced one of those long-promised “convenience search” capabilities with the ability to directly insert Bing search results into Hotmail messages. Microsoft has moved from pilot stage to final and has integrated a "Quick Add" Feature in Hotmail.

To use Quick Add, users can select a category from a new Quick Add pane on the right when composing new e-mail messages. From there, they can directly insert a Bing search result into their messages.Quick Add is “currently available in select languages and geographies (Australia, Canada, China, India, US, and UK), according to the Hotmail team.

Microsoft Research Media Aggregators

Today Microsoft announced a new proof-of-concept prototype monitoring tool which aims to help businesses organize and analyze their social presence on the web. Looking Glass is a Social Media Aggregator and Monitoring Tool for Businesses. Code-named “Looking Glass”, this platform enables companies to manage their social accounts effectively as they create advertising on major social networking websites. By merging social media and advertising into one simple and easy-to-use platform, marketers are now able to listen to the conversation on the social web. They are able to track customer sentiment across an array of social media sites by grabbing a wide variety of feeds related to a specific topic from platforms such as YouTube, Twitter and Flickr. One good example would Microsoft’s new Zune HD. In the past, the Zune HD marketing team would have to analyze statistics from Twitter search and this could be quite tedious unless San Francisco-based micro-blogging service sells data to Microsoft.

Using technology from Microsoft Research, Looking Glass automatically rates each posting as positive or negative, so the Zune HD team could rank comments according to sentiment and see how customers are responding to the product and the campaign to sell it. All these information are converted into pie-charts or line graphs which show them how well their campaigns are progressing. Currently "Looking Glass" is still in testing mode and will be opened to a small group of testers next month.

Market Research

The Marketing Research function at Microsoft is centralized although roles with market research responsibilitites can also exist among product groups at Microsoft. The Corporate Market Research group focuses on research related to specific products and technologies, advertising and PR, brand awareness and customer segments. They partner with outside research vendors to produce strategic insight to drive business decisions.

At Microsoft, they often employ third-party market research companies to conduct surveys on our behalf. Below is a list of companies they engage with for market research.

Market Research Companies

Cheskin Research
comScore SurveySite
ConStat
Hall & Partners
Harris Interactive Europe
IPSOS
Management Insights Technologies
Maritz
MarketTools, Inc.
Market Strategies
Milward Brown
Momentum Market Intelligence
Penn, Schoen & Berland (PSB)
Schireson Associates
Strategyn
Synovate
Taylor Nelson Sofres (TNS)

Microsoft Rethinks Customer Segmentation

It's Microsoft (NSDQ:MSFT)'s turn to think different.

The software giant's top sales executives are challenging both partners and Microsoft's own sales teams to think more deeply beyond employee numbers or seats deployed when considering customer prospects. This theme surfaced time and time again during keynote addresses Sunday at the Microsoft Worldwide Partner Conference here in Toronto.

"Current elements of segmentation are quite insufficient," said Orlando Ayala, senior vice president of the Small and Midmarket Solutions & Partner Group and COO of Microsoft Business Solutions. A better indicator of what technology a customer might need is server penetration, he said.

Ayala received a dose of this reality firsthand when he volunteered to help outfit his brother Oscar's small business, a hobby shop, with Microsoft-built technologies including Small Business Server. (For more on his experiences, click here.)

The problems that Oscar Ayala faced as a business owner " managing payments and cash flow, maintaining appropriate inventory levels, supply chain management, handling the end-of-day settlement process, and maintaining a viable e-commerce presence " were more particular to his classification as a retail store than any artificial census numbers tied to counting seats, his brother related.

For additional evidence, Orlando Ayala points to another poignant example, that of a real estate firm that employed very few number of staffers but yet ha deployed nine servers and supported an annual IT budget of $400,000.

As Microsoft eyes a sales goal of $11 billion for the SMB marketplace, the Redmond, Wash., company is encouraging both its partners and its own sales team to become "cultural anthropologists" who can provide insight into more practical sales scenarios as the market evolves and help partners create repeatable solutions for solving them.

"It's all about evidence," Orlando Ayala said. Steven Guggenheimer, vice president of small business for Microsoft, said beyond the per-seat dynamic there are a number of ways for partners to assess and categorize prospects in the small business world. Among questions that solution providers should ask during early customer work are: What is the prospect using currently? What is the owner's overall view about technology? And what are the company's growth plans?

Likewise, Microsoft is mobilizing its enterprise team and partners to consider how deployment or infrastructure integration strategies differ by industry, and it is forcing its sales and services teams to come up with unified account plans for the roughly 4,600 customers it touches with a direct relationship.

"More and more we are taking a position depending on the vertical market," said Simon Witts, corporate vice president of the Enterprise and Partner Group at Microsoft during the Sunday morning keynote session. In general, the industry faces a scenario in which many enterprises are overlicensed and underdeployed, meaning that customers are failing to derive the true value of their infrastructure or applications, Witts said. "It's a real competitive threat for the entire industry," he said.

Another issue is lagging upgrades.

Gerry Elliot, Microsoft's corporate vice president for U.S. Enterprise and Worldwide Industry Solutions, estimated that only 15 percent of the company's enterprise customers have migrated to Office 2003, while only 40 percent are using Windows XP. Conversely, approximately 40 percent of the installed base has migrated off Windows NT 4.0 and earlier versions onto Windows Server 2003, Elliott said.

During fiscal year 2005, which started July 1, Microsoft's enterprise team hopes to drive up to 8,200 deployments in tandem with partners, compared to 6,500 in the previous fiscal year. In exchange, Elliott said solution providers and other channel members must be prepared to finetune their customer focus and provide evidence that their services can be better differentiated from those of their competitors.

Target Markets

Microsoft has a new plan to introduce itself to a new market which is Mobile Carriers. Microsoft's plan is to provide mobile carriers. Windows Mobile 6.1 is billed as an update that includes new time-saving features, easier phone navigation and management, and increased security safeguards. Microsoft says it includes "several key updates based on customer feedback, including the capability to make the most critical information readily available at a glance, quicker phone setup, and enhanced features adapted for the small screen."This will enable Microsoft to tap into a new market that has great opportunity for longevity in profit. The smart phone has conquered the mobile phone business. Since smart phones are high tech and are very similar to as PC they encounter many technical issues, and since there are over 8 million subscribers to smart phones. Service carriers are in dire need for quicker and easier solutions to consumer issues. So Microsoft has developed a program that deals with those issues and has majority of the Mobile carriers ready to use its program.

Microsoft has unveiled new software products for mobile network operators designed to help them manage the growing number of Windows Mobile OS based devices on their networks and provide additional services to users of these devices

Mobile Device Manager has been in trial with a number of customers and according to Microsoft, "Companies across the financial, manufacturing and professional services industries also requested that mobile operators deliver a core set of software and services to help businesses meet their management needs...A study conducted by Microsoft with large and midsize organizations showed businesses would like to move beyond their current mobile solutions to offer more sophisticated services."

Mobile Device Manager, Microsoft claims, meets these needs with "Features to manage phones with the same ease and flexibility as Windows-based PCs, addressing IT priorities for saving resources and protecting information; capability to help protect sensitive business files and e-mails, contacts and other information through file and storage card encryption on the phone should it be lost or stolen; [the] ability to access more of the information mobile workers need for staying on top of their jobs via a mobile virtual private network, which provides security-enhanced access to company data and application updates over the air."

Inelastic Demand

Inelastic Demand

Microsoft has an elastic demand in its Microsoft Office suite products for computers, which are widely used in almost every part of the world and is almost virtually impossible to complete a vast amount task. The Microsoft processor for computers are used in various institutions and is essential to life and business. Inelastic demand means that an increase or decrease in the price of a product will not significantly affect demand for the product. Since the product is highly needed if the price goes up or down it will still be in demand. The Microsoft product is used in every school, every business, and almost every home.This is an example inelastic demand.

Business Marketing

Business Marketing

Business marketing is very essential for a business whose main clients are other businesses. Business marketing has different components of it that help marketers understand the decisions they make and the effect that it has on consumers and its customers. One form of business marketing is Derived Demand. Derived Demand states that organizations buy products to be used in producing their customers product.

An example of derived demand in Microsoft would be in its game console Xbox 360. The game console was first introduced with a hard drive that allows user to store more memory and access to the internet. Derived demand comes in now, because the game console is priced expensive because of the hard drive. The hard drive is a crucial part of the success of the console. The rise and fall of the Xbox 360 depends on the hard drive which makes up the derive demand. The products sales didn't do as well as marketers expected because of the high cost of the hard drives. So to drive up sales Microsoft made an less expensive version with out the hard drive to offset the loss. So the marketing plan worked and now they have two console which both make money.

Marketing Implications of Involvement

The marketing involvement for the Microsoft store is very high. The reason it is high is because of
Electronic Software Distribution is a new technology that will soon take up alot of market share of software sales. The promotion for the store is extensive because Microsoft has a large target market which is its consumers. The market implication is high because Microsoft understands the consumers wants and needs. The wants and needs are to have all Microsoft products accessable at any given moment without long waits at a physical store, or long waits for custom shipping, saving money from shipping costs. The good thing is that Microsoft has loyal customers and a good product reputation which should give the store a opportunity to show why it is needed.

This is the new wave of technology and marketing for Microsoft products.

Consumer Decision Making

Social Influences on Consumer Buying

Microsoft Inc has recently open the Microsoft Store in the United States, currently it has a total of 5 stores stretching to countries such as Korea,UK , Germany and Japan. The Microsoft store isn't a physical store front, it is a virtual store that can be accessed from computers via internet.

The goal of the store is to offer its customers a faster way to get the products they need in their home or office. It is commonly referred to as Electronic Software Distribution. Ofcourse people will say Microsoft products are already online for sale. The difference is with ESD when you order a product you dont have to wait for the postal service to deliver it, it downloads to your computer within minutes saving the customer days and shipping fees. It saves people time who work and engage in alot of activites where its hard to get to a retail store or are tired of botched deliveries and re-sending of defective packages. This is where Social Influences on Consumer Buying steps in.

Social Influence on Consumer Buying is a major part of how this store will operate and stay open. Social Influence comes from office chatting, store talk, online forums and basically any where you meet people and converse on todays products likes and dislikes. So if a product comes to the market place and majority of the consumers who purchased the item give it a good review , and majority say they bought it from the Microsoft store and it saved them time and convenience plus it works well. Then that will spread word of mouth and influence others to use the Microsoft store, so forth will it spread through the internet forums and blogs increasing business and rendering Microsoft a good name in the ESD industry. Social Influence plays a big role in business today. Microsoft has given its customers their great products all of its entirety quick and easy to access, sounds like they have this under control.


Have you used the Microsoft store yet? If so how your experience, if not why?