Product Life Cycle

Product Life Cycle - Xbox 360

Microsoft has expectations on its game console Life cycle. The Xbox 360 has a proposed 10 -15 year Product Life Cycle. Microsoft executive Shane Kim stated at Microsoft the company "firmly" believes that the Xbox 360 "has a life cycle through 2015," or exactly ten years since it launched.

Talking with Mercury News, Microsoft's Robbie Bach quelled our fanboy fears (or hopes) of a new Xbox console releasing anytime soon, admitted that they're in no hurry to release the 360's successor anytime soon."The life cycle for this generation of consoles - and I'm not just talking about Xbox, I'd include Wii and PS3 as well - is probably going to be a little longer than previous generations," admitted Bach. "Just coming up with something that's faster and prettier isn't going to be sufficient." Well said.So, if our math skills are up to par, we'd say a new Xbox revision should be headed down the pipeline sometime in 2011. Yeah, about then, give or take a year

Chapter 10 Developing and Managing Products

Test Marketing

Microsoft Inc. has been conducting some test marketing with their new product Microsoft TV Foundation Edition 1.7 Platform.

TiVo's business model, however, is changing the way people watch TV, even the kinds of companies competing in the multi-billion-dollar television market. U.S. software giant Microsoft, after testing the waters in its home state of Washington, made a deal in March with Mexico's biggest cable-TV operator, Cablevision Mexico, to offer its Microsoft TV Microsoft TV is a division within Microsoft Corporation that develops software platforms for use in set top boxes to access programming over a Cable TV network. It provides integrated audio, video and data services over a single network. Foundation Edition 1.7 platform to subscribers in the capital city. With this product launch, Cablevision becomes the first company to roll out the Microsoft platform in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies.

This maybe the new wave of T.V. and another successful business deal for the growing software giant Microsoft.

Sales Promotion

Microsoft on October 22 offered a promotion deal for those who are planning to buy a new Windows 7 PC or to upgrade to the newest operating system that discounts the upgrades as much as 58%. The deal applies when consumers purchase a new computer equipped with Windows 7 Home Premium, Professional or Ultimate. The offer is available from Amazon.com and Staples. For example, when buyers purchase a new Windows 7 PC, Staples will sell a copy of Windows 7 Home Premium Upgrade for $49.99 which is a 58% savings compared to the $119.99 list price. On the other hand, Amazon has dropped the price of Windows 7 Home Premium Upgrade to $59.95 which is a saving of 5% or $60 compared to the list price.

Under the promotion deal, when customers ordered a new Windows 7 notebook or desktop at the same time, Amazon will give a $85 savings (42% off) on Professional Upgrade i.e $115.99 and an $80 savings on Ultimate Upgrade i.e $139.99.

This sales promotion was a success.

Public Relations

Public Relations

Microsoft has released a new public relation effort through its public relation firm Waggener Edstrom.

Twends is the new tweet analysis tool that is free and available to any interested parties. WaggEd reps are using the tool in-house to track budding trends. Waggs also have shared twendz “with various Microsoft clients,” a company spokesperson said.

Basically what Twendz does is Twendz marries twitter search with real-time sentiment analysis. twendz is able to effectively generalize the attitudes and feelings about a particular topic, product or brand as the conversation happens. So, for example, the latest top trend on twitter is about the new iPod Shuffle. twendz is able to tell you how people are feeling about the new iPod, and it can summarize those feelings and attitudes for you over time.”

Like many tech PR firms, WaggEd also monitors religiously Twitter trends involving its biggest client. On March 11, WaggEd went beyond simply monitoring tweets: It introduced a beta version of a software tool for monitoring and analyzing them.

I think it is an very effective public relation. Reason is that the analysis wouldnt be accessible to normal tweeples so it gives anyone free to access to analyze things they like or just play around and read data. Also it helps business track data too.

Public Relations and Advertising

Advertising

Microsoft is seizing what is perhaps its most valuable advertising real estate, Microsoft said on Friday it has launched a pilot program to sell ads on the Windows desktop.

Advertisers can buy the right to offer various themes that customize the desktop image and that promote various gadgets and even custom sounds for the Windows 7 operating system. Microsoft stressed, however, that users will choose which, if any, of the customizations they want to download.

The Windows Personalization Gallery offers a desktop branding experience for users throughout the operation of their Windows 7-based PC, including backgrounds, slide shows, borders, and application audio elements.

Microsoft's pitch is that the program will allow consumers to connect with brands they particularly like.

The new Windows Theme Experience and Windows Personalization Gallery in Windows 7 allow consumers to customize their technology to reflect the things in life they are most passionate about, Microsoft vice president Darren Huston said in a statement. "These are great examples of Microsoft innovation and technology coming together to enable top global brands to reach audiences in new and interesting ways."

Microsoft said that the advertising program is a test that will run through October of next year. Early partners include Porsche, Infiniti, and Ducati, and Microsoft itself is participating.

"Microsoft is a key partner in our global advertising strategy; they constantly provide new ideas and opportunities which are tailored to our brand and exciting for corporations customers." The Windows Personalization Gallery and Windows Theme Experience are unique offerings that will provide Infiniti with a new set of tools to integrate our brand elements into the lives of consumers everywhere."

Twentieth Century Fox, another early advertiser, will use the Windows desktop to promote its movies.

Microsoft said that the themes are available globally from Microsoft's Web site.

The purpose of this ad is to introduce Microsoft's new innovation for corporations to advertise. The goal is get corporations to participate in this advertising medium so they can make lots of money and also expand their name and brand. If this becomes a success it will increase Microsoft's revenue and give them a stronger presence in the software industry.

Demand

Inelastic of Demand

The changing of the Xbox 360 will have an inelastic demand because regardless of the price of the on demand games it will not effect the products demand. Below will explain

With so much going on at Microsoft’s E3 keynote, the software giant decided to wait until things had calmed down before they announced what one of their biggest feature will be. The Xbox 360 will be getting games on demand; these will be full retail games.

The new on-demand access will launch on August, and will start with 30 game titles, new games will then be added each week. You will be able to purchase the games with a credit card, so no more worrying if you have enough Xbox points.

Xbox 360 users have already been getting exited at the fact that the points are on their way out, but Engadget have heard it on good authority from Microsoft that Xbox 360 points are here to stay. For those who have wondered when Xbox will offer game rental, this is not happening just yet, maybe in time.

Pricing Concepts

REVENUE

Microsoft Corp has announced revenue of $13.10 billion for the fourth quarter ended June 30, 2009, a 17% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $3.99 billion, $3.05 billion and $0.34 per share, which represented declines of 30%, 29% and 26%, respectively, when compared with the prior year period. Microsoft's business continued to be negatively impacted by weakness in the global PC and server markets. “In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter.” The financial results for the fourth quarter ended June 30, 2009, included the deferral of $276 million of revenue related to the Windows 7 Upgrade Option program that was announced on June 25, 2009. This revenue deferral reduced earnings per share by $0.02. The fourth-quarter financial results also included $193 million of legal charges, $108 million of impairments to investments and $40 million of additional severance charges related to the previously announced plan. Operating expenses were reduced by $105 million of capitalized research and development expenses due to the technical milestones reached for Windows 7.

For the fiscal year ended June 30, 2009, Microsoft reported revenue of $58.44 billion, a 3% decline from the prior year. Operating income, net income and diluted earnings per share for the year were $20.36 billion, $14.57 billion and $1.62, which represented declines of 9%, 18% and 13% respectively. “While economic conditions presented challenges this year, Microsoft maintained their focus on delivering customer satisfaction and providing solutions to our customers to save money.

Retailing at Microsoft

The company i am pursuing is Microsoft a software giant who does also produce hardware, they currently dont have any retail stores that are physical they have currently opened the Microsoft store online. The online store was made to provide its customers with its products directly from Microsoft directly to them. The way it works is when you buy a program from the Microsoft online store you dont have to wait for shipping, or pay for shipping and deal with the usual problems of out of stock or shipping company mistakes, the software is downloaded instantly to your computer with in moments or how ever long it takes your computer to download. The prices are moderate to high and will get maximum service through the online customer support and via phone service. This is an effort to please their customers and cut cost on packaging and shipping fees. Microsoft announced plans to open retail stores, hoping to boost visibility of many of its products and its brand. The move seems to be an effort to mimic the success that Apple has had with its retail stores. The news is just too tempting not to have some fun with. So here are some yet-to-be-officially-revealed details about the Microsoft stores.

Microsoft plans to open its own retail stores to "transform the PC and Microsoft buying experience," it hired an executive to run the retail operation.

The stores will help Microsoft engage more deeply with consumers and learn firsthand about what they want to buy and how, according to a Microsoft press release. Deciding where the stores will be located and what they'll look like will be the first order of business for David Porter, who will report to work on Monday as corporate vice president of Retail Stores.

Microsoft has long been perceived as lagging behind rival Apple in appealing directly to consumers, and Apple has a head start of several years in running a chain of stores. While Microsoft makes its own Xbox game terminals, Zune media players and some other devices, it doesn't have a branded PC product of its own like Apple's Macintosh.

This will be the test of innovation and creation if Microsoft can become a good competitor in the retail business?

A Visit to Target (Retailing)

In this blog i will be talking about retailing at the store i visited this weekend. This weekend i took a visit to Target one of the worlds largest retailers. Target would be considered as a chain store as its classification as a retailer.

As i am a frequent Target customer a lot of things i have noticed but didn't understand why until i read this chapter on retailing which explained it all, it is retail marketing. Target has a wide variety of product assortment such as electronics, clothes, frozen foods, a fast food restaurant on the premises, sporting equipment, jewelry the list goes on. I noticed that the baby pampers, wipes weren't next to the section where the accessories for babies were such as toys, bottles, bath tubs and etc. The baby pampers and wipes were in front next to aisle where you would find deodorant, tooth paste , tooth brushes, and hygiene products. So that stood out to me also their location is key to their success, they are located in a shopping center in an area which is urban and middle class to lower class with other retailers in the same center. So their products are priced as inexpensive to moderately expensive but not out of the price of its demographics. They have clothes in front as you enter the store, maybe to promote the selling or becoming a seller of clothes, their electronics section is separate. The store appearance is generally clean it is always alot of traffic, but they have less sales people on the floor so you have to look for a lot of stuff yourself which to me is a good thing for a retailer it gets customers a chance to find other things they should buy. I observed a lot of things that day about retailing and by the looks of the store and shoppers, the people at Target know what they are doing.