Marketing Management: The Microsoft Experience

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Abstract

Most organizations involved in the IT business are global in scope and operation. Microsoft, with its headquarters in the United States, and a subsidiary in Singapore, is a huge organization selling IT products.

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Marketing field offers a variety of interesting and challenging career opportunities such as personal selling, advertising, etc.

In the Literature Review, we provided some theories on marketing, and a background on marketing and entrepreneurship.

Microsoft Singapore has put work and life balance as a business strategy. They care for their employees.

We discussed on the effects of Microsoft’s products, the operating systems Windows Vista and Windows 7.

Introduction

Marketing has been revolutionized with the advent of high technology, the internet, and consequently, globalization. Distance is no longer a problem of businesses and organizations because there is increased mobility, whilst business organizations are free to locate many screen-based activities wherever they can find the best bargain of skills and productivity. The world is having access to networks that are all interactive. Large networks enable us consumers to order and receive what we want to buy – where and when do we want these things to go.

Transportation too, is on the run, allowing us to be where we want to be at the soonest possible. Technology is the powerful force that now drives the world toward a single converging commonality. No place and nobody is insulated from the alluring attractions of modernity. And it drives these increasingly into global commonality, thus homogenizing markets everywhere. These are countless opportunities that are sometimes considered problems or hindrances in young organizations. But as a whole, they allow marketing to be broader in scope, faster, and larger in profit for the corporation.

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This is the globalization of markets. The result is a new commercial reality, the explosive emergence of global markets for globally standardized products, gigantic world-scale markets of previously unimagined magnitudes (Levitt, 1986, p. 20).

Literature Review

Theories in Marketing

“An economy is a social system for the allocation of resources to alternative productive uses” (Lazonick, 2003, p. 14). An economy is a social system that provides labour and capital inputs to the production of goods and services and that allocates the goods and services that the economy produces to participants in the economy.

In this section, we focus on some theories of entrepreneurship in relation to marketing. Chiles et al. (2007, p. 468) cite Schumpeter’s theory on “creative destruction” and Kirzner’s “entrepreneurial discovery”. Schumpeter argues that innovative entrepreneurs occasionally disrupt the existing market equilibrium to create disequilibrium. Marketing equilibrium is the relationship among customer, supplier, and competitor, and is governed by competition, collaboration and regulations or institutions. These three forces are areas being balanced by marketing equilibrium. Gummesson (2008, p. 314) defines equilibrium as that which “concerns the state of the external market, whereas the same notion can also be applied to the internal market of a company.”

In contrast to Schumpeter, Kirzner (cited in Chiles et al, 2007) suggests that entrepreneurship moves the market from initial disequilibrium toward equilibrium. Although both theorists disagree on this point, they both agree however that equilibrium is the ultimate reference point. Also, these two kinds of entrepreneurs in Schumpeter and Kirzner’s views are complementary: Schumpeter says entrepreneurs disturb equilibrium, creating disequilibrium, whilst Kirzner argues entrepreneurs make corrections that initiate convergence and equilibrium.

The Importance of Marketing

Marketing field offers a variety of interesting and challenging career opportunities such as personal selling, advertising, packaging, transport, storage, marketing research, product development, wholesaling, retailing, strategic planning and consultancy. A business organization must sell products to survive and to grow. Marketing activities help sell an organization’s products. (Jobber & Lancaster, 2003, p. 11)

The marketing concept states that an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals. Customer satisfaction is the major aim of the marketing concept. The organization has to find out what will satisfy customers, then it creates satisfying products. The organization must continue to alter, adapt and develop products to keep pace with customers’ changing desires and preferences. The marketing concept stresses the importance of customers and emphasizes that marketing activities begin and end with them. (Jobber & Lancaster, 2003, p. 15)

As consumers, people make decisions and ultimately adopt products for use and consumption. Companies endeavor to educate their target customers: promotional activity explains product usage, presents an image for the product and convinces customers that they have a reason to purchase. More attention is now being paid to the skills, attitudes and motivations of personnel involved in the marketing channel. Most companies are recognizing the key role played by their personnel, particularly in their interaction with customers.

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The Philosophy of Marketing

For a firm to be marketing orientated requires that a number of changes take place in organization, in practices and in attitudes. Implementing the marketing concept requires more than paying lip service to the ideas inherent in the concept. Behavioral sciences can lead to an understanding of buyer behavior; another example is the development of quantitative and qualitative techniques of marketing research for analyzing and appraising markets. (Jobber & Lancaster, 2003, p. 13)

Strong Market Position

Market position refers to the relative market share that a firm holds in relation to its competition. Firms that have a large share of a market tend to be the most profitable. However, market share does not necessarily create profitability. Business strategies, such as the marketing of high quality products, and the provision of good service, result in profitability.

Marketing Strategy

The 4Ps which is Product, Price, Place, Promotion, and a fifth which is people, is a marketing strategy employed by most firms for competitive advantage. The marketing mix variables are usually considered as internal variables over which a manager has control and makes decisions (albeit influenced by customers, competition and other external uncontrollable factors). Marketing Strategy indicates the specific markets towards which activities are to be targeted and the types of competitive advantages that are to be developed and exploited.

The strategy requires clear objectives and a focus in line with an organization’s corporate goals; the “right” customers must be targeted more effectively than they are by its competitors, and associated marketing mixes must be developed into marketing programmes that successfully implement the marketing strategy.

A marketing strategy can be likened to a recipe. Lancaster and Reynolds (2002, p. 14) state that ‘The ingredients are the marketing functions. Just as recipes vary according to the dish, so different marketing strategies require differing blends of functional ingredients. If a minor ingredient is miscalculated or forgotten, a recipe may not be successful. The same is true with marketing strategy where all functional ingredients depend on each other for success.’

As part of the recipe, advertising and promotion therefore as marketing tools to lure prospective students to study or acquire lifelong learning or continuing education, is not enough. There has to be added ingredients to the recipe.

A marketing opportunity arises when the right combination of circumstances occurs at the right time to allow an organization to take action towards reaching a target market. An opportunity provides favorable chance or opening for the firm to generate sales from identifiable markets (Jobber & Lancaster, 2003, p. 656).

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The attractiveness of marketing opportunities is determined by market factors, such as size and growth rate, as well as competitive, financial, economic, technological, social, ecological, legal and political factors. (Jobber and Lancaster, 203, p. 658)

These factors affect the market but are stimulating too; educational institutions are urging and enticing prospective students to act and enroll in the courses available. Moreover, the size and growth have reached such a proportion; the strong competition can be felt in the environment. The growth and ongoing competition are also affected by other factors like financial, economic, technological, social, ecological, legal and political factors.

Product

Jobber and Lancaster (2003, p. 256) state that ‘Marketing must aim to satisfy customers. In the context of products, this goal demands an understanding of the core product requirement. However, it depends on marketers identifying and providing the actual product features expected and – with ever increasing importance – aspects of the augmented product such as customer service, warranty, delivery and credit, personnel installation and after sales support.’

Advertising and Promotion

Jobber and Lancaster (2003, p. 467) states that ‘When an organization combines specific ingredients to promote a particular product, that combination constitutes the promotional mix for that product. The four traditional ingredients of a promotional mix are advertising, personal selling, public relations and sales promotion.’

Advertising is a paid form of non-personal communication about an organization and its products that is transmitted to a target audience through a mass medium such as television, radio, newspapers, magazines, direct mail, public transport, outdoor displays or catalogues. (Jobber and Lancaster, 2003, p. 468)

Marketers indirectly facilitate exchanges by focusing information about company activities and products on interest groups (such as environmental and consumer groups), current and potential investors, regulatory agencies and society in general. Some marketers use cause related marketing, which links the purchase of their products to philanthropic efforts for a particular cause. Cause related marketing often helps a marketer boost sales and generate goodwill through contributions to causes that members of its target markets want to support. (Jobber & Lancaster, 2003, p. 457)

Price

The price is negotiable because the suppliers of the product or service are competing to get customers’ attention. Educational institutions can offer discounts, scholarships, etc. to students who are working full time.

The price customers are prepared to pay determines the level of demand for a product or service which affects the prosperity of the marketing company and the company’s competitive position in the market place. Price levels have far reaching implications for the national economy. They influence wages, interest rates and government policy. (Lancaster & Reynolds, 2002, p. 28)

Price has a strategic element, since price is commonly how products become positioned against other products in the market: undercutting competitors on price is a common way of competing. Although several areas of marketing activity, including managing the supply chain, can lead indirectly to cutting costs, price is the only area where marketers can directly improve the profits of the firm. (Blythe, 2006, p. 447)

Other scientists, such Montgomery and Rossi (1999, cited in Weitz, et. al.) used methods to improve estimation of store-based price elasticities.

Methodology

First, we developed a hypothesis on marketing in the context of the present trend of globalization: that marketing has been revolutionized because the scope and limitation are endless. Any firm can market its products all throughout the vast arena of marketing which is the world interconnected by computers and the internet.

From this initial step in our thesis on marketing, we have to do the next step, and this is the gathering and analyses of the vast literature or reading materials on marketing: from books, periodicals, magazines and journals, and the internet.

Our study led us to the firm that has made a remarkable and endless growth in the latter part of the 20th century and now the 21st century – Microsoft. To be more specific, we focused on Microsoft Singapore. Microsoft Singapore has implemented what the rest of its headquarters in the United States has done to meet the demands of ideal marketing, to a new and divergent market which is Singapore.

We focused on the launch of Windows 7 and the almost ‘failure’ of Windows Vista, two of Microsoft’s series of operating systems that are now in use by millions of its customers especially the demanding global market of Singapore.

Findings and Interpretation: Windows Vista and Windows 7

Before we focus on the technical aspects of Microsoft’s successes in its products, we like to give importance on Microsoft Singapore’s website, WORK + BALANCE, a striking yet attractive term in the age of globalization, for it involves work-life balance. This is something many firms have missed in their quest for so-called excellence and competition. Microsoft makes its presence in Singapore with more emphasis on work and life. Microsoft Singapore focuses on business productivity and personal productivity, using the latest in technology and what Microsoft products can offer. (Microsoft Singapore, 2009)

Of course Microsoft is Information Technology to the max. And Microsoft Singapore places much importance on IT because it is where their mission is aimed at and what customers and organizations are in dire need. Two of the links in their website states: Business Productivity and Personal Productivity. These are both focused towards work-life balance initiatives. Work-life balance is about employees, family, and the firm. The three are interconnected. The firm has to promote the welfare of the individual employees. The employees have to find satisfaction in their job and happiness with their respective families.

In our discussion of the marketing philosophy, we talked of marketing orientation, and this is to focus the spotlight on Microsoft. The firm has never been more focused on marketing than ever; in fact Windows Vista and Windows 7 could have been planned all for the purpose of a unified and effective marketing. We believed the two OS were implemented with careful yet discreet research and planning before they were introduced to the market. It is marketing strategy at its best (and we don’t know how legal could it be).

All throughout its existence, Microsoft has maintained a market position, only equaled sometimes but never surpassed. It uses marketing strategy, such as product, price, place, and promotion, as a requirement for success.

But how does Microsoft fair with the home and small business sector? In a research, it was found that Microsoft had a potential problem in one particular market sector – the home and small business sector (those with less than 50 PCs). This segment felt neglected by parts of the software distribution chain. They are always overlooked because their spending power was small when compared with large corporate buyers. (Berry, 1998, p. 107)

Then, these questions: Why is the launch of Windows 7 much more successful than Windows Vista? What did Microsoft do right in the marketing or product launch strategy for Windows 7 that makes it a much more successful Product than Windows Vista?

Windows is an operating system of Microsoft. Fehily (2010) says it is a launching platform for programs such as Microsoft Word, Photoshop, etc. (p. x). Mueller (2007) argues that the reasons why Microsoft released Windows were to allow users to run more than one application at a time, and to “provide a friendly interface that made using a computer easier” (p. 4).

But the fact is it has introduced its Windows 7 after the launch of Windows Vista. Vista wasn’t well received although Microsoft’s intention of releasing multiple editions of its operating system was to target different segments of its user base with different features at different price points. Doing so confused the market; many users urged Microsoft to come up with one simple, all-encompassing version of the operating system; thus the long-awaited Windows 7. (Lee, 2010, p. 1)

Leonhard (2009, p. 1) call Vista users as Vista victims. Windows 7 dumps the Windows Sidebar, which was once touted as one of the major reasons to upgrade from XP to Vista. All the old Sidebar functions now take place on the desktop itself.

However, Vista was sort of a preparation, and it has many features that Windows 7 has made use of. Some of them include the Windows Defender, Microsoft’s answer to the spyware threat. This is an easy-to-use and effective tool that can detect and deal with spyware both in real time and by means of on-demand scanning. Because Windows Defender is native to the Vista OS, it is a tool to deal with this growing problem without the need to purchase expensive third-party products.

The Windows Defender has the following characteristics:

  • Easy-to-use interface: Windows Defender provides an intuitive interface that is accessible via Security Center or independently.
  • Quick Scan: Defender affords you a quick and easy way to perform a scan of only those areas that most often hold spyware – such as specific areas of the Windows Registry and the WindowsSystem32, program files, and user directories – rather than scanning your entire system.
  • Full scan: provides the ability to scan the click system at a click of a button. The tool scans every drive and directory on the system.
  • Custom scan: This option provides an interface for the user to customize a scan that better fits their needs. With a custom scan, you can select specific drives and folders that you want to scan.
  • Real-time scanning: Windows Defender protects the system in real time so that if spyware infections occur they can be detected and remediated.

Windows 7 could be the answer for consumers to change the Vista, or at least improve the Microsoft OS. Windows 7 comes with a number of free programs. Upon its launch, Microsoft came up with a marketing strategy no one could refuse: nearly every computer sold since October 22, 2009 had Windows 7 preinstalled. These programs allow the user to do different things, like write and print letters, browse the Internet, play much, or create slides from photos and burn it to a DVD automatically. (Rathbone, 2009, p. 10)

Some facts of the Windows 7 launch:

  • Microsoft took pains to make Windows 7 the most secure version of Windows yet.
  • Windows makes it easy for several people to share a single computer; each person receives his or her own user account. It includes controls for parents to limit the time their kids spend on the PC, as well as what programs they can open.
  • Windows includes a new backup program that makes it easier to make copies of important files every night.
  • Search program allows you to find a missing file by just clicking the Start menu and type what that file contained (Rathbone, 2009, p. 11).

Microsoft’s strategy pushed (or forced) consumers into buying Windows 7. Consumers are dragged into Windows 7 without a choice. Their new computers came with Windows 7 already installed. It was possible too that their companies switched to Windows 7, and everyone has to learn it. Because people buying new PCs automatically already receive Windows 7 preinstalled on their PC, Microsoft is targeting two other groups: people using Windows XP and people using Windows Vista. (Rathbone, 2009, p. 11)

It’s a marketing strategy no one could have thought. Now there’s more money to Gates’s pocket. We tend to believe that Microsoft looks after the needs and wants of its customers, but something else is cooking up. Windows always keeps Microsoft’s interests in mind. When you call Microsoft for help, they automatically charge $50. Likewise, Microsoft also uses Windows to plug its own products and services. For example, Internet Explorer’s Favorites area, a place for the customer to add their favorite Web destinations, comes stuffed with Microsoft’s Web sites. Simply put, Windows not only controls the computer with a Windows 7 OS, but also serves as a huge Microsoft advertising vehicle. (Rathbone, 2009, p. 11)

Vista owners will learn to like Windows 7. This is to mean the launch of Windows 7 is a relief to Windows Vista owners.

  • There are no more nag screens, which is one those hated in Windows Vista.
  • Better backup: Vista made backup copies of everything, even if you wanted to back up only a few files or folders. Windows 7 lets you back up everything but it also offers an option for selecting only a few things to back up.
  • Runs better on laptops: Vista was so slow on laptops.

If your PC already runs Windows Vista, it will probably run Windows 7. In fact, windows 7 runs better on some PCs, mostly laptops, than Windows Vista does.

With Windows 7, Microsoft still has many editions. However Microsoft is expected to focus its marketing effort on just two editions – Home Premium and Professional – just as it did with Windows XP.

‘Windows 7’s primary aim is to enable the user to run and manage other software applications’ (Muir, 2009, p. 15).

If one is currently running Windows Vista, he/she can upgrade to Windows 7 directly from within Vista. Windows XP users will need to install a fresh copy of Windows 7.

Windows 7 brings numerous important changes in both the interface and the underlying architecture (Stanek, 2010, p. 3).

Microsoft first introduced gadgets in Vista. In Windows 7, gadgets are not confined to the sidebar but are free to roam about on the desktop. (Lee, 2010, p. 19)

In Windows XP and Windows Vista, there are special folders named “My Documents,” “My Pictures,” and so on, for storing files. However, not many people actively used these folders for storing their personal data. Instead, people created their own folders. This makes indexing and searching very time-consuming and frustrating.

In Windows 7, Microsoft has attempted to address this problem with the concept of Libraries. Conceptually, Libraries are a central repository of all the various folders on the computer. To search for files, one can go to the Libraries and navigate the various subfolders contained within it. One can still create an assortment of folders, but he/she can avoid the chaos by adding a folder to one of the libraries. (Lee, 2010, p. 26)

The Aero Peek feature allows a user to preview windows without switching to them. And Jump Lists allow you to jump to a specific destination or task by simply right-clicking an application icon. (Lee, 2010, p. 35)

File Sharing has been one of the features common to all Windows operating systems. Besides sharing files with other Windows computers the File Sharing feature in Windows also allows users to share files with other non-Windows computers, such as Mac OS X and Linux users. In Windows 7, file sharing has been further simplified with the new HomeGroup feature.

In Windows 7, Microsoft has made file sharing very simple with HomeGroup. Using, HomeGroup, you can easily share files as well as your digital media (such as music and video) with other users on the same network. HomeGroup also allows you to share one or more USB printers connected to a single computer with the rest of the users on the network. (Lee, 2010, p. 37)

The touchscreen support, especially multitouch, consists of three games and three Microsoft Surface applications that have been recreated for Windows 7.

Conclusions / Recommendations

Marketing has many concepts. It involves meeting the needs and wants of the customers. But this philosophy is aimed at meeting the objectives of the organization, which is to sell and gain competitive advantage.

In our discussion on Microsoft’s marketing, we dare not criticize but Microsoft should lay its cards on the table.

We said that there’s more (and more) money in Bill Gates’ pocket now with marketing that could not be surpassed. Something else is cooking up. When you call Microsoft for help, they automatically charge you $50. Microsoft uses Windows to plug its own products and services. Internet Explorer’s site is stuffed with Microsoft’s Web sites. We say that marketing strategy should put the customer first on top before the product.

References

Berry, M., 1998. The new integrated market direct marketing. United States of America: Gower Publishing Limited.

Blythe, J., 2006. Principles & practice of marketing. London: Thomson Learning.

Chiles, et al., 2007. “Beyond Creative Destruction and Entrepreneurial Discovery.” Organization Studies 2007, 28 (04).

Fehily, C., 2010. Microsoft windows 7: learn Microsoft windows the quick and easy way. Berkeley, California: Peachpit Press.

Gummesson, E., 2008. Total Relationship Marketing. UK: Elsevier.

Harvey, G., 2009. Windows 7 for dummies. Indianapolis, Indiana: Wiley Publishing.

Jobber, D. & Lancaster. G., 2003. Selling and sales management, 6th edition. London: Prentice-Hall.

Koerner, B., 2008. Windows Vista security for dummies. Indianapolis, Indiana: Wiley Publishing, Inc.

Lancaster, G. and Reynolds, P., 2002. Marketing made simple. Great Britain: Butterworth-Heinemann Publications.

Lazonick, W., 2003. The theory of the market economy and the social foundations of innovative enterprise. Economic and Industrial Democracy 2003, 24 (9). DOI: 10.1177/0143831X03024001598.

Lee, W., 2010. Windows 7: up and running. United States of America: O’Reilly Media Inc.

Leonhard, W., 2009. Windows 7 all-in-one for dummies. Indianapolis, Indiana: Wiley Publishing, Inc.

Levitt, T. (1986) The marketing imagination (New expanded edition). New York: The Free Press.

Microsoft Singapore, 2009. Work + Life, All about optimizing technology. Web.

Mueller, J. P., 2007. Windows administration at the command line for windows vista, windows 2003, windows XP, and windows 2000. Indianapolis, Indiana: Wiley Publishing, Inc.

Muir, N., 2009. Windows 7 just the steps for dummies. Indianapolis, Indiana: Wiley Publishing, Inc.

Rathbone, A., 2009. Windows 7 for dummies. Indianapolis, Indiana: Wiley Publishing, Inc.

Smith, P. R. and Taylor, J., 2004. Marketing communications: an integrated approach 4th Ed. United Kingdom: Kogan Page Limited.

Stanek, W., 2010. Windows 7: the definitive guide. United States of America: O’Reilly Media, Inc.

Weitz, B. A. and Wensley, R., 2006. Handbook of Marketing. London: Sage.

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