Image is everything. And now we talk in terms of brand perception, regarding which Microsoft are experiencing a “sharp decline”. But why?
“Microsoft’s brand power has been in sharp decline over the past four years in the US, an indication the company is losing credibility and mindshare with business users, according to a recent study by market research firm CoreBrand.”
So says Elizabeth Montalbano of PC Advisor in her assessment of Microsoft’s declining brand.
Brand is a queer thing at the best of times, ruled by the perception of your customers and seemingly just out of reach. Influencing how people look at you or your business is difficult, since brand perception covers a lot of things, not least marketing.
For the likes of Microsoft, they have massed ranks of marketeers, busying themselves managing the corporate brand equity on a global scale.
So what’s going wrong?
Brand power as a metric
It’s as well to say a few words about how brand power is assessed:
“CoreBrand measures brand power using four criteria. It first rates the familiarity of a company’s brand. Once a company has a certain level of familiarity, they are ranked according to three ‘attributes of favourability’: overall reputation, perception of management and investment potential”
Which must seem like some kind of dark art, in that the whole thing is “wheels within wheels” of metrics chasing after ever smaller metrics. But these guys get paid tons of money to understand this stuff, so let’s just assume they’re right, yeah?
The thing to keep in mind here is that Microsoft are an almost unfathomably large company which bestrides nations and markets alike.
They’re notorious for their Byzantine internal structure and their culture of pitting departments against each other, in some kind of closed Darwinist “only the strongest shall survive” battle of skills.
There’s also the vast array of products & services they offer, which must be beyond the recollective powers of any one individual. For any business to know how to sell its products & services, it must first know what they are.
Of course, it’s not like Microsoft don’t know, but there’s overlap, of which breads confusion. Anyone remember the blank-faced expressions when Microsoft announced seven different versions of Windows Vista?
From a support point of view alone, that’s just crazy. From a consumer point of view, the moment someone has doubts, there’s no doubt at all — just buy a Mac.
And that seems to be a growing trend. People are buying Macs, not enough to inflict injurious harm on Microsoft right now, but it’s enough to give them pause for thought.
In the face of marketing efforts by Apple and their “I’m a Mac, I’m a PC” advertising campaign, plus the continuing problems with the Zune music player, Microsoft may well have a measure of the challenges they face.
However, this decline in brand perception has been going on for not weeks or even months but several years.
When I look at the many directions Microsoft are pursuing, they’re either going to spread themselves too thinly and endure “mission creep”, or they’re going to end up pissing off their partners, confusing their customers further and have interdepartmental conflicts over resources and convoluted staff hierarchies; which has been the case before now.
Microsoft — all things to all business?
As an example, the Xbox is an excellent one. Here’s where Microsoft have a great idea, but little inherent knowledge of the business they’re getting into.
As a product, the Xbox is pretty impressive, demonstrating that Microsoft can least carry off a success and maintain it. Problem is, a successful, well-received product is one thing, making a profit and breaking key markets like Japan are different things all together beyond the reach of even Microsoft.
Further to this, Microsoft have enormous over-heads. Before they can even consider entering a new market, they need to be damn sure it’s going to be worth a $1 billion to them by the 3rd year, or it’s a waste of their time.
At the highest level, the Xbox was the cause of disagreements as to whether a games console was the right direction for Microsoft. Worryingly, prior to the Xbox, Microsoft’s only entry into the hardware market had been peripherals like keyboards and mice.
For the businesswoman and businessman following IT affairs, there has to be a certain irony to how they feel. Microsoft must appear enveloped in the very thing they have so effectively used as a weapon against their competitors in the past; Fear, Uncertainty and Doubt.
Not to be the only child of their new entertainment division, the Zune came into existence, though success of any kind is still elusive.
Microsoft really only make the serious money from their Windows and Office divisions. Everything else is either break-even or subsidized by the aforementionables.
So with all of this product & service sprawl, there’s not only brand confusion, but brand dilution — just what do Microsoft do these days? Well, a bit of everything! Sounds good, doesn’t it? Problem is, it doesn’t quite work that way:
“Microsoft, which has been diversifying its business beyond packaged software in the past several years, has struggled to articulate how the many facets of its business — software, entertainment and online among them — show a cohesive business plan.”
At some point, the wheels really came off the Microsoft brand band wagon. Putting them back on is going to be a team effort. And when faced with smaller, more nimble and agile competitors in this long race, avoiding rough ground in the future will be an even greater challenge…