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MICROSOFT BRANDS
SUBTITLE: 2 BRANDS OR NOT 2 BRANDS

INTRODUCTION

Branding is big business and it's important to do it well. It can be almost Make or Break for a company. How can you create a strong brand? As it happens, it would seem that Microsoft may not be doing too well on this question in the early part of 2006.

The right choice of brand can be a powerful element in driving sales growth. Sometimes one can learn a great deal from the way a big company handles a particular aspect of marketing. This is not always true when it comes to branding. One 'problem' many big companies have is that they have too much cash. Smaller, leaner companies must use guerilla marketing techniques to make the maximum impact with the minimum of cash. To be successful, they must be very creative and effective in the way they create their brand. A big company may have many decision-makers and the final brand choice may be a committee decision. At some point, the die is cast and they then try to make the brand work the best way it can. Microsoft is currently defending why it should continue to have $ 35 billion US on hand, which it maintains is for "new technology and other things important to the company's operations". So if required they can certainly invest money in making their new brands well known.

This newsletter reviews what Microsoft has done and suggests some lessons that can be drawn from their activity. Branding is an important concept for all sizes of companies, including even one-person enterprises. In this newsletter, we will explore in some detail what exactly a brand is and what it can do for your company.

WHAT IS A BRAND?

Modern marketing particularly to consumers ensures that we are all bombarded with an avalanche of brands as we go about our daily lives. The word brand is used with a variety of meanings. Just do a Google search for definitions of brand to see some of this variety. The Wikipedia entry on brand also has a welter of information. Surprisingly most of these meanings are associated with the use of the word brand in commerce and marketing.

Originally the word brand was connected with the notion of burning. A brand might be burned into the skin of an animal to indicate ownership or into the skin of a convict to indicate shame. It was a way of applying a permanent mark. Only in the 20th century did it come to be applied as the name of some good or service, which is for sale. In this usage, it's almost like a label. That notion of brand = name is still the way the majority of business people use it. Others have used this word brand to suggest other associated attributes of the product or service. For them, an often used description is that brand = experience.

Brands are such an important factor that some agencies deal only with brands and how they can be created and managed effectively. Two such agencies confirm the two different views. The Brand Institute claims to have created and tested more names than anyone else and offers a full-service brand identity consultancy dedicated to the strategic and innovative development of brand naming and identity solutions. Their clients would seem to be mostly in the pharmaceutical industry. BrandTrust of Chicago is another agency dealing in brands, but for them it is more than just a name. They believe a brand is a promise. They help clients better understand customer expectations and deliver the desired brand experience.

The notion that a brand is more than just a name seems to be gaining ground. Perhaps one of the most intriguing applications of the branding concept is when applied to cities. Cities already have their (brand) name but many are trying to imbue that with a sense of the brand experience to be found when you visit the city. Glasgow is often cited as the best example of such an approach. Edinburgh is sometimes known as the Athens of the North. Glasgow used to be seen as not in the same league, typified perhaps by the Will Fyfe drinking song, "I belong to Glasgow". That's all changed. Glasgow is now seen as one of the top cultural cities in Europe. This is largely the result of the efforts the city made in its branding project.

One of the key proponents of cities as brands is Simon Anholt. He publishes the Anholt City Brands Index. He is firmly in the 'brand = customer experience' camp. As he says, "Cities have always been brands. Paris is romance, Milan is style, and New York is energy. These are the brands of cities and they are inextricably tied to the histories and destinies of these places. Yet the brand of a city is not always accurate ... some cities benefit from a positive brand that they do little to deserve."

So a brand can be a name or more than a name. Let's examine what Microsoft has been doing on this brand dimension.

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2 BRANDS OR NOT 2 BRANDS

This slightly provocative heading came to mind in reading about Microsoft's branding activities during the early part of 2006. Any very large company has a problem since it has such a plethora of products. It seems that the powers that be at Microsoft decided that branding would in some way improve the situation. So a new brand, Live, was born. An early signal of this was back in November 2005. Bill Gates said that Microsoft was working on two products, "Windows Live" and "Office Live" that would create opportunities for the company to sell online subscriptions and advertising. Both would be targeted at smaller businesses and consumers. In many cases, companies would have a choice between running software on their own servers or as a Live service.

At the same time, Microsoft would continue to maintain the existing brand, Microsoft Networks, often shortened to MSN. For the new brand, Live, Microsoft does own the live.com domain. Even if this brand is only intended as a name, it has a slightly confusing aspect. How should it be pronounced? Is it linked to the verb, live, pronounced liv, implying an exhortation to make the most of life. Or is it linked to the adjective, live, pronounced lyve, and related to something that is lively or alive?

There was a more important confusion that developed. However much money a corporation may have, trying to maintain two brands effectively is a challenge. ZDnet has now had two articles about this confusion ( February 8, 2006 and April 20, 2006 ). It seems that MSN (Microsoft Networks) is intended as the brand for content. Live is intended as the brand for services. If you are unclear about this division, you don't need to feel bad. One of the Live Team Leaders has commented on her blog that the distinction is not at all clear within the company either.

If this is not working very well for Microsoft, why is this? What is a successful brand? Can a company have two successful brands at the same time? These are the questions we will explore.

BRANDING CREATES AWARENESS

Nike swoosh

Creating awareness is often a key reason corporations decide to develop their brand. Indeed one of the most successful brands is typified by a symbol rather than a brand name. It reminds you of the corporation just as a name label might. We don't need to give the name of the corporation since you all know who we are talking about.

That awareness creation is the absolute minimum for a brand. It should be instantly recognizable and not be confused with any other companies or products. The new Microsoft brand name, Live, is not ideal from this point of view. Microsoft may now own the domain, live.com, but that doesn't mean all the other ways the word is used will suddenly disappear. It's always dangerous to take a very common word and attempt to turn it into a brand or company name. Perhaps the worst real-life example was trying to use Monday as a company name. This was the brain wave of PwC Consulting in June 2002, as it divorced from its accounting parent. Thankfully this debacle disappeared when PwC Consulting was absorbed by IBM shortly thereafter. Live is not quite as bad as Monday but it is almost in the same league.

If a brand is seen merely as a name, then awareness may appear fine as an objective. How many of your target market prospects are aware of the brand name? That's acceptable as an objective. However a brand can do so much more than just be recognized.

CAN A BRAND 'MAKE' THE SALE?

Products or services rarely sell themselves. However marketing efforts can improve their visibility and provide reasons why their purchase would be desirable. A simplified view of this is provided by the word AIDA. AIDA is an acronym to list the steps involved in getting potential customers to move along to a purchasing commitment. AIDA stands for

AwarenessMove to RightInterestMove to RightDesireMove to RightAction.

Marketing and selling efforts must coordinate to move sufficient potential customers along this path. Awareness is the first step and even a brand that is only a name can help in creating a memorable impact on a customer prospect. If the prospect associates a satisfying experience with the brand, then this may well move them along the scale through Interest and into the area of Desire. If the marketer understands that a brand can do this, then the challenge is to make this a reality. Assuming that the prospect is in the mood to purchase, how can the brand help to create the Action.

A BRAND CAN BE A USP

As BrandTrust explains, a brand can be a compelling promise if you work at it. Where Brandtrust seems to be remiss is in not mentioning competition, at least on its website. Part of the process of moving from Desire to Action is knowing that this purchase is better than buying other competing makes. Ideally the brand should communicate what has been called the Unique Selling Proposition (USP). The original definition by Rosser Reeves captured the following ideas:

1. This product will give you these specific benefits.
2. This product is unique in delivering those benefits.
3. These benefits are ones you want now.

It's a tough challenge to create the reality that will match such a brand, but it's certainly worth the effort. If true, then the brand can communicate not only the satisfying customer experience but confirm that it cannot be achieved with any competitive brand and that it is something to experience now.

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A BRAND CAN BE AN ASSET

One final notion that is worth examining is the notion of a Brand as an asset. Companies often invest considerable human energy and sums of money in developing and promoting brands. Brands like patents can be viewed as Intangible Assets. Indeed some countries in Europe, including the UK and France, allow such entries in the Balance Sheet of a company. However Assets are only of any true value if they could generate revenues in the future.

What really counts as a measure of the asset-value of a brand is how customers and customer prospects perceive that brand. Indeed Brand = USP or Brand = Experience can only be measured in the minds of all those customers and prospects. However much cash or human effort may have been expended by the company is irrelevant. What counts is the resultant in people's minds.

It's another example of the Product-Driven versus Customer-Centric dimension that is so important in modern marketing. The Internet empowers customers and they determine success or failure. Product-Driven companies may produce fine products and promote the features of those fine products. Their brand(s) may just be like a label that identifies those products. Customer-centric companies identify their customers' needs and the benefits they're seeking. They then design product/service packages that will deliver those benefits. The brand is then the aide-memoire to that way of obtaining those benefits.

The confusion that exists within some of the Microsoft team working on the new brand, Live, will be as nothing compared to outsiders, including customers, as they try to perceive what it's all about. This is perhaps the biggest error of the branding work done to-date. Unless the two Microsoft brands can be very clearly differentiated with each delivering a specific USP that is remembered by prospects, then it is unlikely that these brands can become real assets in profit-generating terms.

CONCLUSION

If a brand is seen only as a name or label to identify a product or service, then a real business opportunity is missed. With careful planning and thought on the perceptions and content of the product/service package delivered under the brand name, the brand can become a powerful lever on sales growth. That should be the company objective.

If you require help with this, then SMM will be happy to help you figure out your best approach. Our help can be configured to meet exactly the needs you have. Our strengths, experience and creativity can complement those of your company. So write us a Message today on what you're looking for without obligation.

Barry Welford

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Added to site 15 June 2006
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