Microsoft operates through indirect marketing channels, which means that one or more intermediary levels curtail the distribution process from the manufacturer to the consumer. Microsoft typically uses value-added re-sellers and retailers as the medium between the manufacturer and customer. Promoting Windows XP through distribution channels plays an important role in developing and spreading pervasive communications about an offer. Value-added re-sellers take products (such as XP) and customize them to fit certain target markets. Retailers for Microsoft products not only act as a go-between to the customer, but also offer product support and maintenance to the end users.
Since Microsoft uses indirect marketing channels to reach their purchasing public, there is the question of who should be allowed to stock the product. Microsoft, by using hybrid-marketing channels, is able to reach different customer segments simultaneously. Selective distribution insures only reputable dealers, such as Future Shop, Staples, Radio Shack, Office Depot, and others are able to sell the product.
A combination of “push and pull strategies” was used both to encourage the stores to stock the product, and to encourage the purchasing public to demand it consecutively. Microsoft also uses a wide variety of advertising and promotional tools in order to draw the distributors and the public to its product. For Windows XP, the bill for the advertising and promo was in excess of 1 billion dollars. This paid for everything from multi-media advertising to sales promotions to public relations. There were events like concert XP and ‘Who Wants to be a Millionaire’ XP edition, staring Regis Philbin. There was even a cross-promotional piggyback between Madonna and Microsoft.
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All of the media hype was intended to inform the end-users (both the home and business operators) of the ease of use and the emphasis of connectivity to the World Wide Web. In fact, the entire campaign was focused around conveying the emotional message of pride, new beginnings, and global unity.
The launching of Windows XP is an effective marketing program that blends all the marketing mix elements into a coordinated program (See Appendix X) aimed at achieving the company’s marketing objectives. Windows XP is the first out of an entire series of products that Microsoft promised to release in order to further support the company and its public image. This is a very ambitious campaign aimed at transforming Microsoft from a traditional software manufacturer into a services company that provides everything from communications and calendaring to one-stop online shopping and Net banking. “If Microsoft is successful, Windows XP will eventually resemble an online service like America Online” .
Microsoft’s aggressive campaign introduced Windows XP in their distribution channels weeks before the actual launch by encouraging PC makers to begin selling new Windows XP desktops and portables. They also encouraged retailers to offer demonstrations of their computers running the new operating system. (See Appendix X) One downside of their distribution strategy relates to the difference between the home and professional versions. As information about Windows XP enters the press and retail distribution channels, many small businesses may find it confusing to determine which type of operating system best fits their computing environment requirements.
The most significant aspect of this event relates to its promotional strategy. Microsoft successfully communicated their message (See Appendix X) by combining efficient advertising with sales promotions and public relations. “Promotion will be key to generating sales, with Microsoft, Intel, PC makers and retailers investing as much as $1 billion in the cause.” Microsoft opted for the Internet as their promotional medium for this campaign. (See Appendix X) Their strategy is far broader though and includes celebrity endorses, promotional tools such as sweepstakes and games, as well as significant public relations tools. (See Appendix X) Microsoft knows who are the experts and does whatever it can to associate them with the new event of launching Windows XP. They started with speeches of famous individuals, written materials and slogans and went all the way to developing a Windows XP website, holding a concert and staring in the famous show Who Wants to be a Millionaire. In other words, Windows XP is everywhere and that is the key to promotional success.
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“Despite an unprecedented $ 1billion promotional campaign by Microsoft and its partner companies, XP is really beyond the capabilities of a lot of existing consumer PC systems.” The most essential part of an effective marketing program is to have a clearly defined target audience. In this case, Microsoft ought to be careful about the technological capabilities of most of their customers because many are not able to upgrade their computers for an efficient use of Windows XP. They may not see any bad result yet, but things may change as soon as the new operating system reaches both home and professional users.
By launching Windows XP, Microsoft broadens their target to include business, home users, as well as entertainment/education. All in all, it was time for the corporation to move towards a wider medium, as their user base has expanded since the launch of Windows 95. Some may be unimpressed with some XP features, but we must not forget to look at the big picture. Windows XP is a new generation, a new beginning in the software industry. It may not be the best Windows possible, but it is the best Windows to date.