Microsoft has lost brand value and rankings in comparison to its direct competitor, Apple Microsoft has done a good job introducing a new corporate brand logo and its timing is also strategically well. With the goal of re-inventing the company and position its new brand logo in the minds of consumers, Microsoft must now attend to communicating characteristics that would best build a brand personality.
Since inception in 1975, Microsoft has updated its brand logo five-times (Skillings, 2012). Figure 1 shows Microsoft brand logos since the companyâ€™s establishment in 1975 up to the current yearâ€”2014. The logo is a combination of two words; microcomputing and softwareâ€”which founders Bill Gates and Paul Allen chose to reflect the companyâ€™s emphasis of (Tu, 2012).
Simplicity has been the approach to prior corporate brand-logos, this facilitates consumer recognition as the black-fonts stand out from a white background. Microsoft had only used letters to depict its logo, updating only font styles and sometimes bolding some fonts. Printing costs are also minimized since the font appears only in black. Although font-styles changed, simplicity can be observed in all the logos from inception to 2012.
The new logo introduced on August 23, 2012, makes use of colors and a new font-style.
The introduction of a symbol (Nudd, 2012) and colors indicate an evolution for the logo. The symbol is a square, which itself is composed of four-colored squares. These four squares represent the four products Microsoft has chosen to emphasizeâ€”Microsoft office, Microsoft x-box, Microsoft Windows and Microsoft Bing (Armin, 2013). The four products along with their colors are shown in Figure 2.
The introduction of a symbol to accompany a newly font-style is a much more sophisticated-logo design in comparison to all prior logos. The new font-style is not bold with black but rather a gray-like color and spaced from the square-symbolâ€”allowing the square-symbol to stand out. The square-symbol becomes a key component of the new logo for it communicates complementary Microsoft-products (Fitzgerald, 2012). The communication of complementary products in the square-symbol further facilitates consumer awareness. The new symbol thus represents a more sophisticated brand strategyâ€”its method of communication is more inclusive and holistic (Tu, 2012). The new brand-logo is a substantial improvement for Microsoft.
The new Logos & Re-positioning Ability
The re-invention of core complementary products permitted the opportunity to change such product logos. Because core complementary product logos were changed, this also permitted the opportunity for Microsoft to change its brand-logo. The new corporate brand-logo was thus introduced at a time when a number of its core complementary products were re-invented (Tu, 2012). This facilitates the ability to reposition the overall companyâ€”since both the core complementary product-brands and the corporate brand logo would complement each other. The introduction strategy of new logos, in turn, enhances the marketability opportunity for the overall company and facilitates the opportunity for consumers to begin forming new perceptions of both products and the company (Tobak, 2012).
Positioning the new Brand-Logo; Characteristics that Create Brand Personality The new logo achieves a new visual interaction with consumers that combined with its lively colors and friendly Microsoft font can better psychologically-stimulate consumer perception and feelings (Labrecque, 2012). The lively colors also achieve a reminder to consumers about complementary products. Such complementary products embedded in the square symbol establish an effective brand to product communication and can substantially help in re-inventing Microsoftâ€™s corporate brand personality (Tobak, 2012). Microsoft now needs to communicate characteristics that align with each of the four products embedded in the square to create a brand-personality. Such characteristics can be work, fun, innovation, and learning for office, x-box, windows operating system, and bing.
Brands have traditionally chosen one or few characteristics to not confuse consumers. However, because the previously mentioned characteristics compose the multi-colored square, such characteristics, associations, and connotations would be an extension of the Microsoft brand personalityâ€”thereby not contradict but complementing a Microsoft corporate brand-personality. This would further enhance Microsoftâ€™s good parent and sub-brand managementâ€”as both the parent and sub-brands would strengthen each other
Re-inventing Corporate Image
Microsoft has begun re-introducing itself as a mobile-first cloud first (Tobak, 2012) company to change consumerâ€™s perceptions and once again position the company as innovativeâ€”many consumers, ex-employees, and critics opinioned the company had become slow and clumsy (Brass, 2010; Hard, 2014; â€œWashington: Reinventingâ€, 2014; Wingfield, 2014c). The accomplish re-invention, Microsoft re-invented products such as office 365, Windows operating systems, windows phones, x-box gaming, windows azure, and visual studio, as well as the combination of explorer and bing (Hard, 2014). Some of these products are new while others have existed before but have received improvements to align with the â€œmobile first cloud firstâ€ image strategy (Tobak, 2012). Figure 3 shows the major product-logos the company manages.
Interbrandâ€™s Valuation of Microsoft
Interbrand is a brand consulting company that analyzes the value of 100 international brands in order to annually rank them according to the influence brands have on their companyâ€™s earnings and customers. Interbrand uses three evaluating variables: the brandâ€™s financial performance, brandâ€™s influence on customer choice, and the strength of the brand relative to competition (interbrand.com). Interbrand measures only the financial contributions attributed by a brand and also measure future profits resulting from the brand-influence. Interbrand measures brand strength through the use of brand management. Interbrand also measures influence on consumer choice with a technique called the role of brand, which is applied to forecasted profits to estimate earnings resulting from the brand alone. Interbrand requires brands to be â€œglobal, visible, and relatively transparent with financial resultsâ€ in order to be listed in their best global brands ranking (interbrand.com). Brands who do not meet such criteria are not considered so
Interbrandâ€™s rankings reflect only international brands.
Interbrandâ€™s results for the Microsoft brand for the past 14 years is shown in Figure 4.
The table in Figure 4 illustrates a decrease in rankings from the number two spot down to number five. However, since Interbrandâ€™s ranking involve 100 global-brands a number five placement among 100 other global-brands still hold an advantage in comparison to the other 95 global brands. It is important to note that consumer tastes change and that marketing strategies often have a delay before consumersâ€™ response begin to pay offâ€”so Microsoftâ€™s decreasing trajectory may be reversed in the future. Other variables can also negatively impact future brand perceptions. Variables such as company scandals, lawsuits, anti-trust prosecutions, loss of patents or intellectual property, business cycles, foreign expansion and earnings, population, socio-political pressure, regulations, etc. Although Microsoft has had brand-damages by some of these variables, antitrust prosecutions in the 1990s, lawsuits, and hostile foreign government reactions, Apple is not immune either (Brass, 2010; Kim, 1995; Cole & Fogarty, 1994; â€œWashington:
Reinventingâ€, 2014; Hartley, 2009; Wingfield, 2014a; Wingfield, 2014b).
Interbrand Brand Valuation & Competitor Comparison
To better analyze Microsoftâ€™s brand-value over a 14-year period, a chart was built comparing Microsoftâ€™s band valuation with its main competitor. Figure 5 charts both
Microsoft and Appleâ€™s brand-value throughout a 14-year time period.
Data from Figure 4â€™s table was used to visually depict Microsoftâ€™s historical values. The same data retrieval was performed for Apple to visually depict its historical values.
Datum retrieval was extracted directly from the sourceâ€”Interbrandâ€™s previous years website section of both companies.
The chart shows a devaluation of Microsoftâ€™s brand-value starting from $70,196 in 2000 to a lower amount of $61,154 in 2014. This depicts a devaluation of 14.78% from 2000 to 2014.
Apple, on the other hand, has an increased value of 94.45% from 2000 to 2014, according to Interbrandâ€™s valuation method. Appleâ€™s valuation when Interbrand began valuing brands in 2000 was $6,595 but began increasing value consistently to arrive at a value of
$118,863 in 2014, a value nearly twice as much as Microsoft.
The chart indicates Microsoftâ€™s brand value remained above Appleâ€™s brand value for 11 years until 2012 when Apple surpassed Microsoftâ€”crossover point. Microsoftâ€™s brand value seems to remain relatively flat hovering around the $65,000 mark while the Apple brand value spiked in 2012 to take the lead. The chart portraits a recent Apple trend but
Microsoft has historically generally held a higher value.
To better compare Microsoft and its direct competitor, an Interbrand ranking analysis is needed. Figure 7 shows a historical Interbrand ranking for both competing brands.
Data from Figure 4â€™s table was also used to visually depict Microsoftâ€™s historical rankings. The same data retrieval was performed for Apple to visually depict its historical rankings. Datum retrieval was extracted directly from the sourceâ€”Interbrandâ€™s previous year’s website section of both companies.
The chart indicates an 11-year higher ranking of Microsoftâ€”from 200 to 2011. The chart also indicates Microsoftâ€™s ranking has decreased by 6% since 2000. Microsoft has slightly dropped in ranking from the number two spot to number five and hovers around three.
Apple, on the other hand, has historically ranked below Microsoft for eleven consecutive years until 2012 when it outranked Microsoft. The chart shows Apple starting from a much lower ranking of 36 in 2000 and in a series of progressions have risen in rankings. Apple has recently taken the lead but it is uncertain whether it will maintain its ranking given that Microsoft has begun making drastic strategic brand-changes.
Interbrand Analysis of Microsoft & Apple
According to Interbrand, Microsoftâ€™s brand has experienced some loss of value and slightly decreased in rankings while Appleâ€™s brand has consistently gained value and drastically risen in rankings. These results indicate Apple has historically better managed its brand while Microsoft has lost momentum.
Figure 7 shows the three historical slogans Microsoft has used in the past.
Microsoftâ€™s introduced slogans were: â€œWHERE DO YOU WANT TO GO TODAY?â€, â€œYour potential. Our passionâ€, and â€œBe whatâ€™s nextâ€ in 1994, 2006, and 2011 (Gondane,
2012). However, the use of slogans in Microsoftâ€™s marketing campaigns rare today. Foster T. (2001) states slogans should contain the following characteristics: be memorable, differentiate the brand, reflect the brandâ€™s personality, help in ordering the brand, be original, simple and believable, be likable, not complicated, meaningless or clumsy. This strategy may have been easier to implement when the company had few products in its portfolio, but with a broader product-segment line, however, the use of slogans can become complex. When a company increases its product offerings emphasizing a slogan may confuse, disappoint, or yield unintended consequences such as falsely alluding a strategic brand direction (Boush, 1993). Because of the brand extension implication slogans posses, the selection of such must be carefully analyzed and readjusted to reflect the desired strategically-brand direction (Boush, 1993). If not done correctly it can send a confusing signal or portray management as inconclusive. Slogans also require monitoring and updatingâ€”all of which require time and resources. It is likely that due to Microsoftâ€™s wide product offerings and the required resources needed to ensure an effective slogan, it wishes to remain neutral and flexible. More importantly, Microsoftâ€™s use of slogans has generally been known for lack of substance or relativity
(Raphael, JR. 2010) so its best not to continue slogan usage.
Microsoft Distribution Channels
Microsoft has traditionally distributed its products thru third-retailers and online-storesâ€” for Microsoft has traditionally sold licensing rights to computer manufacturers, who then distribute products thru retail-channels and via-internet. Microsoft, however, has begun opening Microsoft-stores throughout the nation (Evatt, 2014). This is a new, direct distribution approach, as Microsoft traditionally has not been known for its retail-stores.
Brand Opportunities & Threats
Microsoft has improved its corporate brand-logo strategy; the next step is to communicate sub-brand characteristics to create a corporate brand-personality. Microsoft has already begun taking advantage of a two-way communication channel that social media and social networks offerâ€”by establishing official company profiles with
YouTube, Facebook, and Twitter to release promotional campaigns. Such mediums of communication provide an opportunity for Microsoft to create a new corporate brand personalityâ€”which can be achieved by making use of its square-productsâ€™ characteristic.
Microsoft still has opportunities to further evolve its brand. The brand evolution process consists of three steps: the selection of a brand logo, developing associations, meanings or connotations with the brand logo, developing an image, personality or attitude of the brand, and establish a consumer relationship (Kiesler, 2013). Microsoft has done well in the selection of a brand logo, it is in the following two steps where Microsoft has room for improvementâ€”developing associations with the brand in order to develop a brand personality. Microsoft has released some promotional videos on social media but such promotional content focus on selling the benefits of products and servicesâ€”this helps in slowly building a brand personality (Plummer 1985) but a more direct campaign highlighting brand personality can be more helpful in communicating such messages in a more clear and concise manner.
Microsoft also has room for improvement in building brand value in the minds of consumers. Building brand value consists of brand recognition, brand preference, and brand insistence (Kiesler, 2013). At this point, brand recognition is well established due to a 30-year company existence and products that consumers have interacted with on multiple-aspects. Brand preference and brand insistence on the other hand, as the Interbrand competitor analysis suggests, have eroded due to the entrance of new products such as: iPod, iTunes, Mac OS, iMac, Mac Book Pro, Mac Book Air, iWork, iPhone, iPad, etc (Brodkin, 2011). The availability of substitute products has thus lowered Microsoftâ€™s brand preference and brand insistenceâ€”offering ample room for brand value creation.
From a brand equity process, Microsoft also has room for improvement. Brand equity is composed of brand loyalty, brand awareness, perceived quality, and brand association (Kiesler, 2013). Although some of the brand equity components have been met, ample opportunities still lie in this process. The most reachable opportunities are in brand association and perceived qualityâ€”for if Microsoft correctly addresses them, brand loyalty will eventually follow. Brand loyalty is not directly controllable but brand associations and quality are. Addressing these components will allow Microsoft to influence brand loyalty.
There are always threats to a brand, both internal and external. External threats are difficult to be controlled by marketers, threats such as hostile foreign cultures or governments, unreceptive social groups, and protests. Internal threats however are more controllable so proper monitoring should be maintained to avoid unnecessary brand impact. Internal threats that could be better controlled include company scandals, lawsuits, loss of goodwill, etc. Microsoftâ€™s biggest threat, however, is its main competitorâ€”Appleâ€™s brand has continued to increase value and rankings, while
Microsoft has lost leadership. Continual product innovation is a needed (Hodock, 2010).