Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.) [VitalSource Bookshelf version].
Upper Saddle River, NJ: Pearson. Retrieved from
Marketing Excellence Microsoft
Microsoft is the world’s most successful software company. Bill Gates and Paul Allen founded it in 1975
with the original mission of having “a computer on every desk and in every home, running Microsoft
software.” Today, Microsoft is the fifth most valuable company in the world and has a brand value of
In the early 1980s, Microsoft developed the DOS operating system for IBM computers. The company
leveraged this initial success to sell software to other manufacturers, quickly becoming a major player in
the industry. Initial advertising efforts communicated the company’s range of products, from DOS to
Excel and Windows, and unified them under the Microsoft brand.
Microsoft went public in 1986 and grew tremendously over the next decade as the Windows operating
system and Microsoft Office took off. In 1990, Microsoft launched Windows 3.0, a completely revamped
version of its operating system, including applications like File Manager and Program Manager that are
still used today. It was an instant success; Microsoft sold more than 10 million copies of the software
within two years, a phenomenal accomplishment in those days. In addition, Windows 3.0 became the
first operating system to be preinstalled on certain PCs, marking another major milestone for the
industry and for Microsoft.
Throughout the 1990s, Microsoft’s communication efforts convinced businesses not only that its
software was the best choice but also that it should be upgraded frequently. Microsoft spent millions in
magazine advertising and received endorsements from the top computer magazines in the industry,
making Microsoft Windows and Office the must-have software of its time. The 1998 slogan “Where Do
You Want to Go Today?” promoted not individual Microsoft products like Windows 98 but rather the
company itself, communicating that Microsoft could help empower companies and consumers alike.
During the mid-1990s, Microsoft entered the notorious “browser wars” as companies struggled to find
their place during the Internet boom. Realizing what a good product Netscape had in its 1995 Navigator
browser, Microsoft launched its own, Internet Explorer later the same year. By 1997, Explorer had
grabbed 18 percent of the market.
Over the next five years, Microsoft took three major steps to overtake Netscape. First, it bundled
Internet Explorer with its Office product, which included Excel, Word, and PowerPoint. This meant that
consumers who wanted MS Office automatically became Internet Explorer users as well. Second,
Microsoft partnered with AOL, which opened the doors to 5 million new consumers almost overnight.
Third, Microsoft used its deep pockets to ensure that Internet Explorer was available free, essentially
“cutting off Netscape’s air supply.” By 2002, Netscape’s market share had fallen to a meek 4 percent.
Microsoft’s fight to become the browser leader was not without controversy; some perceived that the
company was monopolizing the industry. As a result, Microsoft faced antitrust charges in 1998 and
numerous lawsuits based on its marketing tactics. Charges aside, the company’s stock took off, peaking
in 1999 at $60 per share. Microsoft continued to release new products, including Windows 2000 in 2000
and Windows XP in 2001. It also launched Xbox in 2001, marking its entrance into the multibillion-dollar
Over the next several years, Microsoft’s stock price tumbled by more than $40 a share as consumers
waited for the next operating system to be released. During this time, Apple made a strong comeback
with consumer-friendly products like Mac computers, iPods, iPhones, and iTunes. Apple also launched a
successful marketing campaign titled “Get a Mac” that featured a smart, creative, easygoing Mac
character alongside a geeky, virus-prone, uptight PC character. Apple’s campaign successfully converted
many consumers and tarnished Microsoft’s brand image.
In 2007, Microsoft launched the Vista operating system to great expectations; however, it was plagued
by bugs and problems and the company’s stock and image continued to slide, helped by the worldwide
recession of 2008–2009. In response, Microsoft created a campaign titled “Windows. Life Without
Walls” to help turn its image around. Its new message—that computers with Microsoft software were
more cost-effective than the competition—resonated well in the recession. Microsoft also launched a
series of commercials that boasted, “I’m a PC” and featured a wide variety of individuals who prided
themselves on being PC owners, hoping to improve employee morale and customer loyalty.
In 2009, Microsoft launched Windows 7, an improved operating system, with the campaign “Windows 7
was my idea.” Four years later, it was operating more than 30 stores like Apple’s across the United
States and Canada. Jonathan Adashek, general manager of Communications Strategy, explained, “We’ve
welcomed more than 15 million customers and counting so far, and have learned a lot from them.
Having this direct connection to our customers has really helped us better understand their tech needs.”
Travis Walter, general manager of Microsoft’s International and New Store Formats, agreed, “In person,
you get a very different experience and it’s one we’ve been very delighted to provide. When you see our
technology in person—when you can touch and feel it—a light goes off.”
After the recession came to an end, Microsoft’s image and stock started to recover, thanks to the
success of its retail stores, effective marketing, and a wide range of new product launches. Microsoft
went after Google’s dominant position in the search marketplace, for instance, with a search engine
called Bing, and it entered the growing mobile industry with its Windows Phone mobile operating
system. The company’s 2011 expansion into smart phones surprised many analysts, but Microsoft
hoped the smart phone and Windows Phone mobile OS would forge a strong connection with its
consumers around the world. It continued its innovation momentum in 2012 with the launch of
Windows 8, Windows 8 Phone, and a computer called Surface Tablet. The tablet impressed consumers
with a detachable keyboard that also served as its protective cover.
Today, Microsoft offers a wide range of software, mobile, and home entertainment products. Its most
profitable products continue to be Microsoft Windows and Microsoft Office, which bring in
approximately 80 percent of its $86 billion in annual revenue.
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