Microsoft

Direct Marketing and Social Media in the Digital Age A Direct & Interactive Marketing Report

Institution: University of Westminster Module Leader: Carol Blackman

Chukwudera C Ugwuegbu

141981571

Abdulaziz Ahmad Almehairi

145023301

Linh Trinh

146577081

Lulu Kushaim

144850221

Po-Lin Chen

146111842

Table of Contents 1.

EXECUTIVE SUMMARY

2.

INTRODUCTION; THE TABLET WORLD

3. MACRO ANALYSIS - The Market Overview - The Market Segmentation - Environmental Factors - Competitive Activity 4.

MICROSOFT; OUR HISTORY – Company Overview – Marketing Strategy – Marketing Performance – Brand & Positioning Analysis – Implications

5. DIRECT MARKETING STRATEGY - The Opportunity - SMART Objectives - Overall Strategic Approach - Segmentation, Targeting and Positioning

6. CAMPAIGNS - Creative Brief - Tactics - Campaign Flow - Forecast Results

7. CAMPAIGN MANAGEMENT - Measurement and Evaluation - Budget and Bottom Line Forecast Results

8.

CONCLUSIONS

9.

REFERENCES

10. APPENDICES

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Executive Summary This report provides a Direct & Interactive proposal for Microsoft Surface 2 exploring the Market Overview, Performance, Situation Analysis of the Tablet Industry along with a Rational, Tactics and Campaign Solutions that would result in achieving an estimated market share increase of 2.5% by May 2015 for Microsoft Surface 2 in the UK Market.

Key Findings The report draws attention to the rapid growth in the tablet industry, which is likely to increase from 1.8 million in 2010 to 23.2 million in 2016. Also there is fierce competition as several companies strive to gain a bigger share of the market size. The Microsoft Surface 2 which is a late entrant into the market is partially disadvantaged because of this late entry and also because it lacks sufficient applications to compete with other tablet providers. This is particularly disadvantageous because 80% of tablet usage is towards applications mostly gaming and social applications however Microsoft is well equipped in productivity and utility and also has the highest compatibility with other devices which serves as an advantage.

Recommendations It is recommended that: Build brand awareness emphasizing strong points of differentiation bearing in mind fierce competition.

Reduce price promotion Target professionals as the demand in their industry for productive tablets is increasing.

Increase visibility and availability of product.

Chapter 1: Situation Analysis Introduction

This is a Direct and Interactive Marketing Report on Microsoft Surface 2, a technology device in the tablet industry. This report will give an overview of the tablet and how it first came into being, the situation analysis of the tablet industry including its market size and main competitors, an analysis of the Microsoft Surface 2 and what its strengths, weaknesses and opportunities are after which we would explore our campaign and campaign management proposals. The report will be brief and will utilize only the tools deemed necessary and specific to our product to produce the desired outcome.

Market Overview The Tablet World; The History The first mainstream Tablet that was invented to give the same benefits as a computer was the Apple’s iPad. Although there are suggestions that the history of the Tablet goes as far back as 1915, which then followed a trend of steady developments (IDC, 2011), arguably the

world was reintroduced to this device on a commercial and diversified level by Apple in 2010 (About, 2010).

Market Size Since then the market for this device has grown exponentially. In 2013, the estimated sales of tablets in the UK were at ÂŁ1.7billion (Mintel 2013). On the other hand, the number of tablet users in UK is expected to increase from 1.8 million in 2010 to 23.2 million in 2016 (EMarketer, 2013)

Product Lifecycle The Tablet device is now in the growth stage of its market lifecycle. This is derived from the market size, which indicates a growth of over 90% in two years from 2011 (Mintel, 2013). The product in Growth stage has some characteristics such as significantly increasing sales, rising public awareness and growing competition. Hence it should be duly stated that it’s advisable the product in this stage should reduce price promotion but build brand awareness and strong points of differentiation bearing in mind fierce competition.

Future Trends According to Mintel’s report (Digital Trends Spring - UK - March 2014, 2014), consumers think of buying tablets as much as they think of buying smartphones however, only 11% of the people plan to buy tablets in next three months out of the 23% who are thinking of buying it. Therefore encouraging consumers to purchase is an important marketing strategy to be implemented.

Also, tablets in the business sector seem to be another growing market.

Based on a forecast in 2012, 11% of tablet sales is owned by businesses and will grow to 18% in 2017 (Tab Times 2014). Therefore this is an opportunity to target professionals as the demand in their industry for productive tablets is increasing.

Market Segmentation The UK Computer Industry segments the overall market into two fundamental divisions including Tablets and E-Readers. This segmentation is based upon the sale records of different companies including Samsung, Apple, Sony Corporation etc. (PCs – Tablets and eReaders in UK 2012). Asides this, it can be more precisely segmented based on the consumer behaviour and the way in which the consumer uses those devices as demonstrated in the diagram below.

This shows a very important trend; 80% of tablet usage is for mostly social applications and gaming. This would immediately suggest that an advantage would exist for the tablet providers who are most able to provide a sufficient amount of varied applications to choose from as only 20% of usage falls to more generic purposes, which can be fulfilled by all tablets.

External Factors Although the success of this product is largely determined by its advantages over competitors, there are however other macro factors that could influence the success in this industry. These external factors are uncontrollable by the industry and affect all players in the industry alike. The major external factors identified, along with the impact and level of impact it has on Microsoft Surface 2 is given below:

External Factors:

Factor

Impact

Level of Impact

Technological Factor: Fierce growth in technology with innovation constantly on the rise

This has a Beneficial Impact on the Surface right now because it is at the top of its competition with the latest advancements. However fierce competition means this could easily change.

High Level of Impact

Social Factor: In the UK, the interest and amount of tablet users are steadily increasing due to the social trend.

This has a Beneficial Impact on the Surface right now because if future trends predict a larger market, that in turn means a larger possible share of the market.

High Level of Impact

These are the factors considered to most influence the industry, however a more comprehensive list has been included in the Appendix.

Below are some more tools simply used to further analyse the market situation for the Microsoft Surface

Competitive Forces A summary of the Porter 5

Microsoft Corporation is a multinational corporation that develops, manufactures, licenses, supports and sells computer software, computer electronics and personal computers. It was founded in 1975 by Bill Gates and Paula Allen. Due to the vast amount of products and services offered by this corporation the structure over the years was such that it had multiple CEOs and HOD’s however recently the company announced a realignment  of the company structure that would enable them innovate with greater speed, efficiency and capability in a fast changing world, what was called One Microsoft (Microsoft, 2013).

Mission At Microsoft, their mission and values are to help people all over the world realise their full potential (Microsoft, 2013).

Strategy To better suit the demands of the world today, Microsoft has embarked on a new strategy to realize their vision, opening the devices and services chapter for Microsoft.

It is clear that after the takeover of the Technology World by Apple in smartphones, laptops and tablets simultaneously, a change in strategy and structure was necessary by Microsoft to secure a comeback and a hold on the market. A necessary change has put Microsoft on the map again with important strides which have been made — launching Windows 8 and Surface, moving to continuous product cycles, bringing a consistent user interface to PCs, tablets, phones and Xbox (Microsoft, 2013).

Going forward, their strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.

“Honestly you’ll love the new windows” (Microsoft, 2013)

Marketing Performance Historic financial performance: Microsoft’s revenue increased 6% in 2013 due to the higher revenue from Server and Tools and growing revenue from new products and service such as Surface, Windows 8 and new Office. (Tabel 1) Surface revenue was totally $853 million in 2013. However, cost of revenue also increased $2.7 billion (16%) because of product cost from Surface, Windows 8 and Surface RT inventory adjustments. Sales and marketing expenses were also growing $1.4 billion (10%) reflected advertising of Surface and Windows 8. To sum up, Microsoft still invested money on new service and products as well as marketing; however, the sales had yet reached the investment cost in 2013.

Meet The Surface 2

The Surface 2 The Surface 2 was introduced 2013 in the UK as part of Microsoft’s new strategy and fresh dedication to the demands of the world today. It is a tablet not just like any other which comprises of a fast processor, an add

on keyboard and high productivity with Office, a USB port and battery life of up to 10hrs.

Competition Although this market is dominated by Apple’s iPad, the competition amongst technological giants started almost immediately, as in the same year Samsung launched the Galaxy Tab in September 2010, Asus released Transformer Pad in April 2011, Amazon’s Kindle which was originally launched in 2007 was relaunched as Kindle Fire in September 2012 better fitting to the scope and demands of the mainstream tablets and finally, Microsoft released the Surface in 2012.

According to the marketing research from IDC, Apple occupied number one market share worldwide by 39.6% in first quarter 2013. Samsung followed by 18% share of market. Microsoft, on the other hand, only has 1.8% share of market as a new entrant in the tablet market.

Below, is a pie chart, which illustrates the precise worldwide market share of the above listed main competitors in the industry. Because The Surface 2 is relatively new in the UK, it does not have a substantial market share.

BCG Growth Matrix

According to BCG Growth-Share created by Bruce D. Henderson, Microsoft’s Surface is in Question Marks section due to the high market growth and its low market share. The result is the large net

consumption. If Surface does not grow the market share quickly, it will degenerate into Dog section after years of cash consumption.

Therefore, the marketing issues for Surface are: Build the consumers’ awareness of its new products in tablet market.

Increase the market share quickly.

Invest heavily to gain market share.

Perceptual Map

The Perceptual Map once again shows the Surface 2 with a high distinction in productivity but a low distinction in leisure and entertainment.

This is a brief table showing each tablet and its strongest point of differentiation to better help understand competitive advantage and positioning in the market.

Company

Strongest Point of Differentiation

Rank in Market Share

Apple’s iPad

Market Leader/ Strong Brand Identity

1

Samsung Galaxy Tab

High Customization

2

Asus Transformer Pad

High Durability

3

Amazon’s Kindle Fire HD

Large E Bookstore & Competitive Price

4

Microsoft Surface

High Productivity/Utility

5

General Discussion of Competitive Activity and Strategic Groups High Applications Moderate Applications Low Applications Very Low Applications

Apple’s Ipad 1,000,000+

Google Nexus 1,000,000

Windows Surface 130,000+ Amazon Kindle 3500+ High Price

Moderate Price

Low Price

The Strategic Group Map above demonstrates where the different competitors along with Microsoft fall relating to the tablet. The number

of applications available along with the price of tablets was considered important because 80% of tablet usage generates from Applications.

SWOT Analysis for the Surface 2 Strengths

Weaknesses

Opportunities

Threats

Well known Brand High Point of Differentiation amongst other tablets with Productivity.

High Compatibility with other devices Late Entrant into the Market Lacks popular applications such as Instagram.

Limited Distribution (only available at 5 Retailers none of which include phone stores such as Carphone Warehouse and Phones4u).

Advanced Technology; right now it is the most advanced tablet Versatility: People are more welcoming of products that give them more options & benefits (i.e Surface also includes Entertainment & Leisure applications along with Productivity) Growing use of Utility and Productivity for Tablets Fierce Competition Rapid Growth in Innovative Technology Quick change in consumer’s preferences towards technology, specifically Tablets and Smartphones.

Implications for Microsoft Surface What this means for the Surface 2 is that right now it has a competitive advantage of being different and more functional than other tablets.

- It also faces the downside of being a late entrant into the market, a low brand aura and lacking mainstream applications.

-This coupled with fierce competition means Microsoft Surface 2 will have to maintain a level of innovativeness and increase their market share quickly to become relevant and influential in the industry. They will also have to use Marketing Communications to boost its Brand Image and Brand Awareness.

Microsoft needs to: Reduce price promotion Build brand awareness and strong points of differentiation bearing in mind fierce competition.

Invest heavily to gain market share Target professionals as the demand in their industry for productive tablets is increasing.

Increase visibility and availability of product

Chapter 2: Recommendation Report The Opportunity After a comprehensive macro and micro analysis with a general discussion of the competitive activity and implications for the surface, a clear and apparent opportunity in Direct Marketing presents itself for Microsoft Surface 2; Of all the tablets that exist in this competitive and fast growing market, the Microsoft Surface 2 stands out as the only tablet with high productivity equal to an actual computer or laptop. With extensive Office tools, a USB port and high compatibility, it’s the only tablet that can serve the purpose of a laptop efficiently without lack therefore it can fill the gap in this market.

Although Apple’s iPad and Samsung’s Galaxy Tab and others outperform this device in Entertainment and Leisure Applications, they are limited in some Productivity Applications as neither of these devices have enough provision to perform several business day to day tasks such as making reports, downloading certain documents and creating different types of presentations therefore there is an opportunity to capitalize on this distinction.

Also the Microsoft Surface 2 has the highest compatibility and versatility, which makes it easy to share with other devices such as phones, cameras, hard drives, televisions and other computers.

This also serves as an opportunity to be capitalized on by emphasizing this through our direct marketing campaign and strategies.

 Objectives Our Objectives based on all that we have assessed are therefore as follows: - Building awareness for Microsoft Surface 2 (using Direct Marketing tools like Direct Mails, Inserts, Emails and Social Media) by 25% by May 2015 in the UK Market - Increasing market share by 2.5% by May 2015 for Microsoft Surface 2 in the UK Market - Acquiring new customers to increase sales by £140 million (390,900 units) by May 2015 in the UK Market

Strategic Approach Because The Surface 2 is new, the company needs to raise awareness for the product by acquiring new customers to increase sales. Therefore, the acquisition campaign is divided into two phases:

Acquisition campaign, which will focus on building awareness.

Acquisition campaign, which will focus on increasing sales.

This marketing campaign will be direct marketing based.

Segmentation, Targeting and Positioning: Segmentation Based on our situational analysis, the consumer’s usage is dominated by Games, Social Networking and Entertainment however, after our SWOT analysis, we believe the ‘productivity and utility’ segment is the most valuable market for Microsoft Surface. As a result, we will target business professionals who heavily rely on productive products.

Target Market Our target group will focus on the following demographics: Gender: Males & Female Social Grade: A, B, C1 Age group: 30 to 45 The total population in this segment 7,254,215

Positioning Positioning statement: “Surface 2 offers professionals with the ultimate productivity device, for those who accept no limitations & need total efficiency compared to partial satisfaction because all of this is in one tablet.”

Creative Brief

The Creative One of Microsoft’s major problems is establishing an emotional connection with its consumers. The functional benefits of a product are not always enough to convince consumers to buy a product; because of this it is paramount to produce a creative, which is able to personify the benefits of the Microsoft Surface 2 in such a way that embodies human values and characteristics; a creative embodying the differences that all make us one – personified in the different attributes and versatility of the Microsoft Surface 2.

Tactics The campaign is going to include different tactics to approach acquiring new customers. The tactics that have been set to acquire new customers are divided to two parts: Tactics to raise awareness: The tactics to raise awareness contain tools including online PR, which will consist of discussion boards. In addition, it will include magazines, posters, email marketing, ecommerce, search engines and social media.

Tactics to increase sales: On the other hand, the tactics to increase sales will contain inserts, social media, e-commerce, search engines, email, mobile marketing in the form of text messages and direct mail.

The media channels for these tactics have been carefully chosen to ensure maximum effectiveness however the strategy adopted to choose the channels is based on target audience, circulation and content.

Media Channels The following table illustrates the media channels chosen to raise awareness and increase sales.

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The magazines listed above have been chosen because they share the same target group as ours and our likely consumers which are professionals, read them.

The AIMRITE Model

The table above demonstrates the evaluation of these media tactics to raise awareness and increase sales. It represents the AIMRITE model as an assessment to the effectiveness of the media chosen.

The campaign is going to include starting discussions in the chosen boards for the first 6 months about the features that the Surface 2 possesses.

A combination of technology related & business related magazines will include ad to build awareness as well as using it to include inserts to increase sales, to ensure that the inserts reach the target population.

Lifestyle cold lists will be purchased from a 3rd party agency, to reach the campaign’s target group using email marketing, direct mail and mobile marketing.

The most visited e-commerce websites and search engines were chosen for advertising the surface 2. In addition, Microsoft’s Facebook page and twitter account will be used to post information about the Surface’s features and it will be kept up-todate.

Posters are going to be put in different underground stations at different times, during the first six months of the campaign to raise awareness

Flowchart

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Forecast results The following table demonstrates each media’s target population size, cost, response rates, the number of responses, conversion rates, expected sales, and the expected revenue:

(Part Sourced from Mediatel 2014 & Transport for London 2014)

Campaign management Measurements To ensure that the effectiveness of the campaign’s performance is maximized, a trained team from the marketing department is dedicated to this campaign. The team will be responsible for replying any incoming enquiries from emails, text messages, phone calls, social media, and discussion boards. The responses to media chosen to reach the target audience are going to be measured using various different tools depending on the media.

Evaluation (testing programme): A pre-testing programme will take place to make the campaign more cost effective, less waste and make the target more accurate. This testing programme is going to focus on some of the direct marketing tools used in this campaign which are e-commerce, email and mobile marketing (text messages). Testing the message using these tools will ensure effectiveness and efficiency of the message, tools and it will give a perspective on how the target will perceive it. In addition, the testing budget is large enough (ÂŁ400,000) to allow testing using these tools.

Authentic results are going to be provided to Microsoft in the form of a report to reduce risk of using an ineffective message and wrong media to reach target. This will help in understanding the target and their characteristics and allow better communication.

To test the effectiveness of the message using e-commerce, a split testing method is going to be used. Two messages are going to be placed on Amazon for two weeks to test which is the most effective.

The numbers of click on each message is going to be recorded.

However, as mentioned above, cold lifestyle lists will be purchased to ensure that Microsoft communicates with the right target group, based on their characteristics. Therefore, the messages are also going to be tested using email using a split testing method. 5,000 customers’ email addresses will be used for testing two different messages. These email

addresses are going to be split equally into two groups, each of 2,500 customers’ email addresses. The first message will be sent to the customers in the first group and the second message will be sent to customers in the second group. Measures of response rates for both groups are going to be taken to determine which message is most effective.

Finally, the same method used to test using email will be used for testing using text messages. The same number of contacts will be used.

This will bring reassurance that the messages used for the campaign are the most effective among all tools.

Budget: The campaign had an estimation of a ÂŁ4.6 million budget. However, the following table illustrates the costs of each media and the exposure frequency along with the total cost.

Mailing costs have been calculated with each media in the above table.

It is worth mentioning that the production and design fees as well as the administration fees has been including with the agency fees. In addition, each media’s total cost included the fulfilment costs as well.

Bottom line forecast results: The total expense for the direct marketing campaign= £4,540,485 The total revenue= £142,047,822 ROI= revenue / total expenses ROI = £142,047,822/ £4,540,485 ROI= £31.28

Timeline: The following table is an illustration of the timeline and how each media will be used through out the year to raise awareness and increase sales:

Based on the marketing objectives, this annual campaign is going to acquire new customer and gain Microsoft’s market share by building awareness and increasing sales. Â

In the first half year from June to November in 2014, extensive media coverage would be the main point for Microsoft Surface 2 to build awareness. Social media, E-commerce and search engine are chosen to cover whole six months. Magazines advertisement and underground posters also cover six months to gain the huge awareness. However, discussion boards and email marketing have some pause to avoid information explosion for target audience.

In the last half-year, the time strategy changes slightly in order to drive the sales. The broad media coverage remains the same in social media, e-commerce and search engine. Emails, direct mails and text messages are chosen two out of three in each week as they use the same contact list. However, discussion boards is taken away and either is underground posters because they are less cost-effective in driving sales. Magazine inserts is added in from December 2014 to May 2015 instead

Conclusions With an implementation of this strategy and proposal, Microsoft Surface 2 can achieve a desired market share and presence in the UK Market

and with the right Marketing Communications can communicate this effectively to the consumers.

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APPENDICES Appendix 1: Brand Wheel

Appendix 2: Porter 5 Forces Threat of substitute products and compliments: Microsoft has greater threats in terms of substitute products. One of its biggest competitors i.e. Apple Incorporation is coming up with improved technology and fast processing computer devices. In addition, companies like Apple are known of continuous innovation and patents.

Hence it is clearly evident that Microsoftâ&#x20AC;&#x2122;s sale of Surface tablet could decline by any of the substitute products. Because of this Microsoft needs to go beyond and think out of the box with new technological innovations, and the Surface is a starting point with its unmatched Versatility.

New Entrants: Microsoft does not have major threats from new market entrants as compared to the competition that company faces from existing market leaders, as it is one of the last to be introduced into the market.

Customerâ&#x20AC;&#x2122;s bargaining power: If UK hits the economic recession then customerâ&#x20AC;&#x2122;s bargaining power will possibly increase. This can also be affected by decreased market value of tablets or introduction of new technology. Plus if we go back to the surface sales, we can notice that their bargaining power is not substantial as the suppliers will charge more if the orders are low.

Supplierâ&#x20AC;&#x2122;s bargaining power: Based on our analysis and the number of competitors it means that suppliers have the raw materials to supply the competitors with, in addition, prices of the Surfaces shows that there is no bargaining power. However; there might be power from the suppliers on the touch keyboards as no competitor offers such keyboard.

Rivalry Intensity: The UK computer industry is expanding its size as per the changing technological trends, which have been discussed above. This subsequently increases the competition for Microsoft as more products are frequently developing with competitive prices and extensive features.

In order to face all of these competitive forces the company would have to make substantial business strategies. These should be based upon better supplier and customer relationships, constant development of new product features and value added services (e.g: extended warranties/after sales services) , improved product costing by offering different storage sizes to reduce the cost.

Appendix 3: PESTEL PESTEL Factors Following is the PESTEL analysis for Microsoft’s Surface Tablet: Factors

Importance

Political

The political stability in United Kingdom has enabled Microsoft to earn 14% more revenues than the previous months (Holder, 2014). Since UK is also saved from international politics as opposed to USA therefore Microsoft’s sales are expecting to increase in the upcoming years.

Economic

The economic recession hit the UK in 2008 and went through different states from slow growth to recession again. However, Apple’s ipad was introduced in 2010 and the user base grew from 1.5 million in 2010 to 8.6 million in 2013. (emarketer, 2013) Hence, Microsoft is not out of the equation, since Apple grew during unstable economy, Microsoft's surface can do that especially when we consider the price of the surface (Which is lower) versus the ipad.

The link between the economical state and purchase power is very strong. Since the UK economy started to recover from the recession and the growth of tablet market sums that there is an opportunity for other companies to grow in such market.(economicshelp, 2014)

Social

As discussed previously that Microsoft surface tablet gives a competitive edge to the students, businesses and individuals. Hence it has become highly compatible with the fast moving lifestyle and socio-cultural aspects of UK. In addition, the

tablet market growth sums that the community behaviour towards tablets is positive and with high acceptance, as the community in the UK tend to use tablets while watching TV. This means that the opportunity is there and Microsoft approached it differently by offering a tablet with a full package to meet students and business segments. (emarketer, 2013) Technological The computer technology has rapidly changed in the last few years, for instance, in the last 20 years there was no concept of tablets used by individuals. However, today more than 27 million tablets are used in UK alone (Curtis, 2014). This has increased the business opportunities for Microsoft. Therefore the company has started operating in hardware industry while having superior status in Software development. In addition, technology is a difficult force to deal with since it changes rapidly, especially if the market responses negatively to a new technology, which in the end will lead to more losses of time and money.

Environmental Microsoft takes the environment seriously with its partnership with (global e-sustainability Initiative) that strives to achieve environmental sustainability via technological innovation. Such collaborations adds a better image to Microsoft to be respected by consumers. (Microsoft, 2014) Legal

United Kingdom has comparatively strict laws with respect to copyright policies and business operations. (IPO,2014) This actually facilitates Microsoft in protecting its products from â&#x20AC;&#x153;copycatsâ&#x20AC;? in the same industry, hence creates a sense of exclusivity and uniques position (e.g:

slim touch keyboard) to the Surface that no other competitor can offer. (techradar, 2012)

Appendix 4: Marketing Strategy Microsoft’s strategy is, to close the gap between the tablets and laptops and provide a “true” functional tablet as powerful as laptops. By offering an all in one product, that is, a laptop and a tablet at the same time.

With a starting price of £ 359 with Microsoft’s office applications against Apple's ipad starting at £ 399 with basic iwork software. Such approach is more appealing for those who look for a much productive hardware, than just a toy. (Forbes, 2013)

In terms of distribution, the product is limited to John lewis, PC World and Microsoft's official website. This could be one of the reasons where the product is lagging behind the competition.

Appendix 5: Ansoff Matrix

Ansoff Matrix explains the Microsoftâ&#x20AC;&#x2122;s Marketing Strategy (McDonald, 2007): Market Penetration: Microsoft does not use this strategy (With the surface at least) as it relates to low price products and mass promotions.

This is best suitable for retail stores rather than computer software and hardware manufacturers.

Product Development: Microsoft introduces new products to the existing customers so as increase its sales. For instance, the company was primarily focusing on software (e.g: the widely known windows operating systems) but later it developed game consoles (e.g: Xbox 360 launched in 2005 and Xbox One launched recently) and tablets like the surface. This has given Microsoft a competitive edge in the computer industry.

Market Development: Microsoft also uses the market development approach as it is currently selling in most of the European countries while increasing its horizon to the Middle Eastern and Asian countries.

Diversification: Microsoft usually sells its new products to the existing customers. This actually gives the company better revenues and financial stability. Hence it does not qualify for this strategy.

Appendix 6: Microsoft Financial Highlight

Appendix 7: Perceptual Map

The Perceptual map compares the perception of the products in terms of “Categories”.

We categorised them into two; First, Productivity (High or low) and second, Leisure & Entertainment (High or low).

We can see that the positioning of the Surface 2 is more powerful in terms of productivity ( heavy tasks, e.g: excel sheets , word and powerpoint) Plus the consumer is given the chance to plug in a mouse and using external storage like the USB port.

While Samsung's tab tries to fit everything in one but still is limited to google’s Android (Still has its own limitations and a laptop can do better, due to the lack of mouse and dependent on a touch screen).

Apple’s ipad is also tries positioning their product that an all in one product, but in reality it is known for best apps portfolio and quality. On the other hand, Asus’s Memo pad emphasize on the entertainment part (e.g: games, movies, photos..etc). Finally the kindle is also categorised in the same area but the differentiation point is their strong e-books library, which is again a part lesiure to the user.

All the above descriptions are taken from their websites & based on the way they market their products on the consumers.

Although the competitors claim that their tablets are good for everything, but they fail in the productivity area, as the tablet usage diagram in the segmentation part revealed.