Introduction to Marketing Management Armen Chakmakjian
4A’s Analysis of a Marketing Failure: Microsoft Zune
October 7, 2009Page
What is a Zune?
Microsoft Zune was a constellation of products and services created as a beachhead inthe market for digital entertainment previously and still dominated by iTunes and the iPod byApple. With Zune, Microsoft has attempted to win some market share from Apple by creatingan integrated handheld, PC and Web ecosystem. As their current product webpage
is everywhere you
Microsoft has made several attempts to provide media playing software for streaming throughtheir PC channels, but has had limited success. Their products have been sleek and usuallyquite excellent from a technology point of view. However they have had several resets over theyears and have not made significant traction. Their history of software for handheld productsbased on the Windows CE operating system and successfully became an alternative to theoriginal non-phone Palm handheld devices. With the popularity of the Rimm Blackberryhandheld and later the iPhone, simple handhelds became obsolete.Zune was announced in September 2006 to much fanfare
.The product was releasedon November 14
, 2006. The battle for digital entertainment was joined. The initial Zune 30handheld was a brick-like device not dissimilar to the original iPod. It had some innovativesharing features hitherto unavailable on any other handheld players. It came in 3 colors, Black,White and Brown. This was coincident with the release of the LG
, and that3
color seemed like a direct response to a perceived opportunity (or threat) from the phonemarket.However, by early December 2006, the buzz had worn off as a result of decisions andadoption issues overlooked by Microsoft. Within a day of the November 14
announcement, itwas discovered that the Zune was incompatible with music that was already on users Vistamachines.
On December 2
, analysts were pointing out that the holiday sales of the new
“need to have” device we
re off to a slow start and that the device was not necessarily targetedcorrectly.
By Mid-December 2007, even Microsoft was backtracking on the Zune plan by
pointing out the Zune was a “1.0” product and that this slowness in adoption was expected.Finally in February 2007, Microsoft’s executive in charge of the Zune, Bryan Lee, announced hewas leaving to “pursue personal interest”.
Microsoft continued to upgrade the Zune ecosystem with new products and services,and in 2009 announced the Zune HD. The Zune HD again has technologies that the iPod andiTunes do not have such as handheld HD video playback, music rentals and a subscriptionservice. The new model is sleeker than the original Zune 30 but now is competing against theiPhone and iPod Touch twin juggernaut.
alysis: Target Market in 2006
It appears that Microsoft’s initial target was users who wanted to share music. "The idea
is to legitimize peer-to-peer sharing in a healthy way that works for everybody," said J. Allard, a