Global Brand Management

Brand Audit Report

Ameer A. Oudah
Student ID: OUD18470860
MBA student

Module Instructor
Laura Scanga
Table of Contents

1. Introduction ........................................................................................... 1
About Microsoft: ....................................................................................... 1
Vision .......................................................................................................2
Mission .....................................................................................................2
Performance ............................................................................................ 2
2. Brand Inventory .................................................................................... 3
2.1 Brand positioning................................................................................3
2.2 Brand identity ..................................................................................... 4
2.3 Brand elements .................................................................................. 5
2.4 Analysis of supporting marketing programs ........................................6
2.5 Points of Parity (POP) and Points of Difference (POD)....................... 9
3. Brand exploratory ............................................................................... 10
3.1 Brand salience ................................................................................. 10
3.2 Brand imagery .................................................................................. 11
3.3 Brand performance........................................................................... 11
3.4 Brand feelings .................................................................................. 12
3.5 Brand judgments .............................................................................. 12
3.6 Brand resonance .............................................................................. 12
4. Global managerial recommendations: .............................................. 13
5. References........................................................................................... 13
6. Appendix: 4Ps Mix of Microsoft ........................................................... 18
1. Introduction

This assignment is going to present an audit report of Microsoft as a global brand via a thorough
analysis that explains the current performance position of Microsoft in relation to its objectives,
and also to its competitors. Additionally, Microsoft’s brand exploratory will be critically analyzed
its market strengths and weaknesses using Keller’s (2013) Consumer-Based Brand Equity Model.
Finally, the report will elaborate global managerial recommendations on how to develop Microsoft
in the long-term.

About Microsoft:
Microsoft (MS) is a global technology corporation headquartered in Washington D.C, America.
The company was established in 1975 by two technology experts Bill Gates and Paul Allen. MS
serves worldwide and currently; there are 151,163 employees in the company (Microsoft.com,
2020). The company name “Micro-Soft” is a short form of micro-computer software (Foley, 2017).

The primary purpose behind the foundation of Microsoft (MS) was the invention of Micro
Instrumentation and Telemetry Systems 8800 microcomputers (Foley, 2017). These
microcomputers were primarily designed for keeping the track record of traffic data. Here the idea
of founding Microsoft arose in the minds of Bill and Paul as they claimed that they had a working
model to show based on the concept of MITS technology that changed the face of calculation and
data manipulation (O’Regan, 2016). Interestingly, the company's internal statement highlights its
positioning in the market in which Bill Gates states that “Every desk and every person’s hand
must have a computer’’ (Cruz, 2014).

Since its foundation, Microsoft (MS) has revolutionized the world through different types of
technologies and computer-related products, e.g., Windows, Offices, servers, Skype and mobiles
etc. While other than product manufacturing, the company is also providing different technological
services, e.g., Bing, LinkedIn, Outlook and One Drive etc. Apart from these products, Microsoft is
also competing with the mobile phone industry. In 2018, it turned to Android mobile technology
and is still a prominent market presenter (Lardinois, 2019).

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 Figure1: Microsoft’s products (source: https://www.tvisiontech.co.uk)

Vision
The vision of Microsoft is “To provide the technical services to the people and businesses around
the world to utilize their full potential in promoting their businesses’’ (Gregory, 2019). This vision
statement of the company highlights that it is helping the people and organizations globally to
upgrade their businesses and social lives in a smarter way, for which Microsoft is providing tools
to help them (Gregory, 2019).

Mission
The mission statement of MS is “To empower the individuals as well as organizations in their
journey to achieve more, around the planet (Pratap, 2018).” Three basic and core elements define
the mission of Microsoft in clear terms. These three elements are Empowerment, all individuals
and organizations on the globe and getting more. It means that Microsoft is not for a specific group
of peoples or organizations but everyone (Gregory, 2019).

Performance
The statistics of 2018 and 2019 show the significant growth in the revenue of Microsoft. The
operating income of the company improved by $7.9 billion in 2019 than the previous year due to
the growth in all of its sectors, and the net operating income reached $43 billion (Nadella, 2019).
The latest annual revenue of Microsoft recorded in 2019 is $125.8 billion (compared to $110.3
billion in 2018). The current worth of Microsoft’s assets is $286.55 billion (Nadella, 2019).

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2. Brand Inventory

Brand inventory is the analysis of all aspects of a brand collectively and individually e.g., brand
positioning, brand identity and brand elements etc. (Steenkamp, 2017). The brand inventory
analysis of Microsoft is discussed in the following section considering three basic factors: brand
positioning, brand identity, and brand elements.

2.1 Brand positioning

Brand positioning of Microsoft is very strong since its foundation, and it has remained a cool brand
in the eyes of the people. The company was the only market leader in the IT sector until 2011
(Fortune, 2011).

MS main rivals include some of the world-famous brands in the technology industry like IBM,
Apple, Google and Oracle. As MS is a diversified brand that presents various kinds of products
and services, it is experiencing an intense competition in all sectors of its operations. This rivalry
comes from several both large and small technology brands (Dolata, 2017).

Although MS Windows, the most popular Microsoft product, dominates the operating systems
field, the company is now competing with many companies, such as Apple (Macintosh) and Red
Hat that own Linux, the famous open-sources OS (Silic & Back, 2017). Another example with MS
main search engine'' Bing'', which is facing high pressure from its leading rival search engine is
Google, along with various other brands such as Yahoo and Baidu (Reliablesoft.net. 2020).
Therefore, MS encounters stiff rivalry in many areas of the technology sector.

Unfortunately, between 2012 and 2013, this competition caused Microsoft to not launch any
product based on a vision and customers need. For example, in 2012, Microsoft launched its first
tablet, “Microsoft Surface RT tablets,” which produced same as other tablets manufacturers were
doing with no new no innovation (Business Insider, 2013). This tablet failed and the company had
to bear a loss of $900 million (Business Insider, 2013).

However, following his appointment as the company’s CEO in 2014, Satya Nadella has
dramatically reinvented the corporation and made it more valuable than ever (Smith & Krivacek,
2019). His leadership approach is focusing on the importance of learning, innovation in the
company, and making a positive impression on customers, Therefore, he has set the company
apart from rivalry in positive terms (Smith & Krivacek, 2019).

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As a global multi-billion company that operates in more than 190 countries, Microsoft's products
are used by millions internationally. Despite it was only short, by the end of 2018, Microsoft was
ranked as the worthiest brand in the world. Currently, it stands in the third position after Apple and
Google (Forbes, 2020).

2.2 Brand identity

Brand identity is the image of a brand that sustains in the eyes and memory of its customers
(Steenkamp, 2017). The brand identity of Microsoft has been changing ever since its foundation
keeping in view the latest and changing trends. The following image shows the timeline of
Microsoft's brand identity.

Figure 2: The timeline of Microsoft's brand identity (Source: Stampler, 2012)

The timeline shows that from 1975 to 1987, the logo of Microsoft was black and white with
changes in its text styles only. It was because during these twelve years, Bill Gates and his partner
Paul were only focusing on DOS which is also black and white. The Windows operating system
runs on DOS only (Papadopoulos, 2019). Therefore, they didn’t focus on their colored image.
They aimed to create an image of their company’s name only by representing their business style
rather focus on logo colors and backgrounds etc.

Nevertheless, in 2012, the company realized that it should focus on a brand identity that meets
the latest demands because till 2012, lots of other IT companies e.g., IBM, Apple and Google,
had changed their brand identity and had made it attractive (Nanda, 2019). The use of color and
its psychological impacts customers' mind had proved positive during that phase. Therefore,
Microsoft Corporation also decided to use its basic feature of Windows with four colors following
a black and white Microsoft name (Tobak, 2012).

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2.3 Brand elements
Brand elements are the different parts of the brand that highlight the business strategies and
directions over time (Steenkamp, 2017). The brand elements of Microsoft are divided into six
categories. These are Memorable, Meaningful, Likeable, Transferable, Adaptable and
Protectable. These six elements of Microsoft brand are part of its business strategy and business
pathway (Steenkamp, 2017).

Memorable

The name “Microsoft” is the memorable element as it represents the abbreviation of windows.
Also, the windows logo and boot sound of Microsoft is still the same even after forty years which
has imprinted in customers' memories (Lindemann, 2010).

Meaningful

Its undeniable that Microsoft products and services makes the work easier. Office pack , for
instance, can be used in daily life to handle daily office work routines, and most important is the
compatibility of office pack with all OS (Lindemann, 2010).

Likable

Everyone likes the products of Microsoft because of their usage, graphics and user-friendliness.
For example, Skype is the product that provides the video calling facility with lots of extra features
e.g., emojis, sounds and messages. also, Skype is a full, formed phonebook (Skype.com, 2020).
Therefore, such product of Microsoft is liked by everyone.

Transferable

Starting from Microsoft’s operating system, Windows has a transferable feature. it is capable of
transferring from just an operating system to gaming, compatibility with different software
including designing as well as is capable of transforming into a large storage hub through One
Drive and other Cloud Computing products (Microsoft.com, 2020).

Adaptable

Microsoft is adopting the latest trends; it is the policy of the company to adapt to the emerging
trends e.g., its logo has changed many times in the last forty years. Also, its operating systems
(Windows) are available from different developers but the brand name is still in customers' minds
(Lai, 2019). Its slogans have also changed with time, as can be seen from the following diagram.

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 Figure 3: History of Microsoft’s Slogan (Source: (Reed, 2019)

Protectable

Microsoft’s brand is protectable both from security and monetary perspectives. From a security
point of view, all products of Microsoft are patented and copyrighted. From a monetary
perspective, Microsoft’s assets are secured with annual revenue of $125.8 billion (Nadella, 2019).

2.4 Analysis of supporting marketing programs

Microsoft keens on implementing its vision statement that the company wants computers on every
desk and in every hand (Microsoft, 2020). Therefore, Microsoft is not confined only to its country
of origin (COO), but, instead, it adopts a globally standardized marketing strategy which means
that all the customers around the world are offered the same products and services features,
brand name, pricing, advertisements and sales campaign (Microsoft, 2020). A notable advantage
of a multinational marketing strategy is it is inexpensive to implement to reach individuals
effectively (Boone & Kurtz, 2015).

The main target audience are individuals (males and females over 16-year-olds) and companies
(Microsoft, 2020). This, in turn, gives it a great opportunity of growth and dominance over the IT
and entertainment markets.

To keep its status in Hi-Technology industry, MS corporation is adopting a prosperous marketing

mix (4Ps), which empowers it to capitalize on its sales revenues. (Please, see the appendix for
the detailed analysis of the marketing strategy of MS).

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2.5 Points of Parity (POP) and Points of Difference (POD)
Points of Parity are the elements of a brand that are common in it and its competitors. In other
words, POPs are the elements that help a brand to sustain itself in the market and compete with
its competitors (Keller, 2013). Microsoft’s biggest competitor is Apple Inc. The POPs between
both brands is their nature of business as both American brands are working in the IT sector.
Secondly, their products both Microsoft and Apple are making computer, mobiles and operating
systems such as Windows and IOS. Moreover, utility software such as Microsoft’s Office Pack
and Apple’s Pages. Also, the target audience of both brands is the same, which is the third POP
as both brands target customers older than 16 years of age (Hunt & Arnett, 2018).

Points of Differences or POD are those elements that differentiate one brand from others and
mark its unique identity in the market (Keller, 2013). Microsoft is also different from its biggest
competitor Apple in many aspects. First, POD is the brand image. Microsoft is multi production
developer, which offer a broad spectrum of products and services such as Windows, Office, Xbox,
Cloud service, etc. Apple is focused on marketing few products, mainly iPhone which accounts
around 65% of Apple sales.

Figure 5: How Microsoft and Apple make their profits

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The second POD is their market approaching style. Microsoft approaches its market from top to
down e.g., Microsoft wants that computer and technology should be in the hands of everyone
regardless of the customers’ gender, race, location, and compatibility with technology (M.Williams
& T.Ilieş, 2018). On the other hand, Apple approaches its market from bottom to up means it
develops products for customized users and then makes it common for everyone. For example,
Apple designed a software “Pages,” which is only for technical users. Then later, Apple made
changes in its Pages software and made it compatible for all users (Hunt & Arnett, 2018).

Moreover, MS as an operating system is in partnership with Original equipment manufacturers

such as Dell, Lenovo and others. These firms then offer the laptops with the MS Windows already
installed. Unlike Apple which restricts its operating system for its products only (CB Insights
Research, 2020).

Finally, MS marketing strategy is directed for both individual customers or enterprises (i.e.,
Business2Business and Business2Customer strategies), unlike Apple which focus its marketing
campaign mainly on individuals (B2C) (Microsoft, 2020; Business Insider,2017).

3.Brand exploratory

This section will critically analyze and compare MS market strengths and weaknesses in the US
as its COO to Chinese market using Keller’s (2013) Consumer-Based Brand Equity Model.

Brand salience
It is undeniable that MS has operated immensely on promoting its brand name in its customers
minds over the years with offering enhanced services and innovative products. MS has worked
to gain this recognition through various marketing campaigns to making up its brand (Kasi,
2019).Therefore, the brand name of Microsoft is enough to attract the Hi-tech users towards its
latest products, and it is high sales in the US markets, which account about 40% of its total sales,
confirm that the company has great level of brand salience (Microsoft,2020).

Comparatively, in developing markets such as in China, Microsoft has invested heavily to build
its brand salience to affect Chinese consumers’ considerations and to enhance their information
or buying motive (Schlæger, 2019). However, a new study in 2017 has found that global brands
such as Microsoft have weakened in salience because it observed that media spending of
Chinese brands is hugely exceeded foreign global brands such as Microsoft and Apple.
Therefore, currently, there is increasing in brand positioning of Chinese local software and
hardware development firms e.g., Lenovo, Huawei and Xiaomi (kato & Tsuda, 2018).

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Brand Imagery
Microsoft’s brand image is becoming stronger among its US customers. A survey showed that
70% of the US citizens have heard about Microsoft regardless of the matter either they used its
products or not (Nicas & Bradsher, 2019).The main characteristics that people of the US keep in
mind about Microsoft’s logo and name and also its co-founder Bill Gates, who is considered as
one of the most successful and richest American characters (Dvorak, 2010). With its continuous
marketing campaigns and innovative products and services, Microsoft has maintained its brand
image in the US customers' minds.

In comparison to US, MS brand image in China is not as strong as that seen in the US. This can
be explained by the fact state that the Chinese market is contracting for MS brand because of
strict advertising and operating policies by the Chinese government (Mozur, 2015).

Another interesting point is the fact that the names meaning place more importance than sound
in the Chinese culture (Oliver, 2004). Therefore, a meaningful name is critical in forming both a
mental image and favorable response. Unfortunately, the meaning of Microsoft implies ‘tiny and
weak’, in opposite to its standing of the world’s largest IT company. This, in turn, creates a
confusion to Chinese consumers and harm Microsoft brand’s image and salience (Oliver, 2004).

Brand performance
It is undisputable that MS products such as Windows provides a high user-friendly experience,
with greater support for carrying out multi-tasks at the same with greater flexibility. Additionally,
the regular market surveys from Microsoft have a vital impact on enhancing users’ experiences
(Microsoft,2020). Therefore, form point of view of most US customers, MS products and services
are unique (Bill, 2017). This can be reflected by huge sales of Microsoft corporation in the US,
which account around 40% of its total global revenues (Microsoft,2020).

Similarly, MS offer the same high-quality end user products and services to Chinese customers.
However, despite the fact that MS is still the most dominant brand in China in terms of operating
system, there is an ongoing decline in its sales in this market because the Chinese authorities’
regulations to restrict foreign products, and working to promote homegrown alternatives like
NeoKylin, the most popular Chinese operating system, that offers similar user-friendly experience
of Windows (Sonnad, 2015).

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Brand feelings
Not limited only to the US, most MS users around the world feel very satisfied and comfortable
while using MS products and services. This can be explained by the continuous efforts of the
company to enhance customers stratification with premium products and highly-valuable
accessories. Although US customers’ opinions on MS have deteriorated slightly for over the past
year, because of issues with the updates of its Windows 10, most US customers are still very
loyal and proud of having its products (ACSI ,2019). On the American Customers Satisfaction
Index, Microsoft scored 74 out of 100 in 2019 while it had scored 77 in 2018 (Theacsi.org. 2020).
in China, the current trade war between the US and China has left its positive impact on the
Chinse customers’ feeling to local brands, besides their negative impression about the US
technologies firms (Kharpal, 2020).

Brand judgments
According to a report published in May 2019 about US customers attitude towards Microsoft,
nearly 65% of MS users said they are getting high quality products and services. Additionally, 60
per cent of the surveyed people mentioned that they get what they need from using MS products
(Statista, 2020). The majority of users in the US are overwhelmingly stated that MS innovative
technologies are making the life more enjoyable and more vital (Statista, 2020).

Nevertheless, there are significant variations in some attitudes to MS technologies between the
US and Chinese consumers. While Americans show widespread enthusiasm regarding the
innovation of MS and its impact on enhancing users’ experiences, Chinses show many concerns
about MS technology’s influence on their privacy. particularly after the criticism towards Microsoft
in its role in developing the Chinese government censorship systems (Stacey, 2019).

Brand resonance
It is irrefutable that MS has succeeded to develop a robust and loyal relationship with its
consumers around the world, including American consumers, who desire to be linked with the
brand once utilizing it (Sinha, 2017). This is due to the quality of MS products and services and
its endless effort to deliver innovative offerings for its customers that aid them to maintain its loyal
consumers. Additionally, MS products are still something that is required for most of the
applications to run (Kasi, 2019). Therefore, it is occasionally criticized for forcing the customers
to be associated to its technologies. Comparing to the Chinese market, MS resonance is also
high. However, MS is facing serious losses in the Chinese market (Yang, 2019). This is because

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of local manufacturers and language as well as government policies related to the international
companies which are very strict (Yang, 2019).

Figure 6: Consumer-Based Brand Equity Model for Microsoft in the US and China

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4. Global managerial recommendations:
Microsoft is one of the oldest hardware and software manufacturers in the world. It is still a market
leader even though it has faced issues in its some business components. Based on the above
analysis, the following recommendations can be beneficial for Microsoft to increase its brand
image globally.

• It would be better if Microsoft conduct a marketing survey before launching any new
product as analyzed in the above sections that Microsoft didn’t survey before launching
its Surface Tablet and had borne a loss of $900 million.
• I would recommend to Microsoft to change its business strategy from sole proprietorship
to franchising to become a stable brand worldwide. Microsoft is currently having its
distributors worldwide who are not good for the company’s long term sustainability in the
global market because the needs, laws and opportunities of every market are different
and without having a local franchiser, it is not possible to capture the specific target market
e.g., Chinese market where there is lots of potentials but due to not having local franchiser,
Microsoft is beaten by other brands.
• Microsoft has been changing its brand image (logo, color and appearance) frequently
since its foundation and from 1975 to 1987, the company had changed its logo and
appearance four times. Therefore, it is recommended that the company should not change
its brand appearance frequently. It poses a wrong impression in customers' minds.
Customers feel difficulty to remember the brand if it changes with such frequency.
Microsoft should follow Apple in this sector who hasn’t’ changed its logo ever since its
foundation.
• Microsoft follow a global marketing strategy which should consider the nature, customs,
needs and demands of every market differently to provide better services e.g., in the
Chinese market, Microsoft is not fulfilling the customers' needs because it doesn’t know
the market neither has it conducted any survey to find the needs of the customers.
Therefore, it is necessary to conduct a marketing analysis every regularly by the company
as the IT market is frequently changing and customers’ needs and demands are also
changing accordingly.
• It is undoubtedly that we are witnessing a dramatic changing in consumer needs and
attitudes. These days, consumers move from purchasing laptops and standalone PCs to
acquiring mobile phones and tablets, the markets, where MS has only a small market
share and may never build itself, unlike its main competitor, Apple, which capitalize mainly
in this area of technology. Hence, it needs to invest more in this fast-growing sector.

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 • MS should consider its Points of Difference and should strengthen them to be recognized
a unique brand in the market e.g., Microsoft Office has no competitors in the market but
the company does not introduce real innovative features from that in old versions. This will
create a a good opportunity for others to enter the market and take the place of Microsoft.

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Appendix: 4Ps Mix of Microsoft
1. Products: MS’s offers a wide variety of products and services which are directed to promote
digital experience and life of clients through enhancing productivity, business processes and
entertainment. Overall, MS products can be classified into three broad sections, as shown in the
figure below.

This growing diversification of MS’s products is correlated to its vision to ensure its dominance
over the global market through maintaining growth by penetrating markets and offering attractive
products (Dolata, 2017).

2. Price: MS applies different pricing strategies to ensure better attractiveness and sales
performance. For instance, the freemium pricing tactics, which includes providing a free of charge
product and needing payment for enhanced functionality or features (Xu et al., 2018). Office 365,
for example, can be used for free on devices with screen dimension up to 10 inches, but money
is required to use this product on larger screens. This is a potent marketing tool because it enables
MS to attract more users without spending on expensive advertising campaigns. Market-oriented
pricing strategy is another policy that is used by MS (Xu et al., 2018). This strategy includes setting
the prices of products, based on market circumstances, such as consumer demand and
competition level. A good example here is Windows OS which has premium-priced because of its
use is continuously growing and to ensure its dominance over the global market (Xu et al., 2018).

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3. Place: MS has different channels of distribution according to the type of product or service. For
instance, MS’s official website, which is the primary source of income generation, enables
customers to directly buy or download software (Kumar,2017). Moreover, MS’s retail stores
endeavor to enhance customer experience and improve the corporate brand image by giving
them access to the newest version of its tangible products such as Xbox and mobile phones
(Kumar,2017).

4. Promotions of MS haves continuously focused on its products' reliability and usability. For this
element, MS adopts different promotional plans such as advertisements, sales promotions,
personal selling and direct marketing (McPherson, 2017). However, MS spends more on ads over
the internet and television, like the "Women Made" Super Bowl commercials, that have helped to
improves MS corporate image (Warren, 2019). Furthermore, MS offers discounts and other
inducements for sales promotions. Office 360, for instance, is offered for students at a reduced
price to improve brand loyalty and limit new competitors to catch the market (McPherson, 2017).

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