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Dexterity
Microsoft's Kleenex Branding Strategy


By Dexter Davenport
(April 8, 2001)

So, Microsoft now says the WebTV brand has now run its course. It's a good thing Microsoft doesn't run Coke or McDonalds. Both companies have strong brand potential, as did WebTV. Actually, WebTV still is a strong brand, but not in a very positive manner, due to its reputation for bad service, and incompatibility with web standards. But it doesn't have to stay that way. And Microsoft didn't have to kill off the brand so early in its life. WebTV had one advantage over a Coke or a McDonalds, it's name reflects its entire category. But unlike WebTV, Coke and McDonalds know how to reinvent themselves and refresh their brand every few years.

Microsoft has never really known how to brand anything. Look at Windows. Here they picked a generic word. It's also a word used within the computer industry to describe a discreet graphical user interface element. They were going along with Windows 1.0, Windows 2.0, Windows 3.0, Windows 3.1, then they took a jag in the road and hit Windows 95, and Windows 98. That was before skipping to Windows ME. On the professional side, it went Windows NT 1.0-4.0 before veering to Windows 2000, and Windows XP. I'm waiting for Windows HUH? Notice that Windows 2000 was not the follow up to Windows 98 as one might assume from the name.

WindowsCE was never fully explained, although people assume it meant consumer electronics. Devices were built with Windows CE. Then they were called Palm PC devices for about a minute before being changed to PocketPC.

By the way, a friend of mine asked me, "What do you get when you combine Windows CE, Windows ME, and Windows NT?" The answer is Windows CEMENT.

Obviously Microsoft doesn't understand the idea of branding is so that people know what to expect when they see your product's name.

But that's a problem when what people expect from your brand is really bad Internet connections, freezes, disconnects, and spotty customer service.

Instead of doing the hard work required to fix the brand and making the company behind it worthy of consumers, Microsoft opted to take another tissue from Microsoft Branding Kleenex Box.

I can hear a commercial now: "Is your brand looking worn and dirty because of years of neglect? Don't worry, just pull out another tissue and a new brand will pop out behind it. We have a whole box of 'em! Microsoft Brands: They're disposable!"

Well, you know what? They aren't disposable to the people to whom they were marketed. We bought into the WebTV brand. We became WebTVers or Webbers, as some people phrase it. I guaran-darn-tee it that if Apple Computers were to change their branding away from Macintosh to UltimatePC, there would be fighting words. People grow accostomed to brands. They identify with them. A lot of people are Ford drivers, or Coke drinkers, or Harley riders. Someone may come out with a better product, but these people would never know. They are brand loyalists. I'm a Coke drinking, Reebok and Levi wearing, Macintosh using, Ben and Jerry's eating WebTVer and almost proud of it.

Last week, our publisher shared her thoughts on how various parts of Microsoft are leaving WebTV for dead by declaring that there's no market for Internet on Television and that the brand had "run its course."

Of course, Ultimate TV's call for the demise of IonTV seems a bit premature, except that doing so solves some marketing problems such as positioning. The idea is that a company has to have a range of products, each intended for different groups of people. Problems arise when a company has multiple products in a single space. Consumers, the company fears, will not know which product to buy, or why that product is important enough to buy instead of the earlier, often cheaper model, or the competitor.

This happened when WebTV announced the WebTV Plus. They made the product different by marginalizing the original WebTV Internet Terminal by calling it "Classic," much the way the music industry marginalizes past decades of music as "oldies."

It's disturbing to hear your favorite song referred to as a "moldy oldie." Many users of the WebTV Internet Terminal complained when WebTV re-branded it as Classic because it all but said Obsolete Model.

More puzzling was the branding that surrounded the next generation of Classic and Plus, dubbed New Classic and New Plus. New Classic? Is that like Military Intelligence? This bit of Microsoft doublespeak was probably the only way Microsoft WebTV's marketing team could think of to differentiate the products from their predecessors.

The New Classic had a built in printer port (which many people don't use), more memory (which is a good thing!), and a supposedly faster modem that most people don't notice because it wasn't implemented in the software and your service has so many connectivity issues. It was basically an improved model of the original Internet Terminal, but it was difficult to differentiate to people who could buy a New Classic for $99 or an old new Original Classic for $50-60.

The New Plus was more of a problem. Its chief differences were more memory (which due to bad software doesn't seem to make any difference) and the lack of a hard drive. So you had a product that was perceived by consumers to be missing a feature (albeit an under-utilized feature) in its improved state. Again, it was difficult for consumers to know why they should buy the "new improved." It's doubtful that any Original Plus users upgraded to a New Plus, unless their old one died. What a missed opportunity!

What if, rather than the same old, same old, Microsoft had truly reinvented the New Plus? What if the engineers had created a Plus that was broadband capable? You would be able to hook it to your cable TV and cable modem or to DSL.

How about Ultimate-WebTV? It would feature a dial-up modem, USB ports, a hard drive capable of recording 12 hours of TV programming, and would be broadband-capable with an optional $50 adapter that connects the box to a cable modem, or DSL modem. $24.95 a month gets you the personal TV service, games, program guide, and dial-up Internet access. Microsoft could knock off $10 for people who want to provide their own broadband service or dial-up. They could sell it for $300. Maybe they could give a $100 discount to existing WebTV users who agree to an 18-month subscription to MSN. At any rate, they should give better discounts for existing customers to upgrade than to potential customers. Although they don't give any special incentives to existing customers, Apple Computer has a brand following that is intensely loyal, with many repeat purchases. WebTV could have followed that model.

Would I pay $350 for a broadband WebTV that connects to my cable TV and records 12 hours of my favorite shows? You betcha. Would I pay $550 for a DIRECTV box that can record 35 hours, and surf the Internet at dial-up speeds? No way.


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