July 23, 2008


Marketing is a vital element to the business world and is essential for any company to grow successfully. To endure a prolonged existence, a business has to successfully reach their target demographic by creating awareness of their good or service using such elements as advertising, promotion, and public relations. Consumers purchase a good or service because they have a need or benefit for that product. The marketer’s job is to discover those wants and needs, and provide a good or service that meets or exceeds the consumer’s expectations. By providing the right goods or services to the right people at the right time, place, and price, using the right promotion techniques, you ensure higher sales, amplified revenue, product growth and company growth. Without proper marketing, a company can suffer significantly, which is why so much money, resources, and man-power in a company are devoted to marketing.


Why The Zune Has Failed

Zune logo

Digital media players have been a growing market within the last decade, and companies continue to expand through a very crowded market dominated by Apple’s iPod. In recent years, computer technology corporation Microsoft decided after years of only supporting and licensing a large range of software products to dive into the digital music player industry with its self-produced, self-orchestrated Microsoft Zune. The Zune incorporates features similar to the iPod and other competing products: video and audio playback, a compact size, premium headphones, wireless sharing and innovative touch controls. However, the features and technology are not what is holding the Zune back from establishing itself as a force in the digital media players industry, it is the poor marketing and advertising by Microsoft and its advertising agency, McCann-Erikson. Currently, the Apple iPod holds 86.1% of the digital music player market and the Microsoft Zune holds a measly 2.2% (Statistics from Mac Observer). The reasons why the Zune has failed and will continue to fail are due to the following reasons: the wrong product strategy, an overcrowded market, features that do very little, poor advertisements, and the unavailability of the product in stores. Microsoft is creating a misleading idea of interests that do not exist. With a revamp of the company’s marketing strategy however, Microsoft might be able to save the Zune from dying like other digital music players that lived before it. With the right marketing, it may finally compete with a company that does marketing right, Apple, and its iPod which has had and will continue to have great success.

Marketing Strategy

marketing strategy


While creating the Zune, Microsoft decided on a “loss-leading” strategy, meaning they will lose money on creating and selling the product and hope to gain their profit with accessories, content sales and renting music through their online store. However, it seems impossible to compete with the Apple iPod when they are selling hardware for a high profit and making minor revenue through content, accessories and their online iTunes music store. Continuing, the Zune Marketplace store features subscription rental media services which have been a flop in the past and current online services such as Napster, Rhapsody, Pressplay, Yahoo Music and much more. The consumer market simply does not want to rent their music. Music renting services for digital music players have all been huge failures, yet Microsoft continued to base their software and services packaged around the Zune with this format.  Alternative methods to a “loss-leading strategy” could have easily produced more profit for Microsoft, and could have lowered the prices for the Zune.


Microsoft sign on building

Unavailability can be a positive thing for a product, especially in the holiday season where it can create buzz and increase the desire to obtain the product. Examples of this are the popular Nintendo Wii gaming console or a product like Tickle Me Elmo in the 1990’s where the company is actively trying to manufacture as many units as they possibly can, but the demand is so high they can hardly be found on store shelves. Microsoft and their public relations team is using the media to try and portray that exact image but fail to mention that it is not because of high demand, but because they are only able to produce a very small amount of devices. As misleading as this is, consumers and media are catching on to this misconception and it is hurting Microsoft’s credibility as a digital music player producer. In addition, with hardly any Zune’s on the shelf, how is Microsoft going to gain any percentage of the market? Public/media relations and distribution are significant for a company to have a successful product. Microsoft is failing at basic marketing principles and need to change the way they are handling the Zune before all credibility is lost and the large investment put into the product disappears.

The Poor Commercial / Print Advertisements

Alice in Wonderland

The commercial and print advertisements done by McCann-Erikson, the Zune’s advertising agency are tasteful, creative and artistic but lack a fundamental principal of advertisements for a product launch – only a very small percentage of viewers/readers already know what a Zune is! The commercials and print advertisements hardly feature the product. The advertisements take you through a magical fantasy world filled with Alice-In-Wonderland-like visuals with catchy indie-rock music. The advertisements, although eye-catching do not include the basic features of the product that would compete with the iPod if the general consumer market were aware of what they were. If Microsoft and McCann-Erikson created advertisements similar to those of Apple’s iPhone, highly informative and to the point about its features, the Zune would be a much more talked about and popular digital music player.


Apple has been able to continually dominate the digital media devices as well as enter a crowded mobile phone market and is tearing away at Microsoft’s Windows Mobile SmartPhone devices. They are doing this by following the same marketing principles that made the iPod such a success. The iPod focuses on innovative yet easy to use controls that the every-day-consumer wants. Combining those features with basic software that can turn any music lover into a music aficionado is a recipe for great success. There are a variety of iPods ranging from $79-$399 making a cheap Christmas gift or an extravagant graduation gift possible to give. When it comes down to a successful consumer electronic product, all that really matters to the consumer is usability and convince. Apple delivers both. It is conveniently distributed to a variety of retail stores and it is easy to set-up, use, try out, purchase and give. Microsoft’s Zune could have taken a lesson from Apple on a successful marketing campaign to introduce the Zune in a crowded market already dominated by one company. Instead of playing up huge features that made the iPod a huge success, it is hyping up small features such as “wireless” syncing and radio through its advertising and public relations. Unlike Apple who has been replaying its signature black silhouettes dancing in all of their iPod ads to build brand recognition, Microsoft Zune commercials are crazy, twisted and are trying far too hard to capture the “cool”, young, hipster market. Microsoft needs to either take a lesson from Apple on how to market to the consumer or stick to doing what they do best, working with large enterprises and corporations to create and license software.

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