Microsoft Brand In Sharp Decline

Amy Bennett writes "A recent poll of about 12,000 US business decision-makers by market researcher CoreBrand found that Microsoft's brand power has taken a dive over the past four years. According to the study, Microsoft dropped from number 12 in the ranking of the most powerful US company brands in 2004 to number 59 last year. In 1996, the company ranked number 1 in brand power among 1,200 top companies in about 50 industries. The CEO of CoreBrand said: 'When you see something decline with increasing velocity, it's a concern.' To add some historical context, IBM suffered a much faster and more severe decline in brand power in the early 1990s and it took them 10 years to rebuild the brand's reputation."

Redmond weather alert

Today's forecast calls for light showers with a high chance of flying chairs. Seriously, though, I used to doubt the power of "branding," but the more I learn about the average consumer (disappointing as it may be), the more I understand why companies care about this kind of thing.

Re:Redmond weather alert

Branding == Reputation.

Not quite. Reputation is one component of branding, yes. There's also qualities such as name or brand recognition (do consumers recognize your brand when they see it?), and brand association (what attributes to consumers associate with your brand?) and brand differentiation (how is your brand different from your competitors brands in the eyes of the consumer?)

People don't always necessarily go for quality. If that were the case, McDonald's and a bunch of other businesses that turn out what are essentially low-quality, cheap or just plain mediocre products would be out of business.

Some people want a brand because it represents an attitude -- like I'm different. Think of Apple's Think Different campaign. People bought Macs just to be different -- they didn't care about features in the OS or available software, they just wanted a different kind of computer.

In the end the average Joe Sixpack buys what he finds familiar. He doesn't make buying decisions based on facts or critical thinking or anything related to clear, precise, logical thought. Kinda scary when you think about it.

popularity and peer pressure

I have a friend who got a Macbook the other day. She said it was really awesome. I was trying to figure out why she liked it so much, but when I asked her she said, "everything is so easy to use!"

That seemed a little strange to me, since it usually takes a little while to get used to a new interface. Then she said, "My boss and coworkers are so jealous."

That's how you know Apple has turned the corner. When suddenly random people can become cool for owning a Mac. Compare that to a few years ago, my brother mentioned in his university classes he was the only one who had a Mac, and people gave him strange looks. You had to actively go against the flow to get an Apple in those days. Now the flow is starting to head in that direction.

(Heads off to buy more Apple stock).

When you come to the fork in the road, take it

(Heads off to buy more Apple stock).

While I acknowledge others' pervious predictions of rough sailing ahead for Apple have generally not come to reality (since the return of Jobs), your tale leads me in the opposite direction.

It reminds of the story of Joe Kennedy knowing it was time to get out of the stock market when he was getting stock tips from the shoe shine boy. Part of Apple's appeal was its status as an outsider. Random people can't become cool for owning a Mac; the point of being cool is you're not just another random person.

With apologies to Yogi, are we reaching a point where no one will buy an Apple because everyone's buying Apple?

Re:When you come to the fork in the road, take it

the point of being cool is you're not just another random person

That's the nerd definition, perhaps, which makes sense considering it's a culture that celebrates the love of obscurity and shunning anything anyone else likes.

The reality is, being cool is about being cool. Can't be defined. Any attempts to do so peg you as uncool, and you'll probably never know why.

Re:When you come to the fork in the road, take it

Unlikely. Apple only owns about 14% of the laptop market right now. Just look at the iPod - initially it certainly did impart some coolness on its owners, but in the end it simply became a hip commodity item, like driving a hybrid.

Until we see another company as consumer-savvy as Apple come along as the next underdog chic electronics manufacturer, I think Apple's position is pretty safe.

As a Mac user I can only see the pattern continue. The Mac has seen an explosion of popularity ever since the Intel switch (the best move ever, really), and that has started to remove the main weakness of the platform: lack of software. Many app developers are now clamoring to port apps to the Mac, and most encouragingly a lot of open source projects now have stable Mac ports as well. As the software barrier becomes removed it will only become easier to switch to the Mac.

corebrand?

corebrand? never heard of em'

No suprise...

In my opinion they need to stop trying to take over the internet and look internally to focus and improve their core product lines. The release of vista and its lack of acceptance in the business sector was a huge blow to their reputation. I personally am aware of several VERY large companies that were considering Vista a year ago and have completely turned 180 degrees towards open source. I dont know how far MS thinks they are going to get by forcing Vista down the corporate throat.

Im not a microsoft hater, in fact I depend on MS products to make a living, but I know Im not alone on this sentiment.

Re:No suprise...

IMO, MS lost its direction when they became entirely marketing/business/lawyer driven instead of engineering driven. If they dumped the power hungry upper echelons (Balmer I'm looking at you) and started actually making engineering decisions (maybe even sound ones) they could turn things around.

By way of anecdote, being a developer in Seattle you will inevitably work with other who have at one point or another worked at MS. One common thread I've heard (as a developer in the Peugeot Sound) is that the MS company culture is severely dysfunctional (ie: many meetings and decisions are nothing but a contest to see who can position themselves for the next raise/promotion). At first I thought this was a given as these developers, program managers, and executives are EX-employees (if they liked it they would have stayed). However, the universality of their experiences combined with the complaining of those I know who still work at MS makes me believe there's merit to their comments.

Brand Dilution

I'm sure unfavorable reception to Vista doesn't help, but it's not like MS hasn't weathered that before. (ME anyone?) I would suspect brand dilution is more to blame, as they branch out more and more. At one point, people might just have thought of their software, but now there's a whole slew of different products that may bring their reputation down. Users who prefer the iPod to the Zune, or the Wii to the Xbox 360, or now see Google as the big cheese in the online world may all have a less favorable impression of MS as a whole.

Re:Brand Dilution

The difference between Vista and ME is that now people have a choice. Back then Linux was too hard to use, too hard to even find out about. Apple was a has-been, and OS2 had made a good attempt, but clearly failed. Also, for those who complained too much, there was Windows 2000/NT, so there was enough goodness coming out of Microsoft to keep people happy.
Now, on the other hand, Apple is cool, Linux is for sale at Dell and Walmart, people realize that Windows XP isn't too bad, and there is no great potential for a new OS in the pipeline from Microsoft(as there was with win2000). Yeah, there's Windows 7.....don't hold your breath). Their brand power was good, now it's getting bad. The winds of change are in the air from a lot of different directions.....no company can hold a monopoly forever, it is destiny that there will be a change. The only question is when.

Who?

Are these guys still around? I remember using a BASIC interpreter of theirs in the early 1980s.

2018

IBM suffered a much faster and more severe decline in brand power in the early 1990s and it took them 10 years to rebuild the brand's reputation.

So, Microsoft ought to be selling a decent version of Windows by 2018?

He brilliant!

The CEO of CoreBrand said: 'When you see something decline with increasing velocity, it's a concern.'

Wow. Thanks for that flash of nuclear-bright insight, Mr. Hawking.

Obvious

"When you see something decline with increasing velocity, it's a concern". Especially when it's a chair making its way down from office building above you.

Microsoft brand declining? Depends...

From the TFA:

Among its peers in the category of Computers, Peripherals and Computer Software, Microsoft is second to IBM in brand power, with Toshiba a close third, Gregory said. If Microsoft's downward trend continues, Toshiba could pass it in brand power next year, he said.

I'm an educator and work with kids (and some university students) all day. Ask anyone aged 10-25 what Microsoft is known for and they'll say Xbox (or Xbox 360). Sit kids in front of a Mac and they'll start messing with it; sit kids in front of a Windows box and they'll start messing with that. They don't "see" the operating system or the cognitive dissonance of the Office ribbon... They're still platform agnostic. And Microsoft is counting on that.

We associate Microsoft with "Computers, Peripherals and Computer Software", we hate their stuff, and we take glee in the decline of the Evil Empire that brought us Windows, IE, and OOXML. If I were to be associated with the Vista debacle and ActiveX exploits forever, I'd want my brand to die, too!

Don't be fooled by the article however, Microsoft still has the mindshare of future consumers - they're the cool company that brought us the Xbox, Xbox Live, and the Halo franchise... In another 20 years, wouldn't you want to buy technology from the guys who brought you all the great memories from your childhood??

Apple went from a declining "Computers, Peripherals and Computer Software" company to a hot mainstream company, and used the iPod halo effect to come back into their old, failed "Computers, Peripherals and Computer Software" market, hotter than ever. Microsoft is simply stealing a page from Apple and guaranteeing its survival for the next 20 years, when the Xbox gamers of today take their turn at being CIOs and CTOs.

Re:What?

Mike Rowe Soft.
It's a dirty job.

Re:Wha?

From TFA "CoreBrand measures brand power using four criteria. It first rates the familiarity of a company's brand. Once a company has a certain level of familiarity, they are ranked according to three "attributes of favorability": overall reputation, perception of management and investment potential..."

Re:No way!

You mean, they put out a new version of their main product, it was widely ridiculed, and their brand suffered as a result? Who would have guessed!?

Well, the article suggest there are more possible reasons than the one you cited, but speaking of suffering, I'll offer up my own jab to add to the fun: No Recession at Red Hat [nytimes.com]. Maybe not a recognised brand name around the kitchen table, but somebody's noticing.

Re:So who is the current #1?

According to the PDF linked to in the article, the top eleven are:

1. Coca-Cola (same rank as last year)
2. Johnson & Johnson (same rank as last year)
3. Hershey Foods (up from number 8 last year)
4. Harley-Davidson (up from number 6 last year)
5. Hallmark Cards (same as last year)
6. Campbell Soup (up from 10 last year)
7. UPS (down from 4 last year)
8. FedEx (down from 7 last year)
9. Colgate-Palmolive (up from 12 last year)
10. Starbucks (up from 13 last year)
11. PepsiCo (down from 3 last year)

This list is measured from a telephone interview among business leaders. Their scores were weighted higher if they had more familiarity with the companies in question. They were rated based on the Brand's overall reputation, perception of management, and investment potential. Note that these are corporate brands, not consumer brands. Apple is not on the list, in case anyone was wondering.

Re:So who is the current #1?

I guess I just don't understand the list of apples and oranges and cars from the article. It just seems to me that if you're going to compare companies they should be at least in similar markets. Sure if you're doing a who's top earner then I can see throwing everyone in the same basket, but then you'd also want to get more accurate information and not just base findings off of a phone survey, which to me is just crap info.

Re:You don't say...

This is just further evidence of Microsoft's imminent defeat at the hands of open source software. Microsoft is terrified of Linux, and it has been the primary cause of many of their recent screw ups which are driving people to Linux in droves.

Just the other night I was installing Ubuntu onto the computer of a freind's daughter, and I explained to her the benefits of open source software, and how it is inherently superior to closed source software.

Please forgive me for going a little OT here, but, at one point she suggested that Photoshop was better then GIMP. I tried to hold in the laughter, but my mouth was full of cheetos, and I spluttered some soggy crumbs over her keyboard. I used my Ubuntu t-shirt to wipe most of them off, and when I looked up, she was staring at me, and making eye contact. Does this mean she likes me?

Re:You don't say...

I have a hard time telling here whether you're serious or not

*jaw drops*

Re:What Microsoft has forgotten....

Microsfot has forgotten, like many other corporations, is that all one needs to focus on is making a quality product.

Forgotten?

Seriously - at the risk of sounding like a basher - has Microsoft ever produced a product where they focused on providing better quality than the competition?

I've known many people who have purchased Microsoft products for compatibility with existing infrastructure (basically vendor lock-in). I've never personally known anyone who has bought a Microsoft product because they perceived it as having more features, being easier to use, or being more stable than competing products.

Re:What Microsoft has forgotten....

Microsoft's strategy has always been to bundle everything together, so no product ever really had to survive on its own. Bundle Windows 3.0 with MS-DOS. Bundle the internet browser with the OS and make it part of the desktop. Bundle Windows 95/99/NT/XP/Vista with new PC's being sold. Bundle Microsoft Word with Excel and Powerpoint, and so on...

Five years ago, a corporate environment had to use Microsoft word for creating documents and Outlook Express to send/receive E-mail. Now, you can use OpenOffice or PDF files to exchange documents, and use any type of client to send/receive E-mail.

Nobody would really want to buy each item individually when they could get the equivalent applications from the open source community.