B891 TMA02 Raymond Fung No. # 97502736
B891
International Marketing Strategy
Assignment
TMA 02
Microsoft Corporation: The introduction of Microsoft Works
Fung Wai Man, Raymond
Student No.: 97502736
Date : March 22, 2000
Word Count: 3998 words
(exclude Cover page, Content table, Reference and Appendix)
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B891 TMA02 Raymond Fung No. # 97502736
Content
Item
Description
Page
1
Introduction
3
2
Situation Analysis
3
3
Global Brand Strategy
4
4
Standardization vs Adaptation
4
5
Concept Testing : Conjoint analysis on customer preference
5
6
Product Customization: Core-product approach
5
7
Organizational Structure
5
8
Product Standardization
6
9
Local Adaptation
6
10
Global Product Strategic Options
7
11
Time of Market Entry: Waterfall vs Sprinkler Strategy
7
12
Segmentation & Targeting
8
13
Positioning
10
14
Special Product Policy: Global marketing of service
11
15
Testing Market
11
16
Protecting brand names: Intellectual property issues
12
17
Conclusion
12
18
Reference
12
19
20
21
22
23
24
25
26
Appendix A. Standardization vs Adaptation
Appendix B. National Innovative-ness vs Individualism/Uncertainty Avoidance
Appendix C. Conjoint Analysis
Appendix D. Time to Market
Appendix E. Software Category Segmentation
Appendix F. Segmentation by different aspects
Appendix G. Difference between perception & expection
Appendix H. Microsoft Works’ Positioning
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13
14
15
16
17
17
18
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B891 TMA02 Raymond Fung No. # 97502736
Microsoft Corporation: The introduction of Microsoft Works
Introduction
I was employed as marketing consultant for helping Mr. Bruce Jacobsen, the product
manager and Ida Cole, the director of Microsoft’s International Product Group. The
issues encountered were how Microsoft to launch their new product Works globally in
domestic market as well as the international district . Another purpose was to decide how
to position Works globally. In the meant time, Microsoft had to respond to the requests
from different country managers’ request on demanding “product features” that could
make their sales excellent and competitive to the market. Due to the different customer
perception of Works in different countries, the positioning in global approach would be
nerve-racking.
Situation Analysis
Before making any decision on the global product policy, situation analysis: SWOT and
Porter’s five forces were carried out :
Microsoft entertained the strength of superior brand image on developing PC system
software operating system standard - MS-DOS. Its chairman, Bill Gates, was a computer
genius, had the product competence of developing microcomputer software for different
aspects. Its company had a proven financial performance shown in exhibit 4 & 5, near ten
times of revenue with five times of costing over five years – won the favorite of many Wall
Street analysis and the highest in the Datamation 100, an annual review of the largest
companies in the computer hardware and software industries. Good experience in
management team in marketing of PC products and delegation of responsibility but
demanded outstanding performance.
However Microsoft had weakness of lack of international experience. Although they had
over 41% of international sales, they did not have a mature global product policy, how to
launch product – in what extents should be local adaptation ? Which market communication
strategies and positioning of Works should be used ?
It was an opportunity to target the Microsoft Works globally, with good market potential
(over 41% oversea sales and $2.25 billions for horizontal application software) and
significant growth in the long run. With globalization, worldwide standard product with
minor variation to accommodate national differences reduced the time and cost required
to develop localized version of software.
Microsoft Works has the threat of encountering the leading competitors like Lotus 123
spreadsheet, Ashton-Tate’s Database, Software Publishing’s integrated, easy to learn,
inexpensive “First Choice” and finally Borland’s low prices “Sidekick”. Microsoft did not
use copy protection as software is a kind of short international product life cycle (IPLC),
it was not only suffer from competitive pressure – “me too” products, but also counterfeit
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B891 TMA02 Raymond Fung No. # 97502736
products.
In the Porter’s Five Forces, software company mainly produced software by itself, it
basically did not have supplier force restriction. However, software company has a
strongly customer force relied on its distribution network. Contrarily speaking, the
distributors had a lot of variety product to sell, they might not obey to sell Microsoft’s
product. As mentioned before, the competitive forces were tough, but by going global,
the worldwide competitive force became weak as some of competitors did not go global.
Temporarily there was no advanced substitute for such horizontal application software.
But potentially there was more new entry coming out as the initial, switch and exit costs
were low – good example of explaining why India was sophisticated in software
development. Pirate products would be lower entry cost for such software market.
Global Branding Strategies
Because of Microsoft’s previous reputed software product MS-DOS or Word, it adopted
a umbrella branding on its Works as it hoped that the corporate image would have a
positive effect on the customer perception of the new product Works. Microsoft name
provided the software customers with an assurance of quality, thus reducing risk. A
global brand achieved higher visibility than a local brand, often capitalizing on the media
overlap and spillover around the world.
Most worldwide software customers were familiar to Microsoft’s brand history. Whereas
in the competitive climate, there was no keen competitors could have such global brand
effect in software. The cultural receptivity to Microsoft was good, no adverse effect.
Finally the penetration in the software product category and usage was speedy as most
of PC client should have tried MS-DOS for their disk operating system.
Microsoft believed that its brand name could be differentiated from those of global
competitors. Its brand got high brand equity because it had high brand loyalty, name
awareness, and perceived quality – global branding was good strategic decision to launch
its new product Works.
Standardization versus Adaptation
Herbig summarized some factors to see if standardization or local adaptation was
preferred (see Appendix A. Standardization vs adaptation) It was concluded that the
local adaptation was needed as most of factors in local adaptation were yes, whereas most
of factors in standardization were no. Because of the economic of scales, brand name and
country-of-origin effect, standardization in certain extent was needed. Therefore if
Microsoft Works needed to be launched globally 4
it should be designed in a
B891 TMA02 Raymond Fung No. # 97502736
standardization package, partial function should be locally adaptive to the host countries.
Concept Testing: Conjoint Analysis on Customer preference
First at all, each product features or design perception would be put as data into the
conjoint analysis to see if it was justified to launch such product locally or globally.
Hofstede’s cultural dimensions – individualism and uncertainly avoidance in European were
used to estimate their perception on different aspects (see Appendix B. National
Innovative-ness vs Individualism / Uncertainty Avoidance ).
Low End – if it was a good idea to launch the Microsoft Works with Low End
IBM-Compatible Microcomputers during the period from 1986 to 1987 ? (see Appendix C.
Conjoint Analysis). The average regression coefficient was 0.05 (=518.16/10375). Low end
would be slightly favor but might not in next year as most of the coefficient were
negative.
International version: basically the domestic version launched in US and Canada would
have the profit of US$643,750 (6000x195 + 500x215 – 97.5x6500). Whereas the
international version launched in nine countries would have the extra profit of
US$216,347.5 (422,020 + 496640 –84000x7 – (97.5-68)x3875). 33.6% extra profit
would be obtained in developing of international version of Works implied the benefits of
globalization of Microsoft’s Works.
Compatibility feature perception: The “toggle switch” and “conversion program” were
perceived as important as several country managers had informed Ida Cole that without
those features, Works might unlikely to be successful in their market. The average
regression coefficient was calculated as 0.59 ( = 6135/10375) meant the compatibility
was average favor.
Price Sensitivity: According to the forecast suggested retail price per unit of localized
version, there were so many difference level of pricing level. It was hard to standardize
the pricing policy globally. Therefore it was better to have local adaptation.
Simplicity usage: except Germany and Netherlands most of countries favor the feature
of simplicity of Microsoft Works. The average regression coefficient was calculated as
2.28 (=23645.95/10375) meant simplicity was a must for the software. Therefore it
should be standard positioning for global product.
Product customization: Core – product approach
Microsoft should adopt the core-product approach that started with design of mostly
uniform core-product domestic version of Works and then added attachment that might
fit local needs like the special features “toggle switch” and conversion program.
International version of Works fit for the local habits and customs. And finally fit the
local language, user manual, and its packaging and documentation. Such approach could
save a lot of costing that came from the centralizing the production of the core. The
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success would be due to the easy product modification.
Organizational Structure
Microsoft adapted an umbrella strategies (Henry Mintzburg) that the organizational
structure (see exhibit 2 &3) showed a strength of control the technical competence
within the headquarter, but decentralized power to the local teams to sell their local
product. It set up a umbrella top of International version frame work and let the
international teams had their own resource of marketing, production, product design and
distribution to generate their own localized final product.
Product Standardization
In order to cite a cost advantages, Microsoft should standardize its core-product
functions or features. In US, Microsoft was able to achieve high volumes, capitalize on
economies of scale and the experience curve, and achieve the lowest possible costs per
unit. Computer consumers were concerned with price with specific features or cultural
imperatives. Beside that, Microsoft could achieve a consistent company image to the
customer and provided standard product for shared needs amongst those computer
consumers that demanded similar products. Basically US and Canada would entertain with
the standard product of domestic version of Works. During the development of
international version of Works and seven countries’ language version, only a fixed cost of
US$84000x7 had been invested. The further development of other languages would be
only charge of translation cost, scale of economies would be achieved to obtain more
profit.
Local Adaptation
Difference in countries and language: an international version of Works would be
launched after the domestic version of Works and modification of specific features
(“toggle switch” and conversion program). The insertion of local language into the
international version of Works took only a short time by the International Product Group.
The seven languages would be French, German, Swedish, Italian, Dutch, Spanish, and
Portuguese. Whereas the Japanese team was responsible for its own localization.
Technical complexities of the two-byte architecture and the unique issues in adapting
products for the Japanese market led Microsoft to establish a separate group in the
Japanese subsidiary to develop its own products and localize software developed in
Redmond for Japan.
Difference in hardware: the countries manager should source their own countries’
facilities for solving the problem of hardware difference: keyboard layout of non-English
characters, printing programs (or printer drivers) and user manuals.
Difference in price sensitivity: the countries manager should suggest their target pricing
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B891 TMA02 Raymond Fung No. # 97502736
level, see on the indication of Exhibit 8. Forecast Monthly Sales of Works English and
Localized Versions. Those prices level would be optimum for local price sensitivity and
customer affordability.
Difference in local habits & customs: it could be solved by introduction of Microsoft
Works international version by built in the selection of different options : rates,
dimension, currency, time & date, standard size of paper size in the software function.
Difference in package and documentation: the countries manager should source their own
countries’ facilities for solving the problem of package & documentation difference.
Difference in Microsoft’s competitive position and corporation image: A suggested
globally positioning theme and market communication to all countries that produced in
domestic area (shown in the later section of Positioning). However, the individual countries
managers could select to take it or not in order to local marketing communication
adaptation.
Global Product Strategic Options:
US & Canada were supposed to have the shortest culture distance, Microsoft was
suggested to have the product & communication extension strategies in the area of US
domestic market and Canada in order to achieve the economic of scales, elimination of
duplicate of product and communication development cost.
While in other international countries, product and communication adaptation was
suggested. As some inter-country differences were the result of local habits and customs,
countries like France and Germany used the metric scale for distance, while English used
feet and inches. This affected the spacing when printing text from a word formats for
currencies and for time and date varied around the world. Cross-cultural differences
required a change in the software itself, others affected the packaging and
documentation. Therefore the above needed the product adaptation.
In terms of customer perception in different culture, it needed communication
adaptation. For example, in France, much had been made of the “ease of use” of name that
roughly translated as “software for the simple life”. A butterfly was displayed as the
Microsoft logo in French ads. Whereas in Germany, the Microsoft Corporation tag line was
“Software with a Future”. Microsoft’s corporation logo in Germany was a series of
cartoons by the German popular poet Wilhelm Busch.
Time of Market Entry : Waterfall method / Sprinkler strategy
Microsoft should engage in a sprinkler strategy – launching domestic Works version in
both US and Canada district (Canada was assumed to be homogeneous country – similar
shared language, religious, history and lifestyle - tended to adopt a product faster than
countries which are highly diverse or multicultural) on September 15, 1987 as the time to
the market was a critical factors in order to capture the first layer of domestic market.
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B891 TMA02 Raymond Fung No. # 97502736
This was a zero-sum game that the second entry marketer would lose certain market
share. With a marketing communication in advance, customers could be updated with a
service pack after two months to achieve two additional features: “toggle switch” to
change to Lotus 1-2-3 or Multiplan format. The service pack only charged with $10 – such
fee was only the administrative and transaction cost for the distribution networks or
retailer shops.
The updated service pack was released on November 15, 1987. The customers could pay
for $10, brought with their own domestic Works along with guarantee license and got a
updated service pack diskette. Some customers were favor of using conventional format
like Lotus 1-2-3’s cell reference “A1”and Multiplan’s “R1 C1”. With a little charge,
Microsoft Works could be used as the existing platform. Another features were Works
could be converted to the Multiplan file format. Conversion programs allowed the
exchange of information between Works and other spreadsheet products. It also allowed
a person with Works to share data with colleagues uisng Multiplan.
Based on such updated design version, the international Works version could be finished
with one months, launched on December 15, 1987 –
captured the customers in the
Christmas period of heavy buying activity for computer products, as the international
markets made purchases for Christmas and some businesses bought at the end of the year
or tax reasons (similar Christmas seasonal buying behavior to the domestic market in
other international markets). Such time strategies was “Waterfall method”. Kotabe &
Helsen noted that adoption rates often tended to be faster in lag countries than lead
countries. Software customers in lag countries had a longer time to understand and
evaluate the perceived attributes and benefits of the new product and “learn” from the
experience of adopters in the lead market – such “learning effect” accelerated adoption
and diffusion in the international markets.
With the international version of Works, other than translating into the native language,
very little was needed for “localization” in various countries. It was believed that the local
language version would be released with a very short time, might be within 10 – 15 days. It
would be another “Waterfall” effect (see Appendix D. Microsoft Works’ Time to the
market ).
Segmentation & Targeting
First at all, Appendix D. Software Category Segmentation showed that Microsoft
Works was a selected as an General Purpose Integrated Software – it engaged 30.5% of
the total 1986 sales turnover, its inheritance of targeting the massive portion of
software market.
Refer to Appendix F. Segmentation by different aspects & Microsoft’s target, four
dimensions were considered in analyzing market segments for software products: the
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computer hardware environment; the level of the customer’s needs; and the country /
language.
Due to Microsoft’s software could only be used in IBM-PC or PC clones, not in
mini-computer or macro-computer, it was a minimum requirement for Microsoft software.
Based on the characteristics of Microsoft Works – easy to learn, easy to sell for the home
and small business market, it would not be a very sophisticated and expensive software as
mentioned in the articles, “The more mature, ‘LOW END ‘ IBM-compatible hardware was
selected for Works because inexpensive software was needed
for the millions of
customer who were planning to purchase inexpensive machines for use in homes and small
business.” The machine type target should be XT, not AT or PS/2, the updated and
advanced version.
In term of usage situation, two type of users were kicked out at the first moment –
scientific and technical one as they were looking for powerful, expensive computer
hardware for special scientific programs like CAD & CAE as they would select other
prestige
software
for
word
processing,
spreadsheet,
database,
graphics
and
communication like Words, Excel, Lotus, or Database.. Second kick out would be the large
business sectors as they tended to have extensive data processing capabilities, more
formal buying procedures for computer products, and more sophisticated requirements
for computer support.
Small business includes professional sectors would be suitable for using Works as the
general applications of word processing, spreadsheet, graphics, database, and
communications were used in most businesses to provide automated support for office
functions – less data processing expertise, less-structured buying process and simpler
needs. Home & hobby sectors would be suitable as they are the individuals and families
who used computers for practical (like word-processing, spreadsheet & database) and
recreational (like graphic & communication) purpose in the home. Customers in the
home/hobby segment tended to buy smaller and less expensive computer systems.
Education would be another segment suitable that included students, teachers and
administrators in schools, colleges and universities. They used Works for homework, term
papers, presentation, and examinations. In this segment, some scientific research (like
statistics SPSS and scientific calculation) and professional teachers (like Architect
teaching used CAD or accounting program used Daceasy) were not suitable as they
requested the power and sophistication typically demanded in scientific /technical
environments.
In term of customer’s depth and clarity of software needs, Works should not be DEPTH.
It is integrated and simple software as the breadth customers like professionals or
managers who did a little bit of everything, and needed a combination of spreadsheet,
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word processing, database, graphics, and communication. They were likely to want low
price and simplicity in software that supported those functions. First-time buyers of
computer were likely the suitable segment for Works as they should be breadth users,
they were looking for a “macho integrated” software met variety of needs at relatively low
price.
In term of country and language, as Microsoft wanted to globally launch its product,
domestic and multi-countries or language were the must. But in the Exhibit 8 sales
forecast of article, there were no indication of the launching in Japanese and Asian
countries. The marketing potential of those countries were insignificant at that time and
“two bytes” conversion works might take a long time and costly. The local language
versions were left to the International Product Groups to develop the localized versions
of Works for Europe. Japan was responsible for its own localization.
The targeted customers were obviously : IBM-PC or compatible XT users; small business,
home & hobby; and education sectors, breadth and new users, that should be launched in
domestic US market as well as international market like Canada, England, Australia/New
Zealand, France, West Germany, Italy, Netherland, Portugal, Sweden and Spain.
Positioning
Originally Microsoft had a tentative positioning strategy – easy-to-learn, easy-to-sell
product for the home and small business market. It was a macro integrative and simple
software included spreadsheet, word processor, graphic program, database, and
communication program.
Functional wise, the Microsoft Works was expected to be integrative, which provided the
flexible ability to move information between spreadsheets, databases, and word
processing documents. Compatible or conversion with other software like Lotus or
Multiplan would be another advantage to the sales performance. The users would like to
enjoy the integrative, compatibility and flexibility of software.
In Appendix F. Difference in Perception and Expectation, the positioning statements in
different districts were :”easy to learn and use”, “software of simple life”, “software with
a future”, ”pioneers in compatibility” and “power and simplicity”. In order to fit for the
“global” needs, a global positioning statement should be designed as follow:
User-Friendly, Harmonious & Integrative for Eternal PC users
“Simple to learn and use”, “software of simple life”, and “simplicity”: all demanded
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“SIMPLE” that were the common needs of global customers. Another word for this was
“User-friendly”. “Pioneers in compatibility” was another need and important as mentioned
before, therefore the word “harmonious” implied the meaning of “compatibility”. “Power”
might not be fit because Works was not designed for powerful and sophisticated
application. However in Italy, such kind of “integrative” software that could be applied in
different field interpreted as “power”. “Software with a future” was interpreted as the
word “eternality”. “PC users” was a minimum hardware requirement of Microsoft Works.
A metaphor was designed to describe Microsoft Works in terms of user-friendly,
harmonious and integrative for eternality :
Microsoft Works – An Integrative solution for The simple harmonious family
The metaphor could be applied to the market communication program and advertisement:
A simple harmonious family composes of a younger son, elder daughter, working mother
and business executive father.
Started with a IBM PC, the Microsoft provided the family with an integrative solution !
The six years old younger son, started to use the computer for fun (a home, hobby and
new user). “Simple to learn and use “- Works‘ graphic and communication program would be
his favors.
The fifteen years old elder daughter, did her homework (a home and
educational- student user) and prepared some of presentation materials in school class.
“User-friendly and integrative”-Works’ word processing, spreadsheet and graphic
program would be her favors.
The thirty four years old mother was a teacher and administrators in a college. She had to
handle daily teaching materials and school’s administrative work such as school activities
planning and fund-raising (an educational - teacher, administrative and breadth user).
“Integrative and compatibility” – Works’ word processing, spreadsheet, database, graphic
program would be her flavors.
The thirty eight years old father worked as a business executive in a small and
professional firm. Currently he had to handle so many business documentation, accounting
and calculation spreadsheet, database storage, symbolic graphic for business
presentation and commercial communication with other companies (a small business &
professional and breadth user). “Integrative, compatibility and user-friendly”-Works’ all
programs would be excellent for his job.
The scene was zoomed to a group of family members : father, mother, daughter and the
younger son were crowded around their home PC, filled with a happy and harmonious
environment. There was a world map hanging behind the family members. It showed they
were a harmonious family – implied an user-friendly, compatible and integrative software
that fit for different users indicated above. The family and world map also implied to a
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group of end-user in different countries - a global PC software that fit for different
countries end-user. (see Appendix H. Metaphor of Microsoft Works )
Special Product Policy: Global marketing of services
Microsoft was suggested to establish its own global service networks through its loyalty
dealers, then developed a global service marketing strategies for the software learning,
training and upgrade service. Invitation of the global dealers to Microsoft’s main office to
have the standardized software training. After the dealers went back to their local area,
they would have to set up a customized training course. Once people bought the Microsoft
Works, a local free training course was granted. Any bad diskettes within warranty period
could be claimed back from their global software dealers. On the other hand, the local
dealer’s software could be upgraded with a service pack through its communication
program, Information Technology. At that time, there were no internet but BBS (Bulletin
Board System) service. Most of software distributors could get the new updated service
pack (normal the file would not be too big) through real time communication. In the meant
time, Microsoft could have its “IT complaint box” for those global dealers.
Testing Market
Before the launching the local version of Microsoft Works, a trial version (or  version) of
international or domestic one could be sent to the global dealers for market testing. The
new features or the compatible features could be tried with the dealers. A prompt
response through BBS could be obtained to lead Microsoft to see any bugs inside the
software or convert a better product design. Of course such trial version would have a
limited usage date that the dealers had to continuously buy the software.
Protecting brand names: intellectual property issue
In order to have higher brand equity of Microsoft, the legal aspects such as copyright
would be valid in US. However, other strategic options against piracy should be used,
communication options like legal copies and licenses to avoid imitations. Microsoft did not
use copy protection because it encourage the diffusion of Works usage in the lag
countries. In certain maturity of time, legal actions would be taken to force the customer
to buy the licenses.
Conclusion
Microsoft tended to launch a new product Works globally and met the challenge of
request of compatibility and local adaptation from country managers. Due to inheritance
of drivers that favor the globalized / standardized product strategies – the common
customer need (simple & integrative software), global customer, scales of economics and
earlier time for entry to market, globalization of Works was a must.
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After details of analysis – customer preference of conjoint analysis, competitive climate,
organization structure and history of Microsoft, a global software product policy was
formulated: adopted core-product approach to develop the main software in domestic
version of Works, and quick to launch in the domestic market to capture the most market
share. Compatible design was then inserted into the software, launch in the next two
months. Finally was the international version of English Works, then local language one.
Sprinkler and waterfall approached were done. Microsoft Works adopted product &
communication adaptation options. A massive segment of general purpose integrative
package: IBM-PC XT users, small business, home & hobby, and education sectors, breadth
and new users were the main target of Works. Positioning statements: “user-friendly,
harmonious & integrative for eternal PC users” and another metaphors: Microsoft Works –
The integrative solution for the Simple Harmonious Family” were presented to the
country manager in order to have them convinced. If the positioning was appropriate, the
product strategic options would change to Product adaptation but communication
extension because most of the countries were favor on such positioning.
References
1. B891 International Marketing Strategies Course Material – Unit 3, 4, 5
2. B881 Strategic Management Course Material
3. Global Marketing Management - Update 2000, Masaaki Kotabe & Kristiaan Helsen
Appendix A. Standardization vs Adaptation
Standardization :
1. high costs of adaptation – no really
2. convergence and similar taste in diverse country markets – no
3. predominant use in urban environments - no
4. marketing to predominantly similar countries – no really
5. centralized management – no
6. scales of economy in production, R&D and marketing – partially yes
7. meeting competition when competitors produce standardized product – no
8. consumer mobility – no exactly
9. if positive home country image (C-O-O) effect exist – yes, brand name is the most
important
Local Adaptation:
1. different in technical standards – some true, but some untrue
2. primarily consumer and personal use products – yes
3. variations in consumers needs – yes
4. variations in conditions of use – yes
5. variations in ability to buy, differences in income levels – yes
6. variation in technical sophistication, skill levels of users – yes
7. strong cultural differences – yes
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8. local environment-induced adaptation, differences in raw material availability,
government requirements and regulations – not exactly
9. use by competitors – yes
10. variations in national habits – yes
Appendix B. National Innovative-ness vs Individualism / Uncertainty Avoidance
source: exhibit 11-6 [2]
Country
Great
Britain
Netherlands
Sweden
France
Germany
Italy
Spain
Portugal
National Innovative-ness
Individualism
0.89
91.48
Uncertainty
Avoidance
42.22
0.70
0.59
0.35
0.07
-0.71
-0.85
-1.2
83.70
74.81
71.11
68.88
74.81
51.85
27.40
63.33
32.22
88.33
68.88
75.55
87.77
107.22
Appendix C. Conjoint Analysis of Microsoft Works
Country
Low End Internatio Compatibili
Low
Simple to Suggest Forecas
nal Version ty features price or use & sell ed price
t
Perception price
concept
US$
monthly
sensitiv
sales
e
US
-0.12
0
0.53
0.61
3.00
195
6000
Canada
0.13
0
0.53
-0.61
3.00
215
500
England
0.32
1
0.53
-0.61
3.00
215
1000
Australia/
0.32
1
0.53
-0.61
3.00
215
380
New
Zealand
France (L)
0.15
0
3.00
1.16
0.30
254
650
West
0.07
1
1.96
0.00
0.00
273
200
Germany
West
0.07
0
1.96
0.00
0.00
273
500
Germany
(L)
Italy
0.38
1
2.32
1.78
0.79
244
50
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Italy (L)
Netherlan
ds
Netherlan
ds (L)
Portugal
Portugal
(L)
Sweden
Sweden
(L)
Spain
Spain (L)
0.38
0.30
0
1
2.32
1.66
1.78
3.00
0.79
1.97
244
224
160
80
0.30
0
1.66
3.00
1.97
224
200
1.50
1.50
1
0
4.01
4.01
3.24
3.24
-5.51
-5.51
220
220
25
80
0.15
0.15
1
0
0.00
0.00
2.39
2.39
0.79
0.79
234
234
100
200
0.875
0.875
1
0
2.97
2.97
2.39
2.39
-2.26
-2.26
234
234
50
200
(L) means local language version
Assumption of the above regression coefficient:
1. Low End: assume the perception to the low end would has the relation with the
relative sales in 1987 to that in 1986, therefore coeff = (1987 forecast sales – 1986
forecast sales)/1986 forecast sales -1
2. International version: “1” means buy, “0” not buy
3. Compatibility: assume risk avoidance has a relation with compatibility, assume Sweden
has the less compatible perception, value 0, France has the second compatible
requirement, value 3. The coeff =(Risk avoidance – 32.22)/ (88.33-32.22)*3
4. Price sensitivity: assume price level has a relation with price sensitivity, Germany is
less price sensitivity, value 0, Netherlands is the second price sensitivity, value 3. First
at all, all local version country has to reduce price $68. Then the coeff
=
{(273-68)-( Price – local charge) }/ {(273-68)-(224-68)}*3
5. Simple to use perception: assume individualism (or hedonism) has a relation with
simplicity usage, Germany has no feeling about it, value 0, Britain has the highest
requirement
on
simplicity
usage,
value
3,
the
coeff
=
(Individualism
–
68.88)/(91.88-68.88)*3
US, Canada and Australia / New Zealand are assumed to have highly similarity with
Britain, therefore their risk avoidance and individualism would be counted as the same
Appendix D. Microsoft Launching time to the market
Sprinkler Strategy vs Waterfall Method
Domestic
Microsoft Works
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2 month after…….
1 month after……
short time after…..
Appendix E. Software Category Segmentation
Company Name
Lotus Development
Worldwide
Sales in
1986 ($
millions)
283
Microsoft Corp.
260
Ashton-Tate
203
Word Perfect
52
Autodesk
50
Borland
38
Micropro
36
Name(s) of a Few
Leading Products
Category of Software Expected Sales
Products
of individual
software
1-2-3
GP spreadsheet
Symphony
GP integrated
Jazz
GP integrated
DOS
SS Operating System
Excel
GP Spreadsheet
Word
GP Word Processor
Dbase III
GP Database
Framework
GP Integrated
Multimate
GP word processor
Wordperfect
GP word processor
Wordperfect Executive
GP Integrated
AutoCad
SP Computer Assisted
CAD Camera
Design Products
SideKick
GP Organizer
Turbo Pascal
SS Language
Wordstar
GP word processor
Wordstar 2000
GP word processor
16
94.3
94.3
94.3
86.7
86.7
86.7
67.7
67.7
67.7
26
26
25
25
19
19
18
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Digital Research
26
Software Publishing
26
CP/M
GEM
PFS: Write
PFS: File
First Choice
SS Operating System
SS Operating Environ.
GP Word Processor
GP Database
GP Integrated
13
13
8.7
8.7
8.7
Niche program 69
GP database 76.4
SS Operating System, environ. & language 131.7
Segment this
portion 30.5%
GP Spreadsheet 181
GP Word Processor 225.1
GP Integrated 291
Appendix F.
Segmentation by different aspects & Microsoft’s target
Computer Hardware
Environment
IBMPC
or
compatible
Usage Situation
Customers’ Depth & Country & Language
Clarity of Software
Needs
PC
Small Business
XT
Large Business
Domestic
AT
Professional
Depth
PS/2
Home
Breadth
Hobby
New users
Scientific
Technical
17
One byte language
like English, French
and German
Two byte language
like Japanese or
Asian countries
B891 TMA02 Raymond Fung No. # 97502736
Education
The red circle implied the targeted group
Appendix G. Difference between perception & expectation
Hardware
Competitive
Importance of Price Sensitivity
Other
position &
target market
difference
Corporate Image
segments
PC-clone
Easy to learn and Public accounting
Highly
Local habits,
use
customs &
English type
Banking
Moderate
formats:
The software of
Dimension unit
Non-English type
simple life
Financial
Less
Standard size of
services
paper
Keyboard,
Software with a
Time & Date
printing program
future
Architecture
Currency
& user manuals
Pioneers in
Construction
Copyright
compatibility
protection
Engineering
Power and
Packaging and
simplicity
Medical / dental
documentation
together
Legal
Home
Other
Appendix H. Metaphor of Microsoft Works
Microsoft Works – An integrative solution for The simple harmonious family
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