Surface 2 – The shotgun approach to marketing

Most people by now would have seen all the announcements surrounding the new Microsoft Surface 2. These announcements pretty much outline the new refined measures taken to make the tablet/laptops more compelling in the eyes of its targeted consumers. That is essentially what I want to talk about today, the targeted consumers. If you look at Microsoft Surface on its own in isolation outside the competing influences the product itself is reasonably well designed. It has the benefits of a laptop and tablet in one whilst at the same time runs all your Windows specific applications natively (assuming your not subscribed to ARM constraints). The reality however it’s not looked at in this light from a consumer and retail mindset. The product today is positioned as a Tablet, meaning its job is to compete against products that iPad and Android occupy quite heavily which means the category itself is quite saturated and has consumers conditioned to approach a tablet as a middle ground between Mobile and Laptop (i.e. the spectrum between Mobile Device and Laptops were defined, tablets would probably sit neatly in the middle). Furthermore, the Surface Pro also is often not associated as being different within retail stores from these competing tablet products and is often found on the same shelf space as their counterparts. The only real distinguishable difference between a Surface and other products on the shelf is the Windows 8 tile screen and maybe the blue/pink keyboard(s). Once you acknowledge that the Surface Pro is now in a heated battle around gaining attention of consumers with other tablets they are also equally in a fierce competitive battle over price (which is slowly in many ways becoming a race to the price bottom given tablets are losing their social currency – i.e. nothing *really* new is happening in terms of points of difference). Occupying the Tablet category is not easy challenge for any company but with Surface Pro it doesn’t end there. No, they also now have to compete equally in the Laptop category and given most retail channels like BestBuy prefer to position the products in the Tablet Category they also have to find ways to claw out of that and reposition the product also in the Laptop marketing category. That’s where it also gets slightly difficult because those distinguishing signatures that I mentioned earlier around Windows 8 tile screen no longer are unique, as all competing hardware makers use that as well. So now you’re competing on brand loyalty, price and hardware specifications. Competing on those fronts isn’t easy as not only do you as Microsoft now have skin in the hardware game you also have a smaller shelf space to occupy – much like Coke vs Pepsi in Super Market(s). Dell, Samsung, HP etc. all have maybe 3-4 products at any given point sitting on the shelf as well and can afford to keep pumping out different iterations faster given this is  their core business. Hopefully I’ve painted a picture that will give you a moment of pause to think beyond the actual product itself and moreover how do you gain the attention of the potential consumer. As it’s not about “I have the best quality product of all” because in reality nobody can accurately say for sure that’s true. It’s the 2nd generation attempt at entering a market that the 1st generation has failed on. Moreover the pricing for the product(s) isn’t exactly a bliss point entry because should they become successful the competitors will find ways to undercut or fight more aggressively to retain relevance.

 Can all this be done though?

I think it could be done if the right ingredients were in place, first of all you’d need to find a way to frame the proposition you’re putting forward to your consumers in terms they understand – that is, you have to convince every user out there that having a tablet/laptop in one is what they need & want. Secondly, you will need to find a way to separate your product from the herd in the retail channel because right now although the brand Microsoft and Windows are attached to the said product(s) it’s also attached to the competing brands as well (ie its over-used and saturated). Microsoft have to work their product line like Apple does, by having a separate table / shelf for their products to occupy and be distinguished from the rest. Thirdly you have to find a way to become the circuit breaker for the taxonomy of online retail, by opening up a new category “both” as if you’re going to say the product on one hand is a tablet and a laptop then you need to find a way to position the products in that light. If you position in the tablet category (like today) then your $2,000 AUD Surface top of the range model will stand out as being insanely expensive for a tablet? If you in turn occupy the Laptop then you’re $899 AUD tablet with low specs looks cheap but fails on hardware specifications – moreover you also run the risk of positioning the brand as a “cheap” solution thus potentially poisoning your own well (ie "Surface = Cheap crap" perception could easily run unmanaged). The reality is Microsoft really haven’t got a structured story here with Surface Pro, it’s what I’d call a “shotgun” approach to competing with Apple/Google. In that it appears they are just collapsing the products for the sake of compete rather than actually trying to disrupt the behaviour we humans have around mobility. The product itself isn’t a measured response, its just reactive and filled with a lot of panic around how to solve this problem. The entire thing could be handled much carefully and strategically by simply easing into the above categories with momentum behind them vs just trying to force their way into the mindset of consumers that all-in-one is the best strategy. Lastly assuming they abandon these silly ads with people jumping around clicking keyboards and actually focus on “why” someone needs to buy the product they also face a very long entrenched campaign ahead. If they are onto a winning formula and assuming that they sort their marketing talent out, then they also have to wait out the consumers who currently have laptop and tablet out which could be 1-2 years minimum. Normally this wouldn’t be an issue but keep in mind Microsoft is about to get a brand new CEO with his/her own ideas about Surface Pro and if anything Microsoft’s marketing machine has shown that they can’t handle a controlled message beyond the life of a single campaign.

My prediction:

  •  Surface as a brand will undergo a split, they will likely retreat back to forking the tablet and laptop offerings.  There will likely be no technical difference between the two and price and category matching will likely influence it.
  • Surface will have poor sales for the next 1-2 years and the industry will remind them off this without mercy. There is to much aggravation in the hardware space for Microsoft to occupy and they not only have to compete on Consumer sales but also Enterprise pie will decay over time as a result of losing focus.  The failure in success over the 1-2 years will simply be the easy punch to the company’s kidneys.
  • Surface RT will evaporate as a laptop solution. If you’re a developer today targeting ARM and you’re thinking to yourself “this is fun” then you’re currently in a small cluster. Today to target Windows 8 ARM would mean you are happy to migrate your code-base over to the new Windows SDK and it isn’t a clean migration at the best of times. Moreover you have to also ignore the lack luster ubiquity metrics that will come out alongside any and all developer relation(s) resets that have occurred in the last 5 years. If you can absorb all of that and still think ARM is the vehicle of choice – then yeah, I just don’t see any upside here.

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  • AS147

    Hi Scott, love your site as usual but thought I would counter some of the points you make and agree with others.

    It doesn’t seem like you saw the surface 2 launch video or understood the changes. What leads me to believe this is that you state it fails on hardware specifications in the laptop $899 space. The video talked about this being more powerful than 95% of the laptops on the market today. This was repeated several times.

    You also unfairly compare the top of the range Surface pro 2 $2,000 device (assuming the most expensive accessories etc) with tablets. The Surface Pro 2 is not just a tablet so my belief is that you are showing bias to justify your point. I agree they haven’t differentiated but you and your readers know better. It would have been more appropriate to compare the top of the range 64GB tablet in the market with the top of the range 64GB Surface 2 $849 (incl power cover)

    Also you mention the adverts (which I agree were as terrible as most of MS’ marketing efforts – when are they going to fire that team !). However the new adverts that were shown did not have any dancing around. It did show glimpses of what is to come, they focused on lifestyle and life benefits rather than prancing around in some hyped up nerd edition of Glee.

    I agree that MS needs to separate its product set but I think all the problems they have can be solved by decent marketing and a better price point. Clearly the best improvements and now the higher value item is the Surface 2 whereas the Surface Pro 2 whilst having decent hardware upgrades, is not that different from the Surface 2 and is a little thicker, doesn’t come with office and is still dull black backed. The price differential between the two models does not tell a good story. The 64GB Pro 2 needs to come with a keyboard for under $999, 32GB for $799 with a keyboard.

    As soon as they set more realistic prices the main premise that MS aren’t differentiating sufficiently will be reduced significantly.

  • I am sure that the statement that the SP2 is: “more powerful than 95% of the laptops on the market today” is perfectly true. However, this is because 95% of the laptops on the market today are not equipped with Haswell generation chips. The SP2 has to compete with the rest of the 5% of the laptops that share the Haswell design. And there, is the SP2 head and shoulders above the rest? Frankly, I’m not sure. And as time marches on, the percentage of Haswell laptops grows, and the competition gets tougher.

    I like the idea of one device being able to act as tablet/laptop/desktop – it’s what I call Origami Computing. I just don’t think SP2 is there yet:

  • Objection – leading the witness – goes to state of mind.

    I choose my words carefully on this post given it could have some blowback like the above. How I position Surface2 offline is a mixed reaction, if someone were to sit through the entire Surface launch as a consumer not as a technical enthusiast you’d probably formulate an opinion about what is and what isn’t relevant – moreover how the comparisons stack up.

    Retail outlets don’t give you this information, moreover the Surface website(s) don’t even give you this information. Online retail outlets don’t give you this information and lastly to majority of non-technical people the whole concept behind hardware gets lost in translation.

    Also the key phrase is “today” … if you are DELL, HP, Sony, Samsung, etc etc and you hear that phrase “Faster than 95%” that’s basically a new arms race, so in reality you will probably hold that first move advantage ONLY if you actually become a threat to their business. At the moment you’re still the new kid on the hardware block that has low sales attached but should it become an issue you will lose that differentiator – assuming you can message that clearly to consumers who have paid enough attention to hear it?

    As I stated its less about how you frame the conversation or how I frame it – it’s everything about how they frame the conversation to consumers who show at this point an interest. Even now on the Surface actual official website none of the points you make are on display. That is the crux of the issue is they need to be 10x more intelligent around how they market this product and they also need to claw their way out of just occupying Tablet category only… as you don’t have to go far in a Google search or Social remark to see that people are still attaching “Tablet Only” category.

  • Kimberly Ledig

    So you have finally put you crimes and evil vindictive ways to attempt to corrupt what little is left of humanity? You may think you are so smart, but beware. This is a warning not a threat “sweetheart” revenge is a dish best served cold. Florida was the answer because I know my Angel will get what she deserves, even if it comes from your parents. Thanks for making me leave nc and insisting on Florida. I saved all the evidence. I have a very good friend who knows a bit more then you. The FBI Agent explicitly stated what I should do. I gsve you every opportunity to do right. Now it is my turn. And I thought I would never be able to afford a house, the state will give me 497 willis way. Perhaps you should rethink your actions. Contact me soon our I will act.

  • I knew this day would come but i’ve clearly broken someone 😉

    To which i’d simply respond – WHAT THE FUCK..