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"Microsoft\u2019s stock price today is approximately half of what it was in late 1999. While there are many reasons for the company's stock slip, two problems stand out: mindset and marketing. \nThe latter is caused by the former. In Microsoft\u2019s case, the two strands are intertwined and linked together like corporate DNA. \nMindset\nIn February 2005, when Microsoft was still universally acknowledged as the leading technology company on the planet, CEO Steve Ballmer addressed the current state of the company in a speech. \n\u201CAnd so in a sense, the lifeblood of our business is that R &amp; D spend. There's nothing that flows through a pipe or down a wire or anything else; we have to continuously create new innovation that lets people do something they didn't think they could do the day before so they get the newest version of a Windows or an Office or a new program, new application that we put in place. And so in a sense, you could say all we have to live with is our innovation.\u201D\nWhat he\u2019s saying is the lifeblood of Microsoft\u2019s business is engineering, product development and feature development. What he doesn\u2019t mention is marketing, customers, branding or life-improvement. \nIf corporate mindset was a continuum, with engineering on one side and marketing on the other, here is where most technology companies, including Microsoft, would fall. \n\nThe ideal range, as you can see, falls to the middle-right of the scale. Apple is there, and so is Amazon. Microsoft is to the far-left of that desired range. \nMicrosoft requires a shift in mindset, toward marketing. Of course, it must remain a top engineering firm, but to compel consumers, to create passion and energy among them, it must shift its focus from purely the \u201CR&amp;D spend\u201D toward aggressive marketing, by demonstrating how its products improve people\u2019s lives. \nThis will be very difficult for a company whose internal culture is so deeply rooted in engineering. But it is absolutely essential if Microsoft wants to get off of the stock price plateau it has occupied for the last decade.  \nShare Price\nSpeaking of stock price, I advise my clients \u2014 from publicly traded companies to startups \u2014  that share price in consumer electronics is a direct function of consumer energy. The more energy in the marketplace for your brand, the more evangelists you develop, and the more sales, revenue and profit you\u2019ll enjoy. \nSee Apple, the most effective marketer on the planet, which is now worth more than Microsoft and Google combined, based on market capitalization. Apple\u2019s stock price has grown twenty-fold in the same time period that Microsoft\u2019s has halved. The difference is mindset, marketing, and the resulting consumer energy each company creates. \nSee Netflix, whose share price soared on the strength of consumer passion, that is, until it angered customers last year with a series of harmful decisions. Passion plummeted, customers left, and the stock lost two-thirds of its value in three months. \nA Marketing Plan for Microsoft \nThe mindset shift away from engineering is difficult, but good marketing is not. Here is a six-step marketing plan Microsoft can implement to dramatically improve its effectiveness.\n\nFocus on strengths: The company\u2019s strengths, as I see them, are software, productivity and the Xbox. This is where Microsoft can reasonably claim that it is superior to the competition. And this is where its marketing effort should focus. \nAdopt strengths: Everything you need to know about Microsoft\u2019s problems with identifying its strengths is summarized in the following sentence: Microsoft Office is still not available for Android and iOS devices, although rumors have surfaced that its launch is imminent. Software is a strength, but software for computers became uninteresting five years ago.  Microsoft should be adopting its excellent productivity software \u2014 as well as its tremendous gaming platform \u2014 for phones, tablets and the cloud. \n\nAbandon weaknesses: Smartphones are not Microsoft\u2019s strength. In fact, Microsoft phone market share fell 20% in the fourth quarter to 4.7%. Nokia or not, there is little Microsoft can do in smartphones to gain on Android's and Apple\u2019s devices.\nFurther, while Microsoft\u2019s Bing search engine has resonated somewhat with Internet users, it is not a strength. Microsoft\u2019s U.S. search engine share in 2011 was up just 0.1% to 15.2%. Google\u2019s was 61%. This war is lost. It\u2019s time for Microsoft to abandon and redirect its marketing budget. \n\nFocus marketing on consumers: Consumers, not businesses, create market passion. Corporate customers are critical, but likely saturated with Microsoft products long ago. Rather, Microsoft\u2019s marketing should focus on consumers. These are the people who can become evangelists, drive market energy, and ultimately affect the share price. \nGather powerful, qualitative customer insights: If you're going to market to consumers, you need to understand what consumers think, say and want in the first place. You should know precisely how they use your products \u2014 and your competitors\u2019 products. To gather these insights, interview customers qualitatively for 20 to 30 minutes each. Internet surveys and focus groups won\u2019t uncover the kind of compelling language and messaging that resonates with consumers. There is no replacement for one-on-one customer conversations. \nAggressively communicate: Once Microsoft understands what to say, it must continue repeating its message relentlessly, with a focus on consumer life improvement.  Remember when Apple mercilessly hammered Microsoft with its \u201CI\u2019m a Mac\u201D ads? Microsoft requires the same kind of frequency and focus.\n\nMicrosoft has the money for these improvements, but its communication has likely been sporadic due to everything I discuss above: Microsoft\u2019s mindset is on engineering, not marketing; the company\u2019s products are too diverse; and Microsoft doesn\u2019t know what its customers find compelling.  \nIn my experience, a company cannot be truly effective unless it markets life-improving products. But in its corporate DNA, Microsoft sees itself as a product engineering organization. The company must shift this mindset \u2014 must alter its DNA \u2014 in order to unleash the kind of powerful marketing that will energize its customer base, increase consumer passion and drive its share price up. \nImage courtesy of iStockphoto, JasonDoiy"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2012/02/23/how-to-fix-microsoft-marketing/>