The market for portable music players has been an industry that continues to be innovative and in current years has been dominated by Apple products. Apple has been in the portable music industry since 2001 and the world has been forever changed due to their ever-popular iPod. These hard-drive based systems allow consumers to take music with them on the go. In 2006, Microsoft introduced the Zune, an entertainment platform and portable media player to compete with Apple’s iPods. Along with the introduction of this product Microsoft has also introduced the Zune Marketplace to compete with Apple’s iTunes. The Zune media player now has the ability to wirelessly connect to other Zune players and share their content. This wireless connection also allows the consumer to connect to the internet using a Wi-Fi connection. The competitiveness for portable media players in the market place has caused innovation to drive success. Due to the popularity of the Apple iPod products Zune sales were far from the expected. With this problem Microsoft has had to recreate the product to better fit the needs of the Target Market. Sales have been stagnant over the years but Microsoft is not willing to give up on their product just yet. In September 2009 Microsoft introduced its newest version of the Zune titled the Zune HD.
The major marketing problem that Zune faces is a product positioning deficiency. The target market is either unaware of the Zune or not willing to try the Zune due to the competition, specifically the iPod. The Microsoft Zune needs to be re-positioned to meet the target markets needs and to be perceived by the target market as a unique and significant product. ("The Microsoft Zune" 2009). The Zune is an MP3 player that is being marketing against the Apple iPod. The product positioning problem exists where consumers identify the Zune as a second-hand or knock-off iPod. The Zune has different benefits than the Apple iPod which need to be made known, for example Zune Marketplace allows you to purchase its “Zune Pass Subscription” allowing for unlimited music for one low monthly fee. Targeting a niche type market, such as music enthusiasts, will help Zune become its own brand and make an impact on the market. One of the symptoms that have led to a product positioning problem is the lack of savvy promotions and advertising. Consumers perceive the Apple iPod as a “fashion” accessory, its iconic commercials becoming an advertising phenomenon, whereas the Zune is perceived as functional but not “fashionable.” ("The Microsoft Zune" 2009). Consumers seeking information on the Zune must rely on news and other information outlets rather than relying on the concise efforts of Microsoft’s marketers. In this way low awareness is a challenge that must be overcome in order to re-position the product. Another symptom that has led the Zune to be ineffective in the market place is a branding issue. With the mass market using the term “iPod” as the generic name for any music device, people mistakenly view the Zune as simply another Mp3 player, when in fact it encompasses more. “Zune owners can act as their own DJ, sending streaming music content to up to four other devices, according to documents filed with the Federal Communications Commission . With the device's wireless networking abilities turned on, people can send and receive photos, as well as "promotional copies of songs, albums and playlists," according to the filing, made public Thursday. (Fried, 2006)” Until Microsoft can re-position its Zune as a separate, advanced music device in the minds of consumers, it will be destined to be overshadowed by the industry leaders.
Microsoft’s channels of...