Norton Anti-Virus, Made by Symantec

Norton Anti-Virus, made by Symantec Corporation, competes in the virus protection segment of the Internet industry and is a complementary product to Norton Internet Security. The company markets to through three primary channels -- consumer, security and compliance, and storage and server management. In 2008, the security software market was estimated to be $13.5 billion. Symantec held the number one position in this market with a 22% share, equating to $2.968 billion in revenue in the segment. The main competitors are McAfee (10.9% share), Trend Micro (7% share), IBM (5.1% share) and EMC (4% share). The other 50% of the market is highly fragmented (Gartner, 2009). In the consumer market alone, Norton holds a 52% share, compared with 18% for McAfee (Weiner, 2009).

The Norton product is positioned as a mass market product. It offers security that, while promoted as being strong, is not unusually robust. It is marketed towards the average computer user with average security needs. Typically, this is achieved through the OEM distribution channel -- Norton Anti-Virus is installed on new computers, leading to subscriptions from purchasers. As such, Norton has a two-step sales strategy. The first target market is comprised of the OEM producers. These computer manufacturers build their machines with a set of pre-installed software, one of which will be a security package. Norton must first target the OEM producers to become the security package of choice. To some extent, this ties the growth potential of Norton to the growth of their OEMs. The second step in the sales process is to convince the end user to purchase the product.

The target market in this case is more easily defined by psychographics, since the mass computer market cuts a wide demographic swath, such that the demographic profile of the user would be so vague as to be useless. The psychographic profile is broadly any computer user concerned about the security of their machine, but perhaps lacking in the savvy or motivation to explore their security options. These users will opt to pay the fee for Norton rather than shop around for better products or better price points. Such users are likely to still use Outlook and Internet Explorer as well, as they tend to stick with OEM software rather than downloading non-OEM software. With the sophistication of computer users generally increasing, the corporate market forms an important part of the customer base as these users are a more captive audience. One sale to an it department can be worth hundreds of licenses. However, Norton is weak in the corporate market and competes mainly in the consumer market at present.

Demand for Norton products is declining. While Symantec overall has continued to grow in size, acquisitions and other business segments have spurred this growth (2009 Symantec Form 10-K). From 2007 to 2008, Norton revenue grew 7.2%, but the market share declined as the overall security software market increased 19.4% by revenue (Gartner, 2009). The market is trending towards increased fragmentation. The share of minor players in the industry has increased from 48% of the market in 2007 to 50.9% of the market in 2008. McAfee has increased its market share slightly, while each of the other largest players in security software has seen its market share decrease. Consumers are increasingly willing to explore their options.

In an attempt to reverse this trend, producers are experimenting with different distribution channels. For example, Norton has struck a deal with Comcast to provide its software to that company's Internet subscribers (Trefis, 2010). This hints at another trend as well. These customers will already have a security suite installed by their OEM. Firms in the industry therefore are competing directly against one another on each machine. Rather than surrendering a customer at the OEM level, firms are finding new ways to reach customers such that every consumer is essentially faced with multiple security software options, even without seeking them out.