Microsoft Bong and Google Using Thefour Ps

¶ … Microsoft Bong and Google Using TheFour Ps of Marketing

Comparing Microsoft Bing and Google Using the Marketing Mix

Google's dominance of the search market globally continues despite the aggressive launch in 2009 of Bing, a new search engine, by Microsoft. To date, Google is still the most preferred search engine globally, with a commanding market share lead (Grensing-Pophal, 2012). Both of these search engines are financed through advertising revenues, with Google's AdWords being the most profitable online advertising platform globally today as well. Microsoft's Bing advertising strategies have gravitated towards paid search and more traditional forms of online business models (Grensing-Pophal, 2012). These have been somewhat successful in raising the profitability of the Online Division of Microsoft, known as one of the least profitable in the entire company (Vance, 2012). Google on the other hand continues to be one of the most consistently profitable businesses in the high technology sector, often surpassing revenue and profitability targets on a consistent basis (Cho, 2009). The intent of this analysis is to evaluate each of these companies using the marketing mix, which is comprised of product, price, promotion and place or distribution. Place will be interpreted as their actual website and location online.

Analysis of Google and Microsoft Bing Using the Market Mix Framework

Both of these companies have world-class depth of expertise in new product development, software development, enterprise software sales and service, and innovation best practices. Despite sharing these attributes both are very different in terms of culture which has a direct effect on their planning, execution and management of the marketing mix. Innovation is also at the core of Google as they have a policy of allowing engineers 20% of their time to experiment and develop their ideas into projects (Klie, 2010). The Google culture also allows for engineers to manage their products through the entire new product development process as well, gaining visibility and advancing their careers in the process (Iyer, Davenport, 2008). Called the Rule of 20%, this strategy as of 2010 was responsible for products delivering 57% of total revenues for the company (Klie, 2010). Based on an analysis of their current filings with the Securities and Exchange Commission on the Google Investor Relations website, the 57% has continued and is growing over time with the introduction of new products. This innovation pipeline Google has created with the Rule of 20% makes them a very formidable competitor to the more conservative and hierarchically-managed Microsoft (Grensing-Pophal, 2012). These cultural factors have a direct effect on the marketing mix each chooses to rely on for positioning themselves in the market.

Product

In the context of their search services and platforms, Google and Microsoft have taken completely different approaches from a technological level to attain their current level of performance and customer experience (Manyika, 2009). For Google the reliance on their latent semantic indexing (LSI) technologies continue to deliver faster, more accurate results than Bing consistently (Grensing-Pophal, 2012). Microsoft has also been working on contextually-based search technologies, yet Google is significantly further ahead as evidenced by the Panda updates and impressive gains in Android application development. Google's search engine, by virtue of the global leadership of the company's Android operating system, is on more devices than any other search engine today (Vance, 2012). Google is concentrating on creating a mobile platform that can scale globally quickly, encompassing both mobile or smartphones, tablets and hybrid devices still under development. All of these initiatives are meant to further extent their core product, the search engine and its highly profitable Google AdWords service, pervasively across the globe (Klie, 2010). The Google AdWords business model is highly effective in creating recurring revenue flows that assure a continual stream of investment capital for new projects being generated through the Rule of 20% campaigns (Grensing-Pophal, 2012). Microsoft has their Windows 8 mobile operating system, yet it lacks proven reliability as it has not shipped in volume yet. The Google Android operating system however is now in nearly its fifth generation and is the most used mobility platform operating system in the world (Grensing-Pophal, 2012). Google is betting that mobile platforms will dominate global Internet use within the next five years, while Microsoft has been very slow to react and capture this opportunity. Microsoft is primarily used throughout enterprises, where Chief Information Officers (CIOs) manage these platforms to avert risk first and make them flexible for internal users later. Google is quite the opposite, having started as a personal productivity platform, then emanated into the enterprise through their marketing efforts (Iyer, Davenport, 2008). As resistance to change is a major impediment to getting new users within companies to adopt technologies, Google has the edge from this product usability standpoint. Google also has the edge from an overall integration standpoint of their systems into enterprise applications, as Google engineering has developed a series of Application Programming Interfaces (API) that enable their core search engine to be used as part of enterprise workflows (Cho, 2009). All of these factors taken together have led to Google being the dominant competitor in the global search engine marketplace, with Bing being in many countries just 20% of search traffic or less (Grensing-Pophal, 2012).

Price

Due to the culture of innovation and the continual stream of new ideas generated through the Rule of 20%, Google has an ongoing revenue stream that makes them profitable as well. The pricing for AdWords is dictated by the value of a given word in terms of its reach, popularity and uniqueness. Google has a specific algorithm to calculate overall value of a given word, at a given time, in a given geography (Klie, 2010). Microsoft however does not have nearly this level of sophistication, relying instead on a value-based licensing approach that has yet to prove profitable (Vance, 2012). As a result, Google also has several product generations of expertise on this aspect of the marketing mix as well, making them both more efficient and profitable.

Promotion

Both Google and Microsoft are heavily reliant on promotion as a means to get customers to sign up. Google will often use a series of promotions and is a heavy advertiser both on television and online. Their focus on creating awareness and interest, then trial and loyalty is supported by their story-telling approach that anchors their marketing strategies (Manyika, 2009). Bing on the other hand has created a promotional campaign that uses sarcasm to show the imprecise nature of search results with Google. This has been only somewhat effective, and has still only left them with a small percentage of the market (Grensing-Pophal, 2012). This has also created even awareness of Google ironically, according to their own internal tests in the past (Klie, 2010).