Category: Products

A lawsuit brought against Microsoft by an Illinois man claims his Xbox 360 console scratched three different games when the console was switched from a vertical to horizontal position during game play. While I am wondering why someone would want to change the position of his or her game console while playing a game, I am also wondering why Microsoft did not take steps to prevent the problem. According to testimony from a Microsoft program manager, this problem with Xbox 360 was detected before the product launched in 2005. Apparently, the problem could have been corrected with minor modifications to product design that would have cost as little as 50 cents per unit.

Maybe Microsoft was thinking like me, questioning who would move around their consoles while playing games. It is an issue because a product feature touted for Xbox 360 is the ability of the console to operate with either a vertical or horizontal orientation. While changing the orientation during game play may not be ideal, engineering the product to hold up to such a change is essential. While some people might think this matter is trivial in the grand scheme of things because we are not talking about a life or death consequence, it is a matter of maintaining brand integrity. If a company knows about potential problems with a product before it hits the market, it should proactively take steps to deal with the problems. If not, be prepared to suffer hits to brand reputation as Microsoft may experience yet again with Xbox 360.

Link: Yahoo! – “Microsoft Faces New Xbox 360 Reliability Accusations”

Weak economic conditions often put marketers in a situation of either raising prices or holding down costs. A common tactic for consumer packaged goods marketers is to do the latter, reducing the weight or quantity of a product item to reduce cost of goods sold. This route is almost unavoidable as these products are often discretionary purchases (e.g., snack foods or candy) that consumers may stop making if prices rise.

The Wm. Wrigley Company is opting for holding price and reducing product in its upcoming “Slim Pack” launch of its well known chewing gum brands. This approach carries with it risk in that consumers may see through the reduced offering and view it the same as a price increase. Even worse, such a move may be seen as a deceptive ploy to maintain profits at customers’ expense. A comment by Wrigley’s VP of North American consumer market- gum, reflects either important insight gleaned from market research or wishful thinking. He said, “To them the value goes up because they’re getting a better tasting product in a better package. Price is not the way the consumer is looking at this.” For the sake of Wrigley, I hope it is the former, not the latter. Link

The white flag has been waved in the battle for high definition DVD supremacy. Toshiba and Sony have been locked in a fierce fight to have their competing technologies become the industry standard in this category. Yesterday, Toshiba announced that it would end production of its HD-DVD products and exit the market within a couple of months. This decision in effect makes Sony’s Blu-ray technology the industry standard.

The news could not have been better for Sony. The company has been seeking to regain the success it experienced in the 1980s and 1990s. More importantly, Sony was able to avoid a repeat of history as it had experienced two major defeats in technology platform wars in the past. First, Sony lost the video cassette player war in the 1980s as the industry adopted the VHS format over Sony’s Betamax. Second, Sony’s effort in the digital music download business was thwarted by the dominance of Apple.

So what was the difference in the case of high definition DVD? Sony developed vital relationships with content providers (e.g., movie studios) and retailers. With support from key players such as Disney and Warner Brothers on the production side and Best Buy and Netflix on the distribution side, Sony created a competitive advantage Toshiba realized it could not overcome. The best products and best technologies are great to have if you can produce them, but if key channel partners do not buy in to your offering you have little chance of realizing your full potential in the marketplace. Sony now has both the product and channel support. Link

Advertising Age magazine has named Nintendo as its 2007 “Marketer of the Year.” Nintendo got the nod over Apple, Nike, Al Gore, Geico, and Unilever. The recognition is for Nintendo’s efforts in bringing its Wii gaming system to market last November. In that time, Wii has become the market leader in video game consoles. Nintendo’s competitors, Microsoft’s Xbox and Sony’s PlayStation 3, may have more technically advanced systems, but consumers young and old have taken to Nintendo’s easy-to-use system.

The message behind Nintendo’s recognition as Marketer of the Year is simple. Products that can engage their users through designs that make the product easy to use or operate add value that may be hard for competitors to duplicate. Unfortunately, not every product maker can expect users to have as much fun consuming their products as Ninteno Wii players experience. The good news is not every product we use has to provide us with fun or pleasure, but we value products that aren’t a source of stress! Simplicity in acquisition and use of a product is a way to add value, one that can even lead to winning Marketer of the Year!