this is a case study

1-compare and contrast taylor's and zeidenberg's concerns regarding the proposed web site

2- In general, what are some of the factors the contribute to conflict between sales and product management ?

3- how should they resolve the differences between their two point of veiw ?

4- analyse taylor's and zeidenberg's experiences , goals and incentives

5- based on your analysis, would you expect the microsoft home magazine web site to be funded or not ?

MICROSOFT CANADA: SALES \& PRODUCT MANAGEMENT WORKING TOGETHER cevtain names and other identifing information to protect confidentialfy. Ivey Management Services prahielt any form of reproduction, storape or transmithal withour is writhen permision. Reprodection of thit madenial is not cevered under authorication by any regroduction mghts oganizaton. To order cepiet or repueut permation so Copyright 0 2005. hey Managoment Senices Versionc (4) 20090424 INTRODUCTION Doug Taylor, national sales manager, Home \& Entertainment Division (HED), for Microsoft Cansda, was considering PC Marketing's move to launch a consumer education website. Barry Zeidenberg. group product manager for PC Marketing, believed that the website (his idea) was key to the long-term development of Microsoft's personal computer (PC) user base. The cost for the creation and maintenance of this site, "Microsoft Home Magazine," was estimated at S1 million per year, or 10 per cent of sales" and marketing's combined promotional budget. Taylor's initial reaction was that the moncy would be bener spent in the sales channels, boosting overall sales. Microsoft Canada - Home & Entertainment Division The Home \& Entertainment Division (HED) was the consumer side of Microsoft Canada's business (the other side, enterprise, dealt with the needs of corporations such as General Electric and Bell Canada). The HED division had two businesses: Xbox and PC. HED's PC business consisted of consumer sottware, commercial software and hardware. Consumer software consisted of brands such as Encarta, Moncy and Works. Commercial software included applications such as Windowx, Office and Excel. Hardware included mice and keyboards. HED had performed extremely well, and Microsoft Canada depended on it for a significant portion of its revenue and profits from consumers. Taylor and Zeidenberg had both worked in consumer packaged goods companies such as Coca-Cola and Unilever. Each had experience in both sales and marketing roles prior to their arrival at Microsott. Although Taylor had been with Microsoft since 1998, Zeidenberg had more recently joined the company. in 2001. Both reported direetly to Greg Barber, head of HED: For the exclusive use of a. Alzuhairi, 2023. Taylor, national sales manager, Hoene \& Entertainment Division, managed national sales for both PC marketing and Xbox. His customers included mass merchandisers, such as Wal-Mart, Zellers and Toys "R" Us electronics stores, such as Best Buy and Future Shop; and focused chains, such as EB Gaames. Taylor had annual base and stretch sales teams targets for both PC and Xbox sales. His annual compensation was a combination of bose salary and incentives linkod to volume and achievement of other objectives included in Microsoft's management by objectives (MBO) initiative. Alheugh customers for both PC Marketing and Xbox were similar, there continued to be differences amoeig customer prineities. One of Taylor's goals was to leverage PCs' advantage for Xbox sales and vice veraa. For example, PC sales could have beea higher at Wal-Mart if the retailer had bece willing to focus its attention en serviag the home-office space. Xbox's high-profile launch and channel support level allowed Taylor to improve his PC business at Wal-Mart. Taylor stated: I'm charged with getting the revenues for HED by selling product within the means I have, using channel budgets. To me, it does not matter whether I sell X namber of Windows or Y number of optical mouse products. Topline revenue is my sole focus. Group Marketing Managers afe charged with sevenues on individual prodoct lines. I'm a very data-focused perwon and enjoy mining databases for insights. I can see that the proposed website would help as build consemer interest in our PC products. I agree that cooperation with marketing requires an element of relationship managensent ... but we also have to do what's best for the basiness. Taylor, along with HED's two group product managers, shared a common promotional budget, deciding among themselves bow best to allocate the dollars between channel spend (to support customers) and consumer spend (to educate the consumer and to drive demand). HED's annual promotional budget for the PC business was approximately $10 million. Zeidenbery, the groep product manager for PC marketing, coordinated the marketing activities for the PC business. His target market was Canadian consumers who used or were intending to use PCx. To reach this audience, Zeidenberg relied on a combination of advertising media, iacluding print, television and online programs. Zeidenberg's gouls included both annual product revenues and generating consumer interest in Microsoft's PC products, including Windows XP and Office. In addition to advertising to consurners, Zeidenberg explained. I am spending time with Taylor to educate our customer accounts ea cur marketing initiatives. And we're happy to see that our retail accounts are starting to recognine the value of our marketing initiatives and coentent. Two major electronics retailers have been For the exclusive use of a. Alzuhairi, 2023. Page 3 9805A015 saying to us that our marketing campaigns are great, and they want to woek with us to leverage them in their own consamer communications strategy. While marketing is typically coneemed with the longer term vicw of the health of the business, we cannot ignore the shorter term impact of our marketing programs at the account level. Zeidenberg's compensation was a combination of base salary and incentives. Relative to Taylor's compensation, Zeidenberg's performance incentives accounted for a smaller pereentage of his overall compensation. The Microsoft Home Magazine Website The objective of the proposed wobsite, "Microsof Home Magarine", was to "educate and excite" consumers in the "fight against PC apathy." "PC apathy" was defined by Microsott as the tendency for consumers to use their PCs for only a limited number of activities, and thus put off uperading their current computer system because they did not perceive the need for additional features. On the website, consumers would be able to find articles on how to use their computer to organine their lives, tips on (legally) downloading and burning music to CDs, and advice columns on various computerrelated topics. Third parties woald be hired to write articles and manage website updates. The site was expected to cost $1 million to develop and launch. The website's ongoing costs were also expected to be $1 million per year. For a screen shot of this proposed site, see Exhibit 1. The lssue Taylor's main concem was that HED's. PC busincss was expected to suffer doeble-digit percentage decreases in shipments from the previous year. He estimated that if he were to invest the same amouint supporting his retail customers (in lieu of spending $1 million on a website), he could gencrate an additional $10 million in revenue next year. Taylor commented: On the positive side, incubating future customers is a good idea. On the negative side, this puts next year's sales goals at risk. The Home \& Entertainment Division held quarterly full-day mectings between sales and marketing in order to encourage collaboration and achieve alignaent of individual product and total business objectives. Although Taylor and Zeidenberg had met several times on the "Microsont Home Magazine" website initiative, both wondered if it would be valuable to solicit feedback from the other executives in HED on this proposed project. On the positive side, Zeidenberg's website initiative would allow Microsoft to establish thought leadership for PC usage in Canadians" minds. It would highlight useful ways to integrate PC usage into everyday lives. On the other hand, competition at the retail level - which had always been ageressive - was not expected to abate. Site developmest and maintenance costs were a significant portion of HED's annual promotional budect. Could the division afford to invest in this initiative? Could it afford not to? The potential for conflict between sales and product management was clear. For the exclusive use of a. Alzuhairi, 2023. Page 4 9B05A015 Exhibit 1 THE "MICROSOFT HOME" HOMEPAGE Source. ww. microsoft comhome