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In its next step to connect with consumers, Microsoft will open a number of stores in select markets

Microsoft announced plans to open its own retail stores in an effort to connect with customers and better compete with the extremely popular stores from Apple.

"The purpose of opening these stores is to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy," Microsoft said in a statement on its website.

The company also said it has selected David Porter, former DreamWorks animation global product distribution manager, to serve as corporate vice president for the retail stores.  Prior to his stint at DreamWorks, Porter also served as in store ops, merchandising and IT of Walmart for more than 25 years.

Microsoft did not publicly disclose how many stores it plans to open, what markets will be targeted, or which products will be made available.  It's likely PCs will be sold with Microsoft Windows Vista loaded with other company software, with the store also used to be an advertising platform for Windows 7.

Porter will be in charge of deciding where stores will open, and how they'll market products to the public.  

"This is an exciting time with our strong line-up of upcoming product releases," Microsoft CEO Kevin Turner said in a statement.  "There are tremendous opportunities ahead to create a world-class shopping experience for our customers."

Apple, one of Microsoft's biggest competitors, has more than 200 stores worldwide, which helps draw in new Apple customers.  Microsoft's latest advertising campaign featured former CEO Bill Gates and comedian Jerry Seinfeld -- and although most PC fans were skeptical from the beginning -- the ads flopped horribly, and forced Microsoft to go back to the drawing board.

There are now 144 Microsoft employees serving as in-store "gurus" to help teach customers in electronics chain stores about Microsoft and its products.

Despite having the popular Xbox 360 video game console and Zune MP3 player, Microsoft has still had an extremely difficult time reaching out to owners of Microsoft products or potential customers.  Furthermore, the Vista operating system was not received very well by PC users, and Apple continues to chip away at the PC market while its iPod MP3 players already control the market.

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Analysing the retail strategy
By crystal clear on 2/14/2009 8:16:16 AM , Rating: 2
Remember you are dealing with mainstream buyers & not the IT crowd.

The move comes as the it prepares for the release of the Windows 7 PC operating system as well as new releases of Windows Mobile and of the Windows Live online portal.

Microsoft doesn't have a branded PC product of its own like Apple's Macs & notebooks nor does it have the likes of the iphone.

But it could use OEM hardware to promote/display/sell the Win7 software & Windows mobile software.

"Show off how well the stuff works ".

It's a good idea to give consumers a place to touch and feel Microsoft products."

With the retail strategy Microsoft takes upon itself the marketing responsibilities that were previously handled by OEMs & retailers.

The disasterous Vista release experience has led Microsoft to take matters in their own hands,rather than depend on OEMs/retailers/& others.

So its a mix of retail sales-marketing-promotions & image building that it wishes to take on with this retail stratergy.

"One thing's for certain: It's going to be an incredibly expensive endeavor."

The stores will help Microsoft engage more deeply with consumers and learn firsthand about what they want to buy and how, according to a Microsoft statement.

The above is the prime motive behind the retail statergy.

Microsoft has a image problem that their adverts have NOT succeeded in projecting or conveying,it now wants to do it via the retail stratergy.

Yes the Vista image problem .....

"Image" is the most important thing they are selling.

They use these stores to display/sell/educate/promote microsoft software.

Remember Microsft is primarily a software company.

This in addition to selling the Xbox-games-keyboards & mouse

Deciding where the stores will be located will be critical for Microsoft.

I wonder just how many of those famous retailers will survive this recession.

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg
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