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Carol Kong is University of Toronto graduate with a background in Engineering (Transportation and Infrastructure), and in Business. She is a part time investor with her core investing principles slated in a hybrid of growth and value investing - finding growth stocks at a reasonable price.... More
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  • Microsoft's Surface By Any Other Name...

    Original Post on http://carolkong.com

    When Microsoft (MSFT) announced their entry into the tablet market in June 2012, I instantly knew that the Surface would not become a huge success. It didn't matter how great the tech specs would be, because I couldn't recall the name of the product two seconds later.

    Although sales results of Microsoft's Surface have not been made public, unofficial sources reported that sales fell short in the quarter of its launch, selling approximately 1.5 million devices as compared to the projected 3 million devices that were ordered. To bring these numbers into perspective, Apple (AAPL) sold 22.9 million iPads in the same quarter ending December 2012.

    There are many reasons for the poor reception of the Surface, ranging from the lackluster Windows 8 operating system to the physical qualities of the device. However, the problem stems from poor product branding and the name itself.

    iPad vs Surface

    What's in a Name?

    When it comes to marketing, people often underestimate the power of a name. The brand/product name is a key component to an overall marketing strategy and ultimately affects a product's success. Simple attributes of a brand name influence the ease and ability to recognize and remember a product. This is particularly important as brand and product names are part of our every day language.

    Ultimately, the goal is to coin a term that is both meaningful and distinctive. In studying linguistics, there are four major aspects to consider in branding.

    (click to enlarge)

    Phonetics - It's important to use consonants and vowels that sound good together. What works best are names that are short and sweet, names that roll of the tongue, and names that even kids and babies can say with ease. Certain consonants known as plosives create strong sounds, dominate other letters, and demand our attention when pronounced. These letters include B, hard C, D, hard G, K, P, and T. Studies have shown that brand names beginning with a plosive tended to be better recalled and recognized than brand names beginning with soft consonant sounds or vowel sounds. Another strong phonetic device is alliteration, such as in Coca-Cola (KO).

    Orthography - Unusual or incorrect spellings can be a clever device to make brands stand out. For example Google (GOOG) was actually derived as a misspelling of the term 'googol', meaning 10 to the 100th power, which was used when the founders were finding an internet domain that was not yet registered.

    Semantics - It's important that a name represents the underlying meaning of the brand or product itself. The associated meanings of the name, along with the emotions that it ignites should be congruent with both the product and the overall values of the brand.

    Morphology - Merging words together can affix numerous associations and meanings to your brand. Creating a multifaceted name helps to generate a wider spectrum of positive attitudes to the brand, and can further enhance the significance of the name.

    A Look at the Competition

    Apple's (AAPL) collection of iOS devices (iPad, iPhone, iPod, iMac) is simplistic, and catchy. Phonetically, plosives were used to create a memorable word that is both strong and sweet to the ear. Semantically, each name is representative of each product, while also being integrated across different product lines. Coining a new iDentity allowed Apple products to be more unique than being restricted to words in the dictionary.

    Samsung's (OTC:SSNLF) mobile electronics are sold within the Galaxy line. Beginning with a plosive and mixed with softer sounds, the word 'Galaxy' just rolls off the tongue. The name elicits positive connotations of infinite possibilities, and also wins the cool factor. Their tablet products are named with one syllable, and aptly describes the purpose of the product - 'Galaxy Tab' for the larger tablet device, and 'Galaxy Note' for the smartphone/notepad device.

    BlackBerry's (BBRY) PlayBook sounds like a fantastic product name. Phonetically, it is - two syllables, use of plosives, catchy. The problem is that semantically, it was caught in the middle between what consumers wanted (a professional enterprise tablet), what consumers were expecting (an entertainment tablet), and what BlackBerry was trying to sell (I'm still not sure). Whatever combination of enterprise and entertainment they were hoping to achieve just wasn't communicated in the choice of product name.

    So What is the Surface?

    When I think of a Surface in relation to a computing device, I think of exactly what it describes - a flat area. I imagine a coaster to rest my mug on. I don't imagine a cool device to entertain myself with, nor do I imagine a tablet meant to compete with a desktop computer. The word Surface, being straight out of the English dictionary, isn't unique, doesn't relate to any promise of innovation, and doesn't incite any powerful emotions.

    Phonetically there is nothing catchy about the word 'surface'. It's a consonant cluster that is hard to pronounce, and enunciating the word 'surface' takes a great deal of energy. In fact, the word sounds so familiar with 'service' that it makes me think of a product-less offering.

    It's not surprising that Microsoft's Surface sales in the holiday quarter were below target. It just isn't a memorable name (if the head of my firm's IT department couldn't remember the name, you can probably guess he wasn't planning on buying any). Try repeating this tongue twister five times:

    "Short Microsoft's Shares as Surface Sales fall Short"

    (click to enlarge)

    The conclusion: A Surface by any other name would smell sweeter.

    Disclosure: I am long AAPL.

    Apr 13 12:07 PM | Link | Comment!
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