Microsoft Marketing Strategy & Marketing Mix (4Ps)
Published by MBA Skool Team, Last Updated: August 28, 2021
Marketing Strategy of Microsoft analyses the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like product innovation, pricing approach, promotion planning etc. These business strategies, based on Microsoft marketing mix, help the brand succeed in the market.
Microsoft marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives.
Let us start the Microsoft Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
The product strategy and mix in Microsoft marketing strategy can be explained as follows:
Microsoft is one of the world's leading technology & services companies in the world. Microsoft is a research and development driven company which identifies the customer needs even before they arise and launches a wide variety of products and services to cater for the same. Its portfolio has huge variety of consumer electronics for customers, software products catering to business enterprises, gaming devices etc. The products in the marketing mix of Microsoft cater to enterprises as well as consumers, and are available worldwide. Microsoft categorizes its products into the following segments:
Microsoft offers several products under the software category, further broken down into productivity tools, collaboration & management tools. Some of the most popular products under productivity are Microsoft Office (Word, Excel, Powerpoint), Outlook, Exchange etc. For collaboration, Microsoft offers various software & services like Skype, Microsoft Teams, OneDrive and Bing Search. For enterprises, the companies have management tools like Linkedin, Dynamics 365 and Power BI tools.
Windows operating system from Microsoft has always been one of the most preferred solutions for PCs & laptops. The legacy of Windows has been established ever since they were launched, and every few years new versions like Windows 11, Windows 10 etc. have been launched.
Microsoft Azure is one of the leading cloud service solution offered by the company. The company provides cloud infrastructure for hosting for enterprises as well as retail customers.
Under its brand Microsoft Surface, the company offers laptops, headphones, touchpads etc.
Xbox video gaming product line is owned by Microsoft, which offers gaming consoles, applications, streaming & online services for its customers.
Microsoft Price/Pricing Strategy:
Below is the pricing strategy in Microsoft marketing strategy:
Microsoft has captured a major share of the market.
Microsoft's pricing strategy is driven by the different segments & competitors it faces in the market. If has a market-oriented pricing strategy, when the company sets the price of their product (higher/lower) post evaluating the prices & demand of similar products being offered in the market. It has a premium price of its popular Operating System as its use is continuously increasing. It follows a freemium pricing strategy where in a set of services of a product is offered for free but enhanced features are to be paid for, allowing trial before customers make the final purchase. On certain devices Office 365 can be used for free. Microsoft uses buy what you need pricing for providing cloud services. Under this strategy, customer is not charged a fixed amount instead he is supposed to pay only for how much he uses. This is very useful for the customers who use multiple devices. Hence the price strategy in the Microsoft marketing mix simply highlights that being a market leader, it is the company which decides the product & service price.
Following is the distribution strategy in the Microsoft marketing mix:
Based upon the type of product Microsoft has various lines of distribution. Microsoft’s official website and online store (e-commerce stores) are major source of revenue generation as through these customers can directly purchase or download software. Microsoft retail stores aims at improving customer experience and enhancing brand image by providing them an access to latest version of company’s products such as Xbox and smartphones. Microsoft authorized sellers are strategically located to be easily accessible to the target market. It operates through distributor network for Operating System and software packages which distributes the product to all retailers. Microsoft also targets OEM’S (laptop and desktop makers) to sell inbuilt OS and software. Some of the consumer electronics, smartphones, laptops, Xbox gaming consoles etc.
are also available via multi-brand retail outlets & ecommerce stores world wide.
Microsoft Promotion & Advertising Strategy:
The promotional and advertising strategy in the Microsoft marketing strategy is as follows:
The promotions of Microsoft have always highlighted reliability and usability of its products. Its promotional strategy in the marketing mix is very comprehensive and focused. Microsoft incurs major promotion expense for its premium products which have a large market share or for highly competitive products, for online products it uses digital marketing and advertising.
• Advertising – Microsoft incurs its major promotion expense on advertising over internet and television to enhance company’s corporate image. These advertisements focus on upgrades and product enhancements and are targeted at the end users of the software
• Sales promotions- Microsoft provides discounts and incentive to attract customers. Example- Students are offered Microsoft office software at a discounted price to increase sales volume, brand loyalty and prevent new entrants to capture market.
• Direct marketing –Microsoft uses this to have sales deal with organizations, like schools, colleges etc. Microsoft has also developed relationships with various OEM’s to sell their product.
• Personal selling – Sales Personnel at Microsoft retail store presents product features and encourage potential buyers for at least a trial.
• Public relations – To promote company’s image Microsoft uses a variety of programs but main PR strategy is fulfilled by Microsoft Philanthropies who look after donations and related activities. Hence, this summarizes the Microsoft marketing strategy & mix.
In 1975 Bill Gates founded Microsoft along with Paul Allen. It is an American multinational technology company with its headquarter in Washington and has an annual income in excess of US $150 billion. Skype and LinkedIn have been acquired by Microsoft for $8 billion and $26 billion respectively.
The idea initially was to manufacture only computers but soon they delved into software and Operating System segments, and thus introduced Windows and other such Microsoft Software. It is one of the few companies who have a market capitalization of $1 trillion.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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