Marketing Strategy of Skype analyzes 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 Skype marketing mix, help the brand succeed in the market.
Let us start the Skype Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
In this article:
The product strategy and mix in Skype marketing strategy can be explained as follows:
Skype is a leading software and app used for making voice and video calls, chats etc over internet. Skype offers a number of online services including text messages, calls and online video chats as a part of its marketing mix. The services offered by Skype can be categorised under calling, video, messaging, sharing and other features. The calling feature contains offerings such as Skype to Skype calls which is a free calling service on Skype app, calls to mobiles and landlines using Skype credits or minimal charges, call to international mobiles and landlines at lower than usual rates, group calls services where up to 25 people can be in a conference call like feature, forward calls feature which allows a Skype call to be forwarded on a phone and many more. Video services include one to one video calls and group video calls.
Messaging feature offers emojis and emoticons, video messaging, instant messaging, SMS, voice messages and finally the GroupMe feature which helps share messages, photos and location on the mobile. Skype also makes sharing easy through its bundle of sharing services which help the user send files, share the screen during a conversation and send contact information to others. Other services offered are- Skype Manager, Skype Connect, Skype for Outlook.com, Contact me button, Share button, Skype Translator and Skype extension. Skype for Businesses is another offering launched for corporates replacing the old Lync feature.
Below is the pricing strategy in Skype marketing strategy:
Skype follows a freemium model for pricing its service offerings. The free services include Skype to Skype calls, video calls, instant messaging and chat services and file sharing over skype.
The free model attracts more users as they find this as an alternative to the costly telephone calls. It also helps increase the registered userbase as free services are only available on Skype to Skype platform, thus more people sign up if they want to use the services. Other services like calls to mobiles and landlines and SMS text messages attract charges as a part of its marketing mix pricing strategy, although they are very low compared to what telephone operators charge. The user pays for these features using Skype Credit which is a convenient and easy way for payment. It is similar to mobile phone balance and can be bought using normal online payment methods like internet banking, Debit/Credit cards etc. Skype credits can also be transferred to friends and family. Skype for Business has separate pricing plans and provides services suited to large corporate communication needs.
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Following is the distribution strategy in the Skype marketing mix:
Skype’s service offering comes in the category of mental stimulus and thus can be easily implemented via internet and online networks. Earlier it was present as a desktop application, which the user had to download on his/her personal computer, but now since Microsoft acquisition, it comes bundled with Microsoft Windows (8 and above) and office 365. The Skype application is also available on other operating system platforms like MacOS and Linux. It is also available on mobile devices in the form of an app and serves various mobile platforms like iOS, Android, Windows 10 mobile, iPod touch and Amazon Kindle. It is also available on Xbox. It used to be available on Blackberry operating system as well but now it only provides support services on Blackberry devices. Skype has its headquarters located in Luxembourg and provides free services across the world.
Skype is also banned in some parts of the world including countries like Guyana, Kuwait, Libya, North Korea, Oman, Qatar, Syria and UAE owing to political and legal issues over VoIP protocol used in the Skype calls which makes it difficult to monitor.
The promotional and advertising strategy in the Skype marketing strategy is as follows:
During the pre-Microsoft days, Skype relied mostly on word of mouth promotions and it worked wonders for it. Free voice and video calls spread like wildfire on the internet and before people realised, they were “Skyping” with their friends. Skype’s tagline- “the whole world can talk for free” was a very efficient positioning for the service and proved to be an efficient and innovative marketing campaign with an interesting promise. It popularised its services among internet users through the informational material channel using its website which is easy to use, shows the company’s service positioning strategy clearly and is attractive in design. Even post acquisition by Microsoft, Skype continues to promote itself through digital channels, social media, YouTube ads and print ads. It also uses sales promotion strategies to acquire new users like giving 500 Skype Credits in some regions for the first sign up of the user. Skype has always had a well-planned and thought out marketing strategy, but its main strength lies in word of mouth which gives rise to brand loyalists and gives it a string brand recognition.
Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of Skype.
Skype, being a part of Microsoft, knows the importance of people. The service offering, as it comes under mental stimulus, requires little or no contact with the end customer, save in case the user faces any issue and contacts the support personnel. The whole service proposition relies on uninterrupted 24/7 service and thus it needs highly skilled technical people who can develop and run such a robust and reliable software. The company, being in the highly challenging and continuously evolving technology sector, also needs to constantly innovate, therefore Skype prefers people with shorter learning curve and who are up-to-date and easily adapt to the technology trends. The support personnel on the other hand interact with users via indirect channels such as emails and chats and thus need to be polite and people friendly. Since the user who calls for support is more often than not distressed, the support staff need to be deft at handling difficult situations as well as good at solving technical glitches.
There are only a handful of brands in the world which so far have become a verb, and Skype is one of them. “Skyping” has become synonymous to video calling someone and that in itself showcases the amount of success and recognition Skype has achieved. Its phenomenal growth and spread across the world attracted investors and it was acquired by eBay in 2005, and later by Microsoft in 2011 for a whopping $8.5 billion. Despite being founded in just 2003, Skype has more than 300 million active monthly users today. According to Microsoft, Skype users generate up to 3 billion minutes of call per day and 11,500,000 new users download Skype on their iPhones per year. These figures are the testimony for brand’s success.
The process of availing services of Skype is very straight forward and similar to most of the existing membership based applications. The first step of the process is downloading and installing the Skype application from Skype.com onto the device, be it a personal computer, laptop, mobile phone or any other device. Once downloaded, the application asks for a Skype id and password which can be easily created using the sign up option present on the screen. After registering on the application, users can make calls, send texts and have video calling features just at the click of buttons. In case the users face any issues, they can very easily contact the support team as well by going on the Support Request Page available on the Skype website. They can ask their questions via email or chat support to the team. Another method for getting support is via the Skype Community Support groups where other Skype customers share their issues and resolve them together. Hence, this completes the Skype marketing mix.
Skype is an online application which provides support for voice calls, video calls and text messages over its own platform as well as on other mobile phones using Voice over Internet Protocol. Skype was made live for public in 2003 and was developed by Janus Friis and Niklas Zennstrom. It was later acquired by Microsoft and now runs as a division of its parent company. Although it was not the first mover in its category, it became famous in a very short span of time. Its competitors include Viber, Hangouts, WhatsApp, Facebook Messenger and many more. In case of Skype for Businesses, it also competes with the in-house communication platform of companies and corporate communication service providers like IBM Lotus Notes.
Apart from direct competitors, Skype has indirect competition in the form of mobile phone operators who provide better quality service in areas devoid of internet for minimal charges. It also has large number of competing substitutes like cheap air travel, email services etc.
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.
Browse marketing strategy and 4Ps analysis of more brands similar to Skype. The Marketing Strategy & Mix section covers 4Ps and 7Ps of more than 800 brands in 2 categories.
The names and other brand information used in the Marketing Strategy & Mix section are properties of their respective companies. The companies are not associated with MBA Skool in any way.
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