Stepwise Marketing Mix of Microsoft with All 4Ps Explained

About Microsoft

Microsoft was founded in 1975 by Bill Gates along with Paul Allen. Since its earliest years, Microsoft got a very good response from the market which was just understanding the growing need for computers. 

Ever since its founding, it has been a perfect setting for Microsoft either from the perspective of the market or customer acceptability or reliability. It has developed into a universally accepted and adopted model, which makes it one of the most familiar names of modern times, with an ever-growing popularity. The fortunes of Microsoft are now ever-growing and multiplying, with sales and market figures resting upon several products, services, features, and incomes directly from sales and subscriptions or from indirectly designed royalties and commissions or leasing, on the whole, it is a huge marketing model. The company was also listed in the Forbes fortune 500.

Now that we have a clear picture of the company, let us learn the marketing mix of Microsoft incorporating its 4P’s.

Marketing Mix of Microsoft

The concept “marketing mix” refers to a business’s foundation model that a company uses to promote its brand or product in the market. It is a collection of marketing techniques that a company uses to achieve its marketing objectives in a target market.

It thus is a total of the marketing and business strategies surrounding a business. Let’s dive deeper into Microsoft’s marketing mix.

1. Product Strategy of Microsoft

Microsoft started as a software developing company. They are a research and development-driven company that always identifies the customers’ needs even before they arise. The business has grown to include an increasing variety of products. Its products in limelight are the Microsoft Windows line of OS, Microsoft Office, Internet Explorer and Edge browsers. Their hardware products that are doing well in the market are the Xbox consoles and the Microsoft Surface touchscreen PCs.

Microsoft categorizes its products as follows:

 Devices and Consumers:

• Devices and Licenses (Microsoft Windows Licensing, Microsoft Office 365 Licensing)
• Gaming and Computing Hardware (Xbox, Xbox 360, Surface Pro)
• Phone Hardware (NOKIA Lumia)

Commercial Products

• Commercial Licenses (Office 365 Professional Licensing)
• Other Commercial Dealers (Office 365 Commercial, Microsoft Azure)

2. Pricing Strategy of Microsoft

The price points of Microsoft affect the attractiveness and the sales of its products. The company has captured a major portion of the market but due to the monopolistic competition its pricing policy has been a mix of strategies: 

• Market-oriented pricing strategy

In this strategy, Microsoft sets the price of their product (higher/lower), based on market factors, such as the prices of similar products offered by its competitors and the consumer demand.

Example: The Widows OS has been priced at a premium as its demand has been increasing.

• Freemium pricing strategy

Under this strategy, a product is offered for free but additional features or functions are to be paid for.

Example: Office 365 can be used for free on devices with a maximum screen size of 10 inches and needs to be paid for to use on larger devices.

• Customized pricing strategy of Microsoft

This pricing strategy enables the customers to pay for how much they use instead of a fixed amount. The advantage of this strategy is that customers who use multiple computing devices do not have to worry about extra charges.

Example:  Microsoft uses this strategy for their cloud services.

We can see how the company has used the price element effectively and reformed it every time according to the customer requirements.

3. Place and Distribution Strategy of Microsoft

Microsoft needs to maximize its reach in both- the computer software and the hardware market. In this element of the marketing mix, the various lines of distribution for business reach are considered.

In Microsoft’s case, the following places are used to distribute products:

• Official Website

Microsoft’s software products can be directly accessed, purchased, or downloaded from their official website and online store.

• Authorized Sellers

The authorized sellers which are located in strategic commercial areas enable Microsoft to reach the target markets by providing a direct approach to sales and marketing.

• Microsoft Stores

Microsoft has retail stores where customers can get the latest products of the company such as smartphones and Xbox. These stores are a direct approach to marketing as they enhance the brand image of Microsoft and improve customer experience too.

• OEMs (Laptop and Desktop makers)

Microsoft targets device manufacturers to sell inbuilt OS and software.

4. Promotional Strategy of Microsoft

This element of the marketing mix focuses on the strategies and tactics used to attract target customers. 

Microsoft/s promotion strategy is very comprehensive and is focused on the reliability and the usability of its products. Microsoft’s promotional mix is prioritized based on the computer software and hardware market and is as follows:

• Advertising 

The majority of Microsoft’s promotion expense goes into advertising over the internet and television to enhance the company’s image. These advertisements are targeted at the end-users of the software and focus on product enhancements and upgrades.

• Sales Promotions

Discounts and incentives are offered to attract customers.

Example: Microsoft Office is provided to students at a discounted price to increase their sales volume, build brand loyalty, and prevent its competitors from capturing the market.

• Direct Marketing

Microsoft uses this marketing strategy to make sales deals with organizations like schools, colleges, etc. It also has developed with various Laptop and Desktop manufactures(OEMs) to sell its products.

• Personal Selling

The sales personnel at Microsoft retail stores present customers with product features and also encourage potential buyers for free trials.

• Public Relations

Microsoft image is promoted through many PR strategies but Microsoft Philanthropies is the one that fulfils it by looking after donations and related activities

Conclusion

Microsoft’s marketing strategy is truly unique but product-focused. Having spent more than 4 decades in the tech industry, their marketing mix has adapted to a lot of newer trends instead of being rigid. We hope that you enjoyed this extensive study on the marketing mix of Microsoft explaining their product, pricing, place and promotional strategy. 

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