Microsoft is an American multinational technology company that deals with software development, social networking services, cloud computing, consumer electronics, video games, and many more related services. Do you want to know how this technology giant became a huge success? Read this case studies on the detailed marketing strategy of Microsoft.
Microsoft has been the world leader in operating systems for more than a decade. It was founded by Bill Gates and Paul Allen in 1975, 46 years ago in Albuquerque, New Mexico, US, and is now operating successfully all over the world. Microsoft ranked no. 21 in Fortune 500 rankings of the foremost important US corporations in 2020. It has the third-highest global brand valuation. The company is a digital leader in operating systems.
Microsoft has replaced its slogan from “Be what’s next” to “Your potential, our passion” as the new slogan
Now as we have got some basic knowledge about the company, let’s go ahead and take a dive into the Marketing mix of Microsoft.
Microsoft Marketing Mix – 4Ps
The marketing mix is the mixture of analysis of most important factors of the business, they are as follows
let’s start with discussing the product mix of Microsoft
1. Product Mix of Microsoft
Product refers to an item that fulfils the consumer’s needs and wants whereas Product mix refers to the assortment of that product. Microsoft deals in both hardware and software products. Their hardware products include computers, laptops, tablets, Xbox and phones whereas software products include Microsoft Office and Windows OS.
Microsoft has a huge product portfolio. It is mostly known for its:-
Now let’s look into the price mix of Microsoft
2. Price Mix of Microsoft
Price refers to the monetary value of a product whereas Price mix is the strategy to determine the price of the product. Often, Microsoft uses a Market-oriented pricing strategy, Freemium pricing strategy, and Buy Only What You Use pricing strategy.
Microsoft Pricing Strategies used in marketing are as follows:
|Freemium Pricing||It means a product is free for consumers but to use it for business purposes that enterprises have to pay.|
|Product line||Under this strategy, the company offers different categories of the same product with different qualities and different prices.|
|Penetration Pricing||It is a marketing strategy that is used by Microsoft while launching a product. Initially, the company sets lower costs to attract a fraction of the market.|
|Price Skimming||It is a product pricing strategy under which the firm charges a higher price initially and then lowers it over time.|
|Psychological Pricing||It is a product pricing strategy under which the firm charges a higher price initially and then lowers it over time to attract the cream crowd of the market.|
|Promotional Pricing||Under this marketing strategy, the firm temporarily reduces the price of a product or service to increase its sale.|
The price mix of Microsoft is extensive. Let us now go through the place mix of Microsoft
3. Place Mix of Microsoft
Place refers to providing convenient access to the consumer whereas Place mix in marketing concerns the distribution of the product.
Most of the sales of Microsoft is generated through its official website. Users can download and purchase the Microsoft software from this website. Microsoft also has brick and mortar shops for selling their hardware products. Apart from this, this technology giant is associated with various sellers who are strategically located in different areas of the market.
Microsoft offers the following facilities to its customers under Price mix-
- Microsoft has an official website where customers can conveniently choose products and services according to their requirements.
- Microsoft has its stores across the globe where the customers have an opportunity to use the advice of technical advisers to make a better choice.
- Microsoft also has authorized distributors and resellers.
Microsoft products are easily accessible to buyers all across the world due to their strategically sound place mix. Now let’s see how it manages to remain on the top by discussing Microsoft’s promotional mix.
4. Promotional Mix of Microsoft
Promotion refers to the marketing of products that comprises elements like sales promotion, advertising, and many more whereas Promotional mix is the efforts made by the companies using promotional tools to reach out to a broader audience.
The promotional mix of Microsoft exactly targets its customers with help of its strong brand image. It uses a variety of social media platforms such as Facebook, Twitter, Google, Instagram, etc to promote its products. Advertising, direct marketing, and sales promotion are some of the promotional mixes used by Microsoft. It uses a strategic channel to reach its target customers. Promotion mix of Microsoft are-
- Advertising – It is a marketing tool that is used to promote products, services, and ideas through an open-sponsored marketing communication channel.
- Sales Promotion – A marketing strategy where the merchandise is promoted using short-term attractive initiatives to stimulate its demand and increase its sales.
- Direct Marketing – A promotional technique where a firm directly communicates its selected customers without the involvement of third-party such as Facebook, Instagram, etc
- Personal Selling – In this strategy, a sales representative meets with potential clients for transacting a sale.
- Public Relations – A promotional strategy that establishes and maintains two-way, mutual relationships and communications between a corporation and its potential customers.
With this analysis of the 4Ps of the Marketing Mix of Microsoft comes to an end, let us now know more about the SWOT analysis of Microsoft. Let’s have a deeper look at the SWOT analysis of Microsoft.
That was the 4PS of the Marketing Mix of Microsoft. Now let us look into the SWOT Analysis of the company.
SWOT Analysis for Microsoft
SWOT Analysis of Microsoft helps the company to use its strength and opportunities to overcome its weaknesses and threats. Let us take a close look at the SWOT Analysis of Microsoft which differentiates the company from its competitors.
Let’s start with discussing the strengths of Microsoft that keeps the company above the crowd:
1. Strengths of Microsoft
Strengths are the positive factors of a company that makes it different from its competitors. The strengths of Microsoft are:
- Microsoft has its reach in almost 190 countries and over 500 million devices worldwide make use of the Windows operating system. Having an enormous reach all over the world is the main strength of Microsoft.
- Another strength of Microsoft that helps it to achieve huge sales across the globe is the variety of products offered to the customer that maximizes their productivity.
- For the past few years, Microsoft has been investing a huge amount in innovating its cloud business. As a result of which cloud industry is on its boom and one of the biggest strengths of the company
- International presence has created a strong brand image of the company, which is another strength of the company.
2. Weaknesses of Microsoft
Weaknesses are those areas that stop a corporation from working at its optimum level. Following are Microsoft’s Weaknesses:
- For the last few years, Microsoft has increased its investment in Research and Development department, but still, the company is lagging behind its competitors in comparison to innovation
- Microsoft’s products are vulnerable to cybercrime, which is another weakness of the company
- The company’s market share is much lower than its competitors in terms of advertising
- The decline in the sale of PCs in the market is due to the rise in the demand for smartphones and tablets has also hit the company badly.
3. Opportunities of Microsoft
Opportunities are the positive factors that give organizations a competitive advantage. Following are Microsoft’s Opportunities:
- AI is a wide-ranging branch of computer science, by investing in which Microsoft can achieve huge growth
- Microsoft should deliberately go into acquisition because it makes a difference in the business value of the company
- The company should keep its products and services affordable so that it can increase its market share
4. Threats of Microsoft
Threats are those external factors that have the potential to harm the organization. Mentioned below are the main threats of Microsoft:
- Despite having such a huge product portfolio, Microsoft has to face very tough competition because there is a lot of competition in the IT industry from every angle
- Microsoft has to focus on improving the innovations, as the technology market keeps changing fast
With this the analysis of SWOT for Microsoft comes to an end, now let’s look into the marketing strategies of Microsoft
Marketing Strategies used by Microsoft
Microsoft uses the strategy of STP to market its products, lets learn what STP is and how Microsoft uses it to its benefit
STP which is also known as Segmentation, Targeting, Positioning helps a company to divide the market and to promote their product to the targeted audience while creating a good image of the company in the brains of the customers, lets see each one of them in detail.
The Process of STP starts from Segmentation where the company divides the market into small segments on the basis of different aspects like
- Demographic segmentation
- Geographic segmentation
- Location-based segmentation etc
Microsoft uses demographic segmentation and behavioural segmentation to convert the huge audience into small segments. Microsoft uses Demographic segmentation to Market products like operating systems and office systems. Microsoft uses behavioural segmentation to market products like windows mobile phones, windows servers, etc
Targeting is a process where we select the market segment out of different segments created during the process of segmentation to advertise our product
Having a wide range of products, Microsoft targets every person who uses a computer/laptop. However, in mobiles and tools, Microsoft cannot target every person using a mobile phone due to the competition level in that sector.
Positioning is a process where a company tries to establish a good image of itself in the mind of the targeted audience selected while targeting the stage. Microsoft has started turning around to rebrand and reposition itself. It has started by changing the logos of all the services they provide.
Now after seeing the strategy that Microsoft uses to promote their product, in this digital world, let’s see what Microsoft do to advertise itself digitally.
Social Media Presence
In today’s digital world, when a majority of the people living in urban areas use social media and when a tech giant like Microsoft targets people living in urban areas, Social media is a platform where they can get their most of the audience.
Microsoft has maintained a huge amount of audience on their social media handles which we can clearly see in the above images where
- It has 3.2million followers on Instagram
- 14125305 likes and 14129883 followers on Facebook
Microsoft has been able to gain such a huge audience with the help of a posting consistently
According to the algorithms of Facebook and Instagram, if a page keeps posting pictures and videos on a consistent basis the algorithms increase its reach which eventually leads to them getting more followers.
Now with the segment of Social Media presence, let’s end the blog here, before going back, let’s just recap what we learned in the blog.
In the blog we learnt about the company Microsoft, how it uses the 4Ps of marketing and how it uses Strengths and opportunities to overcome Weaknesses and threats also, we saw how Microsoft marketed itself in the market and has now become a tech giant. Hope you found the blog insightful and knowledgeable, if you want to know more about the different marketing strategies of different companies, visit IIDE’S knowledge portal