Marketing Mix of Microsoft

This article discusses the marketing mix of Microsoft, including its product, price, place, and promotion strategies. It also explores the macro environment of Microsoft through a PEST analysis.

Running Head: MANAGEMENT 0
MARKETING MIX

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Table of Contents
Introduction................................................................................................................................2
Marketing Mix of Microsoft......................................................................................................3
Macro Environment of Microsoft..............................................................................................6
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The rise of technological advancement in society has a major impact in today business
scenario. Various major development in this area changes the way an organisation operate in
relation to its structure of business, practices, marketing and communication (Payne,
Storbacka & Frow, 2008). One of the biggest and dominant technological company i.e.
Microsoft was founded in 1975 that builds many support software product and services
across the domain. The company offers varieties of products includes their Windows
Operation System, personal and business solutions applications, Microsoft suite of office
products like Excel, Word and PowerPoint. The company also offers various products in
mobile market and software games market.
In the fourth quarter of 2018, the revenue of the company stood upon $30.1 billion
increased at a rate of 17% (Sparks, 2018). During their business life cycle, Microsoft
acquired many big companies such as LinkedIn, Skype technologies, Mojang, Hotmail and
GitHub.
Figure 1 – Biggest innovation of Microsoft
Source: (Sabri, 2013)

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Marketing Mix of Microsoft
Marketing mix is a series of activities that work together and are part of the marketing
process (Day, 2011). There are various ways by which an organisation can satisfy the needs
of targeted customers. In the same way, Microsoft is serving a diverse target market with its
differentiation pricing strategy. All of their products are readily available to the customers
even on the e-commerce platform. In addition, the company also do aggressive promotion to
boost their sales of the products and services and thus increase brand recognition. Explicit
marketing mix of Microsoft in United States is outlined below in respect with the four Ps –
Product, Price, Place and Promotion.
Product – The original Microsoft juggernaut product, the Windows desktop is considered as
one of the important Microsoft product in terms of solutions deliver to the customers, clients
and business partners. All computer programmes need an operating system and from a long
period of time, Microsoft is offering one of the most popular operating systems provides a
graphical user interface helps in simplifying user experience. In January 2019, the global
market share of the Windows operating system range stood at 75.47 per cent. Moreover, in
US, it stood at 67.38% (statista.com, 2019). With the advent of Windows 10 in 2015,
Microsoft brings most notable features in extension with universal apps, an expansion of the
Metro-style apps. This Operating system was built to run on various Microsoft product
families including PC, tablet, smartphones, Xbox One and other embedded systems.
It unveils new innovation with more of its edition and versions. Microsoft made available
Windows 10 in 138 languages with a new platform that reinforces identity protection, data
protection, threat resistance and device security (ebiztown, 2018). In addition, there are also
various subsidiary software applications introduced by the company such as Office 365,

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Skype, One drive and many more. Windows 10 is now active on nearly 700 million devices
around the globe.
Price - Microsoft uses a different pricing strategy for its Windows 10 product as the company
is offering free operating system updates over previous platforms like Windows 7, 8 and 8.1.
In US, Windows 10 Pro is available at a price of $199.99 (Hachman, 2018). This edition is
built for businesses with features like more security, remote desktop, Windows Ink and
Windows Hello. On the other hand, Windows 10 Home is also available to the user who
wants to use it on a personal computing device at a price of $139.00 (Hachman, 2018). It
offers more safety in comparison with previous Windows platform and also brings more
creativity and productivity. In addition, it also enhances gamers experience including
Broadcast and Game Mode. In some of its segment, Microsoft has a premium pricing due to
its popularity and increasingly useful Operating system. However, the company is proving
basic set of services for free and thus captured major portion of the market due to mix of
strategies.
Source: (Microsoft Website)

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Place – Microsoft Windows 10 is available in 190 Countries and the company various lines
of distribution depends upon the type of products (Chowdhry, 2015). Almost half of the
revenue comes from US which gives Microsoft a strong financial position at global level.
Along with their online presence, the company also made available their Windows 10 product
through E-commerce stores where the software can be bought or download online in form of
CD or DVD. In US, Microsoft retail stores are available aims to enhance customer experience
by proving the access to latest version of enterprise product. Microsoft stores are available in
different cities around the world as well as through authorized dealers. Moreover, Customer
and clients who are running their official preceding version can upgrade to Windows 10
without going any place as Microsoft provide inbuilt up gradation which simplifies the
process to the user.
Promotion – The Company is using its promotional strategy in the marketing mix very
focused and comprehensive. Their major promotional expense is on the premium products
and has a large market share. Microsoft reportedly spending over $1 billion to promote their
Windows OS to the various customers, clients and businesses. The company use less than
traditional approach to surface its advertisements such as number of ads are shown across
subway stations and walls. In the 2018 fiscal year, Microsoft spent 17.47 billion U.S. dollars
on sales and marketing (statista.com, 2018). The company also announces various offers
regarding Windows 10 upgrades. One of its updates is depicted below in the picture.

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Macro Environment of Microsoft
The external environment of Microsoft is being explored with the help of PEST
analysis which includes four parameters i.e. political factors, Economic factors, Social factors
and Technological factors.
Political Factors – Corporate participation in public policy process and political
contributions is one of the political aspects through the company is being proudly recognised
as an engaged leader in accountability and transparency. Microsoft needs to engage with
government in US on public policy issues that are vital for the business. This will help the
company in building strong corporate governance. In the United States, the company is
supporting government affairs programmes related to key public policy issues, spending their
corporate funds in political engagement and forming membership in industry and business
trade associations. The company also need to comply with local legislation as its prime
product Windows 10 is already been in various controversies. For instance, Microsoft was
sued by Multiple Illinois residents due to Windows 10 upgrade programme. This lawsuit
against Microsoft claims more than 100 members jointly seeking $5 million in damages
excluding cost and interest (Hruska, 2017).
Economic Factors – Microsoft benefitted from the considerable economic stability of the
majority of developed country. Moreover, their products and services are also boosted due to
change in H-1B visa program overhaul by Trump administration (Jha, 2019). Economic
factors that may impact the units’ sold and potential revenue are volatile behaviours of the
foreign exchange rates. Alterations in the exchange rates of the US dollar (i.e., strengthening
of the US dollar) could negatively affect. If the US dollar is strengthening, the cost of the
Microsoft Windows 10 OS will increase within the foreign marketplace segment. This

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increase would reduce the potential number of units sold. Hence, it is important for Microsoft
to strategically address such opportunities in the industry environment.
Social Factors – This domain of PEST analysis considers how the social situation impact
macro environment of Microsoft in extent with customer expectations and behaviours. One of
the social issues that need to be considered by Microsoft is shortage of skilled talent in STEM
field as it directly impacts local US recruitment. Below is the glimpse of these particular
statistics –
Source: (Bott, 2017)
It is important for Microsoft to differentiate themselves through non-transactional
relationships and deep technical expertise as their success is built on innovation strategies in
relation to evolving trends (Berry et al, 2010). The company also need to act in the local
community to help to boost participation in STEM education, especially among women and
minorities. It will indirectly help the company to boost sales of its products and thus increase
revenue.

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Technological Factors – In this domain, it requires an organisation to use their full technical
capabilities and in the same way, Microsoft also have enormous opportunities through which
the company can attain a distinct position in the market. For instance, the company need to
integrate their OS with AI capabilities in order to enhance customer experience and also
make their life easier (Sicari et al, 2015). This might also help the company to outperform
over its rivals. Moreover, the company is also doing well considering their major R&D
investments allowing Microsoft to bring better product and upgrades every time.
Conclusion
Microsoft is growing significantly since its inception and is proving number of
products and services in the global market. The company is already adopted its vision
effectively by assessing their business dynamics in timely manner. Hence, it can be said that
Microsoft is subject to drastic changes in the industry including new legislation, deregulation,
technological innovation, or globalization which can change industry structure, business
model, and market share globally.

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References
Berry, L. L., Bolton, R. N., Bridges, C. H., Meyer, J., Parasuraman, A., & Seiders, K. (2010).
Opportunities for innovation in the delivery of interactive retail services. Journal of
Interactive Marketing, 24(2), 155-167.
Bott, E. (2017). Microsoft quietly announces end of last free Windows 10 upgrade offer.
Retrieved from https://www.zdnet.com/article/microsoft-quietly-announces-end-of-
last-free-windows-10-upgrades/
Chowdhry, A. (2015). Microsoft Windows 10 Will Be Available In 190 Countries And 111
Languages By This Summer. Retrieved from
https://www.forbes.com/sites/amitchowdhry/2015/03/18/windows-10-190-countries/
#1bd946a3368c
Cusumano, M. (2008). Technology strategy and management The puzzle of
Apple. Communications of the ACM, 51(9), 22-24.
Day, G. S. (2011). Closing the marketing capabilities gap. Journal of marketing, 75(4), 183-
195.
ebiztown. (2018). laptop wont start after windows 10 update?. Retrieved from
https://www.ebiztown.com/questions/laptop-wont-start-after-windows-10-update
Hachman, M. (2018). Microsoft has added $20 to the price of Windows 10 Home, but there
are sales elsewhere. Retrieved from
https://www.pcworld.com/article/3311869/windows-10-home-price-increase.html
Hruska, J. (2017). Microsoft faces new class-action lawsuit over its Windows 10 upgrade
policy. Retrieved from https://www.extremetech.com/computing/246587-microsoft-
faces-class-action-lawsuit-windows-10-upgrade-policy
Jha, L. (2019). US to Change H-1B Visa Programme to Attract 'Talented Professionals':
Donald Trump. Retrieved from https://thewire.in/world/us-to-change-h-1b-visa-
programme-to-attract-talented-professionals-donald-trump
Payne, A. F., Storbacka, K., & Frow, P. (2008). Managing the co-creation of value. Journal
of the academy of marketing science, 36(1), 83-96.

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Sabri, S. (2013). Microsoft teases new Start Screen Innovation plans for Windows Phone in
2014. Retrieved from https://www.windowscentral.com/microsoft-teases-new-start-
screen-innovation-plans-windows-phone-2014
Sicari, S., Rizzardi, A., Grieco, L. A., & Coen-Porisini, A. (2015). Security, privacy and trust
in Internet of Things: The road ahead. Computer networks, 76, 146-164.
Sparks, D. (2018). Microsoft Corporation's Impressive Growth in 5 Metrics. Retrieved from
https://www.fool.com/investing/2018/07/20/microsoft-corporations-impressive-
growth-in-5-metr.aspx
statista.com. (2018). Microsoft's expenditure on sales and marketing per fiscal year from
2000 to 2018 (in billion U.S. dollars). Retrieved from
https://www.statista.com/statistics/506534/microsoft-sales-marketing-expenditure/
statista.com. (2019). Global market share held by operating systems for desktop PCs, from
January 2013 to January 2019. Retrieved from
https://www.statista.com/statistics/218089/global-market-share-of-windows-7/