Microsoft Windows Marketing Strategy - Essay Example

MICROSOFT MARKETING STRATEGY MicroSoft Marketing Strategy Customer Name: Lecturer Name: Date: Contents Introduction 3 Background information on Microsoft’s strategy 3 Critical Examination of Microsoft’s Marketing Strategy 4 Microsoft Windows Strategy 4 Target market 4 Product Related Specifics 6 Core product 6 Technological centred strategies 7 Analysis of the four p’s 8 Pricing Strategy 9 Positioning 10 Specific Recommendations 10 Conclusion 11 References 12 Introduction The paper critically analyses the strategic nature of marketing in action of Microsoft Corporation is an American computing firm, established in 1975 that offers a wide range of computing products and services through several product divisions. The public multinational corporation has its headquarters in the United States, Washington and supports, manufactures, develops and licenses computing products. The company has employed varied marketing strategies, which has ensured that the company has grown from a single product, BASIC interpreters for the Altair 8800, to be the leading software house globally with several products. The company has adopted varied marketing strategies and has embraced other products apart from the predominant software such as Xbox 360, which serves the video game industry, and Zune for the digital services market and consumer electronics as well as Windows Phone OS for the PC tablets. Background information on Microsoft’s strategy Microsoft is the leading software developer globally; the company’s products such as Windows operating system and the office suite have a global market share of more than 90 percent. Whereas some researchers have argued that the quality of Microsoft’s products is the main reason for the huge market share, others are of the opinion that the success of the company is due to its marketing strategies (Currie 2004). Microsoft’s marketing strategies have attracted both admonition and admiration in equal measure. Critics of the company in the last decade argue that the company has used anti-competitive strategies and monopolistic business practices as strategies such as tying and refusal to deal. The company supporters however maintain that Microsoft is utilising varied marketing strategies in a competitive environment. Microsoft is among the most profitable companies globally. The role of the marketing strategies in contributing to the growth has been controversial, in that the company has employed dynamism such that it has substantially increased and expanded its product range while spurring demand from software consumers as presented by (Harold, 2009). Several factors have influenced the company’s strategies in the past including the globalization of business, the growth and advancement of the Internet, the rise and fall of competitors and the changes in technology. The company has contributed to the technological changes; ironically, it has been affected by the changes Donna, (2005). Microsoft’s marketing strategy has varied with time; the company has however maintained a cohesive, comprehensive and integrated, marketing strategy, (Grassley, 2004). The strategies implemented by the company over the years share a common characteristic such as effecting well-researched marketing tactics, having measurable marketing objectives, which can be evaluated by the company’s management and investors through specific numerical goals and objectives. The strategies have also focused in identifying precise target markets, determining the company’s products competitive positioning, developing and enhancement of specific elements of the marketing mix and detailing secretive core marketing strategies that leave competitors guessing on the company’s next move. Critical Examination of Microsoft’s Marketing Strategy Microsoft Windows Strategy Microsoft has different products. The company has a company wide marketing strategy through suite marketing, as well as product specific dynamic strategies. Windows Operating System maintains more than ninety percent market share. Microsoft has adopted different strategies depending on the marketing situations and scenario, to ensure that Windows maintains an immense market share. Target market Windows targets a wide array of clients such as individual PC users, small enterprises, institutions and large corporations. Microsoft has adopted the Market Specialization Strategy, where the company exercises target marketing through detailed analysis of the market segment, which they expect to cater for. Microsoft then develops Windows Operating systems exclusively for the defined segment. The Windows operating system is a family of several operating systems targeting at specific markets. The company offers different editions for windows such as Windows Home, Windows Professional, Windows Ultimate, Windows server and Windows Enterprise. Unlike the approach of the competitors, who offer an integrated operating system utilised in all sectors, Microsoft adopted a marketing strategy of offering a specific product to the specific target market as presented by Harold, (2009). The target market is identified through feature differentiation. Windows Home edition targets simple home use, and offers the basic functionalities defined of an operating system. Windows Professional Upgrade targets professionals and small businesses and has additional features such as full-system Backup, Restore, and Domain Join for connecting to organizational networks easily and more securely. The specialization strategy is also offered through Windows Ultimate, which in addition to the aforementioned functionalities provides multi language switch between different languages and data protection with bit-locker. The company also offers Windows Server for organizations and businesses with Local Area Networks and Windows Enterprise for Software Assurance customers’ only, especially corporate organizations that have advanced systems such as Enterprise Resource Planning systems. The Enterprise Edition differs from the other editions through lower cost compliance; Information Technology tools to streamline PC management as well advanced data protection. Furthermore, the company has developed Starter version, for pre-installation by the OEM manufacturers. The stock keeping unit (SKU) strategy of releasing different versions of the same operating system has been a successful marketing strategy, since it has enabled Windows to target a specific market segment, and offer a product that serves the specific market. Microsoft also utilizes the Full Market Coverage Strategy. In this case, Microsoft utilises the strategy with a desire to serve the mass market. The company develops software products for specialised industries and for specific need by the customers as well as the mass-market software such as word processors. The strategy used by the company is making all its products run on the Windows platform. The strategy has worked for the company, since customers who require application software have to purchase the Windows operating system. Microsoft markets Windows as part of the software houses products, therefore reducing the marketing costs. This means a single marketing mix combination can be used or even several marketing mixes are used to cater to segments made in the entire market. Product Related Specifics Core product MS. Windows is an advancement of the Disk Operating system and the company has maintained the underlying basics it utilised in the marketing of the Disk Operating system. Windows is the company’s core product such that Windows is synonymous with Microsoft. The company has maintained the horizontal based strategy where Microsoft has concentrated in developing the software components of the computer. Windows marketing strategy is founded on uniqueness, which differentiates its core products from the vertical strategies used by the competitors. Microsoft focused on licensing its software to computer manufacturers, hence reaching a wide range of users. This contrasted with the competitor’s simplified model line up. The strategy enabled windows to focus on marketing the operating systems of computers, as its core product therefore enabling the software to work on different sorts of hardware. Computer hardware manufacturers become collaborators hence enabling the company to reduce the competition. This strategy enables Windows to be ahead of competitors since buyers are not tied to specific hardware from one vendor, but could use different hardware, and still install Windows Operating System. Technological centred strategies Microsoft has adopted tying of products as a marketing strategy. The controversial marketing strategy has been a subject of diverse opinions and concerns in the market. The tying of products marketing strategy engages tying together the Windows Operating system with other products such as Microsoft Office, Windows Media Player, Internet Explorer and Outlook Express The marketing strategy of product tying has been a subject of varied controversies and opinions. The bundling of software applications with the Windows operating system has in the past-invoked accusations of antitrust violations. The opponents of the strategy are of the opinion that the tying of products increases entry barriers to certain software market inhibiting free competition and impeding consumer welfare. This strategy has been a subject of controversies including antitrust lawsuits and sanctions in the EU, South Korea and the United States. The strategy has however, worked to enhance the marketability, of the operating systems, since the potential customers are assured of getting additional bundled software, by purchasing the operating system (Noel 2009). From a technological perspective, Windows has been the first in utilizing emerging technologies. Windows has revolutionised the computing industry by introducing unique products to the market, with unique characteristics. This has served as a marketing strategy, such as introducing Graphical User Interface when the user interaction was command driven. The strategy has worked well, since users are always in a state of guessing on which technology the company will release next Ralph & Reynolds, (2008). With every technological advancement on Windows, Microsoft ensures that the release of its Windows products generates a lot of hype, which gives the company a lot of advertorial and web space. The company uses the technological approach of “Technological permission of piracy, while condemning piracy publicly”, especially in the developing world. Microsoft has the capacity to make their products pirate resistant. However, the company has not put in enough technological measures to ensure that the software is immune to piracy. Furthermore, Microsoft can detect non-genuine software online and have the capacity to effectively disable the functioning of the software. However, Microsoft just sends a message to a user. The strategy is to maintain more people using the software whether genuine or not. With several people using the Windows operating system, other competitors are at a disadvantaged position due to Windows dominance. Analysis of the four p’s Figure 1: Analysis of the four P’s The marketing strategy pursued by Microsoft in the attainment of the strategic market position. These constructs are products, pricing, placement and promotion Charles,(2009). The product is the Windows operating system. The product aspects of marketing deal with the specifications of the system. Whereas the quality of software is at times hard to quantify, Microsoft presents Windows as the best operating system, with less crashes and bugs. Moreover, the company argues that Windows performance has enhanced video encoding, has faster program execution, applications open in a snap and is menus responsive. Windows is also marketed for its quality in Big-screen support and start button search (Paul 2007) There are also several versions of Windows depending on the target market. Windows has a comprehensive online, distributors and phone support, while the company releases regular service packs in case there are identified vulnerabilities. Windows also support a wide range of application software (Michael and Susan 2007). Pricing Strategy The pricing of windows operating system is strategic such that Microsoft offers the OEM’s are given a special price consideration in terms of a starter pack. Customers upgrading from earlier versions of windows to the latest release are offered cheaper prices. Moreover, corporate and enterprise customers are offered competitively priced Windows versions where the price per computer is lower. Moreover, piracy has enabled some users to learn cheaply computers through Windows, hence when they are in a work environment, they purchase the genuine versions of windows since that is what they are used to. This has been an important construct in enabling windows to gaining Placement, which refers to how the product gets to the buyer, is efficient in the Windows case and multi dimensional. Windows is distributed through diverse channels such as OEMs, Microsoft regional distributors and certified independent distributors. Furthermore, the updates and services packs are offered through the internet for the convenience of customers as presented by (Ferrell and Michael, 2008) and Tan, (2003). Promotion Microsoft has comprehensive promotion strategy founded on branding, advertising, sales promotion, promotional education, publicity and corporate individual selling as presented by Reynolds, (2004). The company has offices in most of the countries in the world dedicated to promoting the software. Moreover, the company places several online adverts which promote windows. Positioning Microsoft utilises market-positioning constructs that share similarities with the four p strategies (Fuat 2010). These positioning strategies include pricing, considering that Windows is system software, which is important for the functioning of the computer. Microsoft also markets Windows as a quality product with relatively fewer bugs. Windows is customized depending on the usage. This has enabled Windows to progress in terms of attaining market share and maintaining the market position according to Schneider, (2009). Specific Recommendations Windows is facing increasing threat from the changing technologies and emergence of new competition environments. Windows enjoyed immense market share in the Personal Computing environment. The continual convergence of mobile phones, personal Digital Assistants and the personal computers, there has been a paradigm shift in the competition environment. Previous collaborators are becoming competitors. There are emerging competitors such as iOS mobile operating system and Android have influenced negatively in the progression of Windows Mobile’s market share. Moreover, Sun Solaris has achieved important share, in the enterprise operating systems market. There are several recommendations, which Microsoft can adopt to ensure continued maintenance of the market share. Windows has to market immensely the Mobile version, since the global trends are moving towards mobile-based devices. Furthermore, Microsoft has to reduce the price of its operating systems since several Free and Open Source Operating systems have gradually achieved market recognition. Furthermore, Microsoft has to consider the threats of the various editions of Linux Operating Systems. The company has to look for a distinctive feature which Windows has, that Linux does not have, and considering that, the advances in Linux editions have matched Windows features Allen, (2008). Furthermore, there have been different technological innovations, which Windows may not have been optimised for initially such as Grid computing and Atomic computing. Microsoft has to work closely with researchers and hardware manufacturers so that the company are in the forefront in developing Windows operating system for any new computing environment. Conclusion Microsoft enjoys majority market share in the computing industry. Microsoft has maintained an effective marketing strategy, since the operating system’s was developed. The same strategies have worked over time, and have ensured that Windows maintains the market share with every version release. However, the emergence of new platforms such as PC tablets and mobile phones is a threat to the Window’s strategies since the competition environment has changed. There is need therefore to market strongly the mobile edition of Windows, considering that the market is moving towards mobility. Windows also has to adapt strategically to new and emerging computing technologies. References Allen, S. (2008). The emergence of the relationship economy: The new order of things to come. Cupertino: Happy About press. Charles, Gibson. (2009). Financial Reporting and Analysis. London: Cengage Learning. Currie, W .(2004). Value creation from e-business types. London: Butterworth-Heinemann. Donna Jo Fuller. (2005). The Stock Market, How economics works.  Minneapolis: Lerner Publications. Ferrell O. C., Michael D. Hartline, (2008). Marketing Strategy. Boston: Cengage Learning. Fuat Beyazitoglu, (2010). Business Marketing - the Case of Microsoft. Berlin :GRIN Verlag. Grassley, A. (2004). 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