Microsoft Marketing Mix (Microsoft 7Ps of Marketing)

Microsoft marketing mix (Microsoft 7Ps of marketing) comprises elements of the marketing mix that consists of product, place, price, promotion, process, people and physical evidence. The multinational technology company manipulates with elements of the marketing mix according to its marketing strategy, as a part of its business strategy.

Product Element in Microsoft Marketing Mix

The majority of Microsoft’s products relate to productivity and business processes and to support digital work and life of customers. The company also builds the platforms upon which others build their own digital platforms. Some of Microsoft products are clear leaders in the global marketplace.

For example, more than 135 million people use Office 365 commercial every month and Outlook Mobile is installed into more than 100 million iOS and Android devices worldwide.[1]   Similarly, Microsoft Teams is used by more than 300 organizations worldwide, including 87 of the Fortune 100 and nowadays there are nearly 700 million devices around the world with active Windows 10.[2]

Generally, Microsoft products and services can be divided into three broad categories as illustrated in table below:

 Microsoft product categories and products

Place element in Microsoft Marketing Mix

Microsoft sells its products and services through the following three channels:

1. Official website: www.microsoftstore.com/store. Microsoft online store is a convenient platform where customers can choose products and services according to categories such as Devices, Software & Apps, Games & Entertainment etc. The website also includes information about special deals in relation to specific products or special dates and occasions.

2. Microsoft stores. There are 116 Microsoft stores worldwide: 106 stores in the USA, 8 stores in Canada, 1 store in Australia and 1 store in Puerto Rico. Similar to Apple Store, in Microsoft stores customers have an opportunity to use products helpful ‘technical advisers’ in stores are happy to assist.

There are 3 types of Microsoft stores:

     a) Specialty stores provide a limited selection of products, for a quick and convenient shopping trip;

      b) Full line stores offer Answer Desk services, and complete product offerings;

      c) Flagship stores focus on more exclusive experiences and features. These are located in are                 located in New York City and Sydney.

3. Authorised distributors. Distributors and resellers of Microsoft products and services include retail outlets, such as Wal-Mart, Dixons, and Microsoft retail stores, as well as, license solutions partners (“LSPs”), web agencies, and developers and others.

Price in Microsoft Marketing Mix

In 2014 Microsoft pricing strategy was subjected to a major change. Instead of charging companies for software on a per-device basis, it started to price subscriptions and licenses based on who actually uses them. Microsoft also emulated Apple’s strategy of free operating system updates with the Windows 10 release.[3]

Freemium pricing represents an important element of Microsoft pricing strategy. For example, “Skype VoIP product is free for consumers but enterprises have to pay to use it for business purposes. The principal is still the same though – get people using the product as consumers, and then rely on them to drive its adoption in the workplace”[4].

Product line pricing can be mentioned as another noteworthy aspect of Microsoft pricing strategy. In product line pricing, companies offer different categories of the same products with different qualities and different prices. Windows Virtual Machines start with USD 0.004/hour for only 1 vCPU. More advanced version with 2 vCPU that uses Intel Skylake processor costs USD 0.031/hour. The premium version with database servers, caches, and in-memory analytics costs USD 0.049/hour. Additional pricing strategies used by Microsoft at various extends include penetration pricing, price skimming, psychological pricing and promotional pricing strategies.

Microsoft Corporation Report contains a full analysis of Microsoft marketing mix (Microsoft 7Ps of marketing) and Microsoft marketing strategy in general. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Microsoft. Moreover, the report contains analyses of Microsoft leadership, organizational structure and organizational culture. The report also comprises discussions of Microsoft business strategy, ecosystem and addresses issues of corporate social responsibility.

[1] Annual Report (2018) Microsoft Corporation

[2] Annual Report (2018) Microsoft Corporation

[3] Clancy, H. (2015) “Why Microsoft’s ‘buy only what you use’ pricing strategy is a big deal” Fortune, Available at: http://fortune.com/2015/02/04/microsoft-buy-what-you-use/

[4] Rubens, P. (2016) “Why Microsoft continues to embrace the freemium model” CIO, Available at: http://www.cio.com/article/3029322/software/why-microsoft-continues-to-embrace-the-freemium-model.html