Marketing is an integral part in an organization; when devising the marketing strategy to adopt marketing managers need to understand the target market of their commodities. Different products are likely to have a number of customers in different parts of the world; marketers need to segment the market and decide the specific area, age-gap, economic status, and the social well being of the market to focus on.
Market segmentation is a marketing approach where managers establish their market segments or focus market: focus market is a homogenous subset of the main market, which share similar characteristics that make then demand/require similar goods.
Whether in the service or good industry, companies need to have effective marketing policies; Microsoft Corporation is an American multinational headquartered in Redmond, Washington. To sells its products; which are services, the company has enacted effective marketing policy (Anctil, 2008). This paper discusses the marketing approach as adopted by Microsoft.
Microsoft Corporation
Microsoft Corporation is an international developer, manufacture, supporter, seller, and licenser of a wide range of products and service for the computing industry. Although the company is located in the United States, it fetches its market from different parts of the globe; with the wide market the company has an aggressive marketing team.
The company was initially incorporated to sell BASICinterpreters for the Altair 8800 on 04th 1975 however with innovationa dn invention, the company advanced its services to market MSDOS in the mod 1980’s. some of the competitors that the company has to contend with include IBM and Apple Inc.
Describe the main line of business of the company
Microsoft Corporation manufactures and sells operating systems for information communication gadgets like computers and laptops; currently the company has five main products divisions as Microsoft Business Division, Windows & Windows Live Division, Online Services Division, Server and Tools, and Entertainment and Devices Division.
Names four of the countries in which the company operates
Microsoft operates in the following nations: United States, United Kingdom, China, and South Africa.
Marketing Mix for Microsoft
With the similarities of a market segment, an organization is able to develop effective marketing strategy where focus shifts to devising the correct method to sell and address the needs of the target market.
One common method in contemporary business environment to strategize for target market sales is the use of marketing mix (marketing mix looks into four main areas of the established market as price, promotional, places, and product).
In a nutshell, a marketing mix is meant to ensure that products are well promoted to customers, they are available when required by customers and they have a price that reflect the quality of the products/services must add value to consumers/users.
Competition
Although Microsoft Corporation is a leading developer, seller, and marketer of operating systems, the company has a number of competitors which include IBM, Apple, and Google, Linux Operating System, Mozilla, and Opera. To cub competition the company always improves its products with time.
Target market
Target market refers to the specific class of people with certain homogenous characteristics that a company focus on; After developing a marketing segment, Microsoft next step is to develop mechanisms to enable sales in the target market. Microsoft target market are manufactures and users of electronic gadgets that use their operating systems; to sell to the market, the company ensures its has an effective marketing campaign.
For instance when selling to computer manufacturers, the management uses word of mouth to sell the products. The company’s effective marketing mix ensures that goods are available to the target customer, when they need them and they are affordable.
Having the marketing segment in mind, then the company can know the kind of products that will be produced (Campbell, Edgarm& Stonehouse, 2011). The following chart shows how a marketing strategy can be developed:
Product strategy
With advancement in information technology, research and development department at Microsoft have taken the initiative of undertaking wide research and coming up with products that are more user friendly and can handle more information transmitted via computers.
With the product strategy, the company ensures that it develops high quality packages are sold to customer; the success of the company is dependent on the quality and reliability of the products; when products are of the right quality and meet the standards of the people, they are likely to be competitive amidst competitor products.
When a company is developing a product, there should be the need that the product is supposed to fulfill. The company ensures that it improves one product after the other, for instance since MsDos, there have been other better versions of operation which include window XP, Window Vista, Window 2003, and Window 7.
Distribution strategy
To reach to the target customers, the company has devised different method to reach the target customer; depending with the products/ the services, the company sells them in disks and over the internet where someone can download and use the services.
The method of distribution enables the company to reach its target customers with ease; with the option of downloading a software, the company has been able to sell its products in different parts of the world successively (Kotler & Denize, 2008).
Communication strategy
Having products and services is the start point, the company has to ensure that it communicates to the target customer of the existence of the products/services. To undertake this role, Microsoft uses a mixture of approaches. Marketing communication denotes the planned activity of disseminating certain information to a target audience in order to create a favorable and receptive scenario for certain a product, service or idea.
The most basis method that Microsoft adopts is the use of word of mouth; the approach is used for corporate customers where marketers physically sell the products to the companies; with the advent of competitive corporate culture, the relevance and urgency of marketing the method is effective to sell wide range of the company’s products.
According to marketing gurus a well-designed and thoroughly crafted marketing communication strategy can provide a definite competitive advantage to an organization; at Microsoft, the marketing department is given the mandate of determining the best communication strategy that the company should implement.
Microsoft marketing department looks at the prevailing corporate scenario, and then c up with the best policy to sell its services (Kotabe & Helsen, 2004).
Pricing strategy
Microsoft sets prices that are competitive in the market and offer maximum returns; it ensures that the products reflect quality it is the policy of the company that prices set should be attractive to the customers. The cost of services can break or make a company, it is likely to make services/products competitive and convincing the customer to buy them is fast.
The company sets its prices using premium pricing approach and price skimming strategy. price skimming strategy and premium pricing approach are pricing methods where a company sets products prices at relatively high prices than that offered by the competitor; the strategy is particularly effective with unique or new products in the market.
Price skimming strategy is an approach used by companies with strong brand name in the approach, Microsoft is one such company thus it uses the method to reach to target customers. The company use its name to charge expensively for their goods, as people will believe that they have good services; it also a strategy to capture the high-class people in the economy that think that expensive is quality.
The reason for the pricing model and skimming method is because the model rewards a new innovation in a product which conforms to the nature of Microsoft; Microsoft has a strong brand name thus it can effectively use price-skimming strategy.
According to marketing theory of brand extension, price-skimming strategy can be an effective method of pricing when the company using it has a strong brand name; Apple falls in the category (Fred, 2008).
Describe any differences observed in the implementation of this concept, from one country to another
Although Microsoft Corporation has a centralized marketing team, the company takes into account cultural, ethnical, and social-economic differences in different countries. With the above understanding, marketing campaigns are custom-made for different countries.
For instance in developing countries where access to computers is limited, the company has concentrated on disk-software sales while in developed countries the company uses downloaded software method.
References
Anctil, E. (2008). Marketing and Advertising the Intangible. ASHE Higher Education Report, 34(2), 31-47.
Campbell, D., Edgar, D..& Stonehouse, G.(2011). Business Strategy: An Introduction. London: Palgrave Macmillan.
Fred, D. (2008). Strategic Management: Concepts and Cases. New Jersey: Pearson Education.
Kotabe, M.,& Helsen, K.(2004). Global Marketing Management. New York: John Wiley & Sons.
Kotler, P., Denize, A. (2008). Principles of Marketing. Frenchs Forest NSW: Pearson Education Australia.