Marketing Plan and Current Marketing Situation at Microsoft - Research Paper Example

Marketing Plan for Microsoft Executive summary Being one of the most valuable company in the world, Microsoft founded in 1975 is a successful creator and developer of computer technologies and software. In the beginning of 2015 the company stated that it is aimed at having more than 1 billion devices base on Windows 10 all over the world in the next few years (Microsoft, 2015). New edition of Microsoft Office 2016 is to be introduced to public as a modified version designed for tablet computers, smart phones and to be applied in various business and consumer markets. The main idea is to introduce a new look of the MS Office programs such as Word, Excel and PowerPoint provided with efficient features making the working process more comfortable, easy and safe; as well as enhancing already existing means of communication and information exchange. Microsoft profit rate is expected to be about $22 billion, selling over 2.6 billion products worldwide and total sales rate is expected to exceed $87 billion in 2016 fiscal year (Microsoft, 2015). Current Marketing situation Microsoft Corporation main mission is based on idea of sustaining its position as World’s number one technology company which is engaged into creation, development, licensing and manufacturing software products and operating systems, search engines as well as conquering video game industry (Microsoft, 2015). Microsoft audience is as diversified as the product portfolio and it involved young adults of 16-30 years as targeted users Xbox consoles and operating systems for everyday and educational purposes as well as business segment using software in professional sphere where collecting, storing and presentation of information are essential processes and can be seen on firms and corporations different in size. Competition Nowadays the competition within industry is severe as the company is diversified and it meets rough competition in several key areas such as search engine and smart phones from giants such as Google, Apple and Oracle. Market Description Microsoft market consists of products, consumers and business users. The main feature of this very aspect is implied in diversification of product portfolio which is aimed at reaching the audience through erasing the boundaries of age, profession, social status (Microsoft, 2015). Operation systems are designed to be applied on computers and other devices as means of data storing or day-to-day operations including education, entertainment, health care, programs such as Skype can be used by professionals and consumers. Targeted Segments: Corporate (business market) – people engaged in large businesses, firms and corporation feel the need in sufficient software in order to work with information on different levels, bringing convenience into the process of collecting, storing and presentation of information as well as sufficient communication in pursuit of enhancing understandability and professional level. Features: professional software specially intended for conference presentations and public performances, provided with minimal design with a variety of features to fit in business sphere; using Skype as means of conducting conferences to unite participants at all levels and different parts of the world; communication software in pursuit of an ability to be reached at any time. Students (consumer market) – constant need is felt to enhance and ease the process of learning for students of schools, colleges and universities. Using components of Microsoft Office as well as search engines and means of communication is to influence time and efforts used while studies are made. A number of products for entertainment purposes. Features: Microsoft Office used during exams, final assignments as well as during lectures and seminars; Audio-visual programs, games over Xbox console, Skype and MSN as means of communication for both entertainment and educational purposes. Entrepreneurs (business market) – time saving aspect and facility are involved in this segment. A busy person needs fast and easy operation system, provided with facilities to be used on-the-go with immediate and simultaneous access to communication and data. Features: Microsoft mobile phones provided with specific operation system upgraded for professional used, handsfree feature for reaching maximum convenience, software to assist in translation, converting and passing information in the best way possible. Professionals (consumer + business market) – people engaged in health care, education who have the access to large amounts of diversified data can apply easy and convenient programs to sort and classify information. This software can be used personally by each worker on the consumer’s level as well as professionally, using specially created advanced software to be used in universities, hospitals and other institutions. Features: professional operation systems to be used in institution for single database creation, special features to sort data through graphs, tables and to provide connection with different departments and levels (Microsoft, 2015). Product Review 1. Windows Windows is the core product of Microsoft Corporation and is successful as operation system, latest version of which was sold in amount of 400 million. 2. Office Office is a very important franchise for Microsoft. Last year’s sales went up to 100 million copies. 3. Exchange Exchange is the most widely adopted and used e-mail platform for the enterprises. 4. SharePoint Sharepoint is a platform designed for the enterprises which allows to share data created in Office and other programs. 5. SQL Server It is a support for so-called “big data” and this server is considered key pillar for database. 6. Windows Server Apart from business applications such as SQL Server and Exchange, customers feel the need in Windows Server to provide key infrastructure for Windows Storage Server. 7. Visual Studio Visual Studio is the ground which encouraged developers to target latest platforms of Microsoft. 8. Xbox According to recent information, there are more than 40 million users in the Xbox worldwide community and due to this product, division engaged in entertainment over $3 billion in revenues. 9. Bing Much time and effort is required in order to beat Microsoft’s giant competitor Google and to replace it with Bing. Nevertheless thanks to cooperation with Yahoo! Bing managed to gain considerable market share of about 15 percent, however Bing keeps on losing money year by year (Microsoft, 2015). 10. System Center System Center product line contributes overall profit by over $1 billion every year. This product is used by enterprises data centers, in order to manage operation of hardware and software. System Center is constantly provided with new features, presenting new applications and capabilities. 11. Skype Microsoft states it is interested in increasing of the availability of real-time communication for business and consumers. Skype grossed over $900 million last year. 12. Windows Azure Windows Azure is very special in this list as this product is far from making billions. This platform is very important as it is means to transit systems and applications to the cloud. The popularity and success of this platform can be influential for the overall performance of Microsoft. The product portfolio of Microsoft is nothing but the example of diversity and successful strategy chosen. Researches executed annually display that the number of people buying Microsoft products reaches the amount of about 3 billion which is a considerable part of the population of planet. Taking into account last experiences and analyzing current financial statements Microsoft is predicted to gain $22 billion through selling copies of software, programs and applications worldwide with the sales over $87 billion as the prospect for 2016. Competitive review As for the main competitors of Microsoft corporation they include the giants in the world of technologies such as Apple, Google, SAP, IBM and Oracle. Due to the considerable diversification of products and services offered by Microsoft, the company is faced with competition in some aspects on the sea of technologies. The Microsoft Corporation set off by concentration primarily on software and still this sector is emphasized despite the fact that Microsoft successfully entered other areas. The biggest corporations specializing on software such as Oracle and German SAP fight with Microsoft for the market of business services. Taking into account the core Microsoft product – Windows – it is to compete with smaller companies, such as Red Hat and Linux operating systems. As for the hardware area here Microso ft is a descent player, as among the products there are tablets which are to compete with similar products of companies such as Apple. In sphere of accessories Microsoft present a variety of products and shows adequate competition with such firms as Logitech. Google is one of the biggest competitors when it comes to search engines and Bing in particular. The Microsoft Corporation is faced with severe competition pressure in almost every single product and operation and this pressure is generated by a number of companies in the field of technology, whether small or large. Channels and Logistics Review The variety of Microsoft corporation products will be distributed through a network of channels and some of them are as follows: Official stores – huge number of official shops scattered around the world Online shops – products can be bought online in a matter of minutes from Microsoft online stores or other distributors Public places – Microsoft products can be used free of charge in some public places such as libraries and universities Donation – products can be received by means of donation program. When talking about distribution channels they imply the Internet, where the user is free, and software (Java), hardware, web applications (Facebook), own services and products like Hotmail, where the customer is locked. SWOT analysis Strengths Brand loyalty Through a number of years Microsoft Corporation has been the major provider of software. Majority of the population grew up using Windows, it is easy and convenient to use. Brand reputation Taking into account the information from Interbrand, Microsoft is on the 5th position among the other brands and it is worth about $60 billion. The reputation of brand is very important as it influences sales rate and market share. Easy to use software. Despite of the monopoly which influences popularity of Microsoft products, OS are of high quality and easy to use. Strong distribution channels Microsoft is cooperating with giants like Lenovo, Dell, Samsung to ensure preinstallation of Windows on all the computers. Also investments were made into Nokia and Dell in order to establish tight connection between the companies. Robust financial performance Microsoft shows successful performance and displayed a significant revenues growth during 2008-2012 period. Its budget has enough resources to be invested into massive R&D programs. Acquisition of Skype Skype is used by more than 300 million people. It is a significant acquisition for Microsoft and a huge benefit in terms of income. Weaknesses Poor acquisitions and investments Microsoft can boast of few successful acquisitions. Many of them such as WebTV were shud down very soon. Dependence on hardware manufacturers Despite of the size of the company Microsoft does not produce hardware of its own. So Microsoft is dependent on manufacturers to a great extent. If cheaper alternative appears, manufactures can shift to it easily. Criticism over security flaws There has been a lot of criticism in terms of weakness against viruses and Windows appears to be less protected than the other OS. Mature PC markets Microsoft entered sector of mobile technologies not so long ago, its OS is still something company depends on as well as the software. Due to the maturity of these market Microsoft will face difficulties in increasing revenues in this area. Slow to innovate Microsoft is provided with massive resources for R&D and a good chance to enter new sectors with innovations but still company fails in this respect. The market of online advertizing is captured by Apple and Google. Opportunities Cloud based services There is a growing demand in cloud-based products, and Microsoft can use the opportunity. Mobile advertising Microsoft mobile OS should be developed and introduced as markets of mobile advertizing are predicted to grow in the next few years. Mobile device industry The same growth can be seen in sphere of tablets and smartphones in the next couple of years, so Microsoft should use this chance and produce these particular products. Growth through acquisitions Microsoft has enough resources to acquire startups in order to bring new skills and technology. Threats Intense competition in software products A certain pressure is always there upon Microsoft and it is challenged to produce OS that is to be successful as the competitors such as Apple or Google do have very strong positions. Changing consumer needs and habits People tend to buy more smart phones rather that ordinary computers and in this sector Microsoft does have a little market share. Open source projects A lot of free source projects were introduced such as Linux OS and they already are descent alternative to products of Microsoft, which are not so cheap. Potential lawsuits. A number of law suits were recorded and lost. Due to the fact Microsoft is operating the same way, more cases are predicted to come. Objectives and Issues Among the main objectives and issues of Microsoft are: Establishing distinguishing position to be to the forefront of company’s competitors; Expending Microsoft services and provide them with new features and functions in order to acquire bigger market share Enhancing services through expanding to new areas in technology Establishing tight feedback with customers through R&D in order to create competitive product – Acquiring new startups, to help new projects and at the same time to gain more market share (Microsoft, 2015). Marketing Strategy The main idea of Microsoft Corporation is implied in its feature – it is product differentiation. The diversity of product portfolio is beneficial if the company is aimed at acquiring big market share and to embrace the targeted segments. This diversity made it possible to attract people of different age, income, experience, social status introducing product transparent, clear and affordable. Primary target for Microsoft is consumer market using software and OS on day-to-day basis (educational, entertainment purposes) (Microsoft, 2015). Secondary target is business market containing corporations and companies different in size, using professional software for safe storing and exchange of data. Microsoft marketing strategy involves connection with schools, universities and professional firms and corporations. There is a number of organizations engaged into cooperation such as: Society of Women Engineers , National Black MBAs, the Gay, the Lesbians and Straight Education Network just to name a few. It is an adequate measure applied in Microsoft to engage children from different grades to interact with technology which creates the opportunity for the students to become possible candidates to apply for a job in Microsoft Corporation (Microsoft, 2015). Positioning Marketing department will focus on maintaining the position of absolute leader within the market which is characterized with severe rivalry. In this respect Microsoft should be more innovative and to be ready to constantly introduce new features, conquering new segments. The company must assess their weak points and underdeveloped sectors and produce the products that are of great demand (R&D is to be executed permanently) and remain competitive. Much attention should be paid to smart phones and appropriate OS. Pricing Strategy The price of Microsoft products must be reduced as compared to the previous years. Due to emerging of free open source projects such as Linux and rough competition with Apple the core target of Microsoft apart from being easy is to be affordable in order to enhance acceptance of the new services and products (Microsoft, 2015). Distribution Strategy Microsoft is to make efforts to establish tight relationships with giants in sphere of hardware manufacturing through investment programs. Nokia is to be used as a successful example. More than that it is high time for Microsoft to start manufacturing hardware by itself and by means of official stores all around the world a massive variety of products would be available (both other manufacturers and native) provided with appropriate OS (Microsoft, 2015). Marketing Communication Strategy In pursuit of reaching every possible audience and attracting attention of huge numbers of people Microsoft should use all existing media to pass its core messages. In this respect serious research programs are to be undertaken on a constant basis which will help to choose the media to be used. Public relations engines are to be activated in order to build trustful connection and to engage consumers into the process more than ever (Microsoft, 2015). Marketing Research Marketing research plays a crucial role for such companies as Microsoft, as it is to assist the process of identifying specific features that are to be introduced and to assess the aspects that can be beneficial for the company. Constant research can be fulfilled by means of focus groups, surveys and questionnaires and tests and results should go through detailed analysis. Afterwards on basis of these outcomes and findings adequate decision making process is to follow (Microsoft, 2015). Marketing Organization Structure Marketing department of Microsoft is headed by Chris Capossela which is the Chief Marketing Officer and Executive Vice President of the company and he is responsible for regulative and supervisory functions, whereas executive functions are fulfilled by professional team which consists of people engaged in: Microsoft Advertising and Online (A&O) Advertising and Consumer Monetization Worldwide Sales Operations General Manager North America for Search Advertising Sales and Service Global Agencies, European Department North American Department Worldwide Marketing Global Search & Programmatic Display Advertising Emerging Markets (Microsoft, 2015). Action Programs Action programs is a set of concrete steps and measures to be taken which are intended for a certain period of time, here this period is limited within 6 months of 2016: January – introducing Microsoft Office 2016, making trial version available to be tested by consumers all over the world. February – choosing and acquiring new startup in sphere of online communication to be used afterwards in online advertising March – introducing new productivity-boosting features into programs of Microsoft Office providing them with new and fresh graphics capabilities April – introducing Microsoft smartphone on the basis of latest OS, provided with a set of new applications intended for work and entertainment and also provided with minimal and ergonomic design. May – make investment into Samsung corporation in order to ensure smartphones and tablets are based on latest OS June – introduce application for smartphones and PCs intended for schools and universities which is to serve as unified database of literature to be used by students of all ages in process of learning Promotion Microsoft is to use every existing way to promote its services and products and sometimes it is the product existence that plays an important role in promotion of the product itself. Due to the fact that Microsoft brand has well-established position within market for a number of years, it might be enough for consumer just to see the ad of the new product and become interested. More than that Microsoft has immense present of interest meaning that the company is interested in giving life to new businesses and can be of a great help for startups, native search engine can be of a great help when a person wants to look up software, it is beneficial in terms of promoting products of Microsoft. The company has been retailing its products to other businesses thus in their turn it is a comprehensive step to make promotion for Microsoft. Cooperation with companies engaged into PC manufacturing that uses Microsoft OS can give a free trials to provide consumer with opportunity to choose whether it is worth to buy this particular product or not. Budgets Next year sales revenue is expected to reach $22 billion with an average price for Windows 10 OS $120 per unit and a variable cost at $80 per unit for 1.6 billion units (Osborne, 2015). Calculations bring the findings that Windows 10 will be profitable after the volume of sales exceeds 2.4 billion. Analysis of Microsoft product assumes wholesale revenue of $120 per unit, variable cost of $80 per unit, and estimated 2016 fixed costs of $90 billion. The calculations are as follows: Controls Microsoft is planned to be provided with all possible control measures in order to fulfill detailed monitoring and supervision the level of customer satisfaction. This process gives a chance to assess the services and product quality and to come up to the problem or issue with the best decision regardless of the situation. In this respect all the data is supposed to be collected every month in terms of sales (information on channels and segment is included) as well the records of losses and expenses. As long as market volatility is provided Microsoft is to start developing plans to ensure changes in the environment, applying new skills and technologies. Microsoft Corporation applies the Customer Satisfaction Index (CSAT) which is an online survey. It is very easy to use, and this facility is created and provided by service of market research which is 3rd party (TNS). The survey is intended to assess the overall level of loyalty and satisfaction of customers (Microsoft, 2015). The index is to indicate Microsoft is operating in right direction considering services and products, their quality as well as means of friendly communication with clients. This is the key to sound relationships between customers and Microsoft business. 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