Introduction of Microsoft Band 2 into the Market - Case Study Example

SЕ АNАLYSIS (Course Instructor) (University Affiliation) (Student’s Name) Date Introduction Marketing of a new product or a service is not what used to be a few decades ago. During those days, one needed to hire a public relations agency to draft a press statement and organize for a tour of the press. Before the date of the launch, the marketing manager had the responsibility of meeting all the reporters from the big media stations and other crucial media outlets (Sethi, 2000). On the day of the launch, one would just sit back and watch as the events unfold. The reporters would spend days on a fact finding mission, taking to the prospective consumers before they could come up with their stories concerning the product being introduced to the market. In order for the organization to make a new product, one that the consumers cannot live without, it needs to serve the purpose for which it was intended. Defining the purpose will depend on the functionality of the product itself. Once the product has been identified, one will have to figure out the precise role that the product will play in the life of the consumer, and share the information with the members of the public (Sethi, 2000). The main purpose of this paper is to focus on the introduction of Microsoft band 2 into the market. Microsoft band 2 is a tiny computing gadget that can be worn by the consumer on the wrist that was introduced to the market in October of 2015 (Microsoft, 2016). Also termed as the band, the device offers a number of features such as the ability to access text messaging, incoming calls to the Smartphone, notifications on voicemails, new tweets and Facebook notifications. The band is also a significant component of the Microsoft health services where the device is used to monitor the individual’s heart beat, sun exposure, health and fitness information and an application in smart phones used for Microsoft health insights (Microsoft, 2016). The paper will also provide an insight of the new product marketing strategy with the use of marketing theories such as the 7ps to integrate the product elements, the marketing strategy as well as the Application of the theories in the success of the new product. The essay will also focus on the meaning of a value proposition and compare the theoretical aspects of value proposition with Microsoft band 2 value propositions. It will also focus on the role of the marketing theory in the market segmentation as well as analyzing the target market. Market Segmentation Marketing teams have realized that the target market of any given product is not the same. The customers differ in terms of attitudes, needs, demographics, social ties and their location. Most of the markets are composed of distinct individual consumers segments as well as submarkets (Weinstein, 2000). Segmentation and the target market make it possible for the marketer to deliver the new product to the target audience tastes and preferences. It is very important to set out the values and needs of the target market in each segment for the company to promote the new product appropriately (Weinstein, 2000). By adopting the segmentation process effectively, the marketing team will easily achieve the required knowledge that will assist in designing a persuasive marketing strategy. Market segmentation can be defined as the process of dividing a market into different groups of consumers who have diverse needs, attributes and who might need distinct products or marketing mix. By segmenting the market, the marketing team will be able to have a clear understanding of the target consumers and make the marketing of the new product more effective (Weinstein, 2000). This is because carrying out an analysis that puts the consumers first, the marketing team and by extension the organization will get a customer base that is more satisfied and will therefore have an advantage over their competitors. A number of variables exist that the marketing team of Microsoft band 2 uses to define the market segments to come up with a profile of who is believed to be the target market of the new product. The variables include geographic, demographic, behavioral and psychographic segmentation. These variables are discussed in the following paragraphs by comparing the marketing theory and the application of these theories in the marketing of a new product (Weinstein, 2000). a) Demographic segmentation In this variable, the prospective consumers are identified using features such as age, race, gender, class, religion, marital status, level of education and the size of the family. The marketing team of Microsoft band 2 has identified the attributes of the demographic target market that has a relationship with the need, interest as well as the ability of the consumer to buy the band. A demographic for Microsoft band 2 devices includes factors such as age (Dibb et al, 2008). The young population, especially, is very enthusiastic about technological developments. For them, having a gadget on once wrist that has applications whose functionality include monitoring of your health would be very interesting to them (Weinstein, 2000). As a marketing strategy, the marketing team has segmented the target market in accordance to their ages then customizes the wrist bands to match what each of the groups would like to see in the product (Dibb et al, 2008). In their advertising messages, the Microsoft team has been able to explain to the customer base the real advantage of having the gadget with them and the situations under which the device can best serve their needs (Microsoft, 2016). b) Geographic factors The variable segments the consumers into groups based on their geographical areas such as their regions, states, nationalities counties, cities as well as their localities. Microsoft band 2 marketing team can target one or more of the geographical areas and must be informed of the fact that information son geographical segments can always shift from time to time due to a shift in the population. It is crucial for Microsoft band 2 to carry out geographical segmentation since the purchasing strategy of the customer is determined by where they work or live (Dibb et al, 2008). Most of Microsoft businesses are located in the United States of America. In their previous financial reports, 44% of the company’s revenue came from the United States of America (Dibb et al, 2008). This means that the company is doing well in America compared to other countries. It would therefore be prudent that in their segmentation, the marketing team has focused on the United States consumers since the population is very fast in adopting the technology. C) Psychographic segmentation The variable places individuals according to their values, lifestyles, attitudes, opinions and their interests. The variables are derived from two types of consumers, the lifestyle profiles and the personality profiles. These factors provide the marketing team with an access to information that will enhance an understanding of the behavior of the current customer base as well as the potential clients (Dibb et al, 2008). Microsoft band 2 marketing team has constructed a profile that has made it easier to develop effective marketing strategies meant to penetrate the target market. The organization sought information on consumer profiles that include the prospective customer’s loyalty, lifestyle and their spending habits (Dibb et al, 2008). The marketing team then uses this information to tailor their advertising campaigns to present a message that matches that attributes the consumers are looking for in the new product. The team found out a personality trait where a customer will always want to have what their peers have. It therefore capitalized on this attribute to make sure that their sales are significantly improved (Microsoft, 2016). c) Behavioral segmentation Marketing theory regards behavioral segmentation as the grouping of clients based on their attitudes towards the use of a product. Many marketing scholars believe that the variables in these segments are the best foundations for coming up with a market segment. The starting points include benefits, occasions, the status of the user, loyalty and their attitudes (Dibb et al, 2008). Upon realizing that goods and services are bought for a reason, they determined that the reasons were varied on the brand, cost loyalty as well as the frequency in which they use the products as well as the occasion which in most cases is during exercises. This way, the marketing team of the company understood the buying pattern of their customers and rushed to meet their demands in a timely manner (Microsoft, 2016). The new Product’s Core Value proposition and ‘positioning’ in the market A number of definitions exist on the value proposition. It however, scales down to informing people what the organization offers, the key features beneficial to the consumer and why the product and the organization are the best competitive options. The marketing team needs to think about what the target market needs to be informed (Osterwalder et al, 2014). This helps in their identification and the creation of a detailed profile concerning consumer needs, motivation, objectives and the purchasing behavior. The development of a strong value proposition makes it easier to interact with the target customers and at the same time establishing a foundation for building the company’s sales and marketing activities (Osterwalder et al, 2014). Microsoft band 2 value proposition describes the device as the most attractive, low cost and long lasting fitness tracker in the market. It is regarded as a good an advanced wrist band to be worn, fits on the shirt scuff and can also be used as a dumb watch (Dibb et al, 2008). The device has been positioned an s a portable gadget that has made it easy for one to monitor what is going on in their body systems. The concept provides employees with a standard way of talking about what they are offering (Microsoft, 2016). Analysis of the chosen NP’s, Product element of the marketing mix The product The marketing team needs to have a consideration of how to position their products, exploitation of the brand, exploiting the resources of the company, as well as configuring the product mix so that each of the products can complement one another. Microsoft as a company is a brand with diversified portfolios and has not in any way relied on a single product (Klein, 2001). The key to the success of Microsoft band 2 has been the provision of a variety of functionalities to the market, to fulfill the aspirations of the organization and at the same time get over the restrictions in the market. The brand’s expansion is based on an extensive research and development and the study the emerging needs of the consumers and identifying their needs before their existence which creates a greater level of loyalty among the device’s consumers (Klein, 2001). The price From the perspective of a marketer, price is the amount of money paid for a product. An efficient pricing is a price that is so close to the maximum amount of money that a client is willing and able to pay. It is termed as a price that shifts the excesses from the clients to the consumer. The pricing techniques of most organizations vary in accordance with a number of factors, chief among them being the level of competition. The worst thing to happen to an organization is an engagement in price wars with its competitors (Osterwalder et al, 2014). It is important that the organization adopt a pricing strategy that will not compromise its profitability and at the same time make sure that the organization has a sizeable market share. A good price according to studies is one where the price floors and the price ceilings are balanced and at the same time take into account the perception of the consumer. Microsoft band 2 adopted a pricing approach where prices are not so low so as to deny the brand its value and also not overpriced to an extent of negatively affecting the brand’s competitiveness. The organization also has a premium pricing mechanism because of the popularity of Microsoft products and also the low amount of competition that the products currently face in the market (Klein, 2001). The place element Place has to do with techniques of transportation, storage and availing the products to the customers. It involves getting the product to the right place and at the right time in the distribution system. The choice of the distribution mechanism depends on a number of factors such as the cost and the distance between the source and the destination (Osterwalder et al, 2014). Microsoft company has over time had a number of distribution channels depending on the nature of the product. Microsoft band 2 has stamped its presence online and many of the products are bought on online platforms. The company and by extension the brand has made use of e-commerce where individuals across the world can make an order and pay electronically and the products are shipped to whichever country they reside (Klein, 2001). The promotion Promotion is the act of communicating with the clients. The act has to do with providing the clients with information that will help them in making decisions regarding their purchases. Promotion has been regarded as one of the most effective ways of communicating with the clients. The promotional costs usually constitute a very huge portion of the product’s cost of production (Klein, 2001). A successful promotion campaign however increases sales so that the costs are evenly distributed over huge amounts of output. There exist a number of products that are too popular for them to be promoted. Microsoft band 2 has a number of promotional activities which the organization uses to promote its premium products that have a large market share. For the Microsoft band 2, Microsoft has to a large extent used the digital marketing platforms. The organization has an updated website coupled with the use of the social media platforms where they can always tell the target market the products being offered by the organization. Generally speaking, the promotion of Microsoft products has always pushed for the use of its products (Osterwalder et al, 2014). Conclusion The introduction of a new product into the market needs a lot of advanced marketing techniques for the brand to penetrate the market. From the text above, one of the major mechanisms used by Microsoft band 2 is market segmentation. This is defined as the process of dividing a market into different groups of consumers who have diverse needs, attributes and who might need distinct products or marketing mix. By segmenting the market, the marketing team of Microsoft band 2 devices will be able to have a clear understanding of the target consumers and make the marketing of the new product more effective. Microsoft band 2 value propositions give a description of the device as an attractive, low cost and long lasting fitness tracker in the market. It is regarded as a good an advanced wrist band to be worn, fits on the shirt scuff and can also be used as a dumb watch (Klein, 2001). Microsoft band 2 marketing team has made use of the marketing mix of product, price, placement and promotion to develop a strategy to penetrate the market. The organization has embraced the use of the marketing mix to set up a marketing technique that has made it possible for the organization to sell its products at a premium price without compromising the value of the products and at the same time retaining its market share (Osterwalder et al, 2014). Bibliography Dibb, L.S., Dibb, S and Simkin, L 2008, Market segmentation success: Making it happen! 13th edn., New York, Taylor & Francis. Klein, B 2001, ‘The Microsoft case: What can a dominant firm do to defend its market position?’, Journal of Economic Perspectives, vol. 15, no. 2, pp. 45–62. doi: 10.1257/jep.15.2.45. Microsoft 2016, Microsoft band. Available at: https://www.microsoft.com/microsoft-band/en-gb (Accessed: 13 September 2016). Osterwalder, A., Pigneur, Y and Papadakos, P 2014, Value proposition design: How to create products and services customers want (Strategyzer), United States, John Wiley & Sons. Sethi, R 2000, ‘New product quality and product development teams’, Journal of Marketing, vol. 64, no. 2, pp. 1–14. doi: 10.1509/jmkg.64.2.1.17999. Weinstein, A 2000, ‘Segmentation and relationship marketing’, Journal of Segmentation in Marketing, vol. 3, no. 2, pp. 1–3. doi: 10.1300/j142v03n02_01. Read More