Microsofts Windows 8 Big Secret - Case Study Example

Student: Tutor: Course: Semester: Date: Table of Contents 1. Introduction ……………………………………..………………3 2. The Target Market ………………..…………………………….3 3. The Marketing Mix a. Product ………………………………………………….5 b. Promotion ………………………………….…………...7 c. Price ………….………..……………………………....9 d. Place ………………………………….…….…...……...11 4. Competitive Advantages .............................................................12 5. The success of the firm …………………………………….…...14 6. Bibliography… …………………………….................................15 Introduction The product I have chosen is from the most famous computer technology firm; Microsoft. I have chosen a recently released operating system by the company; windows 8. The product has received mixed reactions world over and even in Australia. It is very different in looks and functionality as compared to its predecessor; windows &. As such consumers are yet to adapt to the new operating system and upgrade from their already existing versions of windows. The product was released in October 2012. By the end of the year 2012 Microsoft had sold more than 40 millions licenses of the software around the world. Although this was smaller than the sales of Vista operating system from the same company, The Company noted it was a good start for a product that they expected mixed reactions from the market (Whitaker, 2013). In this paper I am going to analyze the target market of this product in the Australian market and analyze the 4ps relating to the product and see how they target the market for the product. Finally, I will analyze the competitive advantage of the product and its success in the market. Target market Windows 8 is operating system software which is in the family of Microsoft windows. The software was re3leased by Microsoft in October 2012 for home and office use. Widows 8 can be used with both desktops, laptops, tablets and home theatre PCs. Windows 8 is a complete shift from its predecessor windows eight. Instead of the old desktop, the new operating system from Microsoft features a modern user interface which has a series of tiles that users can swipe to access documents applications and software (Bott, 2013). Windows 8 is part of Microsoft’s ambition of shifting from the old desktop experience to the new feature of modern user interface (UI). The company is targeting the large market segment using tablets and other handheld devices and slowly shifting from the PCs. Business usually move slowly to new operating system. The target market for windows eight remains to be the early adopters among young population in the Australian market and the world over. The market in Australia would be segment into the following profile: Target market profile Demographic Age group: the product is likely to be attractive to young Australians aged between 18 and 40, these consists of the early adopters who are willing to spend more time understanding the new operating system which many people find very complicated. According to Slater & Sengupta (2009) this group is already well acquainted with using some hand held devices which utilize the Smartphone technology such as android operating system. Gender: The product is appealing to all gender groups male or female since there are no specific aspects that are descriptive of preferences by either gender. Most of the Australians have adopted technology in their daily lives so it is no longer a matter of preference for genders but rather a necessity.this is same for othe developed countries (Slater & Sengupta, 2009). Geographic characteristics Windows 8 is being distributed by Microsoft worldwide. Currently the new operating system has not been successful in gaining considerable market share due to the new features that people are yet to acquaint themselves with. The Australian market for windows is currently standing at slightly above 2% as compared to previous versions of windows like vista which has more than 50% market shares (Bill, 2013). Behavioral characteristics Windows 8 is being preferred by users currently using more handheld devices and cloud computing services. The expectations are faster browsing speed, quick connectivity to wireless networks and ease of roaming the menu. Windows 8 is designed to offer just. The company expects to woo the business market segment gradually through terminating support for its XP by 2014 and Vista by 2020 (Tung, 2013). The business segment are late adopters and will probably wait to see the efficiency and benefits of the new system including security features which are far more advanced tat in previous operating systems from windows. Marketing mix The product The product I have chosen to study is an operating system produced by Microsoft for use on personal and business computers. The new operating system features new generational computing features which are more focused on improving experience on handheld devices such as tablets and smart phones. Windows 8 features a new touch user interface that was not there in the previous versions of windows. The product has a new start screen that is easy to navigate with grid to display all the programs and documents. Windows 8 is helping windows users to adapt to the changing trend in computing whereby PCs are losing taste with the market. Hand held devices such as tablets are taking the computing world by storm. It explains the reasons why Windows 8 is designed more to suit this market than the traditional PC market (Arthur, 2012). Currently the product remains a specialty product since one can still use their computers on other operating systems and still achieve a lot of which is being achieved by windows 8. However the new operating system features more advanced security aspects such as inbuilt virus protection which is not there in Vista and Windows 7. Most software and computer shops in Australia have Windows 8 in their shelves but are recording slow movement of the product. The price at an average of $147 is not very expensive for the value the product delivers (Keizer, 2013). The core product of windows 8 is an Operating Software with the aim of helping people use computer resources efficiently and effectively such as browsing and other functions of Microsoft office and third party software applications. A customer has the choice of a full version edition which can be installed in a PC without any operating software at all. One can also choose to upgrade an already existing windows operating system such as vista or windows 7. The augmented product for windows 8 is its ability to access cloud computing resources and several applications from windows store (Bott, 2013). Windows 8 is at its first stage in its lifecycle. This means that the company is actively advertising the benefits of the new product in the Australia market through print and website. The pricing for the first six months of the introduction in the Australia market was a low promotional price intended to attract first time buyers of the operating system. The product was going for $ 39 up until January 2013. The distribution of the product by Microsoft is still not at a very high level in comparison with other operating systems. This can be explained by the mixed reception it has received in Australia and world over (Keizer, 2013). Promotion Windows 8 is a new product in the market, as such the company has engaged in rigorous advertisement to popularize the product to the masses. Windows 8 promotions have largely been done using windows applications such as games, news, weather, Xbox music and Bing search engine. Windows has a very extensive network which has been built over the years when windows has been in the market through brands such as XP and windows 7. This network has enabled windows to incur limited expenses in its advertising. Windows uses its gaming console Xbox to advertise it new windows eight among several other products that are not related to the company such as cars and travel destinations (Williams, 2012). Concentrating much of its advertisement on its apps and resources to advertise windows 8 is a very cost effective method and not only about costs it will reach so many people wince windows already has a wide network of gadgets and software that are in distribution the world over. The applications are usually used on a day to day basis by the target market making sense of why the company is utilizing the promotion channel to advertise the product (Beyazitoglu, 2010). The firm also utilizes its website to advertise its products including the new windows 8. This is a very effective communication considering that many people visit the website on a regular basis. The company also provides support including updating of software through its website. From this website you will get solutions after viewing some answers to the frequently asked questions. The website is used for multiple purposes for support services and also for communication. This adds value to the product in the sense that it is an augmented product in addition to the actual product that one gets after purchasing the product itself. Windows also uses TV ads to raise awareness of the new product in order to improve the sales figures. The TV ads for windows RT tablets feature dancers clicking open and closed the touch cover with windows RT tablets in time with music. Basically the TV campaign is meant to raise awareness and user education about the new operating system that is a bit confusing to many people (Tung, 2013). Microsoft has used promotional strategies to introduce Windows 8 to the masses. In the Australian market, the [product for the first six months was going for $39 introductory price in order to take in many first adopters of the product. The company is engaging on a sustained campaign in hardware promotions to its clients and user education. This is in an effort to bring reluctant users on board as the company plans to face out its windows XP and other desktop based operating systems. Upgrading to the new operating system will mean more benefits for the company apart from the profits realized from windows 8 sales. The company is going to use the apps in windows 8 for advertisements and also for other chargeable services such as music stores, apps stores and cloud computing. Basically the campaign has been to raise awareness of the new brand and not specifically to boasts ales or maintain a market share considering it is a new product in the market (Williams, 2012). The stage of the product in the product life cycle means the company has to engage in sustained promotional and advertising campaign to ensure it takes the expected momentum that will enable the company release later upgrades of the operating system as scheduled. Slater & Sengupta (2009) contend that if a product does not gain the right momentum at the introduction stage, then the uptake of the new product will stagnate and his may force the company to remove the product from the market altogether. Price Windows 8 is available for consumers through various options. One can get the product through vendors. A full package in Australia is going for an average of $147 however you can also upgrade your existing windows operating system to Windows 8 at an average of $dollars in many shops. At my.shopping.com.au, the product is available at the following prices (www.my.shopping.com.au); Microsoft windows 8 pro 64 bit (full version) - OEM is going for $143 exclusive of shipping charges. Microsoft Windows 8 pro 32-bit (full version)-OEM is going for $143 exclusive of shipping charges. Microsoft Windows 8 professional – upgrade DVD Y is going for $264 inclusive of shipping. The initial price was used strategically to attract new customers into buying the new windows product. The current price is not high as such considering the product is designed majorly to be taken up by technology enthusiast who exposed to other brands which perform similar features like those with Windows 8. Windows 8 is aligning itself to face competition from android based gadgets like Samsung tablet and Ipads which run on iOS. It is therefore logical that the company has adopted a competitive pricing strategy which take is almost a hybrid of cost leadership in the operating software industry and at the same time competitive considering the stiff competition n the market and the mixed reception the product is likely to experience in the market (Bott, 2013,). Windows apps are available at the windows online store for downloading by the user of windows 8. The apps are either for free or to be purchased at the store or even at Amazon app store (Bott, 2013). The apps are priced fairly to attract new users into buying the new operating system. This may be expensive in the near future as demand for apps increase as users take up the new system. In the long run it will be cheap as more developers join the windows apps team. The price of windows is constant if you are buying from the windows Australia authorized distributors however if you go other vendors you might find a small variation in price depending on the pricing strategies of the vendors. The product has only been in the market for a short time as such the price has not changed considerably at least for now. The company was running a promotional introductory price of $ 39 for the first four months to attract new users however the price is set to change as the company starts releasing upgrades to the new system gradually. This is a god strategy to enter the market considering the product is at its introductory stage in its product life cycle where it has to attract new users through price based strategy and gradually change later as consumers get used to the benefits of the brand and are willing to pay a god price for it (Moses, 2012). The price is in consistent with its promotional strategy f raising awareness to user whereby the product has to be readily available at affordable prices in order for the promotional efforts to gain fruit. The product attributes are also very sophisticated and the price set communicates the expectations the customers should have on the benefits of the new product. It is also in consistent with how the product is being distributed. The product is targeted for the mass market and therefore should have a competitive affordable price to beat competition and also reach more customers as possible through good pricing and distribution networks which are independent vendors who to some extent would want to stock something that is moving in order not to tie up their capital (Smith & Lange, 2010). Place The firm is almost reliant on independent third party vendors to distribute windows 8. The company provides support to many of its vendors and their clients through their regional and country operations centers where vendors may report any problem with the product or forward customers complains. The channel is effective in cutting costs in promotion and logistics costs such as renting valuable spaces. It also utilizes already existing channels and relationships with retailers and distributors. For big companies however, Microsoft approaches and sells the products to the customers and offer support throughout the use of the product as agreed upon between them and the customer. This distribution channels not only benefits the company in cutting costs but also benefits the customers as they can access the products at considerably lower price at their usual retailers and also get their [product problems fixed by people they are already used to. It should be appreciated that the distribution channel takes advantage of a wide; network of retailers who are established in many areas across the Australia and around the world. This means many customers are reached within a short time than it would have been if the company was to distribute the product themselves. According to Ferell & Hartline (2010) such a distribution channel is very effective for the young stage of the product since it takes advantage of already established distributors who have technicians to explain any complicated features with windows 8. The technicians can also help the customers with installing the new system and going about the entirely different menu. Some stores also stock other computer accessories and will therefore provide the customers with an opportunity to buy the windows 8 operating system as they purchase other computer accessories or PCs for that matter which they will need an accompanying operating system to use in their new PCs. Competitive advantage Microsoft’s window 8 has a very huge competitive advantage over several players in the industry. For one, the product is backed by a company with massive financial resources to fund promotional and distribution efforts of the product to ensure it reaches as many consumers as possible. The financial backing will also work in competing in terms of lowering introductory price in many markets to beat competition and establish the brand. Secondly, Microsoft takes advantage of already existing distribution channels and relationships, meaning it will be easy for the product to reach the target markets in Australia through vendors and retailers all across Australia (Beyazitoglu, 2010, p. 123). Thirdly there is already a very huge market in Australia and the world that have used previous versions of windows and approved of them. This market is very likely to upgrade to the new version of windows with expectations of a, much better experience from their popular company which they have trusted to release quality products over the years. Simply said, Windows is an established brand in operating system software and this is a big competitive advantage over other players in the industry. According to Net Market Share website, Windows operating systems are currently enjoying more than 88 % market share (www.netmarketshare.com). This confirms the massive competitive advantage the product enjoys. Graph 1, Source: (netmaketshare.com) The product is developed by a team of highly experienced programmers who have come up with a product which will deliver increased surfing speed and advanced security features through inbuilt antivirus capabilities. This means the product will be very popular with handheld devices users giving it a competitive advantage over other similar products in the market. It should also be noted that the product is mostly sold together with other windows gadgets and computers increasing its popularity and uptake by consumers this is as a result of related diversification by the company producing the product (Bott, 2013). The firm’s success I believe the firm has succeeded in attracting customers to the product through a well carried out campaign to attract the consumers. It should be noted though that the uptake of the product in the Australian market has somehow been sluggish due to the fact that it is offering a new experience to desktop users who had been used to the traditional desktop menu. Considering the fact that change is not welcomed very well. The firm should dedicate more time and promotional effort to ensure people get used fast with the product and are aware of its benefits and thus boost sales which are currently growing at a very small percentage. The price is fair to the average Australian computer accessories buyer as it considers the competition being delivered by other similar products like android. The distribution is effective in reaching the consumers conveniently and I believe it is the best cost effective distribution strategy that The Company could adopt. However the strategy puts the firm a distance from the customer and may thus impact negatively on sales when customers feel there is no supports whenever they run into problems with the product. According to (Moses, 2012.) the product features are excellent considering the ambitious intent of migrating to a different operating system which is much better however more awareness and customer education should be done. Bibliography Arthur, C., 2012. Review: Windows 8. Sidney Morning Herald, [online] 29 October. Available at: http://www.smh.com.au/digital-life/computers/review-windows-8-20121029-28e98.html [Accessed 3 May 2013] Beyazitoglu, F., 2010. Business Marketing- The Case of Microsoft: GRIN verlag Bill, R., 2013. PC sales plunge as Windows 8 flops. Sidney Morning Herald, [online] 11 April. Available at: http://www.smh.com.au/digital-life/computers/pc-sales-plunge-as-windows-8-flops-20130411-2hmlp.html [Accessed 3 May 2013] Bott, E., 2013. Microsoft’s Windows 8 approach: Bold, arrogant or both? CBS interactive [online] 12 april. Available at: http://www.zdnet.com/microsofts-windows-8-approach-bold-arrogant-or-both-7000013905/ [Accessed 3 May 2013] Ferell.O., Hartline.D., 2010. Marketing Strategy: Cengage Learning. Keizer, G., 2013. Windows’ usage uptake falls further behind vista’s. Computer world [online] 1 February. Available at: http://www.computerworld.com/s/article/9236436/Windows_8_s_usage_uptake_falls_further_behind_Vista_s [accessed 3 May 2013] Moses, A., 2012. Windows 8 sales flounder as critics pan clumsy interface. [online] 26 November. Available at: http://www.theage.com.au/digital-life/computers/windows-8-sales-flounder-as-critics-pan-clumsy-interface-20121126-2a2d0.html [accessed 3 May 2013] Netmarketshare., 2013. Operating system market share. [Online] 2 February. Available at: http://www.netmarketshare.com/operating-system-market-share.aspx?qprid=10&qpcustomd 0 [accessed 3 May 2013] Slater.F., Sengupta.S., 2009. Marketing of high-technology products and innovations: Jakki mohr Smith, T., & Lange, F., 2010. Marketing: A Brand Narrative Approach: John Wiley & Sons Tung, L., 2013. From zero to three-million hero? Windows 8 storms the tablet charts to take 7 percent of slate. CBS interactive [online] 25 April. Available at: http://www.zdnet.com/from-zero-to-three-million-hero-windows-storms-the-tablet-charts-to-take-7-percent-of-slates-7000014507/ [accessed 3 May 2013] Whitaker, Z., 2013. Windows 8 edges to 3.84 percent share: still fails to spark. CBS interactive [online] 1 May. Available at: http://www.zdnet.com/windows-8-edges-to-3-84-percent-share-still-fails-to-spark-7000014746/ [Accessed 3 May 2013] Williams, O., 2012. Microsoft’s Windows 8 big secret? It’s actually about advertising. [online] 24 November. Available at: file:///C:/Documents%20and%20Settings/Administrator/Desktop/Microsoft%E2%80%99s%20big%20Windows%208%20secret%20%20It%E2%80%99s%20actually%20about%20advertising.%20-%20The%20Next%20Web.htm [Accessed 3 May 2013] Read More