Microsoft Segmentation, Targeting and Positioning
Microsoft segmentation, targeting and positioning can be explained as a set of activities that constitute the core of marketing efforts for the multinational technology company. Segmentation involves dividing population into groups on the basis of certain characteristics. Businesses focus on certain customer segments and position their products and services to satisfy needs and wants of these particular segments.
Microsoft uses the following types of positioning:
a) Multi-segment positioning. The company targets more than one customer segments at the same time with different product and service packages. For example, Dynamics 365, a software for building and supporting customer relationships starts with USD 115/month Customer Engagement Plan for cost-conscious customer segment. Unified Operations Plan starting from USD 190/month, on the other hand is developed for a different customer segment that do not mind to pay extra for additional set of functions and features within Dynamics 365.
b) Standby positioning. Standby positioning technique involves the development of products and services that can await changes in the market to find demand in the future. When Microsoft announced its ‘cloud-first, mobile-first’ business strategy in 2014, cloud data storage was a new segment. CEO Satya Nadella saw a potential in cloud business, focused on the development of cloud services using standby positioning technique. The demand for cloud consistently increased and in Q2, 2018 alone, Microsoft commercial cloud revenues reached USD 6.9 billion, a growth of 53% compared to the previous period.[1]
The following table illustrates Microsoft segmentation, targeting and positioning:
| Type of segmentation | Segmentation criteria | Microsoft target customer segment
|
|
Geographic |
Region | Global marketplace |
| Density | Urban and rural | |
|
Demographic |
Age | 16 and older |
| Gender | Males & Females | |
| Life-cycle stage | Bachelor Stage young, single people not living at home
Newly Married Couples young, no children Full Nest I youngest child under six Full Nest II youngest child six or over |
|
| Occupation | Students, employees, professionals | |
|
Behavioral |
Degree of loyalty | Hard core loyals
Soft core loyals |
| Benefits sought | Efficiency, accuracy, speed | |
| Personality | Deatermined and ambitious | |
| User status | non-users, potential users, first-time users, regular users and ex-users | |
|
Psychographic |
Social class | Lower class, working class, middle class and upper class |
| Lifestyle[2] | Mainstreamer
Aspirer Succeeder Explorer Reformer |
Microsoft segmentation, targeting and positioning
Microsoft Corporation Report contains a full analysis of Microsoft segmentation, targeting and positioning 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] Evans, B. (2018) “’Legacy’ Tech Vendors Rock The Cloud As Microsoft, IBM And SAP Boom In Q2” Forbes, Available at: https://www.forbes.com/sites/bobevans1/2018/07/20/legacy-tech-vendors-rock-the-cloud-as-microsoft-ibm-and-sap-boom-in-q2/#3c8e30e946fa
[2]According to Cross Cultural Consumer Characterization by Young & Rubican