Microsoft’s pricing strategies

Microsoft’s pricing strategies

Microsoft uses “penetration pricing” in order to boost sales and get consumers talking about the product. The products often start at a high price and continue to decrease until the company finds the best price the for the market.

For example

The Xbox One was priced higher than the PS4 when it was first released ($499 compared to $399).

The Microsoft also uses different Product Mix Pricing Strategies like Bundle pricing, psychological pricing and Discount pricing etc. in order to increase its market shares.

·         Bundle pricing

                      Microsoft Corporation bundles the various software applications.

For example:

They bundled Access and PowerPoint with Word and Excel. Also, they bundled their Internet browser with their market-leading operating system etc.

·         Psychological pricing

                   In psychological pricing, Microsoft uses prices cues, that appear to be significantly more affordable, such as $__.999 and $__.995 etc. instead of rounding it off.

For example:

The Microsoft Office 365 Small Business Premium is available in Rs 16,999 and the Microsoft Office Home & Student 2011 for MAC is in Rs 16,674 etc.

 

·         Discounts pricing

                    There are a number of discount programs available to educators, staff and students who are looking to purchase Microsoft products.

For example:

If you are employed by a school, university, or organization that is contracted with Microsoft, you are eligible to receive a 30% discount on Microsoft Office 365 Home or Personal etc.                    

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