PRICE: - Microsoft advertises a lot of their products through a lot of different mediums whether it be internet or letters through the post, this could be one of the ways to gain market share for their product as well as attract new competition for their product. Two different prices will need to be decided because there is pricing for the actual console and the monthly cost. After analyzing the questionnaire results the two pricing strategy that should really be taken into account for the pricing of the console would be premium pricing and price skimming. Premium pricing needs to be taken into account because the proposed product is unique and will definitely start a new market and gain market competition due to this the pricing will need to be changed and price skimming will come into play. Reasonable price for premium pricing strategy would be up to £400 because customer out the batch of 30 people interviewed there were some willing to pay it and then when price skimming comes into play prices will be dropped down to £250 and then if there is any need to drop prices even more than we can actually afford to because we have had high priced sales at the product launch. This would allow competition with other companies in the market. When this pricing strategy is used we will try and keep our prices slightly lower than competitors. The product will be sold to video game shops like GAME, GameStation, etc. They will distribute the product nationwide. We will also provide the product directly from our different regional websites. High prices at product launch will definitely work because, as said before it is a unique product. The use of two pricing methods can be backed up because my secondary source 3 says that as previously Microsoft sold the Xbox 360 at around $300 which was dropped or cut by a $100 and this is something that can be even further backed up as source 5 shows that the Xbox 360 even though it was late, but still managed to capture potential market share and has stayed the second most selling consoles for over 1 and a half years. This is quite an achievement as Microsoft first console which did not do well in the industry, but the Xbox 360 has managed to keep customers and compete with the Sony PS2/3. Sony is lead console developers and has always had a massive customer base. In addition to this the monthly fee charged for the online services of the console will be around £45, this can be can be backed up by my primary research, which consisted of questionnaires. Firstly the mean average that people would be willing to be pay for monthly charge was £48; this is only an increase of £2 which in reality is nothing, but to keep the maths and calculation easy monthly cost will be set at £45. This is £540 per year. I think the reason people are willing to pay this much is that it would cover the gaming and T.V cost all in one, rather than them paying separately for the TV connection, but also the games. Question 5 asked people how much they spent on average on games and majority answered £30, but then Question 8 asked how they would be willing to pay for monthly cost and the majority answered £55, this is an jump £25. The monthly cost is for the digital service provided of downloading game and videos to watch. The digital downloading seems to be quite popular in the U.S. as $14.5bn was spent by consumers, but it covered other three areas, even if the figure is divided into 4 equal share it still comes out to be around $3.6bn. This can be seen from my secondary research source 6. Which is from Microsoft itself therefore the figures have to be genuine as they are only for the Xbox. As digital downloading gets more and more popular physical media will start to phase out and this will result in more digital downloading and higher price could be charged in theory as the demand will be there, but too high price will mean that demand would die out.
PROMOTION: - Microsoft is a international business which is well known and staff force of more than 100,000 and Microsoft’s will deeply look at offering big promotions simply because we can afford it. Microsoft can offer ‘Special Offers’ to their usual customers by giving them some sort of a voucher that gives them ‘10% off next purchase’ but this would clearly depend on how much they are interested and how much do they usually buy because Microsoft cannot offer too much discount as they will lose out on potential revenue
As Microsoft has a massive software base and huge amount of advertising on the internet, bill posters, magazines, T.V. etc… I would come to think leaflets; poster and so on will not create a lot of customers so it will really be pointless to use these types of promotions. Not a lot will actually need to put in to promote Microsoft as a brand because it is very well known amongst people, due to this the new proposed product will not need that much concentration on promotion. This is simply due to strong brand name. We will also use web-based advertising because we have used it before for promoting our products. This is because a research by Neilsen has shown that over 845 million people have shopped during 2008. I can backup my reasons for promoting at the selected palaces from my research. The primary research questionnaire shows this. Firstly, question five asked people where would they expect the console to be advertised. Where would they expect the console to be advertised, the choice were: in shops, T.V. commercials, radio commercials, online, papers, specialist magazines, and general magazines. E everyone replied “all of the above.” This goes to show that advertisements can be placed anywhere as people expect them everywhere. It’s in Microsoft’s nature to advertise on T.V. but majority of advertisements on the internet. Also I asked another question. The fourth question that was asked is where would they see the product, this means that where could they possibly view the product on demo or test it out, they were really only given two choices either in shop windows, on demo inside the shops or both. Again with this question everyone I asked ticked “both places mentioned above”. This again shows that the product could be promoted anywhere really.
PLACE: - As mentioned before Microsoft is a well known company and they are an international company which provides other stores with the products at a price which the stores than distribute. This is a very good thing because customers can get Microsoft products very easily. Microsoft product can usually be found in stores like PCWorld, Argos, etc. Our products are not only found in stores but actually online as well. In effect Microsoft products made a strong name for the company when it first started and it kept going on with better products being released and initially getting a big market share and expanding business outside of Mexico, outside of the continent and going worldwide. The console will be placed in shop windows and on top of shelves. The products will also be sold online such as the Microsoft Shop, Amazon, etc. The membership will can be bought online as well as retailers such as HMV, GameStation, Game, etc. question 3, which asked where they would expect the consoles to be sold. The choices were online, in retailer shops, in video game shops, at supermarkets or all the places mentioned. Everyone ticked all of the place mentioned, this goes to show that it is possible to sell the console everywhere, because this is what people expected.
