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Marketing In Action “Hot News”

Marketing In Action “Hot News”. Penetration Pricing. Definition – a new product pricing approach designed to achieve high sales volumes

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Marketing In Action “Hot News”

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  1. Marketing In Action “Hot News”

  2. Penetration Pricing • Definition – a new product pricing approach designed to achieve high sales volumes • Goal – to achieve high growth during initial stages of the market so as to own a dominant share when market matures; long term profitability is achieved through market dominance • Environment (External/Internal) • large, price sensitive market • no viable price insensitive market segments • strong competition • potential scale economies in production and marketing • sufficient organization resources

  3. Case Study – Microsoft Windows 8 • Quick Facts • Number of Users in 2012 = + 400 Million Users • Share of Market in 2012 = 92% 90% US Market Share 170+ million users 400+ Million users 116+ million users 49% 25+ million users 26% 125 thousand users US Retail Price $100 Time 1983 1985 1987 1990 1995 1998 2001 2000 2007 2009 2012 Windows Windows 1.0 Windows 2.0 Windows 3.0 Windows 95 Windows 98 Windows XP Windows 2000 Windows Vista Windows 7 Windows 8 Windows 1.0

  4. Microsoft Windows 8 Steve Ballmer Announces Windows 8 October 25, 2012 • Quick Facts • a case of planned obsolescence (development started before the release of Windows 7 in 2009) • provides increased functionality for mobile devices to compete against operating systems for Androids and Apple • incorporates new technology designed for touch screen and tablet PCs • released October 26, 2012

  5. Worldwide Windows Installations • Quick Facts • Windows 7 has been installed 670 million times • Windows global market share (PC and laptop) across all Windows versions at February 2013 was 92% • 60 million Windows 8 licenses have been sold through January 2013 • forecast is that 400 million new PCs will be sold in 2013; most factory loaded with Windows 8

  6. Microsoft - Penetration Pricing, Always • Quick Facts • new PCs loaded with Windows 8 selling for under $300 • introductory pricing of upgrades at $39.99 for Windows 7 and XP users • purchasers of new PCs and laptops with Windows 7 between June – January 2012 purchased Windows 8 for $14.99 • Windows 8 moves to $119 February 2013

  7. --- End --- Marketing In Action

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