Microsoft is a multinational technology company in the United States offering a wide range of products including its popular Office 365 suite of applications. Office 365 is a subscription service that offers Microsoft Office products over the cloud for businesses and individuals. The suite offers various features including email, word processing and spreadsheets among others. The group will use a market-based approach for the pricing structure of this product. There are various factors that the group will consider when setting the price for the Microsoft Office 365 product including the firm's goal and market positioning.
The current objective or goal of the group is to make Office 365 the most used suite of office applications. To achieve this a proper marketing structure and pricing have to be determined using the existing customer preferences and trends while factoring existing competition like the Google G-Suite. Currently, the G-Suite by Google offers a simplified pricing plan compared to the Office 365 Suite. Therefore, the current objective of the group is to simplify the pricing structure for the Office 365 suite. The current Office 365 plans for small businesses and enterprises are shown in the table below.
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| Small business/ SME’s | Enterprise |
| Business Essentials - $5 per user per month | E1 - $8 |
| Business - $8.25 per user per month | ProPlus $12 |
| Business premium - $12.5 per user per month | E3 - $20 |
| E5 - $35 | |
Comparing these pricing options to the that of Google G-Suite, its competition, G-Suite offers three plans as follows:
Basic: $6 per user per month
Business: $12 per user per month
Enterprise: $25 per user per month
By implementing the market-based approach to set the new price structure for the Microsoft Office Suite, the group will consider several factors including the current market trends, economic conditions, and competition. The new pricing structure for the Office 365 Suite can, therefore, be broken down as follows:
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Considering there are 8 applications in the suite each at a subscription rate of 0.8 dollars each, this amounts to 6.4 dollars per person per month for the basic suite. Factoring in infrastructural costs and current market trends the overall cost of subscription the basic suite should be 7 dollars per person per month. |
The new overall pricing structure for the Office suite should be as follows:
Basic: $7 per user per month
Business: $10 per user per month
Enterprise: $22 per user per month
The new pricing structure factors in the current demand for on-demand office productivity applications offered by the Office 365 Suite to enhance the flexibility of work. The market-based approach pricing structure is, therefore, more effective in ensuring the Office 365 product remains competitive.
