The pricing strategy that had been commonly employed by the Microsoft Corporation until the last couple of years had been to target the customers with a global pricing policy (Evers, 2004). Under this pricing strategy, the same price was charged from the consumer on global scale with no differentiation or price change according to the region of sale.
The company as a result has enjoyed Olympian profits from the monopolizing power that it holds in the market on a global level. Recently however the company has sought to consider whether a differentiated pricing strategy would be more beneficial to boost the sales of the company in the face of increasing technological development and increasing competition from small independent firms.
Microsoft has been conducting price discrimination strategies for controlling the market and the demand for its products. “Microsoft gave the best prices for Windows to those OEMs that also sold or distributed Microsoft’s other products. Thus, OEMs could lower their own costs by distributing Microsoft’s other products, which, in turn, foreclosed competition in other areas.” (Spaulding) Similarly Microsoft has also been offering the students a discount on its products and services, which a second degree price discrimination, as well as seeking to charge a differentiated price for its products in the future from the different geographic markets.
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