Office for iPad: A look at the hypothetical STDP (Week 5, Chapter 4/5)

Microsoft launched its Office Apps for iOS at the end of March.  One day after the apps went live, it held the top three spots on the App Store.  Now, similar to other apps, the true test will be to see how long the App is a popular download.  Several other apps have gone before, yet quickly fluttered out after failing to meet customer expectations.  [As an aside, the screenshot below was from 29-March; when I downloaded the Apps today Word, Excel, and PPT still held the top 3 spots]  Now presumably, Microsoft did a thorough STDP analysis on this product release, but I'll take a swing at a simplified version below.

Segmentation
It's quite obvious that Microsoft is pursuing the tablet market, specifically those consumers who use the iPad/iOS.  For this segment, the most obvious observable variable is the purchase or possession of an iPad.  One thing to note in Microsoft's segmentation though, is that the company had to have realized that there would be some cannibalization of its own table market share.  Assuming that some consumers purchasers their table, the Microsoft Surface, solely for access to Office.  It would be safe to assume that some consumers would move towards the iPad, since it is now Office capable.  However, the overall market expansion and profitability were too good to pass up.

Targeting
Since Office is already available to Android powered tablets and it comes pre-installed on the Microsoft tablet, Microsoft is targeting the iOS market and confidence that this market segment will continue to grow.  Based on the Garner data below, Microsoft saw the obvious market share with regard to operating system and decided it would be in their best interest to include iOS in its offering.   The data shown here, is the Worldwide Tablet sales to end users, by operating system.

The next table shows the Worldwide tablet sales to end users, by Vendor.  It's obvious from the data below, that Microsoft wanted an opportunity to target the 70M plus customers using Apple products.  

These customers could also be Office users on their notebook and desktop, but have selected Apple for their tablet needs.  

Differentiation

The Office product has set itself apart as the go-to for workplace and personal document platform.  What Microsoft is looking to do with Office on iPad, is get that large target market above accustomed to using the platform on their tablet.  A quick 4 P analysis below shows that Place is the key marketing-mix element for setting itself apart, but the true revenue stream will come in how they use Pricing.

Product:  Office (Word, Powerpoint, Excel, Note)

Place: Apple App Store

Pricing: Free download, for full access to platform will require Office 365 subscription

Promotion: Emphasis on ease of Office use on iOS

It's easy to see how Microsoft is looking to lure in potential customers with the free version for document viewing, but to get the creation and editing options, the user must pay for the Office 365 service.  This service costs $10 per month or $100 per year.

Positioning

Microsoft has found a valuable place in customer's minds as so many people are on the go these days and prefer the ease of a tablet over their notebook computer. I can personally think of dozens of times where Office on my iPad would have made life easier.

Microsoft's decision was certainly based on a more robust STDP analysis than what I showed, but it should offer some insight into the key decisions that were made in the marketing process.