Microsoft Product Pricing

Microsoft has a very interesting perspective on product pricing. It is clear that Microsoft looks at the market and prices its products competitively. But there have been occasions when Microsoft is introducing an innovative product. How does it decide then? In these instances Microsoft takes the low-price strategy. Microsoft worries about competitors even when it has a very large market share. If there are important differences in the prices of competing products, a lower-quality and …

…this what happened? Absolutely! Microsoft wins market battles (word processors, spreadsheets, browsers) when its products are better, and loses such battles (financial software, on-line services, palm-sized computers) when they aren't. Microsoft pricing strategy and its concern about potential entrants might explain why Microsoft has not lost any markets it has gained. The decline of Lotus might have been due to an erroneous lack of such concern. Reference ________________________________________________________________________ http://www.utdallas.edu/~liebowit/book/msmonopoly.html