Marketing Mix Of Hotmail and 7Ps (Updated 2024)

The Marketing mix of Hotmail analyses the 7Ps of Hotmail, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of Hotmail. Hotmail was the brainchild of Jack Smith and Sabeer Bhatia. It was founded in 1996 in Mountain View, California, with its headquarters in Sunnyvale. It has the distinction of being one of the first providers of webmail services. In 1997, Microsoft acquired it for nearly 400 million dollars. This article will analyze the current Microsoft marketing strategy by applying the marketing mix model. Over the years, Hotmail has been rebranded several times, for instance, MSN Hotmail and Windows Live Hotmail, and it was recently replaced in 2013 by Outlook.com. It faces completion in the internet industry from several providers like the following-

• Gmail
• Yahoo mail
• Rediff mail
• Net

About Hotmail

• Type: Webmail service
• Industry: Internet
• Founded: July 4, 1996
• Founder: Sabeer Bhatia and Jack Smith
• Headquarters: Redmond, Washington, United States
• Area served: Worldwide
• Key people: Satya Nadella (Chairman) and Jared Spataro (CEO)
• Number of employees: 147,000+

Hotmail Product Strategy

Hotmail is a well-known app that deals in emails. It is an easy-to-use and customizable service provider recognized for efficiently delivering the customer experience and dealing with the customer experience within its own target customer market of customers. It was a first-of-its-kind webmail service through the internet and had access to a user inbox from any place in the global arena.

Initially, Hotmail was run on Solaris and FreeBSD operating systems, and by 2002, its infrastructure was based on UNIX services. Later, it was tied with a web authentication scheme, instant messaging, Microsoft account, MSN Spaces, and MSN Messenger. Hotmail has periodically upgraded its hardware products, product features, and versions with advanced hardware products, features, security, and higher speed. 2005, its new and better version, Windows Live Hotmail, was launched. 2008, it was updated to provide increased storage space, improved speed, and better customer experience and usability features.

In 2009, Microsoft integrated Bing, a search engine, with Hotmail via “Quick Add.” This helps in including search results from Bing to Hotmail. The latest, modified, and revamped version of Hotmail is now Outlook.com and existing Hotmail users can easily upgrade to this version for free. The search option is of an advanced category and has removed restrictions on the size of attachments. It relieves users who face severe difficulties uploading pictures through their email accounts. Outlook also allows users to integrate Google, Facebook, and Twitter contacts.

Hotmail was rebranded as Outlook.com in 2013 and no longer exists under its original name. As for Outlook.com’s product and its marketing strategy and mix, Hotmail primarily focuses on web-based email services.

The new Product mix target of Hotmail in 2024 is as follows (Source).

1. Email Service: The core offering of Outlook.com is its email service, which provides users with the ability to send, receive, and organize emails. It includes features like a focused inbox, sweep, and search functionalities.
2. Calendar Integration: Outlook.com integrates a calendar feature where users can schedule and manage appointments, events, and reminders.
3. Contact Management: The platform allows users to store and manage contact information, syncing across devices and integrating with email and calendar services.
4. Task Management: It includes task management features, where users can create, manage, and track tasks, often integrated with the calendar and email functions.
5. Cloud Storage Integration: Outlook.com integrates with Microsoft’s cloud storage service, OneDrive, allowing users to store and share files directly through their email accounts.

These features reflect a product mix emphasizing integrated productivity and communication tools, leveraging Microsoft’s broader office and productivity applications ecosystem.

Hotmail Pricing Strategy

Hotmail is a trusted commercial app offered to its users free of cost. Email addresses are provided for free, which has helped Hotmail acquire a large subscriber base. Integrating Hotmail in Microsoft sites has helped drive traffic to revenue-generating sites like Expedia. Hotmail users will also immensely help generate advertising revenues for its parent company. It has adopted a reasonable, low-cost pricing strategy and marketing strategy for target customers that makes its rates affordable target customers. Hotmail users receive 5GB and 25GB of storage space on Windows Live-Skydrive.

Hotmail’s pricing strategy and competitive advantage balance the competitive advantage by offering free services with premium, subscription-based product features. This pricing strategy and competitive advantage can be outlined as follows:

1. Freemium Model: At its core, Outlook.com uses a freemium model where the primary email service is offered free of charge. This approach is designed to attract a broad user base by removing the barrier of entry costs.
2. Premium Subscription Upselling: Outlook.com offers a premium version through Microsoft 365 subscriptions for users requiring more advanced features. This includes additional storage, advanced security features, and enhanced productivity tools. This upselling strategy targets professional users and businesses seeking more than the standard free offerings.
3. Bundling with Microsoft 365: The premium features of Outlook.com are often bundled with the Microsoft 365 suite, which includes Office applications, additional OneDrive storage, and other productivity tools. This bundling strategy enhances the perceived value and encourages users to subscribe to the broader Microsoft ecosystem.
4. Ad-Supported Revenue Model for Free Version: The free version of Outlook.com includes ads, providing a revenue stream while offering the essential service at no cost. This ad-supported model is a common strategy in freemium services, balancing free access with monetization.
5. Segmented Pricing for Different User Groups: Microsoft employs segmented pricing strategies for individual users, businesses, and educational institutions. This segmentation allows for targeted pricing structures, meeting different user groups’ specific needs and willingness to pay.

Hotmail Place Strategy

Hotmail is a webmail company ranked as the second-largest provider in the world, with registered users at eight and a half million in December 1997 and, in recent years, nearly three hundred and sixty-nine million. HTML is the language for creating web pages; hence, Hotmail was a combination of product features and a marketing mix of Hotmail, email, and HTML. Currently, it is available in thirty-six global languages with different windows and integrated live features.

The most common language used and preferred by its users is English. Hotmail has become an integral part of everyday life, and its product features and usability have been declared indispensable by the target market and customers. Microsoft has also allowed MSN members to access emails via the web. Besides individual users, organizations and business houses can use Hotmail easily.

Hotmail’s place and marketing objectives and strategy primarily revolve around being a web-based service. Here’s a breakdown of its place and marketing objectives and strategy:

1. Online Platform: Outlook.com, the successor of Hotmail, is a purely online platform accessible via web browsers. This ensures global accessibility, allowing users from any location with internet access to use the service.
2. Mobile Applications: Outlook.com offers mobile applications for iOS and Android devices, ensuring users can access their email, calendar, and contacts on the go, increasing convenience and usability.
3. Integration with Other Microsoft Services: As a part of the Microsoft ecosystem, Outlook.com is seamlessly integrated with other Microsoft online services like OneDrive, Microsoft Teams, and Office Online, enhancing user experience and utility.
4. Cross-Platform Synchronization: The service ensures that user data, including emails, contacts, and calendar events, are synchronized across all devices where the user’s account is logged in, ensuring consistency and ease of access.
5. Availability in Multiple Languages: Outlook.com is available in multiple languages to cater to a global audience, making it accessible and user-friendly to non-English speaking users worldwide.

These various marketing and traditional advertising strategies, pricing strategies, and product features highlight Outlook.com’s focus on accessibility, integration, and user convenience, making it a versatile and widely used email service.

Hotmail Promotion Strategy

Promotional activities are integral to any organization as they help with brand loyalty and keep the brand loyalty company at the top of the target market. Hotmail is one of the most desired and recognized service providers and does not cater to extensive or traditional advertising campaigns. It relies heavily on its viral marketing policy to create and retain visibility and brand loyalty amongst consumers.

Word-of-mouth or viral marketing is one of the most sought-after traditional advertising and marketing strategies used worldwide, adopted successfully by Hotmail. It has helped improve communications through advanced technology by using traditional advertising and marketing strategies to create viral commercials in interactive flash images, video clips, text, and images. Every user of Hotmail is an involuntary and automatic salesperson as they help advertise the site amongst other users.

Some Recent Video ads and Print ads of Hotmail are:

Hotmail People Strategy

The “People” element of the marketing mix for a service like Hotmail focuses on the human aspect of the service delivery. This marketing mix of Hotmail’s marketing mix includes direct marketing to the employees behind the service and the customers who use it. Here are several key points regarding the “People” aspect of Hotmail’s service marketing mix:

1. Customer Support and Service Staff: Hotmail’s customer service representatives and technical support staff are crucial in managing customer inquiries, complaints, and technical issues. Their expertise, responsiveness, and manner of customer interaction significantly influence customer satisfaction and loyalty.
2. Development and IT Teams: The developers and IT professionals behind Hotmail are essential for its continuous improvement, security, and introduction of new features. Their skills and innovation contribute to the overall service quality perceived by the users.
3. User Community: Hotmail’s user base, including individual and business users, is a significant part of the “People” element. The user community’s diversity, size, and engagement level can influence new user acquisition and retention, as satisfied users often recommend services to others.
4. Management and Strategy Teams: The strategic decisions made by Hotmail’s management regarding the service’s direction, features, and policies play a vital role in its market positioning and user satisfaction. Leadership’s vision for Hotmail affects how the service evolves to meet customer needs.
5. Marketing and Communication Teams: These teams are responsible for how Hotmail communicates with its current and potential users, shaping the service’s image and expectations. Effective communication and marketing strategies can enhance user engagement and satisfaction.
6. Training and Development: Continuous training and development programs for Hotmail staff ensure they remain knowledgeable about the latest technologies, customer service practices, and security protocols. This investment in people contributes to high-quality service delivery.
7. Corporate Culture and Employee Engagement: The internal culture at Hotmail/Microsoft impacts how employees engage with their work and, by extension, the service they provide. A positive, innovative, and customer-focused culture can enhance service delivery and innovation.
8. Feedback Mechanisms: Hotmail incorporates user feedback mechanisms to gauge customer satisfaction and gather insights for service improvement. The company’s response to this feedback reflects its commitment to user satisfaction and continuous improvement.

Hotmail Process Strategy

The “Process” element of the service and direct marketing mix model refers to the mechanisms, workflows, and procedures through which services are delivered to customers. For Hotmail, this encompasses the various steps involved in providing email services to users, from account creation to the management of emails. Here are key points regarding the “Process” aspect of Hotmail’s service and direct marketing mix model:

1. Account Creation and Setup: The process starts with a user-friendly account creation system that requires minimal steps, making it easy for new users to sign up and use the service.
2. Email Management: Hotmail provides a streamlined email management process, including sending, receiving, organizing, and searching messages. Features such as folders, tags, and filters enhance user experience.
3. User Authentication and Security: Hotmail employs a robust authentication process, including two-factor authentication (2FA), to ensure user accounts are secure and protected from unauthorized access.
4. Integration with Other Services: Hotmail is integrated with various Microsoft services like Office Online, OneDrive, and Skype, allowing users to access multiple services seamlessly within the same platform.
5. User Interface (UI) and Experience (UX): The design and functionality of Hotmail’s user interface significantly impact the service process. It is designed to be intuitive, responsive, and accessible on various devices, including desktops, tablets, and smartphones.
6. Technical Support and Customer Service: Hotmail provides multiple channels for technical support and customer service, including help articles, forums, and direct support through email or chat, ensuring users can resolve issues efficiently.
7. Privacy and Data Protection: The process includes measures to protect user privacy and data security, complying with regulations such as the General Data Protection Regulation (GDPR). This involves processes for data encryption, regular security audits, and user data controls.
8. Feedback and Continuous Improvement: Hotmail incorporates user feedback into its service improvement process, using it to identify issues, enhance existing features, and develop new functionalities that meet user needs.
9. Spam and Junk Email Filtering: An automated process that identifies and filters spam and junk emails, using advanced algorithms to improve accuracy and continuously protect users from unwanted content.
10. Scheduled Maintenance and Updates: Regularly scheduled maintenance and updates ensure the service remains reliable, secure, and up-to-date with the latest features and security measures.

Hotmail Physical Evidence Strategy

The “Physical Evidence” element in the service marketing mix usually pertains to the tangible or physical proof of a service’s quality and existence, which can be challenging for digital services like Hotmail. However, in directing the marketing mix of online services, physical evidence can also refer to the digital environment and other elements contributing to the user’s perception customer experience of the service. Here are key points regarding the “Physical Evidence” aspect of Hotmail’s service marketing mix model:

1. Website and User Interface Design: The Hotmail website’s design and user interface prove its quality and professionalism. A clean, modern, and user-friendly design enhances credibility and user trust.
2. Brand Logo and Identity: Hotmail’s logo and Microsoft’s branding elements provide visible markers of the service’s identity and reliability. These elements are consistent across various platforms and marketing materials, reinforcing the brand’s presence.
3. Security Certificates and Encryption Indicators: Visible indicators of website security, such as SSL certificates and encryption symbols (e.g., a padlock icon in the browser address bar), offer users tangible proof of Hotmail’s commitment to data security and privacy.
4. Email Templates and Formats: The quality and design of email templates available to users for sending emails can be physical evidence of the service’s sophistication and customization capabilities.
5. Testimonials and User Reviews: Published testimonials, user reviews, and case studies provide tangible evidence of user satisfaction and the service’s effectiveness, helping to build trust among potential and current users.
6. Online Support and Help Resources: The availability and quality of online support resources, such as FAQs, forums, and tutorial videos, are evidence of the service’s reliability and the company’s commitment to user support.
7. Mobile Apps and Desktop Clients: The presence of well-designed and functional mobile applications and desktop clients for accessing Hotmail services provides tangible proof of the service’s accessibility and convenience.
8. Social Media Presence: Active social media accounts where Hotmail shares updates and tips and engages with users contribute to the service’s physical evidence by showcasing an active and responsive brand presence.
9. Marketing and Promotional Materials: Quality marketing materials, including advertisements, brochures, and emails, reflect the service’s professionalism and brand values.
10. Email Deliverability and Performance Metrics: Tangible performance metrics, such as high deliverability rates and low downtime, indicate the service’s reliability and effectiveness.

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