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Marketing Strategy of Xiaomi PDF
Marketing Strategy of Xiaomi PDF
A Project Submitted to
DEGREE
OF
BY
DEV TIL DARLAMI
PROF.PADMA NADAR
APRIL 2020
DECLARATION BY LEARNER
I undersigned Mr. Dev Til Darlami hereby, declare that the work embodied in this
project work titled " Marketing Strategy of Xiaomi "forms my own contribution to
the research work carried out under the guidance of Prof. PADMA NADAR is a result of
my own research work and has not been previously submitted to any other University for
any other Degree/Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.
Certified by
Name and Signature of the guiding Teacher
SHRI CHINAI COLLEGE OF COMMERCES & ECONOMICS
CERTIFICATE
This is to certify that Mr. Dev Til Darlami has worked and duly completed his Project
Work for the degree of Bachelor of Management Studies under the Faculty of Commerce in
the subject of Finance and his project is entitled, “Marketing Strategy of Xiaomi”
under my supervision.
I further certify that the entire work has been done by the learner under my guidance and that
no part of it has been submitted previously for any Degree Diploma of any University.
It is his own work and facts reported by his personal findings and investigations.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I would also like to express my sincere gratitude towards my project guide Prof.
PADMA NADAR whose guidance and care made the project successful.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who responded me throughout my project.
INDEX
SR CHAPTER TOPICS PAGE NO
NO NO
1 CHAPTER 1 INTRODUCTION 7
3 CHAPTER 3 HISTORY 9
46 – 51
14 CHAPTER 14 DATA ANALYSIS & INTERPREATION
16 CHAPTER 16 CONCLUSION 54
17 CHAPTER 17 BIBLIOGRAPHY 55
18 CHAPTER 18 QUESTIONNAIRE 56 - 57
INTRODUCTION
1. Qualitative Research
This type of research methods involves describing in details specific situation using research
tools like interviews, surveys, and Observations. Qualitative Research is primarily
exploratory research. It used to gain an understanding of underlying reasons, opinions, and
motivations. It provides insights into the problem or helps to develop ideas or hypotheses for
potential quantitative research. Qualitative Research also used to uncover trends in thought
and opinions, and dive deeper into the problem. Qualitative data collection methods vary
using unstructured or semi structured techniques. Some common methods include focus
groups (group discussions), individual interviews, and participation/observations. The sample
size is typically small, and respondents are select to fulfil a given quota.
2. Quantitative Research
Quantitative Research used to quantify the problem by way of generating numerical data or
data that can be transforming into useable statistics. It used to quantify attitudes, opinions,
behaviours, and other defined variables–and generalize results from a larger sample
population.
Quantitative Research uses measurable data to formulate facts and uncover patterns in
research. Quantitative data collection methods are much more structure than data collection
Methods. Quantitative data collection methods include various forms of surveys – online
surveys, paper surveys, mobile surveys and kiosk surveys, face-to-face interviews, telephone
Interviews, longitudinal studies, website interceptors, online polls, and systematic
observations. Quantitative methodology is used in this study for many reasons. This type of
research methods requires quantifiable data involving numerical and statistical explanations.
Quantitative Research is used to quantify the problem by way of generating numerical data or
data that can be transformed into useable statistics. It is used to quantify attitudes, opinions,
behaviours, and other defined variables–and generalize results from a larger sample
population. Quantitative Research uses measurable data to formulate facts and uncover
patterns in research. Quantitative data collection methods are much more structured than
Qualitative data collection methods. Quantitative data collection methods include various
forms of surveys online surveys, paper surveys, mobile surveys and kiosk surveys, face-to-
face interviews, telephone interviews, longitudinal studies, website interceptors, online polls,
and systematic observations.
History of Xiaomi
Xiaomi was founded in 6 April 2010 by ex-Kingsoft CEO Lei Jun, as a software company
creating a new custom ROM based on Google’s Android. Their aim was to provide additional
functionality that Android had yet to offer and an easy to use user interface. MIUI, the ROM
which the team created, became a huge success and has been ported to many devices. As of
2014 MIUI can be downloaded and installed to over 200 devices in both English and
Chinese, even non developers can easily install MIUI to their phones using the MIUI Express
APK. As of the end of 2013 Xiaomi had over 30 million MIUI users worldwide! Very
impressive for such a young company!
The MIUI ROM was likened to Apple’s iOS for being very easy to use whilst providing
sophisticated services such as cloud backup, an easy to use music player and their own app
store. The team at Xiaomi have always wanted users to feel part of the company and happily
take on fan feedback via multiple channels and update the ROM every Friday with bug fixes,
optimisation and additional features. It’s probably available for your device already.
The First smartphone released by Xiaomi is Xiaomi M1 Smartphone in August 2011 and has
rapidly gained Market Share in China and also become China’s largest Smartphone Company
in 2014. It is shipped with Xiaomi’s MIUI firmware, Based on Android, and resembles both
Samsung’s Touch Wiz and Apple’s IOS Xiaomi has 15,000employees in china, India,
Malaysia, Singapore and is expanding to the other countries such as Indonesia, the
Philippines and South Africa.
LITERATURE REVIEW
For any multinational brand its marketing strategy varies from country to country where the
marketing department should be aware of various marketing mix strategies which will
significantly impact the cumulative success of the firm. Either the companies can make use
of conventional marketing mix or can customize this existing mix as per the country they are
carrying out their business in. when assessing the appropriateness of certain strategies the
performance of the company is one of the most crucial aspect. To exceed customer
expectations it is extremely important to offer right product/service offerings to the target
market which forms the value proposition. For a successful marketing strategy it is very
important to design and deliver product/service that satisfies customer needs. To create
brand loyal customers, marketers should strive hard so that the customer experiences with
the brand should meet if not exceed their expectations to satisfy customers it is essential to
exceed their expectations so that they always remain loyal towards the company offerings.
Companies when trying to expand their market rely on forces which influence either the
adaptation or standardization strategy with an aim to improve the company performance.
When entering a foreign market any firm needs to make modification in their marketing mix
so as to satisfy the needs of the customers. In case of an adoption strategy any element of
the controllable marketing mix is altered so as to achieve a competitive advantage when an
entry has to be made in the foreign market. When considering an international marketing
adaptation approach it is important that brands put a lot of emphasis of customization in
order to meet diverse customer necessities. When firms use the same marketing mix as in
the domestic markets in the export country to attract customers a firm makes use of
standardization strategy as it requires less investment as compared to the adaptation
strategy. As proposed by some researchers in case of standardization there is a union of
cultures along with the customer interest across the world. Author also is of an opinion that
companies have moved away from customizing products to that of providing globally
standardized products which are functional, reliable and even low priced. Companies make
use of various strategies to increase the awareness level about the benefits offered by their
brand offerings and one such strategy is known as Guerrilla marketing which is low cost
marketing. Brands also make use of social media like Facebook and twitter in today’s era to
market their products. Xiaomi became very successful by using guerrilla marketing where
they concentrated their marketing efforts mostly on Weibo (in China) and Facebook when
they expanded in global markets. For a successful guerrilla marketing marketers need to
follow certain success driven strategy
4. Flexibility is the key to success and should be made possible for all variables in the plan.
Xiaomi took only 4 years to position itself as the fourth largest Smartphone manufacturing
company of China. Founded by ex-CEO Lei Jun of Kingsoft Xiaomi earlier was basically a
software firm having an expertise in creating customized ROM based on Android OS of
Google. The pace at which smart phones have dominated the life of all of us is phenomenal
and is no more a product to own for luxury. Smart phones are now considered as the most
essential necessity where firms are approaching with new marketing strategies leading to cost
cutting and a better ROI.E-Mails are the most cost effective way to attract consumers to buy
the product. In past few years marketing has become highly innovative where acceptance of
such devices by consumers is rising exponentially, giving marketers lot of new opportunities
to target customers.
How Xiaomi Started
In 2011 Xiaomi announced the Mi One phone. Xiaomi was now not only making its own
software, but its own hardware too. The Mi One was a top spec phone with a great price way
ahead of its time; this has remained Xiaomi’s philosophy from day one. While commenters
are quick to call the Beijing based company “The Apple of China”, Xiaomi prefer to compare
themselves to Amazon, they create powerful hardware which they sell at cost price and rely
on their services and content to make up most of the revenue. Speaking of which their
revenue for 2013 alone over $5 billion extremely impressive for a new company. There are
similarities between Xiaomi and Apple however, they are both hardware and software
companies, both have strong control over supply chains and both have a feverish fan base.
Apart from this the two companies don’t have much else in common, Apple price their
smartphones at ludicrous prices and don’t take on much customer feedback whereas Xiaomi
do the opposite.
2010
On 6 April 2010 Xiaomi was co-founded by Lei Jun and six others:
In the first round of funding, institutional investors included Temasek Holdings, IDG Capital,
Qiming Venture Partners and Qualcomm.
On 16 August 2010, Xiaomi officially launched its first Android-based firmware MIUI It
resembles Samsung's TouchWiz and Apple's iOS.
2011
The Xiaomi Mi 1 smartphone was announced in August 2011. The device had Xiaomi's MIU
firmware along with Android installation. The first Xiaomi Mi 1 smartphone was then
commercially appeared in Asia and East Asia technological markets.
2012
In August 2012, following the first version of smartphone, Xiaomi Corporation announced its
new device called Xiaomi Mi 2 smartphone. It was improved from the previous version by
updating the new firmware with the most updated Android Version.
2013
On 5 September 2013, Xiaomi CEO Lei Jun announced plans to launch an Android-based 47-
inch 3D-capable Smart TV, which will be assembled by Sony TV manufacturer Wistron
Corporation of Taiwan. The company explained the choice as to take advantage of Wistron's
skill as a supplier of Sony.
2014
In 2014 Xiaomi announced its expansion outside China, with their first international
headquarters in Singapore. Future product launches and activities in the region will be set up
there. Following Singapore, the company opened in Malaysia, Philippines and India, and
plans to enter Indonesia, Thailand, Russia, Turkey, Brazil and Mexico in the following
months.
On 21 February 2014 Xiaomi's Redmi and Mi 3 phone were released in Singapore. The
Xiaomi Mi 3 batches were sold out within 2 minutes of the opening day sale in Singapore.
In March 2014, Xiaomi Store Australia (an unrelated business) began selling Xiaomi mobile
phones online in Australia through its website, XiaomiStore.com.au. However, they traded
for only a few months, as Xiaomi soon "requested" that the store be shut down on (or by) 25
July 2014. Shortly after sales were halted, the website itself was also taken down, on 7
August 2014. An industry commentator described the action by Xiaomi to get the Australian
website closed down as unprecedented, saying, “I’ve never come across this [before]. It
would have to be a strategic move.” At the time this left only one online vendor selling
Xiaomi mobile phones into Australia, namely Yatango (formerly MobiCity), which was
based in Hong Kong — although this business closed in late 2015.
On 17 March 2014, Redmi Note phablet was announced by Xiaomi CEO Lei Jun.
In April 2014 Xiaomi purchased the Internet domain mi.com for a record US$3.6 million, the
most expensive domain name ever bought in China, replacing xiaomi.com as the official
Xiaomi domain.
In November 2014 Xiaomi said it would invest US$1 billion in television content building.
In December 2014 Xiaomi completed a round of equity financing led by Hong Kong-based
technology fund All-Stars Investment Limited, a fund run by former Morgan Stanley analyst
Richard Ji raising over US$1 billion, with a valuation of more than US$45 billion making it
one of the most valuable private technology companies in the world.
In April 2015 Xiaomi announced it would make its Mi devices available through two of
India's major e-commerce sites and through offline retailers for the first time.
On 23 April 2015, Xiaomi CEO Lei Jun and VP Hugo Barra came together to announce a
new smartphone named Mi 1s in India, the first phone to be launched in India before any
other country. The Xiaomi Mi Band was also launched in the same event.
On 27 April 2015, it was reported Ratan Tata had acquired a stake in Xiaomi.
On 30 June 2015, Xiaomi announced its expansion into Brazil with the launch of locally
manufactured Redmi 2; it is the first time the company assembled a smartphone outside of
China.
2016
On 9 March 2016, Xiaomi launched its Redmi Note 3 in India. It was a groundbreaking
smartphone at the time in the budget segment and was well received by Indian customers. It
made record sales on the year, and Xiaomi brand name continued to grow.
Shortly after starting operations in Brazil the company left the country in the second half of
2016.
In July 2016 Chinese artists as Liu Shishi, Wu Xiubo and Liu Haoran became the first
ambassadors of Xiaomi's Redmi series in China.
In August 2016 Xiaomi entered Bangladesh via Solar Electro Bangladesh Limited.
In September 2016 Xiaomi's cell phones became officially available in the European Union
through their partnership with ABC Data.
2017
On 20 February, Xiaomi officially launched in Pakistan and brought its Mi and Redmi Note
lineup to the country.
In May, Xiaomi opened two MI Home stores; one in Bangalore (India) and one in
Bangladesh. It is the first of several planned for the region.
On 5 September Xiaomi released Mi A1, which is the first Android One smartphone under
the slogan: Created by Xiaomi, Powered by Google. In the event key note Xiaomi stated they
started working with Google for the Mi A1 Android One smartphone almost six months ago.
An alternate version of the phone is also available with MIUI and is known as MI 5X.
In October, the EU's first Mi Store has been opened in Athens, Greece.
On 7 November, Xiaomi started operating in Spain, making available the Mi A1 and Mi Mix
2 smartphones. In Q3 2017, Xiaomi overtook Samsung to become the number one
smartphone brand in India. Xiaomi has sold 9.2 million units during this period.
2018
In March 2018, at China's annual legislative session in Beijing, Xiaomi CEO Lei Jun
announced that Xiaomi has "always been considering entering the US market" and will
launch in the US smartphone market by late 2018 or early 2019. Xiaomi already sells
assorted items in the US such as power banks and Bluetooth speakers.
On 3 April 2018, Xiaomi launched the Mix 2S model which is a successor of Mix 2.
On 22 May 2018, Xiaomi will open, in Paris, its first French store.
On May 3, 2018, Xiaomi filled to go public on the Hong Kong Stock Exchange and aims to
raise $10 billion in IPO which is expected to be the world's biggest IPO raise since 2014.
In May 2018, Xiaomi began selling some of their smart home products in the United States
through Amazon.
In July 2018, Xiaomi opened their office in Bangladesh with a view to establish a
manufacturing plant within the next couple of years.
In September 2018, Xiaomi launched its 4th 'Mi Home' experience store in India. They also
launched their products in the UK, offering UK customers to purchase without customs fees.
2019
In March 2019, Xiaomi partnering with AMTD obtained one of the eight virtual bank
licenses in Hong Kong. The company also has introduced Xiaomi Mi 9 phone which has a
fingerprint scanner in its display. It was second phone of the brand with this technology
available on market.
The Mi Pad was first unveiled during a Xiaomi launch event on 5 May 2014. It was launched
in India on 25 March 2015.
Xiaomi CEO Lei Jun told Richard Lai from Engadget around 2012 that he wasn't sure about
making a tablet, but on 15 May 2015 he confessed that he had been quietly developing one
this whole time. MiPad currently (as of 2019) have 4 successive devices, namely:
Mi Power Bank is a battery charger with a built-in internal battery and charges devices by
USB. The chargers have an aluminum case. The batteries rated at
5000/5200/10000/10400/16000/20000 mAh (Miliampere). The 16000 & 20000 mAh have
two USB ports. Silicone sleeves are available for all, except the 20000 mAh version and it
was launched in February 18.
Television (TV)
The MI TV is a line of smart TVs designed and marketed by Xiaomi. It runs Android and
was initially announced in 2013. The latest in the series are Mi TV 3s 43 inch and the Mi TV
3s 65 inch curved. The Mi TV 3s 43 inch has a 43-inch 1920p x 1080p from either LG or
AUO. It has the 1.45 GHz quad-core MStar 6A908 Cortex-A9 processor with Mali-450 MP4
GPU, and 1 GB DDR3 RAM and 8 GB internal memory (eMMC 4.5). At 10.9 mm, it is
pretty thin for a TV. The Mi TV 65 inch curved has a 4K Samsung display. It has a 1.4 GHz
quad-core MStar 6A928 Cortex-A17 processor with Mali-760 MP4 GPU. For the memory, it
has 2 GB DDR3 RAM and 8 GB internal memory (eMMC 50). It is 5.9 mm thick, but it has
to have a sound bar for audio.
The Founders of Xiaomi
Lei Jun was part of the founding team of Kingsoft in 1992 and became the CEO in 1998.
After Kingsoft successfully completed their IPO in 2007, Lei Jun stepped down from his
position and became Vice Chairman at Kingsoft. In July 2011, he returned to Kingsoft as
Chairman of the Board. In 2000, Lei Jun founded the IT information service and download
website Joyo.com, which was sold to Amazon.com in 2004. Moreover, he invested in many
successful start-up companies like YY, UC and Vancl as an angel investor. On April 6, 2010,
he chose to re-start and founded Xiaomi. In April 2010 Lei founded Xiaomi Corp. with
several partners, including former Google executive Lin Bin. While the company sold various
electronics, it was especially focused on smartphones. By concentrating on online rather than
brick-and-mortar sales and by eschewing costly advertising in favor of interacting with
customers directly through social media, Xiaomi was able to significantly undersell its
competitors and thrive in the Chinese market. By 2014 the company’s valuation at more than
$46 billion had made it the most-valuable tech startup in the world. In April of that year,
Xiaomi demonstrated the power of its brand when it sold 2.1 million smartphones online
within just 12 hours, setting a world record for the most mobile phones sold on one online
platform in a single day, and by the end of 2014 Xiaomi had surpassed Samsung to become
China’s leading smartphone vendor. In an effort to continue Xiaomi’s growth, Lei
increasingly looked for opportunities to expand beyond China. In July 2014 the company
began selling smartphones in India, which Lei described as Xiaomi’s “most important market
after China,” and in May 2015 Xiaomi launched an online marketplace for customers in the
United States and Europe, although initially it offered only computer accessories and fitness
devices rather than its smartphones. Under Lei’s guidance, Xiaomi became the world’s third
largest smartphone manufacturer—behind only Samsung Electronics and Apple Inc.—in
2014, and Lei himself was widely known as the “Steve Jobs of China.” In 2018 he oversaw
the company’s IPO, which raised about $3 billion when it was listed on the Hong Kong Stock
Exchange.
LIN BIN (Co-Founder, Chairman, President of smartphone Department)
Lin Bin joined Xiaomi in 2010. He is in charge of handset R&D and supply chain
management. He graduated from Sun Yat-sen University in 1990 with a bachelor degree in
electronic engineering. He was obtained his master degree of computer science from Drexel
University in the United States of America. From1995-2006, he acted as Director Engineer of
Microsoft Corporation, Senior Development Manager of Microsoft Research Institute in
Asia, and Director of Microsoft Advanced Technology Center (ATC), etc. He involved in the
software research of Windows Vista、IE8 during this period. He joined Google at the end of
2006 as vice president and Google global engineering director of Google China Academy of
Engineering. He is solely responsible for Google China Mobile search, android localization
application team formation, engineering research and development.
Dr. Zhou Guangping (Co-founder, Senior Vice President)
Dr. Zhou obtained his PhD in Electrical Engineering from Georgia Tech in 1991. He joined
Motorola in 1995 and returned to China in 1999 to establish the R&D Center for Motorola
China. During his career at Motorola, Dr. Zhou served as Senior Director of the Motorola
Beijing R&D Center, Chief Engineer and Director of the R&D Center of Motorola Personal
Communication Department, Vice Chairman of the Mobile Patent Committee in Motorola
China Research Academy, and the Vice Chairman of Cellphone Quality Control in Motorola
Asia-Pacific. He led Hardware R&D for Motorola's best-selling model "Ming" series.
Mr. Liu graduated with a M.S. in Industrial Design from Art Center College of Design in
California, USA. He is one of only 20 Chinese graduates over the institution’s 80-year
history. Mr. Liu established the Industrial Design Department at University of Science and
Technology Beijing, where he served as Department Head from 2001 to 2001. In 2003, he
founded and served as Chief Designer of New Edge, an industrial design company. He was
also a Partner of Rethink Concept in LA.
Mr. Liu currently leads Xiaomi's Industrial Design and Ecosystem Development teams.
Li Wanqiang (Co-founder, Senior Vice President)
Mr. Li graduated from Xi’an Polytechnic University in 2000, with a B.S. in Industrial
Engineering. He then joined Kingsoft and co-founded their UIUX Design Center, serving in
various positions including General Manager of Kingsoft Dictionary, Chief Designer of UI
department, Director of Design Center, and Director of Internet Content. Mr. Li played a key
role in developing numerous well-known software projects at Kingsoft, including Kingsoft
Antivirus, Kingsoft Dictionary and WPS Office. He is also considered one of the earliest UI
and HCI experts in China.
In 2010, Mr. Li co-founded Xiaomi where he led both the MIUI and Mi.com teams.
Wong Kong-Kat (Co-founder, Vice President)
Mr. Wong graduated from Purdue University with a B.S. in Computer Science in 1997. He
worked for Microsoft from 1997 to 2010, eventually serving as Principal Development
Manager. While at Microsoft, he oversaw product development for Microsoft’s business
server BizTalk’s data analytics and business process automation features, as well as
multimedia, browser and instant messaging feature for Windows Mobile (China) and
Windows Phone 7.
Mr. Wong currently leads the Mi Wi-Fi and Mi Cloud teams.
Hong Feng (Co-founder, Senior Vice President, Chairman of Mi Finance)
Hong Feng joined Xiaomi in 2010. He is the Chairman Xiaomi Finance and CEO, focus on
development of financial business. Hong Feng graduated from Shanghai Jiao Tong
University where he obtained a computer science & engineering degree. He continued his
academic career at Purdue University, where he received a Master’s Degree in Computer
Science. Before Xiaomi, Hong Feng worked at Siebel and then joined Google as Senior
Software Engineer. While at Google Headquarters, Mr. Hong oversaw Google Music, Google
Pinyin Input, Google Calendar, and Google 3D Street View. Mr. Hong currently leads the
MIUI division at Xiaomi.
Expansion OF Xiaomi
In 2012 Xiaomi shipped a total of 7.2m smartphones and in 2013 Xiaomi shipped a total of
18.7m smartphones and even shipped more than Apple in one quarter. In the first quarter of
2014 Xiaomi had already shipped over 11m smartphones, more than they sold in the entirety
of 2012 and just over half the 2013 sales numbers. Demand continues to increase due to the
high specification hardware of their devices and the price they sell their products
international markets such as Hong Kong, Taiwan and Singapore where Xiaomi are also
officially available have seen similar demand to China. This continued expansion out of
China also prompted the high-profile hire of Hugo Barra (ex-Google android executive)
whose job it is to discover new markets. Malaysia, Philippines, Thailand, Indonesia and India
will see Xiaomi phones next. This may eventually lead to an official European and US launch
but nothing is confirmed yet. And besides, those that want Xiaomi phones (and many do) are
willing to pay the money to import the world’s best smartphone.
Lei carefully cultivated the image of Steve Jobs even in his outfit by wearing jeans and black
shirts and was very much ambitious in creating his brand into one of the World’s Top 500
Best Companies. Started steadily in the Chinese market on April 6, 2010, Xiaomi swiftly
tightened its reach in the Chinese smart phone market and current scenario said that Xiaomi
is the third largest smartphone maker in the whole world. As mentioned earlier, the company
that was founded just 5 years back in 2010 has overtaken the twin giants of mobile market
Samsung and Apple in China. This all was made possible through its unique marketing
strategy which involves offering cheap but high quality hardware embedded in the phones. It
is expected that around 500 million smartphones will be sold only in China in the year 2015,
which will be more than three times as many as will be sold in the United States. Till date,
the company has raised 6 round of funding for its expansion and product development plans.
Xiaomi is now the third largest smartphone maker in the world followed by Lenovo and LG
at fourth and fifth place respectively. Samsung and Apple hold the first and second positions
respectively.
Growth of the most preferred Smartphone brand-Xiaomi
In the first half of year 2016 Xiaomi occupied the top position as its Redmi Note3 became the
most popular smart phone brand in India. As per above figure.1 it shows us that the Xiaomi
Redmi Note 3 was the most popular Smartphone in most Asian countries in the First half of
2016.
Figure.1
Figure 2 reflects the Global Smartphone sales forecast which shows that China is now a
matured market in terms of Smartphone whereas India is all set to become the next major
growth wave due to factors like rise of wealthier middle class consumers, intense competition
and aggressive promotions from local Smartphone brands to name a few.
History in India
With its first international headquarters in Singapore, Xiaomi announced its expansion
beyond the home country of china. Following Singapore, the company started operations in
Malaysia, Philippines and India. The company entered the Indian market with mi 3 (mobile)
in partnership with Flipkart, India’s leading online retailer. It used the concept of ‘flash sale’
to market its value-for-money smartphones. A flash sale is a discount or promotion offered
by an e-commerce platform for a short duration of time. Interested customers had to register
for the sale, and Xiaomi only made available a limited stock of devices that were sold out in a
few seconds.
In India, Chinese brands have always been perceived as cheap and low quality, but Xiaomi
changed that perception. It is affordable but not low quality. In fact, the quality is much
higher in comparison to the local brands. With its good quality and mid-range pricing, mi
phones became an instant hit and the perfect device to upgrade for the low-end phone users.
Xiaomi continued and launched many more successful mobiles like the Xiaomi mi4 for
rupees. 19,999 in 2015. Xiaomi was highly affordable and was very well received in the
market. It competed with the Samsung galaxy s5 that was launched at a high price of rupees
50,500 in 2015. Xiaomi understood the sensibilities of the Indian market and continued to
launch smartphones in the mid-price range. Budget offerings helped the brand to expand the
footprint and establish an image of value-for-money products.
At the time, Meng Zhang, senior analyst at Counterpoint Research said that a lack of
presence in offline space has been one of the determinants for Xiaomi's slowing growth as its
e-commerce driven business model has hit a ceiling. Even in China, Vivo and OPPO started
to edge out Xiaomi as the country's top phone makers.
3. Big strides
Yet, business continued to grow for Xiaomi in India. In just two years of doing business in
the country, Xiaomi's revenue in India exceeded $1 billion last year.
In October, the company sold a million smartphones in just 18 days as online retailers like
Flipkart and Amazon went into overdrive with discounts and promotions for the festive
season which typically starts from October before Diwali, the Hindu festival which marks the
biggest shopping season in the country, and continues until the end of the year with different
festivals celebrated by diverse communities and religions across the country.
Around the same time, as Barra left Xiaomi to join Facebook, Xiaomi India managing
director Manu Kumar Jain also assumed the vice president role at Xiaomi. Jain had done
quite well to charter the course of the company's expansion into India and became a much-
respected brand ambassador.
Jain, without any prior experience in the smartphone or telecom industries, took confident
and innovative steps across the board to take the company beyond just smartphone sales
figures -- identifying the roadblocks that were leading the company to a plateau of sorts in
terms of growth.
Piggybacking on the success of some bestselling devices like the Redmi Note 4 -- the fastest
device to sell one million units in India -- the company became the top smartphone brand
amongst the online players in the country.
Yet, with only one-third of smartphone sales in the country happening online, the company
had to find a way to crack the offline market for a sustainable market share.
From the beginning of this year, Xiaomi started to build its offline business aggressively with
a three-pronged strategy which involves large format retailers (where Xiaomi puts up a pop-
up store at big electronics retailers), Mi Preferred Partner stores, and its own Mi Home stores.
The company's most innovative outreach is via the Mi Preferred Partner stores where the
company picks up a key multi-brand retail store in each market cluster. These stores carry
differentiated Xiaomi branding and get stock from Xiaomi on priority. While they continue to
sell devices from other brands as usual, they get additional business by being an outpost for
Xiaomi. It's an interesting way to build offline retail without going for the breadth and reach
associated with traditional distribution. Xiaomi currently has 600+ such stores, but it aims to
have 1,500+ Mi Preferred Partner stores across 30+ cities by the year end.
Also, earlier this year, Xiaomi opened its second factory in India to keep up with a demand
which now enables 95% of the smartphones sold in India to be manufactured in India.
When Xiaomi opened its 500th service centre in India a couple of months ago, Jain declared
that the company wanted to be known as the "benchmark for service." It was very important
How did Xiaomi entered into the Indian Market?
Xiaomi s major move was to move to the India which is the world’s second most populated
country after a success record in China. The company will have to fight to prove its worth to
potential new Indian consumers as many are apprehensive that the Chinese government will
have direct access to their data. Another major challenge is to make a strong position in the
smart phone market as there is immense competition, thereby focusing on providing good
services to the consumers. India is a land of diversity and in this competitive Smartphone
market to be successful company needs to focus on different product mixes and strategies to
effectively target different segments. The segments which are submarkets of the larger Indian
market segmentation should be done on the basis of four factors which are economic
purchase power, required functionality, technological familiarity and Intended use. These
guidelines have led to the formation of three broad customer segments.
A couple of years ago in 2015, MIT Technology Review ranked Xiaomi number 2 on their
list of 50 Smartest Companies -- a list that also had companies like Apple, Google and
Microsoft who were rated far below the Chinese smartphone and smart home products maker.
This was exactly a year after Xiaomi landed in India -- the company's biggest market outside
of China. In almost three years, the company has since become the number two brand in the
overall Indian smartphone market, behind the long-standing leader, Samsung. India is a very
important market for smartphone makers as it is expected to double in size in terms of sales
by the year 2020.
In the last three years, smartphone sales have tripled in the country to 120 million in 2016. In
a letter to all Xiaomi employees, Xiaomi CEO Lei Jun announced that the company shipped
23.16 million smartphones in Q2 2017, an increase of 70% from the previous quarter. This
record high for Xiaomi’s quarterly smartphone shipments signifies a major inflection point in
its growth. According to Jun, after two years of internal recalibration, Xiaomi is once again
embarking on a rapid growth trajectory and he asserts that to date, no other smartphone
company globally had been able to resume growth after a decline in sales. In his letter, he
acknowledges two instances of supply issues that hampered the company’s supply chain for
several months and softened the smartphone sales. One of the highlights of Xiaomi’s success
in the period is its new retail model that integrates online and offline retail channels. While
Xiaomi was ranked number one in terms of smartphone sales on popular Chinese ecommerce
stores like JD.com, Tmall, and Suning during this year’s 618 online shopping festival, the
company also opened 123 Mi Home stores across China with another 14 coming up
tomorrow on July 8. Jun also credits the company’s relentless pursuit of technological
innovation and investments in R&D for its success. Last year, Xiaomi applied for 7,071
patents globally and it was granted 2,895, of which half are international patents. Of course,
Xiaomi also made great strides in India – the company’s biggest market outside of China.
Xiaomi is the number 2 brand in the overall Indian smartphone market, and the revenue in the
first half of the year is up 328% year-on-year. Other countries where Xiaomi is seeing great
results in are Indonesia, Russia, and Ukraine. But Lei Jun is not ready to settle just yet. He
has set a ‘humble’ revenue goal of RMB 100 billion for the year, and kicking off a new
chapter for the company; he aims for Xiaomi to ship 100 million smartphones in 2018. EO
Lei Jun shared that the company aims to ship 100 million smartphones globally in 2018.
Jun is of course banking on the great strides Xiaomi has made in the Indian market to achieve
that target.
1. Humble Beginning
Hugo Barra, vice president of product management at Xiaomi at the time, was the star of the
show as he was the company's most recognized face, having gained fame as a product
spokesperson for Android at Google before. A young 33-year-old Manu Kumar Jain, the head
of Indian operations, was happy to remain in his shadow while working on helping the
company to gain a foothold in the crowded Indian smartphone market.
The company entered the market in partnership with Flipkart, India's leading online retailer,
using hunger marketing tactics to market its value-for-money smartphones. Interested
customers had to register for the sale, and Xiaomi only made available a limited stock of
devices that were sold out in a few seconds.
Once Motorola (making a comeback of sorts early in the year) and later Xiaomi validated this
model, a lot of Chinese players landed in India taking the same route of exclusive online sales
in partnership with ecommerce stores.
While Xiaomi smartphones mostly got positive reviews, and sold well in a quick timeframe,
the company had limited scope and more than one challenge.
The sloppy after-sales support experience and non-availability of spare parts hurt customer
experience and brand reputation. There was also an irrational disdain for "made-in-China"
products in general.
Also, while the flash sales created hype, it also annoyed a lot of potential customers as well
as technology writers who found it awkward to recommend a device that was hard to procure.
as Xiaomi grew in brand equity as well as market-share in the country, and its efforts were
validated in a recent report from Indian Market Research Bureau where it was declared as the
company that offers "best in class" service delivery.
4. Grand ambition
In India an extremely important market in Xiaomi-s globalization strategy and the company
now aims to capture the largest market share in the country within three to five years.
It's hard to imagine that it won't, since its growth as yet -- in just three years since its debut in
India -- has been exponential and a fascinating case study. Xiaomi looks poised to double its
revenue in India to $2 billion in 2017 -- something that likely won't surprise many industry
watchers.
5. Entry-Level Consumers
This segment comprises of people belonging to lower socioeconomic classes of India whose
discretionary income is low to spend on technology-based products but show a great level of
curiosity in owning the product. Pricing is an important factor for them and are always on the
lookout for cheaper substitutes. As they are not very literate, they are more responsive
towards advertising, hence would buy Smart phones to merely getting connected on social
media. Also, they expect their hand-held devices to make their lives simpler by use of digital
solutions.
6. Mid-Range Consumers
These consumers are India s growing middle class and people who are moving from lower
sections of the society towards the higher strata which are approximately 267 million in
number. Looking for a reasonably priced product and expect lot of value-added features This
segment can be further divided as newcomers, white collar professionals, wealthy ones and
high-end consumers.
Manu Kumar Jain – The mastermind behind Xiaomi’s smart
Ecosystem in India
Know Him
Manu Jain comes across as a person who was always determined towards his career
endeavors. His passion for technology made him pursue B.Tech from IIT Delhi, and MBA
from IIM Calcutta.
He initially paved his career path in Headstrong, working as an engineer. He later served a 5
year tenure at McKinsey. However, Manu always envisioned an innovative path, and wanted
to embrace his identity as an entrepreneur.
Within just 5 years of span Xiaomi company with its unique blend of innovative business
ideas and effective implementation of strategies it has successfully established itself as a
valued start up and in coming 5 to 10 years, Xiaomi has the chance to develop into the worlds
topmost Smartphone Company. Xiaomi follows two competitive strategies which are
producing products with superior quality and features, and the other is production at a lesser
cost. In addition, the additional applications, present in Xiaomi phones, catch the attention of
the customers towards them. Before launching its first android Smartphone the company
carried on an aggressive market survey which is one of the competitive strategies of the
company. Xiaomi made an intelligent move by realizing that the competing giants of the
world, Apple Inc. and Samsung Electronics Co. have their strong customer loyalty as a result
of their separate features and OS platform bases. As a result, Xiaomi chose the Android OS
platform and designed MIUI (Mi User Interface and pronounced as "Me You I") to deliver
smart phones at a cheaper rate. Cloud services, security app, music and video player, browser
and many more common apps were developed by the company (Mi.com, 2015). Thus, the
competitive cost advantages, quick expansion in the international market, online selling
strategy and the razor-thin margins are among the most important core competitive strategies
through which Xiaomi made a strong global presence. Technical and cheap cost of its
products may not be enough to entirely uproot the market Xiaomi is entering. In terms of
brand recognition in India market Xiaomi still needs to compete with to that of its
competitors like Samsung, Apple, Micromax etc. as they already have a success history and a
huge customer base. Indian market is very large to tap at one go, hence a narrowed segment
to cater to initially which aspire for a great product but at the same time are financially very
conscious regarding the pricing aspect. To find out its market dominance let us have a look at
the marketing strategies Xiaomi has adopted to conquer its market.
One of the most effective strategies Xiaomi executed is through its brilliant software based
on android and highly customizable having a customer base of more than 30 million users.
Apps, theme customization and games which are installed on MIUI contribute to over $4.9
million revenue generation on monthly basis. Xiaomi works a lot like Amazon where is
aspires to earn profits via its ecosystem by marketing various goodies and ultimately succeed
like an e commerce giant. It believes that by delivering cheap phone along with a great
hardware results in getting a happy buyer for the firm.
A unique marketing approach for brand promotion was designed by Xiaomi to appeal to the
market. The face behind making the brand have a “Cool Image” is none other than the CEO
of the company Lei Jen. Xiaomi used the word of mouth publicity as they strongly believe
that satisfied customers create positive vibes in the market and is also one of the cost-
effective ways to penetrate in the international market. There was no expenditure made on
traditional advertising and they aggressively make use of Social media and other online
forums to connect with their target audiences. Employees as engineers had a direct contact
with the consumers as it helped them gather lot of information to refine the software are also
to overcome other technicalities.
Xiaomi has created a huge fan following known as Mi-fans who are known as early adopters
and are the first ones to buy MIUI Smart phones. These fans are none other than an army of
patrons and bloggers which are called as Mi-fans community who constantly create buzz on
the World Wide Web. China s topmost twitter like micro blogging platform lead by Sina
Weibo, which had 400 million subscribers is one of the fastest growing social forum. The
company understood the power of doing a smart work and finally decided to sell phones
directly from Sina Weibo. At present the company makes use of online channels like Flipkart,
Snapdeal and Amazon for delivering the products to its target customers. Company makes
use of “Customer obsessed” strategy which means that customers can involve themselves
completely in the designing and development process where inputs from users can be taken
from online medium and ultimately incorporating suggested change in new products.
Company strongly believes in a system which works on a continuous innovative platform not
only for their operating systems but also in terms of their marketing programs. Company
manufactures superior quality products which are aimed to provide value for money
proposition to their customers. Its two most important series of handsets known as Mi and
Redmi has been continuously delivering trendy Smartphone models. Company came out with
4S, Mi 4 and Redmi Note 2 mobile phones in 2015 and rocked the market with great sale
numbers. Later in 2016, Xiaomi continued its popularity by launching Mi5, Redmi Note 3
and Redmi 3S. In the history of online Smartphone industry, as per IDC, the highest shipped
device with more than 2.3 million units sold within six months was Redmi Note 3.
Brands like SAMSUNG, Apple, HTC and many more make their products available in the
market through physical stores and third-party retailers, on the other hand Xiaomi sells most
of its products via online mode through Flash Sales”. Such sales are products in limited
quantity which are put on sale at a particular time and goes on until the stock lasts
encouraging impulse buying. Also, there is limited availability of the products which
motivates consumers to buy on the spot. In this way the company increases its profits and it
prevents the firm from over production of phones that it might not sell leading to a smaller
inventory. Such a strategy not only creates sales but also create a fake propaganda which goes
a long way to achieve overall organizational goals. Xiaomi’s flash sales aids in inventory
management, creates scarcity and avoids over production disasters. In Indian market Xiaomi
launched the Mi 4, which went on sale for the first time via Flipkart on 10th Feb 2015.During
the first flash sale company’s demand exceeded its supply as there were more than 2,50,00
buyers who registered themselves, whereas the company kept approximately 25,000 to
35,000 units of the Mi 4 on sale.
Xiaomi 4P’S of Marketing
1. Product
Presenting itself as the good quality phone with the low prices is the good strategy that
drives Xiaomi to the top spot in the Smartphone industry. It has more special features than
the standard Android phones and has options for customization. The biggest key that drives
Xiaomi on becoming successful is the software rather than the hardware. Product refers to
what a production or service unit or even an individual offers. In marketing mix, product is
defined as what is offered to market for noticing, buying, or using which may meet a need.
Product may include a physical object, service, place, organization, or even an idea. In the
current study, marketing mix strategy of Xiaomi product has been considered as the most
important factor in the mobile phone industry. The quality of product plays an important role
in customer making decision preferences of shops. The consumers often judge the product
quality or brand by the perceived quality. Perceived brand quality can be identified as the
consumer’s general subjective judgment on the advantage or superiority of a product which is
derived from the evaluation process of its different features. The chance of success for brands
of higher perceived quality is more than brands of lower perceived quality. Chinese brands
were seen as cheap and low quality but Xiaomi changes this thinking by providing high-
quality products at affordable prices. It was important to do that as Indian buyers love to save
their money. Soon, this Chinese brand established an image of value for money products.
2. Price
Xiaomi sells its phones at a price that just covers the cost of the device rather than it’s Cost of
production. Xiaomi is focusing more on selling its phones at a low price today, but Gaining
more in the future from selling contents such as applications, service and accessories. There
is a major difference between price and other marketing mix factors; price is an income-
making factor while other marketing mix factors are costly. Price as a marketing tool for
Xiaomi mobile is a key factor in selling product to customers. Following this, pricing can be
effectively used to indicate the position of a product in proportion to other competitors and
this can provide reliable information regarding the different sections of the market. Moreover,
price is a quality index and products must be analysed in terms of the advantages they offer
In consumable markets, price is an external indication of product quality and high-price
brands are considered as high-quality brands. On the other hand, since the quality of a
product is a norm and can be easily proved, higher price may have negative effect on making
decision to buy products and customer satisfaction; because it may lack the indication of
higher quality and it just highlights the more money that must be paid.
3. Place
There are many countries outside China where the Smartphone market is dominated by
Apple and Samsung. This is the main obstacle for Xiaomi in expanding its brand
internationally. Xiaomi already has a strong base in mainland China, Malaysia, and
Singapore. Currently, Xiaomi is expanding its market to Myanmar, India and the Philippines.
Xiaomi mostly sells its products online instead of opening physical stores. Distribution refers
to activities that are done to deliver a product or service to customers. Distribution or place
are the simplest terms in 4P; however, they play a very important role in it.Xiaomi operates in
China, Singapore, India and 27 other countries mainly in emerging markets of south east
Asia.
Marketing Mix
The concept of marketing mix was first proposed by Neil Borden in 1949. The term
"marketing mix" became popularized after Neil H. Borden published his 1964 article, The
Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's
after James Culliton had described the marketing manager as a "mixer of ingredients". The
ingredients in Borden's marketing mix included product planning, pricing, branding,
distribution channels, personal selling, advertising, promotions, packaging, display, servicing,
physical handling, and fact finding and analysis.
The marketing mix is a model of creating and implementing marketing strategies. It
stresses the blending of various factors in such a way that both organizational and consumer
objectives are attained. The elements are the marketing tactics, also known as the 'four Ps',
the marketing mix elements are price, place, product, and promotion. The model was
developed by Neil Borden who first started using the phrase in 1949. When blending the mix
strategy, marketers must consider their target market. They must understand the wants and
needs of the market customer then use these mix elements in constructing and formulating
appropriate marketing strategies and plans that will satisfy these wants. However, the most
common variables in marketing mix (Product, Price, Distribution And Promotion) were
introduced by Mccarthy and were known as 4Ps (Vazir Zanjani, Motameni, & Mousavi,
2010). Until now, there has been no considerable change in the concept of marketing mix and
in many researches; 4P is still the coordination concept that other aspects of marketing are
organized around it. The most common definition of marketing mix in target market is to
offer the proper product at a reasonable price in the proper place and time. To put it another
way, marketing decision variables in different models of marketing mix provide a framework
through which the business develop plans for its marketing activities.
It has a huge presence in many of these countries but major turnover comes from mainland
China. Xiaomi mainly sells through online mode though it has made some modifications in
some of the emerging markets like India where it uses retail outlets to sell its products. It
operates through Flipkart in the online space in India. Xiaomi also operates dedicated stores
called Mi home present in Beijing and now being opened in Bangalore. It expects to open
100 Mi home stores in India.
4. Promotion
Xiaomi promoted its products by selling high specs at lower price to markets where
technology savvy people could not afford high spec products from Xiaomi competitors. They
have distinguished themselves by building a strong following around their custom operating
system. “Just For Fans”, Xiaomi’s unique initiative where the Xiaomi loyal fans lead the
development of the product in every step. Most of the employees of Xiaomi are also previous
loyal fans who have become part of the team developing the product. In this way Xiaomi has
made sure there is a pull strategy than a push strategy of the products produced by them.
Xiaomi also leveraged social media to the fullest and word of mouth. It promoted through
micro blogging sites and social networking sites like Facebook and Twitter. They regularly
organize flash sales which forced the people to buy them due to the urgency. This caused a
hype for the product and there has been alleged reports that some of the products were sold
out in 6 minutes. This type of publicity pushed sales for Xiaomi. Another crucial part of
Xiaomi’s social media strategy is that it runs Weibo accounts for every product range in
China and for Facebook in other markets. Xiaomi also organizes fan festivals and local
meetups regularly like the concept followed by Harley Davidson to try and create a cult
following for Xiaomi products. The fans are encouraged to bring their friends along to these
meetings as well. They also combine forces with likeminded companies to promote its
products like it did along with Uber to promote its brand. Xiaomi launched phones
exclusively on Flipkart in India. FlipKart being one of the leading online platforms helped the
publicity of Xiaomi. Xiaomi has a well-established program under the VIP Users Center.
Being a Xiaomi VIP entails getting points with each new purchase, which counts towards
your status in the Xiaomi online community as well as for discounts on future purchases.
These VIP members are also invited to these local meetups and fan festivals. This concludes
the 4Ps marketing mix of Xiaomi.
Theoretical Model of Marketing Mix
The marketing mix framework was particularly useful in the early days of the marketing
concept when physical products represented a larger portion of the economy. Today, with
marketing more integrated into organizations and with a wider variety of products and
markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as
Packaging, People, Process, etc. Today however, the marketing mix most commonly remains
based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this
framework remains strong and many marketing textbooks have been organized around it.
The goal is to make decisions that centre the four P's on the customers in the target market in
order to create perceived value and generate a positive response. Theoretical model are as
below as independent variable and dependent variable.
Fig 1.1 Model of Marketing Mix and decision making towards customer satisfaction
1. Independent Variables
The marketing mix in relocation benchmark for summers for retailing management strategy,
either price, product, place/distribution and promotion, can be performed using multiple
criteria decision model. Making Decision Model attempt to identify all alternatives and to
quantify characteristics of these alternatives—attributes—in order to rank them in some
consistent manner. Making decision can be divided into those that allow trade-offs between
attribute levels (“compensatory decision rules”) and those that do not, and those that
explicitly incorporate risk, or uncertainty, and those that do not. Therefore, to make decision,
customers are impacted following marketing mix strategies.
The term "Product" refers to tangible, physical products as well as services. Although this
typically refers to a physical product, it has been expanded to include services offered by a
service organization. The specification of the product is one of the variables that a marketer
has at his/her control. For example, the product can include certain colours, certain scents,
and certain features. Lastly, in the broadest sense when a consumer purchases a product it
also includes the post-sales relationship with the company. The post-sales relationship can
include customer service and any warranty or customer satisfaction.
The price is the amount paid for a product. In some cases, especially in business-to business
marketing this can also include the total cost of ownership. Total cost of ownership may
include costs such as installation and other products required to deliver a complete functional
solution. Xiaomi mobile phone is low price and good quality product. So, as an under
development country, Myanmar people are suitable price to use it. Quality is more valuable
than price. In that reason, most people from Myanmar are making decision to buy Xiaomi
and get satisfaction on it.
Place represents the location where a product can be purchased. It is often referred to as the
distribution channel. It can include any physical store as well as virtual stores on the Internet.
Distribution is about getting the products to the customer. Customers are easy to check to buy
the products, price, quality and brand from the distribution channel without going anywhere
to make decision towards customer satisfaction.
In the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of
generating a positive customer response. Promotion represents all of the communications that
a marketer may insert into the marketplace. This can include TV, radio, and print advertising,
as well as coupons, direct mail, billboards, and online advertising. One of the less well-
defined areas in promotion is the role of a human sales force. On the other hand, consumers
may rather purchase the product only when sold through the support of a known salesperson.
In this case, the service, perceived or real can be defined as a feature of the product.
Therefore, customers can make decision whether to buy that products or not and decide their
satisfactions.
2. Dependent Variable
a. Customer Satisfaction
Customer satisfaction is a perception (Nam, Ekinci, & Whyatt, (2011) as dependent variable
in this paper. It is also a question of degree. Providing quality products and services is all
about meeting customer requirements. Customer satisfaction, a business term, is a measure of
how products and services supplied by a company meet or surpass customer expectation. It is
seen as a key performance indicator within business and is part of the four perspectives of a
Balanced Scorecard. In this research customer satisfaction is independent variable because
their expectation and quality of products, low price, easy to checking place and distribution
channel are fulfilling of their needs and wants. In a competitive marketplace where
businesses compete for customers, customer satisfaction is seen as a key differentiator and
increasingly has become a key element of business strategy. The four key steps for successful
marketing are identified as understanding the customer, making value for customer,
communicating the value to target market, and making decision for the customer to buy.
Xiaomi Segmentation, Targeting and Positioning
1. Segmentation
Age
Gender
Income
Lifestyle
Values etc.
By using the segmentation technique, Xiaomi can narrow down the large, diversified target
audience into specific and narrowly defined groups. Market segmentation surveys are
common methods of obtaining the customer-specific information that could be used to create
groups sharing common characteristics.
After understanding the unique buying behaviour of customers and getting the required
information through surveys, Xiaomi can divide the market into small homogeneous groups.
It can be done by exploring the geographic, demographic, behavioural and psychographic
characteristics of customers.
The company can use one or more of these segmentation strategies to choose the right market
segments and develop an effective Marketing Strategy.
The geographic segmentation divides the market according to geographic areas, like-
city, country and region.
The demographic segmentation will require Xiaomi to divide market according to
demographic characteristics, like- gender, age, income and ethnicity.
If Xiaomi chooses behavioural segmentation, then customers will be divided
according to their buying pattern like usage frequency, benefits sought, usage
occasions and brand loyalty.
Use of psychographic segmentation will result in customers' grouping according to
their lifestyles, interests, attitudes, values and traits.
2. Targeting
After dividing the large diversified customer market into smaller groups with homogeneous
characteristics, Xiaomi should wisely choose the target segment/segments whose needs and
expectations match the company’s resources and capabilities.
The targeting can be done by evaluating the commercial attractiveness and growth potential
of identified segments. Xiaomi can choose one or more segments depending on the segments’
characteristics and the company's resources, capabilities and growth objectives.
The commercial attractiveness and growth potential of each segment can be evaluated by
using the following indicators:
Identified segments have the appropriate size
Have concrete differences.
The estimated profits should exceed the additional marketing costs.
Segments are easily accessible.
3. Positioning
After segmenting the customer market and choosing the right target market, Xiaomi now
requires to set a clear positioning statement that could create a positive image of the offered
product in the customers' mind. Xiaomi can follow the following steps to develop an effective
positioning strategy:
Develop the positioning statement for Xiaomi Marketing Strategy by answering the
following questions:
o What your brand stands for?
o What are the needs and wants of your target market?
o How your brand serves those needs?
o How different is your offering from competitors?
Answers to these questions will yield enough information to develop a positioning
statement.
The comparison of their communication and messaging strategy with competitors will
reveal the potential areas that could be addressed with targeted positioning message.
Identify the strengths/weaknesses of business by comparing with competitors to find
that gaps that offered product can fill.
Analyse positioning of competitors and evaluate own position in the market.
By using the analytical data collected from a different market, customer and
competitor surveys, develop a positioning statement and periodically test its
effectiveness by collecting qualitative and quantitative data (like focus groups, polls,
interviews etc.).
Use the test results to make necessary adjustments in the brand positioning.
SWOT Analysis of Xiaomi
1. Strengths of Xiaomi
a) Affordable pricing
Xiaomi offers smartphones and other electronic devices at extremely competitive prices. This
is extremely important for two reasons. First off, Xiaomi’s budget-friendly pricing allows
them to compete for the more budget-friendly consumers in developed regions. Secondly, it
allows them to enter new, previously-untapped markets in which smartphones were
previously too expensive. For example, Xiaomi is able to sell millions of devices in the Asian
market, especially in China and India, which would be impossible as a luxury brand such as
Apple or Samsung.
Despite their affordable prices, Xiaomi has a reputation for building high-quality products.
Consumers and tech critics alike are consistently impressed by how much bang you can get
for your buck with their smartphones. In part, this is thanks to the powerful specifications of
the individual components which Xiaomi use in their devices. What’s more, Xiaomi devices
are well put-together at the assembly level.
Most amazing of all, Xiaomi is able to offer quality products at affordable prices, and still
make plenty of profit for themselves. Quite consistently, Xiaomi has posted profits
amounting to hundreds of millions of dollars. Xiaomi can thank low manufacturing costs for
their high-profit margins. These low manufacturing costs are likely due to the low cost of
labor in China, as well as the significant economy of scale which arises when manufacturing
so many devices.
2. Weakness of Xiaomi
The global GDP is rising, and, as a result, consumers have more and more money to spend on
electronics. As a result, the smartphone and electronics market is growing organically. This is
especially true for some geographic regions, where previously devices were too expensive to
even consider. Xiaomi has a fantastic opportunity to capture these emerging markets, such as
Africa or India, thanks to their great prices. This is a particularly powerful opportunity for
Xiaomi, since it only involves competing against other budget-conscious manufacturers, such
as Huawei, but not luxury brands like Apple.
Unlike Samsung or Apple, Xiaomi has made little effort to grow its brand with the use of
brick and mortar stores. While Xiaomi does have a few “Mi Stores” located around the
world, they could certainly invest in some more. These brick and mortar stores would not
only improve Xiaomi’s offline sales channels, but they would also improve the company’s
perception as a luxury or high-quality brand. It’s worth mentioning that much of Xiaomi’s
sales are currently accounted for with E -Commerce.
c) Green branding
On the topic of branding, Xiaomi has another opportunity for growth. By pitching themselves
as a “green brand” i.e. an environmentally-friendly brand Xiaomi may be able to set
themselves apart from the crowd. There’s a growing environmental consciousness, especially
in more developed countries, and Xiaomi may be able to profit from this while saving the
planet! Naturally, this would be a two-step process. First, Xiaomi would need to ensure their
manufacturing processes are as green as possible by reducing and managing waste products
and pollutants. Secondly, Xiaomi would need to go about promoting this message with some
clever marketing tactics.
4. Threats of Xiaomi
a) High competition
The smartphone and electronics industries have a reputation for being cutthroat competitive.
Most players in these markets are well-established brands with plenty of capital to support
them. This means they are capable of large marketing campaigns, long legal battles, and
plenty of investment into new technology. Xiaomi is a relatively new electronics
manufacturer, so they’ll need to be extra careful they’re not pushed out of the market. It
wouldn’t take a lot for a premium manufacturer such as Apple to offer a more budget-
friendly device, and that could have devastating consequences.
Xiaomi has seen extremely quick growth over recent years, selling many millions of
smartphones. However, there have been reports that Xiaomi lacks the customer service
infrastructure to adequately serve all of their recently-acquired customers. If there were to be
a model-wide issue with one of Xiaomi’s products, they may find themselves with more
support tickets than they can manage, and plenty of unhappy customers.
DATA ANALYSIS AND INTERPRETATION
Data analysis is a process of collecting data and organizing it in manner where one can draw
a conclusion
The Objective of this question was to find the age of the people. In the survey of 100 people,
it was found that 78.3% of people are under the age of 18-25, 10.4% of people are under the
age of 0-18, 11% of the peeople are under the age of 25-35 above
2) Gender
The Objective of this question was to find the Gender of the people. In the survey of 100
people, it was found that 58.3% of the peropla are Male and 41.7% of the people are
Female
3) Income?
The Objective of this question was to find the income of the people. In the survey of 100
people, it was found that 69.9% of the people comes in No income category, 22.6% of the
pople comes in 1 Lakh – 2 Lakh category and 7.8% of the pople comes in 2 lakh – 5 lakh
category.
The Objective of this question was to find the income of the people. In the survey of 100
people, It was found that 77.4% of the people come across this brand, 14.8% of the
people don’t know about this brand and 7.8% of the people had answer as maybe.
5) Have you used any products of this brand?
The Objective of this question was to find the income of the people. In the survey of 100
people, 77.4% of the people use this brand, 20% of the brand don’t use this brand.
The Objective of this question was to find the income of the people. In the survey of 100
people, 76.5% of the people use mobile phones of this brand, 8.7% of the people use
earphone of this brand.
7) Which Xiaomi product provides the best feature?
The Objective of this question was to find the income of the people. In the survey of 100
people, 77.4% of the people has select the Mobile phones as best feature of this brand and
7.8% of the People select Earphones.
The Objective of this question was to find the income of the people. In the survey of 100
people, 80.9% of the people has select the Mobile Phones which is easily available, 7.8% of
the people has select Earphones Which is easily available and 7% people has select the
Fitness Band which is easily available.
9) Are these products available online?
The Objective of this question was to find the income of the people. In the survey of 100
people, It is found that 91.3% of the people know that these products are available online and
7.8% people of the people Don’t know that these product are not available online.
10) Which Xiaomi product would you recommend to your friends and family?
Fig 2.10 Which Xiaomi product would you recommend to your friends and family
The Objective of this question was to find the income of the people. In the survey of 100
people, it is found that 76.5% of the people will recommend Mobile Phones and 8.7% of the
People will recommend earphones and 14.8% of the people select Others.
11) How much would you rate Xiaomi as a brand?
The Objective of this question was to find the income of the people. In the survey of 100
people, it is found that 33 (28.7%) of the people gave 10, 21 (18.3%) of the people gave 9, 26
(22.6%) of the people gave 8, 17 (14.8%) of the people gave 7, 7 (6.1%) of the people gave 6,
5(4.3%) of the people gave 4, 2 (1.7%) gave 4, 1 (0.9%) of the people gave 3 and 3 (2.6%) of
the people gave 1.
FINDINGS AND SUGGESTIONS OF XIAOMI MOBILES
Findings
Predicting the consumer behaviour has become a tough challenge for the corporate. The
selection and buying decision about product depends largely upon the consumer perception
and knowledge about product that further influence their final decision. The companies
always remain curious to know answers of various questions in mind like what consumers
buy, how they buy, when they buy, from where they buy, what factors influence their final
buying decision.
Indian Mobile Sector does not remain galvanized from these questions. Mobile phone
markets have hunting the solutions to decode the consumer’s psychology and try to demystify
the selection criteria behind their selection for mobile service providers. This research makes
an attempt to address the basic question of identifying various factors influencing the
consumers to purchase mobile phones. Managerial implications have been suggested few
effective marketing strategies to retain the existing customers and to attract the new
customers.
On the basis of the review of literature based on past studies following objectives have been
formulated:
Suggestions
Possession of mobile phones is high among he graduate students. It is important for the
manufacturers to manufacture user friendly mobile phones in order to reach the people of
primary level of students also. They should give more attention to after sales services. The
service centres should be able to carry out fast repairs. Since the majority of the Mobile users
are males, it is suggested to produce attractive and fashionable models catering specially to
the females. Mobile companies should do marketing by taking female celebrities in their
advertisements so to tap the female customer also. Create a new niche for extremely basic
phones, as some people do not care about features. Many handsets have a low ring volume.
Especially in a country like India where crowds and noises are the common features, a loud
ring is necessary. Some attractive warranty packages should be given to lure buyers.
The introduction of 3G mobile facility is expected to create a boom in the mobile market.
New services offered by the service providers in 4G would be an added attraction. Service
providers should start offering good value for money schemes in 4G mode. There are cheap
mobile phones available for very low price and countries like China and Korea manufacture
them mostly. It is suggested that the State could come down heavily on those sets as they are
mostly without International Mobile Equipment Identity (IMEI) which poses a security
threat. Majority of the mobile users are unaware of the health hazards caused by mobile
phones.
Hence, it is strongly suggested to keep them informed with regard to the side effects due to
the excessive use of Mobile phones. Educating people about the proper use of Mobile phones
will help in getting rid of avoidable health hazards. Mobile phone users must be advised to
use it only when there is a need. Call rates in India are the lowest in the world. It is stated that
the SMS rates should be cut down so much to counter the attitude of consumers in giving the
missed calls. Therefore, efforts must be made to attract the consumers to other usages.
CONCLUSION
In just eight years after it was founded, Xiaomi has already been named the third largest
smartphone maker in the world and the most popular in China. The company has a unique
business model and strategies, which has enabled the firm to occupy the smartphone market
at a rapid rate. It is a success because it has been integrating a crowd sourcing approach to its
product designing process. In addition, it has done away with traditional marketing means,
and it fully uses online marketing, social marketing, and relies on their customers to advocate
their products through the word of mouth. All these factors have contributed to the success of
the company. The company will continue to thrive in new markets because the offer high-end
quality tech products at relatively lower prices compared to other brands offering the same
product. Their integration of a health platform, such as the Real Time Eye Blinking Detection
offers the company with another undisputed success. The technology and prices of their Mi
phones give the company a competitive advantage in the market over their rival competitors.
BIBLIOGRAPHY
https://en.wikipedia.org/wiki/Xiaomi
https://pestleanalysis.com/swot-analysis-of-xiaomi/
https://www.mi.com/global/about/
https://www.mbaskool.com/marketing-mix/products/17243-xiaomi.html
https://pestleanalysis.com/swot-analysis-of-xiaomi/
QUESTIONNAIRE
1) Name
2) Gender
a) Male
b) Female
c) Other
3) Age
a) 0-18
b) 18-25
c) 25-30
d) 35 & above
4) Occupation
a) Student
b) Working
c) Housewife
5) Income
a) No income
b) 1 Lakh - 2 Lakh
c) 2 Lakh - 5 Lakh
d) 5 Lakh - 10 Lakh
e) 10 Lakhs & Above
6) Have you come across Xiaomi as a brand?
a) Yes
b) No
7) Have you used any products of this brand?
a) Yes
b) No
8) Do you agree that the procedure to open an account with the ICICI bank is difficult?
a) Yes
b) No
9) Which product from these have you used?
a) Mobile Phones
b) T.V
c) Fitness Band
d) Power Bank
e) Earphone
10) Which Xiaomi product provides the best feature?
a) Mobile Phones
b) T.V
c) Fitness Band
d) Power Bank
e) Earphone
11) Which one is easily available?
a) Mobile Phones
b) T.V
c) Fitness Band
d) Power Bank
e) Earphone
12) Are these products available online?
a) Yes
b) No
13) Which Xiaomi product would you recommend to your friends and family?
a) Mobile Phones
b) T.V
c) Fitness Band
d) Power Bank