Business Case Analysis: Xiaomi's Marketing Approach and Strategies

This report presents a comprehensive business case analysis of Xiaomi's marketing strategies. It begins with an overview of how Xiaomi produces high-quality, low-cost products, particularly within the Chinese market. The analysis delves into Xiaomi's value proposition, targeting tech-savvy consumers aged 18-35, and meeting their needs with innovative smartphones. The report then examines the 4Ps of marketing (Product, Price, Place, Promotion), detailing Xiaomi's product range, pricing strategy, distribution channels, and promotional activities. Furthermore, it explores the 4Cs of marketing (Company, Customer, Competition, Communication), analyzing Xiaomi's vision, mission, customer understanding, competitive landscape, and communication methods. The report concludes with an examination of Xiaomi's branding using the 4D model, covering functional, social, mental, and spiritual dimensions. The analysis highlights Xiaomi's commitment to innovation, customer satisfaction, and its ability to offer quality products at competitive prices, making it a significant player in the global smartphone market.

Running head: MARKETING
Business Case Analysis
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Table of Contents
1. How Xaomi tries to make high-quality, low-cost products within China:..................................2
2. Value Proposition of Xiaomi.......................................................................................................3
3. 4P’s of Marketing:.......................................................................................................................4
4. 4C’s of Marketing:.......................................................................................................................5
5. Branding 4D:...............................................................................................................................7
References:......................................................................................................................................9

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1. How Xaomi tries to make high-quality, low-cost products within China:
Xiaomi, a startup firm from China, launched in the year 2010 and commonly known as
MIUI, built a hardware to align with MIUI experience (mi.com 2020). The firm launched the
first handset in August which became known as Mi One, a high quality product that has been
way ahead of time and available at lower price. In the first quarter it was found that, a startup
like Xiaomi defeated Samsung to become one of the biggest smartphone makers across the
world. During second quarter of the year 2014, Xiaomi shipped close to over 15 million
smartphones in comparison to Samsung that sold only 13.2 million.
As far as pricing strategy is concerned, Xiaomi only undertakes selling through the e-
commerce. Thus, they are able to maintain a low cost as they do not have to worry about the
distribution and warehousing. Also, since Xiaomi undertake marketing through word of mouth
and the social media so it has no investments in the traditional means of marketing. Thus, it can
be said that Xiaomi reduces cost at each stage. Besides, the company themselves source the
component and handles the sellers following different strategy. Xiaomi has also been found to
sell the products for close to 18-20 months since its launch in comparison to the bigger players
who mostly discontinue the product after selling for 6 to 8 months. This is how Xiaomi is also
able to bet Moore’s Law which indicates that price of the components reduces with the phone
price remaining constant. The most crucial thing has been the fact that Xiaomi has focused more
on being ‘mobile internet company’ which implies that the company looks forward to making
money not solely on the hardware but through selling of the games, apps, internet service and
special theme for Android. Thus, Xiaomi is able to bring quality products at the most affordable
prices.

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2. Value Proposition of Xiaomi
Consumer Segment: Xiaomi provides higher quality products for the consumers and
primarily targets the consumer who are mostly tech savvy and within the age group of 18 to 35
years (justforfans.wixsite.com/xiaomi 2020). They consumers are mostly students and the
working class people who look for good quality product.
Needs: Xiaomi tries to meet the unique needs of the customers by providing smart
phones that has a bigger screen, CPU and qualities that helps it in deriving higher value within
smartphone market of China.
Relative Price: Xiaomi charges the minimum prices for capturing the maximum share of
the market. Xiaomi also made use of online strategy of selling for customer convenience and
fixed themselves at the medium to higher position in relation to the smartphone.
Persona
 Suitable for students
 Suitable for people belonging to working class
 Users of social media who are known for driving e-commerce market.

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3. 4P’s of Marketing:
Product:.Xiaomi is one of the largest sellers of smartphones comprising of MI and
RedMi range of the products (mi.com, 2020). The brand now offers a major range of the
consumer electronics that include:
 Notebooks
 Smartphones
 TV
 Smart devices
 Charging and power bank devices
 Drones
 Headphones and speakers

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Price: Xiaomi is known to put across higher quality products at a lower price. The
pricing strategy aimed towards gaining substantial market share and enabled the brand to enter
into the global market.
Place: Xiaomi primarily operated in Singapore, India and China along with 27 countries
that belonged to the emerging markets of the South-east Asia (mi.com 2020). Nevertheless its
primary market is China. Xiaomi is also available through online mode and also makes use of the
retail outlets in selling its products. The firm also sell its products through dedicated stores
known as Mi Home.
Promotion: Xiaomi undertook promotion primarily through social media and the word
of mouth. It also undertook promotion through the micro blogging as well as the social
networking site known as Twitter and Facebook. They even undertook promotion through flash
sales that encouraged people to make a purchase due to urgency.
4. 4C’s of Marketing:
Company
Vision: Xiaomi remains committed towards constant innovation with unwavering focus
on the efficiency and quality (mi.com 2020).
Mission: The mission of the firm lies in offering affordable and smarter devices such that
people are able to enjoy benefits of the connectivity and the technology at lower price.
Goal: It lies in offering smart and affordable devices so that people are able to enjoy the
benefits of connectivity and technology at a lower price.

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Customer: Xiaomi understood that in a highly fragmented and hyper saturated market
customer attention can be drawn only when the brand is successful in undertaking a differential
element which make them popular.
Competition:
Xiaomi faces immense competition from the key competitors of the industry which
includes Huawei, Vivo and Oppo (financialexpress.com 2019). Although these competitor tries
to capture their fair share in the international market but the dominant share is captured by
Samsung and Apple.
Communication:
The increasing competition from Vivo and Oppo has forced Xiaomi to engage in
traditional advertising in the form of newspaper and poster advertising. Xiaomi has also resorted
to viral marketing and celebrity endorsement. In addition to this, Xiaomi also undertook sales
promotion techniques that included customer loyalty scheme, flash sales, promotions through the
seasonal sales and use of the display stands and the posters.

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5. Branding 4D:
This kind of branding has four dimensions, the functional dimension, the social
dimension, the mental dimension and the spiritual dimension (Pogorzelski 2018).
The Functional Dimension: Xiaomi produces smartphones under the Mi brand that
supports fast charging. The products comes with a better GPU and a better quality of selfie-
camera. It also has an advanced type C USB port and is available in multiple color options.
The Social Dimension: The customer believes that Xiaomi as a brand stands out in terms
of the following.
 Build wise: The Xiaomi phones has been amazing.
 Software: Although the custom User Interface (UI) is not great but it has less bug.
Besides the user interface comes with ample customization options and themes.
 Performance: Offers amazing performance with Snapdragon processors within an
affordable range.
 Battery life: Xiaomi has the an amazing battery life for its phones
 Service: The service provided by Xiaomi has been commendable since it not only
resolved issues faster but also involved higher cost.
The mental Dimension: This dimension is linked to Xiaomi’s slogan that states “Staying
hungry and staying foolish”. Xiaomi believed in staying hungry which referred to the state of not
being satisfied and always pushing yourself. Staying foolish refers to trying the things that
people addresses as impossible.
The Spiritual Dimension: The sincerity and passion delivered by Xiaomi adds to the
spiritual dimension. Sincerity implies delivering higher quality products at accessible pricing

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while appealing to the customers and listening to their demands. When it comes to delivering
passion then Xiaomi gathers individual who ensure excellence by creating products. In fact, the
sincerity and passion has brought about a change in the lives of the people.

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References:
financialexpress.com, 2019.Xiaomi’s time in India is now as competitors like Oppo, Vivo and
Nokia close in fast. [Online]. Available at
https://www.financialexpress.com/industry/technology/xiaomis-time-in-india-is-now-as-
competitors-like-oppo-vivo-and-nokia-close-in-fast/609929/[accessed Mar 7, 2020]
justforfans.wixsite.com/xiaomi, 2020. . [Online]. Available at
https://justforfans.wixsite.com/xiaomi/value-proposition[accessed Mar 7, 2020]
mi.com, 2020. [Online]. Available at https://www.mi.com/global/about [accessed Mar 7, 2020]
mi.com, 2020. [Online]. Available at https://www.mi.com/global/list[accessed Mar 7, 2020]
mi.com, 2020. [Online]. Available at https://www.mi.com/global/social[accessed Mar 7, 2020]
Pogorzelski, J., 2018. Literature', Managing Brands in 4D (pp. 213-221). Emerald Publishing
Limited.

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