Analysis Of The International Marketing Strategy For Xiaomiedited

Running head: ANALYSIS OF THE INTERNATIONAL MARKETING STRATEGY FOR

XIAOMI 1

Analysis of the International Marketing Strategy for Xiaomi

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ANALYSIS OF THE INTERNATIONAL MARKETING STRATEGY FOR

XIAOMI 2

1. Background

Xiaomi is a leading smartphone producer China and ranks third best in the world.

However, the company still has the ability and unending opportunities to open its services

and reach the global markets of the United States, India, and the likes of the United Kingdom.

The company can also extend its business and take advantage of the developing areas of

Africa and Latin America. However, before extending into the international markets, Xiaomi

should be aware of the markets competitive advantage, come up with development strategies,

and at the same time establish its marketing objectives.

2. SWOT Analysis

2.1 Opportunities and Threats

After conducting a critical analysis of Xiaomi’s situation, Apple and Samsung

appeared as the two significant competitors. The competition is evident as the two giant

companies are aggressively reaching the smartphone markets of Asia (Sin & Yazdanifard,

2013). Therefore, this move makes it hard for the growing Xiaomi to attract more customers.

However, its executives should analyse the effect of expanding into the new markets. When

considering to expand into the less developed areas like Africa, the company is sure to

experience struggles in development from the regions political instability and the poor

infrastructure.

Xiaomi should also make consideration of the current market standings and take advantage

of the competitive advantage in it. The company is not well known in the United States, and

thus it can position itself somewhere in this region (Hill, 1997). However, the company’s

executives should also eye on gaining a more share of the Asian market. Nevertheless,

ANALYSIS OF THE INTERNATIONAL MARKETING STRATEGY FOR

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Xiaomi spends little of its money on marketing, and thus it has the privilege to gain more

customers and grow its name in the market.

Strengths and Weaknesses

As a competing brand of smartphones in the market, Xiaomi has many strengths of

development. The company’s customer service is satisfactory and thus retaining many of its

customers globally. By taking several development measures, Xiaomi grows its brand

attracting new customers at the same time (Huizhenxiong, 2018). Due to its cheap products,

the company has taken advantage of the middle-class living population who cannot afford the

expensive products of its competitors. Despite the few highlighted strengths, the company has

several weaknesses which prevent its global market penetration. The company once

infringed on the products of Ericsson and got a total ban in India. Although its ban in India

has been lifted, the company still has the challenge of attracting the Indian market (Sidak,

2015). The company’s executives should consider making unique products to gain a position

in the global smartphone market.

3. Objectives

When developing a market strategy, a company should consider the customers and the

products as the primary issues (McDonald, 1996). Therefore, Xiaomi can use Ansoff’s

marketing matrix and expand its business globally. The company should retain its customers

and continue supplying them with what best suits their needs. Therefore, because the

company is already familiar with its existing customers and products, this becomes one of the

easy strategies to obtain. Secondly, the company can decide on supplying its existing

customers with new products. However, this can be challenging because of the high cost of

developing new products. Thirdly, Xiaomi should look for new customers to trade on its

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existing products but this can be costly to find new customers. Lastly, Xiaomi should use the

strategy of diversifying to develop new products and at the same time find new customers.

The diversification strategy is significant in that it helps in the creation of new opportunities

for the company's sales. The bad side of diversification is that it comes with a risk associated

with the development of the new products as it unclear how the market would react to them.

Until there is a clear demand for the new products in the market, the company cannot

diversify on its products to reduce the risk of running into losses (Huizhenxiong, 2018).

Therefore, before the company sets its objectives for marketing its products, its executives

should have a well-defined target market. Xiaomi should consider targeting the urban

populations and the categories of the affluent professionals in the urban areas, the well-off

professionals, young couples, the youths, and the middle-class population. This strategy is

possible because the groups named above have the passion for the new technology.

Furthermore, they possess the necessary skills to use the new products while they have the

necessary capital to order these products. Therefore, any strategic move should be smart,

measurable, attainable, realistic, and timely as per the SMART framework.

3.1 Potential Marketing Objectives

Xiaomi desires to expand and reach the global market, and thus it should focus on

controlling its cost, the market entry, and the penetration of its marketing. Thus the company

would reap much from several objectives of marketing as they would help Xiaomi Company

attain its global market goals in not less than three years. First, because Xiaomi focuses on

the competitive side of the price of its goods, the company can take advantage of this move

(Huizhenxiong, 2018). This strategy would help scale Xiaomi's business and at the same time

initiate the advantage of giving bulk on the discounts. Therefore, a preferable marketing

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objective would be aiming at reducing the cost of manufacturing by a 10% in a period of not

less than one year. There are many opportunities to expand in many markets like in the

United States, the United Kingdom and in India. Although many more competing brands in

the smartphone market are entering into these areas, more chances in the market exist in

India.

Therefore, it would be a significant move for Xiaomi to expand its services and penetrate the

Indian market. The company should increase its shares in the Indian market by preferably

20% of its shares in three years. However, before expanding its services into the Indian

market, Xiaomi should consider retaining its previous customers and smartphone markets

(Huizhenxiong, 2018). First, by Xiaomi expanding its services in China, the company should

increase the market share in that region by 5%. When the company takes this move within six

months, Xiaomi would be able to raise the necessary revenue to help in the expansion into the

Indian market. Because Xiaomi spends little to no revenue in the side of marketing, the

company spending $125,000 in its marketing objectives would increase customers in six

months' time.

4. Strategy

Primary and Secondary Targets

Xiaomi has the most of the benefits in the Indian market, and it should put more focus

in increasing its shares by 20% in the Indian market in three years. This comes after the

Indian market lifted the case of the company's ban for selling its products in India. This ban

uplift is an opportunity for the company to market its products into the Indian market. One of

its big competitors, Samsung, has established many of its businesses in South Korea leaving

India a choice for Xiaomi (Huizhenxiong, 2018). Therefore, Xiaomi should utilise this viable

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market which mostly consists of the middle-class population, a target market for Xiaomi. The

middle-class consumers in the country have increased with the largest portion being the youth

(Huizhenxiong, 2018). Xiaomi should pursue this opportunity and make a step ahead to

promote its products to compete with its expensive rivals, Apple Inc. and Samsung. The

company should also target a global market by engaging in advertising opportunities to

showcase its products to the world. This promotion would increase the awareness of the

brand to many people in India helping Xiaomi penetrate the Indian market.

Competitive Strategy

Xiaomi Company stands over its rivals Apple and Samsung when it comes to the

competitive advantage of their products in the Indian Market. The middle-class population in

the Indian market cannot make purchases on expensive products as is the case of Apple and

Samsung products (Huizhenxiong, 2018). Therefore, Xiaomi should take this as an advantage

over its competitors and provide its products cheaply. The middle-class population will take

its products as an alternative to the devices made by the Apple and Samsung companies. In

another case, Xiaomi's devices are not prone to annual upgrades, and thus it would beat the

rival's products which require annual upgrades.

Market Entry

The company needs to make more steps and enter the global market starting with

India. Therefore, Xiaomi should make considerations of the various methods of market entry.

The first of its steps will be to provide its products directly to the Indian users as this would

save them on the distribution fees (Hollensen, 2013). The company would also interact

directly with its customers building their loyalty. However, Xiaomi would find it hard to

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reach the Indian market via the internet as it is internet operations are restricted to certain

services. Therefore, to reach the Indian market directly, the company should set its business

extensions in India.

On the other hand, Xiaomi should use the indirect export option of goods where it should aim

at using the country’s local agents and distributors (Svend, 2013). This option would help

save the company of law and rules infringing according to India. These local agents are also

familiar with the regions market climate and culture.

5. Tactics

The company’s executives should consider its marketing mix just before their attempt

to increase their market share in India (Borden, 2013). Hence, the firm should familiarize

with India's culture before the expansion. The country has a well-developed internet which

they prefer to save on time and efforts. The Xiaomi Company should pursue this as an

alternative to fulfil the Indian’s wishes. They should target the material comfort wish of the

Indian community. At the time of provision, it is significant for the company to address the

urban and rural customers in India differently for their satisfaction.

Furthermore, Xiaomi should focus on the pricing strategy of its products while at the

same time considering the target markets, their policies, and the general distribution (Borden,

2013). The company has simplified its recent marketing mix to address the needs of the

upcoming generation of technology. Now the company’s executives should focus on

fulfilling the 4p’s of marketing which are price, product, place, and promotion. The

marketing mix of the company focuses on its internal structure instead of its external

structure. The modern marketing mix also ignores the market professionals and consumer

interaction.

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Marketing Mix

Because the Xiaomi Company wants to enter the Indian market, which is its primary

target, the company should incorporate the direct export of its products to the Indian

customers. Its strategy of promoting its products should focus on advertising its products at a

cheap price as the alternative to the expensive Apple and Samsung products. The company’s

executives should use the pull strategy in their marketing and provide a solution for the

product demand at an affordable price (Goi, 2009). The customers in Indian are responsible

for establishing the pull strategy for the company with their products selection criteria.

Action and Control

After analysing the company’s marketing mix, the executives have some issues to deal

with. The Indian population needs products which make their life easier and so will Xiaomi

need no adjust to their products. The company should make its customers aware of the

designs of their devices. The company executives should also decide on the market portion to

serve, either the urban or the rural population (Kapferer, 2012). The executives should also

do a marketing measure of the company’s performance to check whether they are working to

reach for their set objectives.

7. Conclusion

The Xiaomi Company has a good opportunity to expand its market into India. A SWOT

analysis stated that the company should pursue a pricing strategy and set a primary target in

the market. The company should also consider the culture of India before market expansion.

References

Borden, Neil. The concept of the marketing mix. Journal of advertising research, pp. 7-12.

ANALYSIS OF THE INTERNATIONAL MARKETING STRATEGY FOR

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Goi, Chai Lee. (2009). A review of the marketing mix: 4Ps or more? International Journal of

Marketing studies, 1(1), pp. 2-15.

Hill, Terry. (1997). SWOT analysis: It’s time for a product recall. Long Range Planning,

30(1), pp. 46-52

Huizhenxiong, Pu (2018). “International Marketing Strategy for Xiaomi.” Retrieved from

https://www.simpletense.com/samples/Marketing_Essay.pdf

Sidak, J.G., 2015. FRAND in India: The Delhi High Court's emerging jurisprudence on

royalties for standard-essential patents. Journal of Intellectual Property Law &

Practice, p.jpv096.

Svend Hollensen, 2013. Global Marketing (6th Edition). 6th Edition. Pearson.

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