Introduction
The emergence of e-commerce technologies has dramatically transformed the business dynamics of buyers and sellers. Lee (2017) argues that E-commerce has promoted business flexibility since individuals can make deals interchangeably in the cyber marketplace. Furthermore, technology has impacted the expansion of various companies such as Xiaomi, which sell their goods and services to consumers online. As a result of e-commerce, companies, Xiaomi included, have been able to dodge operational costs, which are incurred in physical stores. Most importantly, these technological advancements have fostered effective communication between buyers and sellers, impacting the development of sustainable business relationships. An analysis of blue ocean strategy is conducted to determine the effectiveness of these marketing approaches in contemporary businesses.
Xiaomi
Xiaomi Inc. is a technological corporation located in Beijing. The company has gained fame for innovating the operating systems of mobile phones via internet services. In addition, the corporation also focuses on designing and the development of consumer electronics. The company is currently privately owned. Nonetheless, it has a high probability of being stock-held in the near future due to its rapid expansion. This is anticipated to increase its competitive advantage to match that of other tech companies such as Google and Apple Inc. Xiaomi has managed to secure a considerable market share in East Asia. It, therefore, has a high potential to be internationalized due to its rapid expansion.
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Analysis
According to Eavani, & Nazari (2012), the 4Ps offered by the marketing mix is a critical strategy for transforming marketing plans into practice. The marketing mix is a conceptual framework that recognizes the core decisions made by managers in aligning their products and services to suit the needs of the consumers (Eavani & Nazari, 2012). The blue ocean strategy focuses on the formation of new demand in new markets as opposed to competing with chief rivals. According to Lee (2017), business success is highly contingent on value-creation to commodity users, dynamic value-innovation, and viable strategy revitalization of an organization. The 4Ps and the theory of the blue ocean strategy can be used in the analysis of the marketing principles of Xiaomi.
Product
The value of a product, and how well it meets the needs of consumers determines how competitive an organization is. Xiaomi has embraced dynamic-value innovation, based on the theory of blue ocean strategy, to generate new demand for the company’s products. For instance, the company has recently produced ‘Mi’-series smartphones and ‘Mi TV’ (Lee, 2017), among others. Fresh innovations in the company’s products are always integrated with the consumer experience. The company prioritizes user feedback and incorporates their new ideas into future product development plans and practices.
The immediate and continuous product updates which incorporate users’ product ideas have promoted a customer-centred corporate culture, which is effective in the establishment of long-standing business associations, as well as consumer endorsed product development. Customers are always willing to try out new products and services as long as these commodities have something extra to offer. Product innovation is critical to business success. Moreover, value creation and dynamic value-innovation have been a useful marketing strategy for attracting new consumers, retaining existing ones and increasing the company’s brand and sales.
Price
Xialomi employs the cost leadership strategy to gain a competitive advantage to match that of other dominant tech giants such as Google and Apple. The company’s smartphone performance and functionality are well-matched with those of other tech companies. Nonetheless, Xiaomi sells its products at a price that is one-third to one-half of the amount listed in other companies for their smartphone lines. Xiaomi has been able to maintain a low product price via the use of internet sales. Through online marketing, the corporation can reach a vast number of customers.
In addition, this marketing strategy is also highly cost-effective. The company has been able to acquire a reasonable profit margin as compared to other companies such as Samsung, which loses more than five per cent of its sales through traditional marketing strategies. By using online advertising, Xiaomi has retained affordable product costs, gaining good profits and saving capital that would otherwise be used on staffing expenses, upkeep, supplier and retailer commission, as well as real-estate rents. Xiaomi understands the law of demand. According to Išoraitė (2017) when the prices of commodities are affordable and relatively lower than those of the same products in other companies, consumers can buy products in large quantities. Hence, demand increases, as well as the amount demanded. The use of the cost leadership strategy destabilizes the productivity of other such companies. In addition, it creates a barrier for new entrants into the market. Therefore, the company that employs this approach gains a competitive advantage over others.
Place
Xiaomi makes use of the online business environment to promote business interactions with its customers. Through the use of the Blue Ocean Strategy, the company’s engineers consistently and responsively interact with the customers, embracing their ideas for product improvement. Fresh product updates are posted continuously. Through the internet, the company has been able to transform its clienteles into product designers. As a result of these actions, the level of the consumers’ product engagement and support has increased, and loyal customers have emerged.
Furthermore, the company has also targeted markets that have been overlooked by other tech giants, to increase its brand and acquiring loyal customers in these target areas. The company employs the focus marketing strategy by targeting ignored market segments and establishing a strong consumer base in them. For instance, despite concentrating on the mainland Chinese market, Xiaomi has dispersed its products to Hong Kong, Singapore, Malaysia, Taiwan, and Thailand, among others. This is a smart move since these economies have experienced tremendous growth over the years. The company targets emerging markets as opposed to already developed ones. The strategy is highly effective in increasing the company’s market share and heightening its competitiveness in the tech industry.
Promotion
Based on the growing popularity and use of the internet, Xiaomi employs online sales as opposed to the traditional promotion strategies. Through digital marketing, the company can boost its sales. The advertising approach is relatively cheaper since it enables the company to save funds that would typically be used for human resources and business management. The company employs flash sales, whereby it provides limited quantities within a limited time frame. Therefore, customers become more eager to purchase these products and provide their feedback to others in social media, based on their experience with the products. In addition, the company uses popular social sites such as Wei-Bo to gauge the consumer experience with the product, complaints, as well as product feedback, and comments. Xiaomi has therefore been able to augment customer engagement, which is critical for profit maximization. Social media has fostered the development of a strong brand for Xiaomi. In addition, it has impacted the growth of a strong consumer base, who refer to themselves as ‘Mi-Fans., a critical success driver.’
Pride
The consumer-centred marketing approaches employed by Xiaomi coincide with the blue ocean approach, which fosters customer pride as well as long-standing loyalty. The users of the company’s products are honoured by being referred to as ‘Mi-Fans’(Lee, 2017), which indicates their devotion to the organization. Furthermore, the company and its customers have a symbiotic relationship which enables the customers to provide critical feedback for product enhancement, which symbolizes the augmented satisfaction levels in users (Lee, 2017). Moreover, the article emphasizes the importance of transformational leadership in an organization. As compared to other company leaders, Lei is depicted as a transformational leader who is outspoken about his commodities and organizational goals. He is portrayed as a distinctive, charismatic leader, who prioritizes the needs of his staff and customers prior to his own. Furthermore, the emphasis is also put on effective communication, as the key to business success. It is only through good communication that the company is able to acquire valuable feedback regarding its products, creating room for improvements.
Conclusion
Companies should employ consumer-centred marketing strategies for the most favourable business outcomes. In addition, a good relationship should be maintained between the company and its consumers, for the purpose of obtaining valuable feedback with regards to consumer products, and areas that require improvement. Moreover, it is also crucial for organizations to foster an in-group atmosphere to augment the consumer’s sense of belonging. The creation of a good rapport between a company and its consumer base is critical for the development and success of a business. By doing this, small companies such as Xiaomi are bound to expand and pose stiff competition to dominant tech giants such as Google and Apple Inc.
References
Alghamdi, A. A. (2016). Market Knowledge, Blue Ocean Strategy, and Competitive Advantage (Direct and Indirect Relationships and Impact). Universal Journal of Management , 4 (4), 141- 160.
Eavani, F., & Nazari, K. (2012). Marketing mix: a critical review of the concept. Elixir Marketing Mgmt , 49 , 9914-9920.
Išoraitė, M. (2017). Internet Marketing Theoretical Aspects. Ecoforum Journal , 6 (1).
Lee, Y. F. L. (2017). Blue Ocean Strategy in Online Marketing: Case Study of Xiaomi’s Business Model in China, 7th Annual International Conference on Business Strategy In the Age of Disruption
