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ANALYSIS OF XIAOMI CELL PHONE MARKETING STRATEGY BASED
ON MARKETING MIX
Zhang Qiu, Graduate Student
Supervisor: E.V. Kuznetsova, Candidate of Sociological Sciences, Associate Professor Ufa University of Science and Technology (Russia, Ufa)
DOI:10.24412/2411-0450-2024-10-2-166-169
Abstract. As competition in the global smartphone market intensifies, Xiaomi has emerged as one of the representative Chinese smartphone brands, achieving remarkable success in international markets in recent years. This article analyzes Xiaomi's marketing strategy in Russia using the 4P marketing mix method and offers corresponding marketing strategy recommendations. These suggestions will aid Xia-omi in achieving better results in the competitive landscape of the Russian market. Keywords: Xiaomi phones, Russian market, marketing mix, marketing strategy.
Xiaomi's products have been very successful in the Russian market. Analyzing Xiaomi's marketing strategy in Russia aims to help Chinese smartphones leverage their strengths and weaknesses while implementing the latest marketing strategies that suit the competitive landscape. By increasing its market share in Russia, Xiaomi can gain a competitive advantage and provide insights for other companies in developing their marketing strategies [1].
Xiaomi focuses on the research, development, and sales of smartphones, smart home products, and Internet of Things (IoT) devices. The company is renowned for its high cost-performance ratio, with its smartphones utilizing the latest technologies to provide consumers with an exceptional user experience [2]. Furthermore, through its ecological chain strategy, Xiaomi covers a wide range of products, from smart home devices to wearables, creating a vast ecosystem that continually strengthens the market position of Chinese smartphone brands. By the end of 2023, their shipment volume and market share reached 80% and 50%, respectively, reflecting an increase of 10% and 5% compared to the previous year. In 2023, Xiaomi smartphones secured the top spot in Russia's smartphone sales rankings, holding a 30% market share [3].
The marketing mix strategy, known as the 4P principle, includes product strategy, price strategy, channel strategy, and promotion strategy. The 4P marketing mix strategy originated in the United States in the 1960s. In 1953, Neil Borden introduced the term "Marketing Mix," which refers to the way market demand is influenced to some
extent by various so-called "marketing elements" or "marketing variables." The primary goal of marketing is to satisfy consumer needs. In the concept of the marketing mix, the 4Ps refer to four types: Product, Price, Promotion, and Place. The 4P theory serves as the foundation of marketing strategies [4].
1. Product strategy is crucial for corporate development. Companies with outstanding products can stand out in market competition and bring profits to the business. The core value of Xiaomi smartphones lies in the usage value they provide to consumers. In the Russian market, Xiaomi phones feature stable performance, large battery capacity, and designs that better align with local aesthetics. Xiaomi has made adjustments to its phone products based on the actual conditions of the Russian market to cater to local consumers' preferences. Currently, most buyers in Russia prefer to purchase Xiaomi phones rather than the new models of Apple, indicating a recognition of Xiaomi products among Russian consumers [5].
Strategic Recommendations:
- address inherent product issues: Such as battery overheating problems and MIU system issues;
- increase product diversity: Xiaomi should offer a range of phones from entry-level to highend to meet different consumer needs. The Red-mi and POCO series target the cost-effective market, while the Mi series is aimed at users seeking high-end experiences;
- produce personalized products: Such as smartphones with excellent camera features, out-
door professional phones, long battery life phones, and gaming phones;
- enhance technological innovation: The company should focus on technological research and development, continuously innovating in areas like cameras, processors, and batteries;
- implement localization adjustments: To better adapt to the Russian market, Xiaomi has made specific localization adjustments in design and functionality. For example, launching a version of the MIUI operating system that supports the Russian language, optimizing lens design, improving the smoothness of local applications, and enhancing phone performance configurations.
2. Price Strategy: A price strategy refers to the potential changes in product pricing under market conditions, which can help achieve the company's goals. However, not all buyers are satisfied with Xiaomi's pricing policy. By comparing the prices of the same model of Xiaomi phones in the Russian market with those in the Chinese market, we can draw the following conclusions: In the high-end price segment, Xiaomi phones in the Russian market are priced about 70% higher than in China; in the mid-range segment, they are about 50% higher; and in the low-end segment, they are about 25% higher. Some specific models are priced 90% higher than in China, while certain low-end models are priced similarly to those in the Chinese market. Although Xiaomi's current pricing strategy can ensure profitability, it may lose some price-sensitive mobile users.
Strategic Recommendations: There is nothing inherently wrong with Xiaomi's pricing strategy. In 2023, the high cost-performance products from Infinix and TECNO have seen rapid growth in both sales volume and revenue. For instance, Infinix's sales have quadrupled in unit terms, placing it among the top five popular brands by year-end. As a recommendation, Xiaomi should adopt a penetration pricing strategy, aligning its mid- and low-end mobile phone models with those of Infinix and TECNO, and implement a pricing strategy that is lower than its competitors to attract price-sensitive consumers and quickly gain market share. Furthermore, Xiaomi should emphasize its products' high cost-performance ratio, offering features similar to those of competing brands but at more reasonable prices. This approach will help Xiaomi earn a good reputation among budget-conscious young consumers. Xia-omi should implement promotional pricing strat-
egies by offering discounts during specific holidays or promotional events to attract consumers.
3. Place strategy is one of the marketing mix strategies and an essential means for companies to successfully penetrate the market and achieve their business objectives. The Chinese company Xiaomi has established a vast retail network in the Russian Federation. In cities such as Moscow, Nizhny Novgorod, Yekaterinburg, and Novosibirsk, Xiaomi operates approximately 50 self-owned MiS stores. Additionally, the company has formed partnerships with major retailers. In 2020, Xiaomi launched its online store. Overall, the company plans to open at least 200 brand stores in Russia.
In terms of sales channels, the online sales channel includes Xiaomi' s official online store in Russia, where users can directly purchase smartphones and other smart devices. Xiaomi has also partnered with major Russian e-commerce platforms, such as Wildberries and Ozon.
For offline retail channels, Xiaomi has opened over 50 self-owned MiS stores in major cities and has authorized other retail stores, expecting the total to exceed 200. This not only enhances brand visibility but also improves the consumer purchasing experience. Furthermore, Xiaomi collaborates with local telecom operators, such as MTS, to broaden market coverage through bundled sales and contract phones.
Regarding strategic recommendations, since 2022, logistics costs, international shipping prices, and e-commerce operating costs in Russia have risen, along with an increase in related taxes. Xiaomi could consider raising product prices to transfer some of these increased costs to consumers while reducing investments in less profitable offline channels, thereby cutting expenses and seeking new profit growth points, such as in household appliances. Notably, if the political environment and sanctions become more severe, Xiaomi should consider further localizing the POCO brand and establishing factories in Russia, while ensuring the protection of its business interests.
4. Promotional strategies are aimed at recommending products and services to end users while also encouraging consumers to purchase them. The main promotional activities include offering special discounts, prizes, and employee rewards. Promotional methods encompass advertising, sales promotions, direct marketing, and more. In
Russia, a common promotional approach for smartphones is word-of-mouth advertising [6].
When entering the Russian market, Xiaomi adopted a unique promotional policy. Instead of competing through traditional market models, Xiaomi leveraged word-of-mouth and the support of its fans for promotion. Xiaomi's advertisements are hardly visible in traditional media, yet the brand gained immense popularity on websites and forums. The company interacts directly with consumers, allowing it to quickly understand customer needs. This non-traditional strategy not only enables rapid and flexible customer acquisition but also saves a significant amount in traditional advertising costs.
Strategic Recommendations: Xiaomi should actively utilize social media platforms (such as VK and Telegram) for brand promotion and establish interactive relationships with young consumers. Collaborating with well-known KOLs (Key Opinion Leaders) and influencers can help promote the experience of using Xiaomi phones, thereby enhancing brand influence. Furthermore,
Xiaomi should regularly hold offline events such as product launches, experience activities, and user meet-and-greets to strengthen user loyalty and engagement with the brand [7].
Xiaomi not only relies on profits from smartphone sales, rather, it profits from the MIUI brand through services and embedded advertising. With a substantial market share, Xiaomi can confidently handle price competition with other smartphone brands.
Conclusion. This article analyzes the successful marketing strategies of Xiaomi smartphones in the Russian market using the 4P framework. These strategies are reflected in product diversity, reasonable pricing strategies, extensive distribution channels, and innovative promotional activities. By effectively combining these strategies, Xiaomi is able to secure a competitive advantage in a fiercely competitive market, leading to sustainable brand growth and increased customer loyalty. The marketing mix strategy employed by Xiaomi smartphones serves as a valuable reference for other companies.
References
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2. Бикметов Е. Ю., Галиханова Л. И., Кузнецова Е. В., Рувенный И. Я. Использование клиентского опыта для принятия маркетинговых решений в здравоохранении // KANT. - 2023. -№3 (48). - С. 4-9.
3. Аналитика МТС: в 2023 году результаты продаж смартфонов в России стали одними из самых высоких за последние пять лет. - [Электронный ресурс]. - Режим доступа: https://moskva.mts.ru (дата обращения: 20.10.2024).
4. Бикметов Е. Ю., Кузнецова Е. В., Рувенный И. Я. Основы стратегического маркетингового управления: учебное пособие. - Уфа: РИЦ УУНиТ, 2023. - 150 с.
5. Официальный сайт Xiaomi Россия. - [Электронный ресурс]. - Режим доступа: https://ru-mi.com (дата обращения: 18.10.2024).
6. Yan N., Sokolova O., Lyu D., Huang J. Xiaomi Smartphones Global Marketing - Analysis on focus markets of China, Russia, the Netherlands and Brazil, 2020. - 30 p.
7. Lei J. The Business Thoughts of Xiaomi Corp. - Beijing: CITIC Press Corporation, 2022. - 315 p.
АНАЛИЗ МАРКЕТИНГОВОЙ СТРАТЕГИИ МОБИЛЬНЫХ ТЕЛЕФОНОВ XIAOMI НА
ОСНОВЕ КОМПЛЕКСА МАРКЕТИНГА
Чжан Цю, магистрант
Научный руководитель: Е.В. Кузнецова, канд. социол. наук, доцент Уфимский университет науки и технологий (Россия, г. Уфа)
Аннотация. В условиях обострения конкуренции на мировом рынке смартфонов Xiaomi стала одним из представительных китайских брендов, добившимся в последние годы заметного успеха на международных рынках. В данной статье анализируется маркетинговая стратегия Xiaomi в России с использованием метода 4P маркетинга-микс и предлагаются соответствующие рекомендации по маркетинговой стратегии. Эти рекомендации помогут Xiaomi добиться лучших результатов в условиях конкуренции на российском рынке.
Ключевые слова: телефоны Xiaomi, российский рынок, маркетинг-микс, маркетинговая стратегия.
