PESTEL ANALYSIS:-

INTRODUCTION TO THE INDIAN MOBILE PHONE INDUSTRY

Today a mobile phone has become the necessary part of one’s life. Earlier mobile phones are
meant for only calls and short messages but now they mean more than that.

Top Players of the Mobile Phone Industry of India:

According to market share (2018):-

market occupy
xiomi samsung vivo oppo realme others

13%
27%
8%

12%

21%
19%

Mobile phones are being sold in India through offline and online markets. But a recent survey
reveals that online market sales for mobile phones have been drastically reduced. This tells us
how closely the consumers want to see the products before buying.

POLITICAL FACTORS:

 Political environment play an important role in marketing decisions of a mobile company

which includes taxation, operations etc.
 Make in India is an initiative taken by the government which gives boost to those
companies which are going to set up their manufacturing facility in the country.
 Through this a mobile manufacturing company can avail some concessions in taxes
 With GST act being passed the rates on mobile phones are going to decrease and
 Company can pass some benefits to the customers.
ECONOMIC FACTORS:

The economic environment consists of the factors that affect consumer’s purchasing power and
spending patterns. India’s GDP is growing at good pace so is the per capita income. Increase in
the consumer’s income increases the sales and helps the company to invest more on R&D and
expansion

ENVIRONMENTAL FACTORS:

Keeping in mind that majority of e-waste is from mobile phone the company should take
the following measures :-

• Raw material used should be recyclable.

• Energy efficient components should be used.

• Eco friendly material should be used in manufacturing and packaging.

SOCIAL FACTORS:

• India’s population is growing tremendously day by day. Majorly we have young

population that the company mainly targets. Different people have different tastes and
preferences.

• So, the company should understand the needs of different groups and provide the
products accordingly .

TECHNOLOGICAL FACTORS:

Technological Innovations and advances are perhaps the most dramatic forces affecting today’s
marketing strategies for Mobile manufacturers. Their survival depends on how the company
launches the product which is different from already developed technology. Now a day’s people
use phones not just for conversations but are using them different purposes. So, new technology
and features should be provided.

E.g: High battery power, high camera resolutions, storage capacity and fast processors at lower
prices.
LEGAL FACTORS:

 In India the maximum permissible SAR value is 1.68w/kg. Beyond that companies are
not allowed to sell their products.

 The company should disclose all the matters relating to the product to the consumers.

 Necessary permissions should be taken before launching new product.

PORTER’S FIVE FORCES:-

It is a business model developed by Michael Eugene porter an American academic. This is

mainly used to know the position of the company in industry to influence or defend itself from
different forces which are as follows

 Barriers to entry: . In the past decade, there were only a few mobile companies in the
industry and barriers to entry were high, but technological advancements and capital
helped firms to enter into the market. Medium to High Force.

 Threat of substitutes: Companies need to innovate their products to retain their existing
customer base. Tablets and ipads cannot be considered as a substitute for mobile phones.

 Buyer’s bargaining power: They play a major role in most of the countries but in India
it is not the case, here electronic stores also have medium force.

 Supplier’s bargaining power: Supplier’s power is medium because the suppliers can
control the price of components they provide.

 Competitor's rivalry: This is very high because it is really difficult for a new player to
compete and gain market share against major brands in the mobile industry.
Xiaomi segmentation, targeting and positioning

Segmentation involves dividing population into groups according to certain characteristics,

whereas targeting implies choosing specific groups identified as a result of segmentation to sell
products. Positioning refers to the selection of the marketing mix the most suitable for the target
customer segment. Xiaomi uses mono-segment and imitative types of positioning.
The internet technology company uses mono-segment positioning, appealing to the needs of a
single customer segment. Specifically, Xiaomi targets a customer segment that want to use good
quality smartphones and other technology products, but have limited budget to make such a
purchase.
Xiaomi also uses imitative type of positioning by closely imitating the products of market leaders
such as Apple and Samsung. The electronics and software company has even earned the
nickname “Apple of the East” due to its close imitation of Apple products and Apple product
presentation.
The following table illustrates Xiaomi segmentation, targeting and positioning:

Type of Segmentatio Xiaomi target customer segment

segmentation n criteria  

  Region 70 countries and regions globally

Geographic
Density Urban and rural

Age 18 – 65

Gender Males & Females

Teenagers to old age peoples

Life-cycle
  stage
Demographic
Occupation Students, employees, professionals

Benefits
sought Cost attractiveness

Behavioral User status Both for first-time users and regular users
Xiaomi Inc. is a privately owned electronics and Software Company founded in 2010 by serial
entrepreneur Lei Jun, along with seven other co-founders. The mobile company has established
its presence in 70 countries and regions and it is among the top 5 in 16 markets. Xiaomi currently
working with 18,000 people. In 2017 Xiaomi generated more than RMB 100 billion revenues
and expected to get listed in the Fortune Global 500 list in foreseeable future.
Xiaomi business strategy is based on cost advantage. Moreover, the company gathers and utilizes
its large fan base in an efficient manner with positive implications on customer loyalty and the
bottom line for the business. An aggressive expansion of ecosystem of products and services is
also placed at the core of Xiaomi business strategy.
The mobile internet company has matrix and flat organizational structure. Xiaomi uses all for
strategies – market penetration, product development, market development and diversification, in
an integrated manner.
Efficient leadership by founder and CEO Lei Jun, impressive rate of growth and cost advantages
compared to competition are considered as major strengths associated with Xiaomi. At the same
time, the company has noteworthy weaknesses such as low profit margin, lower smartphone
capabilities and functionalities compared to major competitors and difficulties of sustaining
competitive advantage.
Xiaomi SWOT Analysis

Strengths of Xiaomi

As one of the leading organizations in its industry, Xiaomi has numerous strengths that enable it
to thrive in the market place.
 High level of customer satisfaction – the company with its dedicated customer
relationship management department has able to achieve a high level of customer
satisfaction among present customers and good brand equity among the potential
customers.
 Innovation and design
 Low production cost
 Advancement in every product
 Hardware integration with many open source OS and software

Weakness of Xiaomi

 There are gaps in the product range sold by the company. This lack of choice can give a
new competitor a foothold in the market.
 Not very good at product demand forecasting leading to higher rate of missed
opportunities compare to its competitors.
 The marketing of the products left a lot to be desired. Even though the product is a
success in terms of sale but its positioning and unique selling proposition is not clearly
defined which can lead to the attacks in this segment from the competitors.

Opportunities for Xiaomi

 New customers from online channel – Over the past few years the company has invested
vast sum of money into the online platform. This investment has opened new sales
 channel for Xiaomi. In the next few years the company can leverage this opportunity by
knowing its customer better and serving their needs using big data analytics.
 The new technology provides an opportunity to Xiaomi to practices differentiated pricing
strategy in the new market. It will enable the firm to maintain its loyal customers with
great service 
 New trends in the consumer behavior can open up new market for the Xiaomi . It
provides a great opportunity for the organization to build new revenue streams and
diversify into new product categories too.

Threats Xiaomi Facing

 New technologies developed by the competitor or market disruptor could be a serious

threat to the industry in medium to long term future.
 The demand of the highly profitable products is seasonal in nature and any unlikely event
during the peak season may impact the profitability of the company in short to medium
term.

Xiaomi Product Strategy:

The product strategy and mix in Xiaomi marketing strategy can be explained as follows:
Xiaomi is one the fastest growing consumer electronics companies based out of China. Xiaomi
initially started off as a mobile brand but now offers a wide range of consumer electronics
products. The products in the collection of Xiaomi are
• Smartphones
• TV
• Notebooks
• Smart devices
• Power bank and charging devices
• Speakers and headphones
Xiaomi’s biggest sellers are its smartphones with the MI and the RedMi range of products. These
products are mostly run on Qualcomm processors in India due to a case pending with the court
with Ericsson on the usage of non-Qualcomm products in India. Similarly, it has customised the
products to the requirements of the region it operates in to incorporate the local market and
political conditions. This shows the strong product portfolio in the marketin g mix strategy
possessed by Xiaomi.
Xiaomi Price/Pricing Strategy:

Xiaomi sells at low price and offers high quality products. According to the founder, chairman
and CEO their main aim is to sell the products at the price the product is produced without
making any profit.
So, the strategy being followed by Xiaomi is selling at a low price today and gain later strategy.
Their profit generation focus is on the accessories, apps, and services that are to be used with
their products.
This is a unique pricing strategy in its marketing mix, mostly aimed at gaining a substantial
market share.
The pricing strategy of Xiaomi has enabled the brand to penetrate into a global market and have
a substantial market share. Initially, they started with low end feature phones to enter the market.
Now, gradually, Xiaomi has also established itself as a leading smartphone player across the
world.
Xiaomi Place & Distribution Strategy:

Following is the distribution strategy of Xiaomi:

Xiaomi operates in China, Singapore, India and 27 other countries mainly in emerging markets
of south East Asia.
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.
Xiaomi Promotion & Advertising Strategy:
The promotional and advertising strategy in the Xiaomi marketing strategy is as follows:
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 Face book 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.
Xiaomi launched phones exclusively on Flipkart in India. FlipKart being one of the leading
online platforms helped the publicity of Xiaomi.
 Xiaomi’s Globalization Strategy and Challenges

Xiaomi Inc. is a Beijing-based mobile company which was founded on 6 April, 2010 by Lei Jun,
had quickly become an industry leader in the Chinese market. By 2016 it had started to expand
internationally, and this case lays out the company’s globalization strategies and challenges
moving forward. Hugo Barra, a top Android executive, had left Google a few years earlier to
lead Xiaomi’s international growth. Xiaomi’s founder and CEO, Lei Jun, said the company’s
ultimate goal was “making good but cheap things,” a low pricing strategy that had succeeded in
China. The company sold over 70 million mobile phones in 2015—while aggressively building
out a robust ecosystem. However, Xiaomi had expected to sell 80 to 100 million units that year;
it was facing a declining domestic market and increased competition. Therefore, international
expansion had become an important part of the company’s overall strategy.

But expanding to other countries would be a challenging road. For one, it would take
considerable time and effort to tailor the company’s Android-based MIUI operating system for
diversified markets—and obtain market-access qualifications. Xiaomi’s patent portfolio was thin
compared to those of large competitors, and it ran the risk of lawsuits from companies that held
patent rights in the countries it wanted to enter. Other challenges included building out sales
channels, output capacity, and cross-culture management development. Xiaomi’s international
plan included ten countries in Asia, Europe, and Latin America. The next year or two would be
critical for Xiaomi—and it needed to make the right strategic decisions to succeed in its
globalization efforts. 

In April 2014, they hired former Google employee Hugo Barra as Xiaomi VP to expand their
business to international markets. And, then launched itself in INDIA in July, 2014 with their
then flagship Mi3 (via Flipkart).

COMPANY PERFORMANCE:
The company's initial goalwas to provide additional functionality not yet offered on ordinary
Android and an easy-to-use userinterface.
MIUI, the ROM they created, were a huge success and were ported to various devices.Until
2014, MIUI could be downloaded and installed to more than 200 devices.
In 2011, Xiaomi decided to enter the mobile market, not just limited to making software. The
first product was named the Mi One, a high spec phone in its time but it was tilted.
Xiaomi seems to have beenconsistent with the formula from the start.
Xiaomi is also fast growing in the mobile industry.
In2014, they had generated USD 5 billion in revenue, an impressive achievement for the newly
established cellphone company.
Including the style of the CEO Lei Jun who when making a presentation immediately reminded
us of the legendary figure of Steve Jobs at Apple.
At present, Xiaomi cannot be called a mini company. According to Tech in Asia reports, Xiaomi
has been worth USD 10 billion, equivalent to Rs 130 trillion.
With a fanatical user base, Xiaomi's new cell phones, which are mostly sold online, are usually
sold out quickly by fans. In fact, sometimes it makes a record of the short time until the cell
phone is sold out.
In 2012, Xiaomi recorded shipments of 7.2 million units of Smartphone. Then in 2013, it
increased rapidly to 18.7 million Smartphone units. And in the first quarter of 2014, it sold 11
million units.
Feeling quite successful in China, Xiaomi began targeting foreign markets. Especially in the
Southeast Asia region where the Indian market is included. As a result, it can be seen that
Xiaomi easily won the hearts of Smartphone enthusiasts in India.
 Unethical marketing practices done by company

Company- nestle

Maggi seems to be just that perfect quick-snack between meals and is so easy to make that kids
sometime make it alone. At the end of May 2015, India’s Food safety administration (FDA)
ordered Nestle India to recall its popular Maggi noodles after tests showed that the product
contained high levels of lead and MSG. Hence, the 2-minutes ready Maggi Noodles ban in India
was declared. Maggi is a product of Nestlé India, a subsidiary of Nestlé of Switzerland. Major
Maggi products that are manufactured by Nestlé include instant noodles, stocks, instant soups
and ketchups. The various products of Maggi are manufactured in the seven highly
technologically advanced factories of Nestlé India that are located in Moga (Punjab), Choladi
(Tamil Nadu), Nanjangud (Karnataka), Samalkha (Haryana), Bicholim and Ponda (Goa),
Pantnagar (Uttarakhand) and Tahliwal (Himachal Pradesh).

Nestle S.A., a multinational company headquartered in Switzerland, was the largest food and
beverage company in the world in terms of revenue. Nestle India Ltd was a subsidiary of Nestle
S.A., incorporated in the year 1956.It had its head office in Gurgaon, Haryana. The first
production unit of Nestlé was set up in 1961 in Punjab. By 2006, it had expanded to 7
manufacturing units and four branch offices throughout India. Its branch offices in Delhi,
Mumbai, Chennai, and Kolkata facilitated the sales and marketing of its Products .

Nestle S.A., a multinational company headquartered in Switzerland, was the largest food and
beverage company in the world in terms of revenue. Nestle India Ltd was a subsidiary of Nestle
S.A., incorporated in the year 1956.It had its head office in Gurgaon, Haryana. The first
production unit of Nestlé was set up in 1961 in Punjab. By 2006, it had expanded to 7
manufacturing units and four branch offices throughout India. Its branch offices in Delhi,
Mumbai, Chennai, and Kolkata facilitated the sales and marketing of its Products.

On August 13, 2015 the Bombay High Court struck down the nationwide ban imposed on Nestle
Maggi instant noodles by FSSAI. The Court directed Nestlé to have fresh safety tests conducted
on the product before bringing it back to the market. Nestlé was asked to provide samples of
each variant of Maggi instant noodles for fresh test to three labs in Punjab, Hyderabad, and
Jaipur. The High Court ruled that if even after the fresh tests, the lead content was found to be in
excess of the permissible limit, then Nestlé would not be allowed to manufacture and sell Maggi
noodles in India. The results of the fresh tests conducted at the three labs went in favour of
Nestle. As a Consequence, Nestle India resumed selling Maggi noodles in the month of
November 2015.

Initially, the company rejected the accusation that the noodles were unsafe and said on their
website and social media accounts that there had been no order to recall any products. A
statement on their website said “The quality and safety of our products are the top priorities for
our Company. We have in place strict food safety and quality controls at out Maggi factories…
We do not add MSG to Maggi Noodles, and glutamate, if present, may come from naturally
occurring sources. We are surprised with the content supposedly found in the sample as we
monitor the lead content regularly as a part of the regulatory requirements.” This statement was
made to revoke the Maggi Noodles ban. On the other hand, some of the renowned Indian
celebrities also found themselves caught in the midst of controversy as several states proposed to
penalize those who endorsed and promoted Maggi. Noted Bollywood actors like Amitabh
Bachchan, Madhuri Dixit and Preity Zinta were the prime figures who had a sword of Damocles
hanging over their heads. Meanwhile, the Swiss conglomerate Nestlé, the manufacturer of
Maggi, recalled its stocks from the stores in several states as was directed by the respective state
governments but kept denying the results of the tests, saying that Maggi was safe.
ethical marketing practices done by company

Company-

"Mother Dairy" is the single largest brand of milk in India as well as in Asia, Marketing about
4.45 million liters of milk per day. Mother Dairy commands 62% market share in the organized
sector in and around Delhi, primarily because of consistent quality and service – whatever be the
crisis - floods, transport, strike, curfew etc. Mother Dairy, Patparganj, Delhi, is presently
manufacturing & selling around 8.5 lakh litres of toned milk through bulk vending shops.

Mother Dairy was the first Dairy in the country to implement ISO-14031
(Environment Performance Evaluation) project.

The company’s Quality Assurance is certified by NABL (National Accreditation Board

For Testing and Calibration Laboratory), Department of Science & Technology, India

This provides assurance to consumer in respect of Quality and Safety of products

manufactured and marketed by Mother Dairy.

The National Dairy Development Board (NDDB) commissioned Mother Dairy in the
first phase of Operation Flood in 1974.

With a view to separating the commercial activities from developmental activities, the
NDDB merged Mother Dairy and the Fruit & Vegetable project into a wholly owned
Company named Mother Dairy Fruit & Vegetable Ltd (MDFVL) in April 2000.

This becomes the holding company of Mother Dairy India Ltd (MDIL) – marketing
company and Mother Dairy Foods Processing Ltd (MDFPL) – a processing company.
MDFPL is a multi unit company, with units at various locations in India.

Over the years, Mother Dairy has not only served the daily need of milk of the
consumers of Delhi, it has also extended its milk to other States like Haryana, Uttar
Pradesh, Maharashtra, Andhra Pradesh & Gujarat and is expanding its wings rapidly
to serve the masses and provide daily requirement of Milk, Flavored milk, Butter, Dahi,
Lassi,Cheese, Chaas, Ice Creams.
Objectives of Mother Dairy

The main stakeholder of Mother Dairy was the farmer member for whose welfare it
existed.
Unlike other organizations, their objective is not to maximize the profit. They are
more interested in giving the best price for the farmers for their milk than in making a
large profit. Thus they look at the price given to their suppliers as not a cost but as
an objective.
Mother Dairy had, as its main objective, “carrying out activities for the economic
development of agriculturists by efficiently organizing marketing of milk and dairy produce,
agricultural produce in raw and/or processed form and other allied
produce”.

Marketing

“It is clearly said that Marketing Department is the Front Face of any
Organization or firm”. This is said because marketing is the only means from where
the consumers can know about the upcoming products of the firm or organization.
This indirectly gives result in increased sales of products.

Mother dairy is having a full-fledged marketing dept. where all the functions related
to marketing are performed. As a part of marketing strategy Mother Dairy has
increased its Morning milk centres.

Mother Dairy has plans for reach out to newer markets - but the strategy here is more product-
specific. In liquid milk, it will initially concentrate only on four markets - Delhi, its home
ground; the Junagarh region and Ahmadabad in Gujarat; Mumbai, which it entered a year ago;
and Hyderabad, where it moved in a little more than a year ago. They have no plans to go
everywhere with liquid milk.

On the marketing front, Mother Dairy says it's trying to take its product campaigns
and communications to a higher platform. For instance, in the case of milk, the
campaigns do not talk about the obvious benefits - milk is good for health, it has
calcium and so on - but rather it targets children and are created around ideas such
as "The country needs you, grow faster".

As far as products such as butter, cheese and ice creams go, the campaigns have
been created around "taste". For butter again, the focus is on children. Here, Mother
Dairy has dared to go different. Since 60 per cent butter is consumed by kids, the
company wants them to sit up and take notice of its butter.

"Cheese khao superhero ban jao", where kids buying cheese at a retail outlet were
invited for a photo op - dressed as superheroes - through Polaroid cameras; and the
framed photograph was presented to them. The activity was carried out in about 150
outlets in Delhi and Mumbai, with about 20,000-25,000 snaps being taken.
CSR ACTIVITY BY MOTHER DAIRY

 Rain Water Harvesting.

 Effluent treatment Plant.
 COW Programmed For Poor people.
 Issuing Franchise to Retired Army Personals
 Reduce plastic usage
 Use solar panels

 FAMOUS QUOTES
• "The country needs you, grow faster”
• "Cheese khao superhero ban jao“
• "Cheese ke saath bees ke cheez,“

PRODUCT GALLERY

References:
https://research-methodology.net/xiaomi-segmentation-targeting-and-positioning-2/

http://fernfortuniversity.com/term-papers/swot/1433/1224-xiaomi.php

https://www.academia.edu/39120971/Analysis_of_Business_Strategies_of_Xiaomi

https://www.gsb.stanford.edu/faculty-research/case-studies/xiaomis-globalization-strategy-
challenges

https://au.simpletense.com/app/samples/Marketing_Essay.pdf

https://www.mbaskool.com/marketing-mix/products/17243-xiaomi.html

https://www.scribd.com/document/438220333/Nestle-unethical-practices-Case-Study-pdf

https://www.researchgate.net/publication/305986442_MAGGI_SAGA_IN_INDIA_AN_ETHIC
AL_ISSUE_OR_UNCONTROLLED_VIRAL_MARKETING

https://www.exchange4media.com/marketing-news/reinventing-the-mother-dairy-brand-
55094.html

https://brandyuva.in/2018/10/marketing-strategies-of-mother-dairy-brand.html