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Assignment on: What are the elements of success factors of

Xiaomi based on their pricing strategy?
Submitted to: Mahfuzur Rahman
Lecturer
Department of Marketing
Comilla University.
Submitted by: Babun Nesa
ID:11907012
13th Batch
Department of Marketing
Comilla University.
Date of submission:2ndSeptembar2020.
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What are the elements of success factors of Xiaomi based on

their pricing strategy?
Introduction
A company came out with having a smooth blend of customer value, quality
products, as well as a reasonable price, entered the world market in 2010 and win
the demands of the market when there was a significant lack of standard products
at a fair price in the Chinese market. Yes, we are going to introduce the world's one
of the top 4 gadget manufacturing brands, Xiaomi.

Xiaomi came to limelight with Lei Jun when there was no alternative to Apple in
the Chinese market. Besides occupying the market of India so skillfully that it
could be made the record of selling 1lakh phone in 4.2 seconds in 2014. As pricing
is one of the most challenging parameters for optimizing, there is some power pack
pricing strategy behind the prosperity of this company.

Value-Based Pricing

Xiaomi uses value-based pricing as setting the price based on the customer's
conception of value rather than on the seller's cost. For instance, it assesses the
requirements of customers for setting target prices to match with customers
perceived value and finally, it sketches products to convey the desired amount at
the target price. People take a few months to save money from their salary to buy a
smartphone in India, but Mi3 changed this perception.

Good value pricing

Offering just the right combination of standard and good service as a fair price is
another pricing technique of Xiaomi. As a result, it lost Samsung then became the
best selling smartphone and the world's fourth-best smartphone manufacturer in
2017. In the same year, the revenue in the Indian market rose by 67 percent
comparatively from 2015.

Market penetration pricing

Xiaomi arranging a low price for a new product to penetrate the market swiftly to
attract a large number of buyers fast and win a large market share. Thus, in the
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pandemic, where globally, the demand for smartphones reduced 13 percent, the
sale of Xiaomi increased by 6.83 percent. Moreover, the sales of top competitors
like Huawei, Samsung and Apple have gone down than the first quarter of last
year, whither Xiaomi got it risen 29.2percent.

Optional product pricing

Over and above, Xiaomi produces a vast amount of optional products along with
the main product. For example, a smartphone buyer may choose a screen protector,
lens protector, back cover, headphone, or a power bank with the phone. It is quite
tricky to pricing these options since the company must decide which items to
include in the base price and which is to offer as options. Xiaomi is the second
largest company that has a market share of approximately 10%. One of Xiaomi's
TWS headsets, the Redmi AirDots, is one of the cheapest headsets in the market
and a famous alternative for those who cannot afford premium ones from
manufacturers such as Samsung or any other well-known brand.

Discount and allowance pricing

Last year to receive discounted pricing during Xiaomi's annual 'Black Friday Sale'
in India, Mi A3, Redmi K20, Redmi K20 Pro, Poco F1, and Redmi Note 7S were
placed. It was a kind of strategic advertising of Xiaomi by which people can be
able to know about the company as well as its products. On the other hand, due to
due to discount pricing, buyers can be more satisfied with the company and may
consider it at their choice list.

Segmented pricing

To figure out the target buyer's possible demand and to broaden the selling point of
the product, allocates buyers into various segments helps the company. In 2011
when Samsung, Apple, And Huawei seized the market, Xiaomi launched their first
smartphone Mi 1. Xiaomi became the world’s 6th smartphone vendor in just three
years after its birth by selling over 60.8 million smartphones. Xiaomi, as a new
company in the smartphone market, benefits a lot from its superior market
segmentation.
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conclusion
To sum up, the core reason for Xiaomi's popularity is through the pricing strategy
by which Xiaomi products are successfully promoted. Maintain an effective
process made Xiaomi the company that exists in Guinness World Record as well as
the ‘Apple of China.’ Affordable pricing, working capacity with more than 70
countries, the broad range of gadget proves that xiaomi is being driven
spontaneously. Within all these, the world expects that Xiaomi will explore
something new soon.