Advertising Management

Members:
Vincent Sarmiento
Sean Christ Leander
Edmond Magtarayo
Raymond Lingcaso
Kevin John Genanda

Company Name Brand Name

CHAPTER 4
CONDUCTING A PROMOTIONS OPPORTUNITY ANALYSIS

3.0 Promotion Opportunity Analysis

One of the Largest Smartphone maker. Xiaomi is one of the largest smartphone
makers in the world. It is said to be the 5th largest smartphone manufacturer as
of 2017. Originating from China, the Smartphones are manufactured in huge
quantities and have wide acceptance across the world Highest selling Smartphone
The REDMI Note 4 became the highest selling smartphone in India and China and
practically in 50% of the Asian market. This shows that Xiaomi is strongly rising in
the smartphone market and has already beaten several giants.

Good Quality product Even at such low prices, no one can doubt the quality of
Xiaomi phones. The smartphones are regularly rated high on all E COMMERCE a
further proof that Xiaomi does not compromise on quality even if lowers the price
regularly. Manufacturing Advantage China has a huge manufacturing advantage
because the country in itself is known for manufacturing and exporting the
products. China is also one of the largest consumers in the Asian market.

3.1 COMMUNICATION MARKET ANALYSIS

Xiaomi marketing communication explains the extent of usage of individual
elements of marketing communication channels by the mobile internet company.
Generally, elements of the marketing communication consist of print and media
advertising, sales promotions, events and experiences, public relations, direct
marketing and personal selling.

3.1.1 : COMPETITORS

Xiaomi is a company providing hardware, software and internet services.

Apple is a company that designs, manufactures, and markets mobile
communication and media devices. Huawei is a global provider of information
and communications technology (ICT) infrastructure and smart devices. Samsung
Electronics is a company engaged in the manufacture and distribution of
electronic products.

3.1.2 OPPORTUNITIES

Xiaomi has a fantastic opportunity to capture these emerging markets, such as

Africa or India, thanks to their great prices. This is a particularly powerful
opportunity for Xiaomi, since it only involves competing against other budget-
conscious manufacturers, such as Huawei, but not luxury brands like Apple.

3.1.3 TARGET MARKET

Xiaomi Inc targeted consumer who are tech-savvy as well as who are in the group
of age 18–35 from students to working class people, who want good quality
products and knew that market leaders like Samsung, LG and Apple were
overpriced for the specs they were providing in their products. So their target
were students, working class people, Heavy internet and Social media users that
drive the e-commerce market. Xiaomi has positioned itself on behalf of its
smartphones so well in Indian Market that whatever product comes is taken
cheerfully by mass that they become massive hits along with their existing
smartphones. These products include Power Banks, Headphones, TV, Bluetooth
speakers, Smartphone accessories and wearables. Xiaomi managed to streamline
their supply chain and make sure the demand versus supply gap is not that
significant. To reduce the intermediaries cost they promote Online Shopping.

SECTION 3.1.4: Customers

Xiaomi has already a large customer base in China, Malaysia and Singapore. It is
expanding its market to India and Philippines and places which are dominated by
Apple and Samsung, mainly in all other developing countries in Asia Pacific region.
Xiaomi offers two different smartphone models MI and Redmi,Xiaomi has wide
range of products for lower middle-class users as well, phones like Redmi 4A
biggest competitor in this segment is Vivo and Vivo Y51 model.

The core competency in pricing of the Xiaomi allows lower middle-class of users
to buy phones which are cheaper than closest competitors without compromising
technical features and quality. Initially, Xiaomi launched top MI phones and after
introduced the Redmi models in the Indian market, such entry strategy was
necessary because reduction in price of products would not be too drastic and
consumers would be able to gain confidence in quality of products.
Most of the smartphone users are price-sensitive and pay huge attention on price
of the product before considering the adoption. Thus, Xiaomi should adopt rapid
penetration pricing strategy and keep low prices for their products, despite the
fact that they will open stores and this will require investment. Xiaomi’s
consumers are price sensitive and increase in price might be risky in losing market
share.

SECTION 3.2: Distribution 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 sell 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 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 also operates
555 Mi authorized service centers across 356 cities in India alone.
Section 3.1.1: Identify and Describe Your Primary Competitors.
Apple Segmentation, targeting and positioning represents the core of its
marketing efforts. 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. Common set of
characteristics shared by Apple target customer segment include appreciating
design, quality and performance of technology products and services over their
prices. Positioning refers to the selection of the marketing mix that is the most
suitable for the target customer segment. The multinational technology company
positions itself as a premium brand offering products and services with advanced
functions and capabilities for additional costs. Accordingly, Apple target customer
segment comprise well-off individuals who are willing to pay extra for technology
products and services with advanced design, functions and capabilities

Huawei Segmentation helps in profiling/grouping the various characteristics of

the population. Huawei uses a mix of demographic, geographic and
psychographic segmentation strategy for a different set of its businesses.
Differentiated targeting strategy is used by the company in order to the serve
different segment of customers accordingly. Huawei uses value based and user
benefit positioning strategies depending on the products offered to the
customers.

Samsung segmentation, targeting and positioning involves a set of activities

performed in a sequence. These activities constitute the essence of Samsung
marketing strategy. Segmentation involves dividing population into different
groups on the basis of their common characteristics. Targeting is associated with
selecting specific group(s) as consumers of products and services. Lastly,
positioning refers to the selection of the marketing mix the most suitable for the
target customer segment.
Section 3.1.2: What Opportunities Do You See for Your
Product?

NEW GEOGRAPHIC MARKETS

The global GDP is rising, and, as a result, consumers have more and more money
to spend on electronics. As a result, the smartphone and electronics market is
growing organically. This is especially true for some geographic regions, where
previously devices were too expensive to even consider. Xiaomi has a fantastic
opportunity to capture these emerging markets, such as Africa or India, thanks to
their great prices. This is a particularly powerful opportunity for Xiaomi, since it
only involves competing against other budget-conscious manufacturers, such as
Huawei, but not luxury brands like Apple.

BRICK AND MORTAR STORES

Unlike Samsung or Apple, Xiaomi has made little effort to grow its brand with the
use of brick and mortar stores. While Xiaomi does have a few “Mi Stores”
located around the world, they could certainly invest in some more. These brick
and
mortar stores would not only improve Xiaomi’s offline sales channels, but they
would also improve the company’s perception as a luxury or high-quality brand.
It’s worth mentioning that much of Xiaomi’s sales are currently accounted for
with eCommerce.

GREEN BRANDING

On the topic of branding, Xiaomi has another opportunity for growth. By pitching
themselves as a “green brand” an environmentally-friendly brand Xiaomi may be
able to set themselves apart from the crowd. There’s a growing environmental
consciousness, especially in more developed countries, and Xiaomi may be able to
profit from this while saving the planet! Naturally, this would be a two-step
process. First, Xiaomi would need to ensure their manufacturing processes are as
green as possible by reducing and managing waste products and pollutants.
Secondly, Xiaomi would need to go about promoting this message with some
clever marketing tactics.

4.1 COMMUNICATION OBJECTIVES

Xiaomi marketing communication mix explains the extent of usage of individual

elements of marketing communication channels by the mobile internet company.
Generally, elements of the marketing communication mix consist of print and
media advertising, sales promotions, events and experiences, public relations,
direct marketing and personal selling.

Xiaomi Print and Media Advertising

Xiaomi once touted its avoidance of advertising as one of the keys to its early
success saving money on commercials helped keep the overall price of the phones
lower. Instead, it relied on its upper executives and its “fans” to spread the word
and attract new customers through social media. However, due to increasing
competition from its local rivals Oppo and Vivo, the mobile internet company had
no choice but to engage in certain forms of traditional advertising such as posters
and newspaper advertising. Nevertheless, viral marketing remains as the most
important form of marketing for Xiaomi. The internet technology company also
uses celebrity endorsement.

Xiaomi Sales Promotions

Xiaomi uses the following sales promotions techniques, like Flash Sales, Customer
Loyalty Scheme, Seasonal Sale Promotions, Point of Sale Materials.
Flash sales. Flash sales refer to sales of products and services online at a heavily
discounted price for a short period of time. Xiaomi uses flash sales extensively,
especially in India.

Customer Loyalty Scheme. Reward Mi is a customer loyalty program that rewards

loyal customers with exclusive benefits such as priority passes a.k.a F-codes and
discount coupons which can be redeemed on selected products across Mi Store.

Seasonal sales promotions. The electronics and software company announces

sales promotions on notable occasions as Christmas day and anniversaries of
notable days for the company.

Point of sale materials. The company uses point of sale materials such as posters
and display stand at its stores.

4.2 COMMUNICATION BUDGET

In 2019, Chinese electronics company Xiaomi spent 10.38 billion yuan on selling
and marketing. In that year, Xiaomi's total revenue amounted to 174.92 billion
yuan or 1,284,843,682,084.28 Philippine peso.
 CHAPTER 5
CONSTRUCTING AN ADVERTISING PROGRAM

1. SELECT AN ADVERTISING AGENCY

The Naya Note campaign videos are conceptualized by the

brand marketing team of Xiaomi India led by Karan Shroff,
Brand Marketing Lead, Xiaomi India and implemented by Lowe
Lintas Advertising agency.

Lowe Lintas is the creative agency of MullenLowe Lintas Group, India. One
of the largest in India, Lowe Lintas has created tremendous success for
some of India’s leading brands. Today, Lowe Lintas manages more number
of brands amongst India’s Top 10 Most Trusted Brands. In fact, a number of
brands managed by Lowe Lintas have gone on to become leaders in their
respective categories.

2. DEVELOP IMC BUDGET IN EACH

OBJECTIVE OBJECTIVE 1:

COMMUNICATION PLAN

Integrated Marketing Communication (IMC) Plan for Xiaomi Smartphones.

Adoption of Xiaomi’s Unique Selling Point (USP) of high specification but
low-priced smartphones would fit strategically into the Asian mobile phone
market where the GDP per capita is $3,203.3 according to the World Bank.
The country’s economy is regarded as largely middle income. The high
percentage of the middle class and their high internet accessibility
represents Xiaomi’s main marketing target even though internet
penetration and online shopping percentages are low. For Xiaomi, ability to
successfully implement a hybrid IMC strategy that combines internet and e-
commerce marketing with some form of retail marketing, just like it did in
India, would make it take over the Asia smartphone market. The company
grew to become the fifth largest smartphone seller in Q4 2014 on a hybrid
marketing strategy that combined both online and brick-and-mortar
marketing. Xiaomi, which entered the Indian smartphone market in 2014,
had to adopt this marketing approach due to target consumers’ preference
for purchase in physical stores.

5.1 OBJECTIVE BUDGET

There is a reason why Xiaomi is able to price its smartphones aggressively

and that is because they don’t spend heaps of money on marketing and
advertising. Instead, they rely more on word of mouth advertising model.
Xiaomi knows, if they bring a really good product in the market at an
extremely attractive price, people will talk about it and that's exactly where
most of the sales come from. People refer their friends and family to a
Xiaomi product and the chain continuous. In a recent interview, Manu Jain,
company’s India Head said that Xiaomi thinks of its users as brand
ambassadors as it is, they who actually market the product. The model has
worked wonders for the company and with almost zero marketing cost, the
company is still achieving pretty amazing sale volumes. As of August 2017,
Xiaomi sold about 5 million Redmi Note 4 in India.

OBJECTIVE 2: DISTRIBUTION CHANNEL

In China and India, we are very successful with our own online channels,
but there also exist Xiaomi's Mi Home retail stores and retail partners. In
India, Xiaomi partnered with the largest e-commerce company, Flipkart,
along with Amazon and Snapdeal.

6.1 OBJECTIVE BUDGET

Xiaomi to invest additional $725 million in China to boost its

business.
 OBJECTIVE 3: BUSINESS TO BUSINESS MARKET

Xiaomi will sharpen its focus on its own Mi online stores to sell its wares, a
strategy which has paid off rich dividends in its home market. Presenting
itself as the good quality phone with the low prices is the good, It gives
other company a budgetable devices with good quality

3. OUTLINE YOUR IMC METHOLOGIES FOR EACH

OBJECTIVE OBJECTIVE 1: Social Media Marketing

OBJECTIVE 2: Good Quality Phone with Low Price

OBJECTIVE 3: Direct or Official Mi Store Marketing

4. DISCUSS YOUR ADVERTISING GOALS IN EACH OBJECTIVE

OBJECTIVE 1: The main goal of xiaomi is to become one of the best in the
Smartphone industry not just in Asia but in the whole world.

OBJECTIVE 2: By using online channels it’s easy to order and to pay with
no hassle to the customer, especially in this situation that we’re in
pandemic online selling is a good for the safety of our customers

OBJECTIVE 3: Our goal in B2B is to make other company equipment or

devices with low price and with good quality
 5. WRITE A CREATIVE BRIEF FOR EACH OBJECTIVE

BACKGROUND OVERVIEW

A electronics company founded in April 2010 and headquartered in . Xiaomi makes and invests
in , , , home appliances, bags, shoes, consumer electronics, and many other products.
 OBJECTIVES

o give customer good quality device but in a low cost or low-price de

TARGET AUDIENCE

who are tech-savvy as well as who are in the group of age 18–35 from students to work
t market leaders like Samsung, LG and Apple were overpriced for the specs they were pr

BRAND VOICE

as a straightforward solution to that problem they create its own AI c

 WHY WOULD OUR CUSTOMER BUY OUR PRODUCT?

buy a Xiaomi product is, our product is very affordable but good quality, com