Download - Xiaomi Enters Brazil - Final Draft
Marketing Group Assignment: Xiaomi Enters Brazil
International MBA Program, Renmin University of China
Lecturer: Dr. Jing Jiang
Due Date: 25/12/2014
“Group Six Marketing Consultants”
Anna Liu - Organizational Structure, Budget, Execution Strategy, Evaluation
Alex Fu - Products Overview, Pricing Strategy, Promotional Strategy
Cian O’Dowd - Concept Website Build, Questionnaire, Project Final Edit
Julie Fu - Introduction, Company Overview, Company Strategy
Mikheili Songulashvili - Background Analysis, Promotional Strategy, Keynote
Introduction
In this project our group will aim to use our diverse knowledge and expertise to develop a marketing
plan for the launching of a new product in a new market for a local Chinese firm. We aim to
practically apply the lessons contained within our Marketing module to develop a custom plan for
how our firm can successfully launch this product into that market using innovative and cost-effective
marketing practices. We will confront the challenges which the firm may face in entering this market
and offer advice as to how they may overcome these.
Our focus text for this assignment was Kotler and Armstrong’s Principles of Marketing1. Globally
recognized as the ‘bible’ of marketing education this textbook offers a solid introduction in the field
of Marketing. As some of our group had not studied Marketing before this easy-to-read book was a
good point of reference. We found it in particular useful when developing our Pricing and
Promotional Strategies.
When selecting a firm for this project our group agreed on three criteria; the firm needed to be local
(Chinese), it needed to be known as a firm which developed innovative products and had a track
record of using unique marketing strategies. We also agreed that it should be a sector in which all
members in the group shared a common interest, after an hour of discussion we came to only one
answer, mobile phones.
Eventually our group decided to pick Xiaomi. We did so as Xiaomi is a very local firm with its
headquarters located a stone’s throw from Renmin in Zhongguancun. Xiaomi is an incredibly young
Chinese firm that met all our criteria for a firm and has used fun, creative marketing to capture cold
hard market share. Less than five years after its creation it is now already the world’s third largest
smartphone manufacturer2.
Company Overview
Founded in 2010 “Beijing Xiaomi Technology Company Limited”, trading as “Xiaomi” is a
manufacturer of Smartphones, Smart TVs, Tablet Computers and other electronic devices. Xiaomi’s
devices use an in-house developed variant of Google’s Android operating system that Xiaomi calls
‘MIUI OS’.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1!Kotler, P. and Armstrong, G. (2012) Principles of Marketing – 14th edn. New Jersey: Pearson Prentice Hall.!2 Gibbs, S 2014, ‘China Rising: Xiaomi becomes world’s third largest smartphone manufacturer’, The Guardian, 30 October. Available at: http://www.theguardian.com/technology/2014/oct/30/china-xiaomi-third-biggest-smartphone. [28 November 2014].
In selecting Xiaomi the main disadvantage for our group was that Xiaomi is as of yet not a publicly
traded company and thus does not issue Annual Reports. The firm is privately owned by a investor
group including its CEO Lei Jun, the Singapore Government’s investment body Temasek Holdings
and Chinese venture capital fund IDG Capital3.
Xiaomi has successfully delivered its growth by focusing on Asian markets such as China, India,
Singapore and Malaysia. However Xiaomi executives have spoken openly about entering Western
markets such as the United States, Europe and South America4.
Initially our group assessed several potential markets for Xiaomi to expand into next. When exploring
other developed markets such as Europe and America our group identified a key barrier to entry for
Xiaomi could be legal action by competitors such as Apple and Samsung. Both firms in the past have
taken patent and design infringement actions in US and European courts to have products removed
from the shelves and in recent months press have pointed to similarities in Xiaomi and Apple
products. In October 2014 Jonathan Ives, Head of Design at Apple when referring to claims that
Xiaomi copies Apple designs said5 “It really is theft and its lazy. And I don’t think it’s OK at all”.
The Brazilian market is sufficiently distant to avoid Apple’s wrath and lacks the sufficient copyright
legislation to facilitate such action against Xiaomi.
Company Strategy
Since launching its first product in 2011 Xiaomi has followed a cost-differentiation strategy offering a
products with high specifications at highly competitive pricing. It has innovatively used E-Commerce
as it’s main sales medium as opposed to a traditional “bricks and mortar” retail network which would
have cost the young firm a considerably sum to develop6.
For Xiaomi’s most popular products it chooses to sell them on selected days only in what Xiaomi
calls “Flash Sales”. This occurs due to two reasons: current global demand for Xiaomi devices means
stock shortages are constant and would make managing a constantly operating e-commerce operation
very difficult to manage. Also, by dispatching devices in bulk on particular days this enables Xiaomi
to negotiate discounts from its logistics partners and requires less staff in it’s warehouse.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3 Wikipedia (2014), Wikipedia- Xiaomi. Available at http://en.wikipedia.org/wiki/Xiaomi [Accessed 28 November] 4 Ibid 3. 5 Kan, M 2014, ‘China’s Xiaomi defends itself from Apple copycat claims’. Macworld, 29 October. Available at http://www.macworld.co.uk/news/apple/chinas-xiaomi-defends-itself-from-apple-copycat-claims-3583101/. [28 November 2014]. 6 Xiaomi Global Site (2014), Xiaomi – About Us. Available at http://www.mi.com/en/about [Accessed 28 November]!
Background Analysis
SWOT Analysis - Strengths of Xiaomi When Entering Brazil
Emerging Market Favors Xiaomi’s Cost Model
Xiaomi usually favors entering rapidly developing emerging markets where income levels are rising
but are not yet at Western levels. Such markets find Xiaomi’s price competitive devices highly
attractive. To date Xiaomi operates in China, India and Russia, by entering Brazil it would be in all
the “BRIC” nations.
The Hugo Barra Factor
A major incentive for Xiaomi to enter the Brazilian market is that it’s highly charismatic Vice
President for Global Markets is Brazilian. Recruited from Google Hugo Barra enjoys a huge social
media following and has become the ‘face’ of Xiaomi outside of China. Having a popular local face
would be a huge advance for Xiaomi when entering the Brazilian market.
Hugo Barra pictured at a recent Xiaomi event in Beijing (Source - Xiaomi.cn)
Brazilian E-Commerce Strength
Research from Forrester Research has claimed Brazil’s e-commerce market is the largest in South
America and is three times the size of Mexico and Argentina’s e-commerce markets combined. In the
past five years it has grown 250% and this receptive e-commerce environment will support Xiaomi’s
e-commerce focused business model.
SWOT Analysis - Weaknesses of Xiaomi Entering Brazil
Brand Recognition Is Low
A major weakness of Xiaomi when entering the Brazilian market is that it’s brand is not very
recognizable in this market. While ‘Techies’ may be aware of it and be eager to purchase it’s product
the brand is not well known amongst the general public and will require sustained marketing efforts to
build.
‘Made In China’
Unfortunately for Xiaomi many customers in foreign markets still perceive ‘Made in China’ to mean
poor quality and service. Dispelling this perception will be a major challenge for Xiaomi, especially
when selling its higher tier products.
Absence of an Establish Retail and Service Network
Xiaomi’s typical business strategy and our strategy for entering Brazil favors an E-Commerce focused
model. However the absence of ‘bricks and mortar’ retail and service centers could create challenges
for Xiaomi.
SWOT Analysis - Opportunities for Xiaomi when entering Brazil
High Growth Market
Today, Brazil is home to one third of mobile phone users in Latin America and the Caribbean7. This
astounding performance is forecast to continue as the country expands it’s investment in high-speed
“4G” mobile phone signal. Euromonitor8 forecasts volume smartphone sales in Brazil to increase by
103% from 2013 to 2018.
Prepaid Customers Dominate The Brazilian Market
Local market research by Teleco has said that of those surveyed 82% of Brazilian mobile users
favored Prepay plans (without singing Contracts). In Q3 2014 76.8% of all Mobile connections in
Brazil were Pre-paid9. This requires customers to pay the full price of the device up-front and thus
favors Xiaomi’s direct to customer (B2C) e-commerce model while also giving its cheaper priced
devices a natural cost advantage.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!7 Budde Communications [2014], Brazil Mobile Market Insights. Available at http://www.budde.com.au/Research/Brazil-Mobile-Market-Insights-Statistics-and-Forecasts.html [Accessed 28 November] 8 Euromonitor [2014], Mobile Phones in Brazil. Available at http://www.euromonitor.com/mobile-phones-in-brazil/report [Accessed 29 November]!!9 Teixeira, M 2014 ‘Brazil – Mobile Market’, Tech in Brazil. Available at http://techinbrazil.com/recharging-prepaid-mobile-plans-in-brazil. [Accessed 30 November]
Consumer Products Tax Reduction
In 2013, the Brazilian Government reduced the standard rate of taxation on consumer products such
as mobile phones and tablets to stimulate economic growth. This has made these products more
attainable to millions of low and middle-class customers.
SWOT Analysis - Threats for Xiaomi when entering Brazil
Threat posed by Microsoft’s Lumia Range
Microsoft (previously known as Nokia) represents a major threat to Xiaomi in the Brazilian market.
Microsoft’s ‘Lumia’ range of Windows smartphones offer strong specifications at competitive
pricing. This model is proving particularly popular in developing markets. However can count this
threat by emphasizing its use of Android that is a far more popular operating system amongst
consumers.
Legal Threats by Competitors
While less of risk than in North American or European Markets the threat of legal action does exist
for Xiaomi. Entering new markets intrudes on it’s competitors and may encourage rivals to take
action against Xiaomi should they feel it’s infringing on patents or designs. This month Ericsson was
granted an injunction in India against Xiaomi for alleged patent infringement10. Xiaomi was banned
from selling its devices in that market until the issue is resolved.
Products Overview
When selecting the products to market for our project we looked at Xiaomi’s existing range available
in China11. While the products were extremely impressive and offered exceptional specifications at
competitive pricing their Operating System was the main let down for foreign customers. Due to
China’s ban on Google products the Xiaomi MIUI operating system has all Google applications
removed. Outside of China tech conscious consumers view applications such as ‘Google Play Store’,
‘YouTube’, ‘Google Chrome’ and ‘Gmail’ as essential. As a result our new products for our project
are four products from the Xiaomi range with a pure variant of Google’s latest Android Lollipop
operating system installed. Each device will naturally have a Brazilian Portuguese pre-installed and
will support the Brazilian 700Mhz 4G frequency. For detailed information on each of our four
products please see “Product Overview” in the Appendix.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!10 Bhargava, Y ‘Forced to suspend sales, Xiaomi assessing legal options’ The Hindu. Available at http://www.thehindu.com/business/Industry/forced-to-suspend-sales-xiaomi-assessing-legal-options/article6689231.ece [Accessed 13 December 2014] 11 Xiaomi China (2014). Mi. Available at: http://www.mi.com/index.php [Accessed 28 November 2014]
Pricing Strategy
Pricing will play a major role in Xiaomi’s brand model in Brazil and in forming our marketing
strategy. As illustrated in the graphic below Xiaomi devices have a substantial price difference versus
rival devices of similar specification. This will enable Xiaomi to pursue a strategy of ‘Market
Penetrating Pricing’ which Kotler and Armstrong12 describe as when “…companies set a low initial
price to penetrate the market quickly and deeply – to attract a large number of buyers quickly and win
a large market share.”
Table 1 - Price Comparison of Unlocked Smartphones & Tablets in Brazil Device Type Device Name Device Cost (No Contract)*
Entry Level 4G Smartphone Xiaomi Redmi M1 BR$ 299 (USD$116)
Entry Level 4G Smartphone Apple iPhone 5C 8GB BR$ 1,499 (USD$584)
Entry Level 4G Smartphone Nokia Lumia 930 BR$ 1,049 (USD$409)
Large Screen Smartphone Xiaomi Redmi Note BR$ 369 (USD$143)
Large Screen Smartphone Apple iPhone 6S Plus BR$ 2,653 (USD$999)
Large Screen Smartphone Samsung Galaxy Note 4 BR$ 1,999 (USD$789)
High-End Smartphone Xiaomi Mi 4 BR$ 849 (USD$325)
High-End Smartphone Apple iPhone 6 BR$ 2,180 (USD$850)
High-End Smartphone HTC One M8 BR$ 1,357 (USD$529)
High-End Tablet Xiaomi MiPad BR$ 629 (USD$249)
High-End Tablet Apple iPad Mini 2 BR$ 1,399 (USD$529)
High-End Tablet Samsung Galaxy Tab S BR$ 1,152 (USD$449)
Graph Guidelines * Xiaomi prices are an estimate (Chinese retail prices plus 10%).
~ Prices shown are retail prices for devices sold unlocked (without contract) in Brazil.
Promotional Strategy
In order to ensure sufficient market penetration in such a large market our team will recommend
several mediums to market our new product range. However throughout our priority will be to
minimize cost and maximize innovation.
E-Commerce Strategy and ‘Flash Sales’
At the heart of our group’s marketing strategy is E-Commerce. E-Commerce offers a cost-effective
alternative to traditional retail networks and allows Xiaomi to sell directly to the Consumer (B2C)
without Retailers and thus substantially increase profit margins. Due to occasional shortages in
Xiaomi stock due to high global demand products will be sold on a time-limited basis via events
known as ‘Flash Sales’ – this means that particular products are only sold on a set day each week, that
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!12 Ibid. 1
day does not change to enable word of mouth to promote the activity. This will create an air of
‘exclusivity’ with our products and in doing so increase customer demand. This also enables Xiaomi’s
Social Media channels to generate interest ahead of these ‘Flash Sales’.
‘MiPop’ Events
One of Xiaomi’s unique marketing tools are ‘MiPop’ events13. These events are held when Xiaomi
launches a new device or enters a new market, it enables Xiaomi to build relationships and spread
awareness of products to local mobile networks, journalists, developers and ‘loyal customers’. Key
Xiaomi staff attend these events and the public have the opportunity to try new devices and give
feedback on their experience. The addition of a pure version of Android Lollipop to our Brazilian-
variant of the Xiaomi range would likely ensure the popularity of our events with developers and
‘techies’. Our group recommends holding several of these events with Hugo Barra presenting across
several of Brazil’s largest cities. These events can be run at a relatively low cost but act as highly
targeted PR activity and attract a considerable amount of social media and press coverage.
‘Something Wonderful’ Social Media Campaign
Another cost-effective and innovative way of marketing our new products in Brazil is social media.
Social Media is a highly effective medium of promoting products in Brazil. In 2014 remarkably Brazil
was Facebook’s second largest market with over 65 million accounts, the world’s second largest
market for Twitter (41.2 million accounts) and the world’s second largest market for YouTube by
unique visitors14. Some international companies have been successful in using Brazil’s social media
action to spread brand awareness; a noticeable success story in this was Diageo’s ‘We Are Social’
campaign for its Smirnoff Vodka brand15. Over a four-month period Smirnoff Brazil asked customers
to post on it’s Facebook page photos, videos, songs and stories which embodied the brand’s “Be
There” slogan. Over the four-month period the number of fans on Smirnoff Brazil’s Facebook page
increased by 427% to over one million making Smirnoff the third most popular brand on Facebook in
Brazil. Leslie Orsioli, Managing Director of the ‘We Are Social’ Campaign said it engaged
customers, encouraged them to engage with the brand and helped them create a bond with Smirnoff,
all this was achieved at minimal cost to the company. Our group suggests Xiaomi follows a similar
strategy surrounding it’s company motto of “Always believe that something wonderful is about to
happen”. After launching ‘Xiaomi Brazil’ Facebook, Twitter and YouTube profiles we would start a
three-month campaign to get users to share their own ‘Something Wonderful’ via photos, videos and
stories a weekly winner winning a Xiaomi smartphone and tablet. Social Media is also a highly
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!13 Xiaomi China Blog (2014). ����. Available at http://bbs.xiaomi.cn/thread-10919264-1-1.html [Accessed 28 November] 14 Holmes, R 2013 ‘The Future of Social Media? Forget about the US, Look To Brazil’. Forbes, 9 December. Available at http://www.forbes.com/sites/ciocentral/2013/09/12/the-future-of-social-media-forget-about-the-u-s-look-to-brazil/. [28 November 2014] 15 Moth, D 2013 ’10 Innovative Digital Marketing Campaigns from Diageo Brands’. E-Consultancy, 16 October. Available at https://econsultancy.com/blog/63593-10-innovative-digital-marketing-campaigns-from-diageo-brands. [28 November 2014]!
measurable marketing medium thanks to web analytics tools such as Google Analytics and Adobe
Omniture that can provide up-to the minute traffic data on these sources and enable Xiaomi to quickly
gauge the effectiveness of these strategies.
Organizational Structure
Following our policy of cost-effective marketing Xiaomi Brazil’s marketing team structure will be
based on function. Our group is confident that the aforementioned objectives can be achieved with
local team of thirteen staff. During major product launches headcount could be increased in a
temporary basis if additional promotional staff are required. Due to Xiaomi’s bulk shipping policy
linked to ‘Xiaomi Days’ and the fact that E-Commerce for Xiaomi will only operate on selected days
we do not require round the clock E-Commerce staff nor do we need several staff to handle logistics,
this will further contribute to Xiaomi’s cost-savings.
Execution Strategy
When developing our plan to enter Brazil our team concluded that there should be a focus on
minimizing cost and external activity. By keeping marketing options in-house we can minimize delay
and run operations using a small team of our own dedicated staff. Below we have put together a GTM
Timetable (Go-To-Market) based on the perception that Xiaomi wishes us to launch the website just
before Christmas.
Staff!
Team!Managers!
Senior!Management! Head!of!Marketing!(Brazil)!
Public!Relations!Manager!
PR!Rep! Brand!Ambassador!
Event!Planner!(MiPop)!
Social!Media!Manager!
Social!Media!Promoter!
Customer!Care!Rep!
Creative!Manager!
Graphics!Designer!(Print)!
EFCommerce!Manager!
Web!Developer!
Graphics!Designer!(Web)!
Table 1 – Go To Market (GTM) Timetable for Xiaomi Brazil Marketing Plan
Go To Market Timetable For Xiaomi Brazil Marketing Plan
Week One November 10th - 16th Design Planning Graphics Designers with Teams plan site/social media designs
Event Planning First MiPop Event venue booked in Sao Paulo.
Week Two November 17th - 23rd Site Build Commences Website construction begins based on pre-agreed designs
Social Media Pages Launch Social Media Team launch pages, upload content and images
Event Planning Prepare venue layout for MiPop event, invite Press & Bloggers
Week Three November 24th - 30th Site Build Nearing Completion UI Testing, SEO Testing via Google Analytics & Adobe Omniture
Social Media Pages Launch Social Media goes live, first posts - shows product graphics
Event Planning Offer limited tickets to MiPop event for social media subscribers
Week Four December 1st - 7th Xiaomi Brazil Website Goes Live Frontend live but E-Commerce not launched
Social Media Pages Go Live Something Wonderful' Social Media Competition launches
Event Planning Final preparations ahead of MiPop event, rehearsal of activities
Week Five December 8th - 14th First Post from Hugo on Website First Post from Hugo's Blog ahead of first Flash Sale in Brazil
Social Media Promotes Hugo Post Daily countdown to pre-orders, coverage of MiPop event
Event Planning MiPop Event - Friday 14th, Hugo attends - Social Media Presence
Week Six December 15th - 21st Our First "Flash Sale" in Brazil Pre-orders taken on Monday 15th, bulk dispatches occur 17th-18th
Social Media Promotes Xiaomi Day Strong Social Media Activity - launch and dispatch days celebrated
Event Planning Next 'MiPop' event announced for Rio De Janiero & Brasilia
Budget
Through adopting an E-Commerce and Social Media focused Marketing Strategy our group is able to
deliver a project to Xiaomi that achieves sales objectives at minimal expenditure. By adopting the
‘Flash Sale’ strategy these cost-savings can also be continued in the logistics side of the business. As
Social Media activity forms the majority of our advertising activity we enable Xiaomi to avoid costly
print media and television advertising costs.
• Website Build - $2,000 USD
• Server Hosting - $5,000 USD P.A.
• MiPop Event - $30,000 USD
Forecasted Marketing Expenditure - $37,000 USD
Evaluation
Xiaomi today represents a Chinese company at the forefront of technology and innovation. It is thus
only right that they have a Marketing Strategy for entering new markets that reflects this stance. In
selecting a target market our group decided that copyright and intellectual property laws played a
major role in where Xiaomi could go and was the deciding factor in why the company could not enter
the North American or European Markets. Brazil represented a good market due to it’s ambiguity
surrounding foreign copyright protection, it’s high growth economy, recent adoption of 4G and strong
E-Commerce sector. When deciding our marketing strategy for Brazil our group felt it was essential
that we developed a strategy in line with the existing Xiaomi brand but yet was also sensititive to the
intricacies of Brazilian culture. In general we feel our strategy represents a strong entry plan for
Xiaomi highlighting its innovative culture and offers optimum customer reach at minimal cost.
Xiaomi’s existing E-Commerce-focused business strategy coupled with its bulk dispatches and
limited sales days have proven to be a highly effective model. It generates customer demand for
products and creates a perception of rarity while at the same time achieving optimal use of logistics
and staffing. We felt that continuing with the E-Commerce focused strategy was the best way forward
and offered considerable cost savings versus a traditional retail strategy. The rapid growth of E-
Commerce within Brazil suggests that our faith in E-Commerce is likely to prove successful.
Recognizing the popularity of Social Media in Brazil our plan prioritizes this area as a cost-effective
means of encouraging customer interaction and affinity with the Xiaomi brand. The outstanding
success of past Social Media-led marketing campaigns in that market gave us confidence and
precedence in which to follow16. While in its home market due to Government restrictions Xiaomi’s
activity in Facebook, YouTube, Twitter and Instagram has been low key we would recommend a
dedicated Social Media Team to target these mediums.
When looking at execution our proposed strategies could be rolled out in a very short period of time
with minimal staffing. Whilst traditional marketing mediums such as Print Advertising and Television
would require the involvement of third parties and take a longer timescale to roll out our strategies
could be launched entirely from within Xiaomi.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!16 Ibid. 13
Marketing Group Assignment: Xiaomi Enters Brazil
International MBA Program, Renmin University of China
Appendix, Bibliography and Presentation Slides
Products Overview
Product One – ‘Entry Level 4G Smartphone’ - Xiaomi Redmi M1
After our group analyzed this product we concluded that it’s competitive specs and pricing made it an
ideal choice for the Brazilian market. Adding a pure variant of Android Lollipop into the mix makes
this a high spec device at a very affordable price point. Its 4G support would make it an attractive
option for Mobile Networks to purchase as they attempt to encourage 4G adoption. Marketing for this
device would target young consumers and focus on the Red M1’s super-fast quad-core processor, 4G
support, Android Lollipop support and variety of colors.
To Market Price in Brazil – 299 Brazilian Reals (USD$116)
Product Two – ‘Phablet – Phone/Tablet Smartphone’ – Xiaomi Redmi Note
Our group concluded this would be a strong competitor in the ‘phablet’ segment of the Brazilian
market as a substantially cheaper alternative to the Apple iPhone 6 Plus and Samsung Galaxy Note 4.
Our marketing would target 18-35 year old consumers and would focus on cost, the phone’s fast
eight-core processor, 4G support and impressive 13-megapixel camera.
To Market Price in Brazil – 369 Brazilian Reals (USD$143)
Product Three – ‘High-End Smartphone’ – Xiaomi Mi4
This device again offers superior specifications and high-quality construction at an affordable price.
Our group would focus marketing for this product on cost as it has a highly competitive spec which
could rival the likes of iPhone 6 and Samsung Galaxy S5 and yet is also less than half the retail price
of those devices. The target audience for this device would be middle-aged professionals aged 25-50.
To Market Price in Brazil – 849 Brazilian Reals (USD$325)
Product Four – ‘Tablet Device’ – Xiaomi MiPad
To capitalize on the growing Tablet Computer market our group selected the Xiaomi Mi-Pad to also
enter the Brazilian market. The MiPad offers a near identical specification to the Apple iPad Mini but
costs USD$200 less. Coupled with our additional of Android Lollipop we are confident this would be
a very strong seller in the Brazilian market. At an attractive price point we would target a broad range
of customers with this device and our marketing activity would focus on price, the availability of
colors and the addition of Android Lollipop.
To Market Price in Brazil – 629 Brazilian Reals (USD$249)
Questionnaire
Our team conducted a survey to determine insights into the young Brazilian consumer today.
Unfortunately due to our current location our survey was restricted in scale and was conducted with
ten young Brazilians living in Europe.
Sample Questionnaire As E-Mailed To Participants
Thank you for participating in our survey regarding Xiaomi selling products in Brazil. For Question
Six please rate your answer according to the scale of one to five. One being “Highly Unlikely” to Five
being “Highly Likely”.
• Question One - Have you heard of the brand Xiaomi before?
• Question Two – If you answered ‘Yes’ to Question One, given what you know about Xiaomi already
would you buy a Xiaomi device?
• Question Three – If you were to use three words in English to describe Xiaomi what would they be?
• Question Four – After looking at Table One concerning the price differences between Xiaomi and
other manufacturers in Brazil would you be more inclined to buy Xiaomi.
• Question Five – Would you prefer to buy your next phone online on in-store?
• Question Six – After viewing our website would you be interested in purchasing Xiaomi?
The results of the Questionnaire were quite insightful, unfortunately only five out of our ten
participants had heard of Xiaomi before but four out of those five said they would consider buying
such a product. The two key terms that arose from Question Three were “Chinese” and “Android”
thus our decision to adopt a new pure Android variant for Brazil is likely a wise decision. Question
Four received an emphatic response from those surveyed with ten out of then saying they would be
more inclined to purchase Xiaomi after looking at our price comparison table, this result guided us to
make price a key focus in our marketing. Question Five gave us faith in the Xiaomi strategy with only
one person saying they’d rather purchase in-store than online, yet another example of the success of
E-Commerce in Brazilian society today. Finally, in Question Six, four out of our ten participants said
they would be “Highly Interested” in purchasing Xiaomi after looking at our website while three out
of the ten said they would be “Interested” in purchasing Xiaomi after looking at our site.
Bibliography
Textbooks
• Kotler, P. and Armstrong, G. (2012) Principles of Marketing – 14th edn. New Jersey: Pearson Prentice
Hall
Online Articles
• Gibbs, S 2014, ‘China Rising: Xiaomi becomes world’s third largest smartphone manufacturer’, The
Guardian, 30 October. Available at: http://www.theguardian.com/technology/2014/oct/30/china-
xiaomi-third-biggest-smartphone. [28 November 2014].
• Wikipedia (2014), Wikipedia- Xiaomi. Available at http://en.wikipedia.org/wiki/Xiaomi [Accessed 28
November]
• Bhargava, Y ‘Forced to suspend sales, Xiaomi assessing legal options’ The Hindu. Available at
http://www.thehindu.com/business/Industry/forced-to-suspend-sales-xiaomi-assessing-legal-
options/article6689231.ece. [Accessed 13 December 2014]
• Kan, M 2014, ‘China’s Xiaomi defends itself from Apple copycat claims’. Macworld, 29 October.
Available at http://www.macworld.co.uk/news/apple/chinas-xiaomi-defends-itself-from-apple-copycat-
claims-3583101/. [28 November 2014].
• Teixeira, M 2014 ‘Brazil – Mobile Market’, Tech in Brazil. Available at
http://techinbrazil.com/recharging-prepaid-mobile-plans-in-brazil. [Accessed 30 November]
• Holmes, R 2013 ‘The Future of Social Media? Forget about the US, Look To Brazil’. Forbes, 9
December. Available at http://www.forbes.com/sites/ciocentral/2013/09/12/the-future-of-social-media-
forget-about-the-u-s-look-to-brazil/. [28 November 2014]
• Moth, D 2013 ’10 Innovative Digital Marketing Campaigns from Diageo Brands’. E-Consultancy, 16
October. Available at https://econsultancy.com/blog/63593-10-innovative-digital-marketing-
campaigns-from-diageo-brands. [28 November 2014]
Research Documents
• Budde Communications [2014], Brazil Mobile Market Insights. Available at
http://www.budde.com.au/Research/Brazil-Mobile-Market-Insights-Statistics-and-Forecasts.html
[Accessed 28 November]
• Euromonitor [2014], Mobile Phones in Brazil. Available at http://www.euromonitor.com/mobile-
phones-in-brazil/report [Accessed 29 November]
Company Publications
• Xiaomi Global Site (2014), Xiaomi – About Us. Available at http://www.mi.com/en/about [Accessed
28 November]
• Xiaomi China Blog (2014). ����. Available at http://bbs.xiaomi.cn/thread-10919264-1-1.html
[Accessed 28 November]
? C AB AA?D . A C ? BD C CB
Meet Our Team
Project Brief
“Complete a marketing plan for a hypothetical product that your group creates for a selected company.”
Choosing Xiaomi
• Company should be Chinese ✓ (It is!)
• Company should be local ✓ (It’s based in Haidian!)
• Company should be involved in a sector of common interest ✓ (Everyone loves Mobile Phones!)
• Xiaomi is one of China’s most innovative and fastest-growing companies!
Company Overview
• Founded in 2010 in Beijing
• Owned by CEO Lei Jun, IDG Capital and Temasek Holdings
• Manufacturer of Smartphones, Tablets & Other Technology Products and Accessories
• Allegations of copying Apple’s designs - “It really is theft and it’s lazy” - Jonathan Ives, Apple
Company Overview
• Has successfully deployed it’s ‘MIUI OS’ operating system - a Chinese variant of Android without Google functionality
• Within four years has gone from producing it’s first device to being the World’s third largest Smartphone brand
• VP of Global Business - Hugo Barra, Former Head of Android at Google
Meet Xiaomi Company Strategy
• E-Commerce Rather Than Retail
• Design Focused On Ease of Build
• Bulk Price Negotiations with Manufacturers
• Advertise Via Social Media Only - No TV/Print
• “Flash Sales”
Background Analysis
Strengths
• Emerging Markets Favour Xiaomi’s Cost Model
• The Hugo Barra Factor (He’s Brazilian!)
• Brazilian E-Commerce Strength
Background Analysis
Weaknesses
• Brand Recognition is low
• ‘Made in China’
• Absence of an Established Retail Network
Background Analysis
Opportunities
• High Growth Market
• Prepaid Customers Dominate Brazilian Market
• Consumer Products Tax Reduction
Background AnalysisThreats
• Microsoft Lumia Threat
• Growth of Chinese Rivals (Huawei, ZTE etc.)
• Threat of Legal Action by Apple, Samsung, HTC
• India Injunction by Ericsson
• Similar action in Brazil unlikely to succeed
Product OverviewKey Changes with new Brazilian variants
• Replace Chinese ‘MIUI OS’ with Android Lollipop (Most recent version of Google’s OS) - A new strategy for Xiaomi
• Add Portuguese language functionality for Brazilian market
• Update antenna specifications to support Brazilian 4G frequency (700Mhz)
• Change charger type to support Brazilian power supply
Xiaomi Redmi M1
Specifications • Entry-Level Xiaomi Phone • Now with Android Lollipop • Quad-core Processor • 8GB Internal Storage
Target Market • Targeted at 18-25 year old
Brazilian consumers • Low to Medium Income
Xiaomi Redmi Note
Specifications • 5.5” ‘Phablet’ Device • Now with Android Lollipop • Quad-core Processor • 8GB Internal Storage
Target Market • Targeted at 18-25 year old Brazilian
consumers • Heavy internet users attracted to the
larger screen for browsing experience
• Low to Medium Income
Xiaomi MiPad
Specifications • 7.9” Tablet Computer • Now with Android Lollipop • Nvidia Tekra K1 Processor • 16GB Internal Storage
Target Market • Targeted at 21-35 year old
Brazilian consumers • Low to Medium Income
Xiaomi Mi4
Specifications • Premium-Level Device • Now with Android Lollipop • High Build Quality • 16GB Internal Storage • 13MP Camera (with 8MP front)
Target Market • Targeted at 21-35 year old
Brazilian consumers • Medium to High Income
Pricing StrategyTable 1 - Price Comparison of Unlocked Smartphones & Tablets in Brazil
Device Type Device Name Device Cost (No Contract)*Entry Level 4G Smartphone Xiaomi Redmi M1 BR299 (USD$116)Entry Level 4G Smartphone Apple iPhone 5C 8GB BR1,499 (USD$584)Entry Level 4G Smartphone Nokia Lumia 930 BR1,049 (USD$409)Large Screen Smartphone Xiaomi Redmi Note BR369 (USD$143)Large Screen Smartphone Apple iPhone 6S Plus BR2,653 (USD$999)Large Screen Smartphone Samsung Galaxy Note 4 BR1,999 (USD$789)
High-End Smartphone Xiaomi Mi 4 BR849 (USD$325)High-End Smartphone Apple iPhone 6 BR2,180 (USD$850)High-End Smartphone HTC One M8 BR1,357 (USD$529)
High-End Tablet Xiaomi MiPad BR629 (USD$249)High-End Tablet Apple iPad Mini 2 BR1,399 (USD$529)High-End Tablet Samsung Galaxy Tab S BR1,152 (USD$449)
*Xiaomi prices are an estimate (Chinese retail prices plus 20%).~ Prices listed are for devices sold unlocked (without contract) in Brazil.
Promotional StrategyE-Commerce Strategy
• Business to Consumer (B2C)
• No Retail Network (No Retail Costs)
• Don’t sell to Retailers or Mobile Networks
Flash Sales Strategy
• Lower Logistics Cost
• Sense of Exclusivity
“Flash Sale” Explained
Promotional Strategy
“MiPop” Events
• Reach Out To Press, Corporate, Techies
• Generate PR in Traditional Media
• Create Brand Loyalty
Promotional Strategy
Using Social Media Instead Of Traditional Media
• Diageo’s ‘Smirnoff’ Vodka brand in Brazil
• “We Are Social” Social Media Campaign
• 427% Increase in Facebook Fans in just four months - Over 1m - 3rd FB brand in Brazil
Smirnoff Brazil “We Are Social” Promotional Strategy
“Your Something Wonderful” Campaign
• Using Xiaomi’s motto “Always believe something wonderful is about to happen”
• Daily Give Aways - Media - Share “Your Something Wonderful” - Daily/Weekly Prizes
• Let Our Customers Advertise For Us.
Organisational Structure
• Lean with Minimal Cost
• Function-based
Execution Strategy• No Traditional Marketing
• E-Commerce/Social - Short Development Time Go#To#Market#Timetable#For#Xiaomi#Brazil#Marke3ng#Plan
Week$One November$10th$1$16th Design$Planning Graphics$Designers$with$Teams$plan$site/social$media$designs
Event$Planning First$MiPop$Event$venue$booked$in$Sao$Paulo.
Week$Two November$17th$1$23rd Site$Build$Commences Website$construcLon$begins$based$on$pre1agreed$designs
Social$Media$Pages$Launch Social$Media$Team$launch$pages,$upload$content$and$images
Event$Planning Prepare$venue$layout$for$MiPop$event,$invite$Press$&$Bloggers
Week$Three November$24th$1$30th$ Site$Build$Nearing$CompleLon UI$TesLng,$SEO$TesLng
Social$Media$Pages$Launch Social$Media$goes$live,$first$posts$1$shows$product$graphics
Event$Planning Offer$limited$Lckets$to$MiPop$event$for$social$media$subscribers
Week$Four December$1st$1$7th Xiaomi$Brazil$Website$Goes$Live Frontend$live$but$E1Commerce$not$launched
Social$Media$Pages$Go$Live Something$Wonderful'$Social$Media$CompeLLon$launches
Event$Planning Final$preparaLons$ahead$of$MiPop$event,$rehearsal$of$acLviLes
Week$Five December$8th$1$14th First$Post$from$Hugo$on$Website First$Post$from$Hugo's$Blog$ahead$of$first$Flash$Sale$in$Brazil
Social$Media$Promotes$Hugo$Post Daily$countdown$to$pre1orders,$coverage$of$MiPop$event
Event$Planning MiPop$Event$1$Friday$14th,$Hugo$a\ends$1$Social$Media$Presence
Week$Six December$15th$1$21st Our$First$“Flash$Sale"$in$Brazil Pre1orders$taken$on$Monday$15th,$bulk$dispatches$occur$17th118th
Social$Media$Promotes$Xiaomi$Day Strong$Social$Media$AcLvity$1$launch$and$dispatch$days$celebrated
Event$Planning Next$'MiPop'$event$announced$for$Rio$De$Janiero$&$Brasilia
Budget• Highly cost-effective marketing model
• Far cheaper than Traditional Marketing strategy
Plan Budget (Estimated)
• Website Build - $2,000 USD
• Server Hosting - $5,000 USD P.A.
• MiPop Sao Paulo Event - $30,000 USD
• “Something Wonderful” Prizes - $3,000 USD
• Total Plan Cost - In the region of $40,000 USD
Summary• Our Product is innovative, attractive and has fit.
• High-growth market with infinite potential.
• Our Plan focuses on the non-traditional reflecting our young brand. In using Social Media our customers advertise for us!
• This Plan can be implemented in just six weeks at a cost which is a fraction of alternative strategies.
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