MRKT6001 – The Marketing Strategies of Apple and Xiaomi
Session 2, 2021
Assignment 1: Case Study Analysis
Individual Assignment
Student Name
Student ID
Harvard Style
Word Count: 1638
Executive Summary
Marketing strategy ensures the success of a company in the globalized environment of increased competition. The concerned report has a focus on the two global leaders of the smartphone industry, Apple and Xiaomi. Case studies on the marketing success of two companies are selected from Forbes and Google Scholar for the comparative analysis of Apple and Xiaomi, respectively. The report first introduces the summary of two selected pieces of articles, where the core concepts and marketing strategies of these two companies are illustrated. The report shows that Apple has a focus on innovation and different customer experiences as a part of their marketing strategy, whereas Xiaomi has a focus on the lower pricing strategy for competitive existence in the market. Further, it entails detailed evidence regarding the successful market performances of these companies. The analysis portion of the report deals with the theoretical evidence and frameworks relevant to the analyzed market success of these two companies.
Table of Contents
2. Description of Two Cases 300 5
3. Evidence of Marketing Related Success 6
3.1 Marketing Success of Apple 6
3.2 Marketing success of Xiaomi 7
1. Introduction
1.1 Aim
Comparative analysis of the marketing strategies of two selected case organizations, Xioami and Apple, is the aim of the concerned report. However, the selected report has a focus on identifying the instances relevant to the marketing strategy from the case study of two selected organizations.
1.2 Background
Xiaomi and Apple are the two biggest market players in the smartphone industry of the world, and these companies achieve their marketing success through the strategic marketing process. Camilleri (2018) opines that the successful marketing mix of an organization reflects in the overall marketing strategy of an organization, where the different promotional tools foster the effectiveness of market performance. The effective marketing strategy of an organization considers strategic decision-making regarding the promotions of the products along with the management of product quality. Winter et al. (2018) further identify that the success of the mobile business is relevant to the identification of users’ attitudes towards the product suability.
1.3 Scope
The scope of the present report is to describe the two selected cases on the marketing success of Xiaomi and Apple along with the identification of evidence related to the marketing-related success of the two selected companies. Further analysis is taken to illustrate the contemporary market success of two selected organizations in terms of their marketing strategies.
1.3.1 Core Concepts
Moorman (2018) opines that the core marketing strategy of Apple deeply relies on the degradation of performance of the existing models to enhance the accountability of the newly launched models of the company (Moorman, 2018). Xiaomi is the fourth largest market player in the smartphone industry, and it focuses on sustainable development approaches along with strategic flaws to improve market performance (Sun and Fah, 2020). The inclusion of a wide range of products, along with the different kinds of products like MI chat, MIUI, and Xiaomi smartphones, improve the market performance and offer a strong presence in the mobile ecosystem (Sun and Fah, 2020).
Figure 1 Comparative Analysis of Apple and Xiaomi
(Source: Saiidi, 2021)
2. Description of Two Cases 300
2.1 Case of Apple
Moorman (2018) opines that Apple has remained as one of the strong marketers of the smartphone industry, where it focuses on the creation of legendary experiences of customers from the offered smartphones along with the other electronic products of the company. It further identifies that Apple has an approach to create distinct experiences for the customers, where the B2B model is followed by the organization. The aim of the sales team of the company is to target the industry segments not focussed on the products. Furthermore, the price controlling approach creates a brand value, where the company has a focus to utilize the customer-based matrix for the purpose of marketing (Moorman, 2018). The simple advertising process is the USP of this brand as it focuses on the fundamentalism in designing the smartphone interfaces, brand logo designing, and even advertising purposes. Apple understands the essence of innovation and new product development to provide advanced service quality to the customers. The company successfully implements Theodore Levitt’s approach to pay attention to innovative designing (Moorman, 2018). Finally, Apple always tries to keep its brand identity in its global presence, which creates sensitive attention of customers towards the brand.
2.2 Case of Xiaomi
Sun and Fah (2020) opine that the marketing strategy of Xiaomi is focused on the pricing strategy, where it keeps transparency in the pricing for all of its products like Mi Chat or MIUI and even in smartphones. The company makes a clear pricing process with little margin for dealers. Xiaomi has a core business strategy to focus on the C2B model where the community e-commerce offers effectiveness in the marketing of products. Sun and Fah (2020) further argue that Xiaomi has an aim to integrate the internet resources into the business to expand the advantages available for the business of the company. The company also aims to improve the reliability of its system to replace the traditional brand image of Apple to become ‘China’s Apple’ (Sun and Fah, 2020).
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3. Evidence of Marketing Related Success
3.1 Marketing Success of Apple
Apple Newsroom (2021) addresses that the company is in the state of rebranding and recovery of market share in the global operation as the company has a commitment to improving innovative approaches. The company is improving the marketing function with a focus on the sustainable product designing approach with the development of green technology in the US operational unit. Focus on the clean energy aspects makes Apple invest $4.7 million in Green Bond Spend (Apple Newsroom. 2021). Services revenue of the company has touched all time high mark in the recent market operation. The reason behind the market growth identified by the company is the sharing innovation with the customers through newly developed products to users (Investor.apple.com. 2021). The annual report of 2020 of the company describes that it has secured a net sales volume of 34% through the direct channels, whereas 66% through the indirect distribution channels, as the company has a focus on advertising through third party licensing agreements (Investor.apple.com. 2021). The advertising of the company has been performed through the company’s own marketing platforms.
Figure 2 Apple US market Share
(Source: Investor.apple.com. 2021)
3.2 Marketing success of Xiaomi
The effective marketing strategy of Xiaomi focuses on the market growth in the US Segment, but it was impacted amid market rivalry between China and America. However, the marketing strategy of the company reflects in the successful market operation in the Chinese market. Premium smartphone production and selling at low prices is the secret of the market success of Xiaomi (Saiidi, 2021).
Figure 3 Market Performance of Xiaomi
(Source: Company.mi.com. 2021)
Additionally, the company has recorded a revenue of $245.9 billion in worldwide operation along with year-to-year revenue growth of 19.4% (Company.mi.com. 2021). Furthermore, the company has recorded an overseas revenue of 34.1% as a part of its global marketing strategy (Company.mi.com. 2021). Along with the 190 million connected smartphone devices, the company has more than 324.8 million devices connected in its internet ecosystem (Company.mi.com. 2021).
4. Analysis and Explanation
Silva et al. (2018) opined that the success of a company in the mobile market is concerned with innovation and improvement. It further identifies that focus on the pricing strategy as well as on the variety of products influences the market performance of a brand.
4.1 Analysis of Apple
Apple has focused on improving innovative technology to offer different experiences to the customer. Among the identified two aspects, Apple has a focus on continuous improvement products to engage customers towards newly developed products (Apple Newsroom. 2021). Sustainable operation is the core of the operation of this company. Within the next five years, the company is investing $430 billion to improve the sustainable 5G technology as a part of its marketing strategy (Apple Newsroom. 2021). As a part of the success in the marketing strategy, the company has recorded revenue growth of 36% in the June quarter of this year (Investor.apple.com. 2021). Sharma et al. (2020) opine that brand identity is an important aspect of the market success of an organization, taking the context of sentiment analysis on Twitter. Moorman (2018) opines that the ‘Act Glocal’ approach of Apple always maintains a brand identity in the global operation, which creates a market sentiment for the products of Apple to reflect in the revenue of the company. As a part of an effective marketing strategy, Apple has a focus on innovation, premium pricing strategy, along with Act GloCal aspect.
Figure 4 Global Revenue of Apple in Greater China
(Source: Investor.apple.com. 2021)
4.2 Analysis of Xiaomi
Wang et al. (2017) opine that the ‘Reward-Penalty Mechanism’ (RPM) of smartphone companies reflects in the market success as it lowers the Wholesale prices as well as the retail prices to boost the sales volume of a company. Sun and Fah (2020) acknowledge that Xiaomi has successfully installed a transparent pricing strategy to offer a margin to the dealers. A smaller margin in the pricing strategy in dealing with shares has a consequence of higher sales volume, and it additionally reflects in the revenue performance of an organization. The market performance statistics of Xiaomi is a reflection of this strategy of lower pricing strategy for higher sales.
Figure 5 market Performance of Xiaomi in China
(Source: Company.mi.com. 2021)
After the first foray into Singapore in 2014, the company has launched in more than 80 countries all over the world (Saiidi, 2021). 40% of the total revenue of the company comes from Outside of mainland China (Saiidi, 2021). In addition, the company has more than 1000 retail outlets at premium locations of the world like Mexico City, Dubai, and London. The result of the successful marketing strategy of the company reflects in its performance, where it has 190 million connected devices worldwide (Saiidi, 2021). RPM strategy has an effect on increasing the profit line as well as competitive advantages in the market (Wang et al., 2017). As stated by Silva et al. (2018), the effective pricing strategy of Xiaomi makes the company one of the leading smartphone producers in the global smartphone ecosystem.
5. Conclusion
Apple and Xiaomi have established a strong presence in the global smartphone market with their effective marketing strategy. The strategic move of Apple is to influence the customers to upgrade and enhance the market performance of Apple. The brand identifies itself as a company that relies upon innovation and inclusion of new product experiences for the launches of new technologies. Oppositely, Xiaomi has a focus on the improvement of market presence through a clear and transparent pricing strategy. The marketing success of Xiaomi is ensured by offering quality products at a minimum price to create competitiveness in the market. The two companies have their two distinct approaches in marketing, and they both are successful in achieving their corporate goals.
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6. References
Apple Newsroom. 2021. Apple commits $430 billion in US investments over five years. [online] Available at: <https://www.apple.com/newsroom/2021/04/apple-commits-430-billion-in-us-investments-over-five-years/> [Accessed 28 July 2021].
Camilleri, M.A., 2018. Integrated marketing communications. In Travel marketing, tourism economics and the airline product (pp. 85-103). Springer, Cham.https://www.um.edu.mt/library/oar/bitstream/123456789/21432/5/Integrated%20Marketing%20Communications.pdf
Company.mi.com. 2021. Mi Global – Investor Relations. [online] Available at: <https://company.mi.com/en-us/ir/indexContent/> [Accessed 28 July 2021].
Investor.apple.com. 2021. Apple – Investor Relations. [online] Available at: <https://investor.apple.com/investor-relations/default.aspx#tabs_content–2021> [Accessed 28 July 2021].
Moorman, C., 2018. Why Apple Is Still A Great Marketer And What You Can Learn. [online] Forbes. Available at: <https://www.forbes.com/sites/christinemoorman/2018/01/12/why-apple-is-still-a-great-marketer-and-what-you-can-learn/?sh=1c79295a15bd> [Accessed 28 July 2021].
Saiidi, U., 2021. [online] Available at: <https://www.cnbc.com/2019/09/09/xiaomi-how-the-apple-of-china-grew-rapidly-into-80-new-markets.html> [Accessed 28 July 2021].
Sharma, S.K., Daga, M. and Gemini, B., 2020. Twitter Sentiment Analysis for Brand Reputation of SmartPhone Companies in India. In Proceedings of ICETIT 2019 (pp. 841-852). Springer, Cham. https://link.springer.com/chapter/10.1007/978-3-030-30577-2_75
Silva, A.T., Moro, S., Rita, P. and Cortez, P., 2018. Unveiling the features of successful eBay smartphone sellers. Journal of Retailing and Consumer Services, 43, pp.311-324. http://repositorium.uminho.pt/bitstream/1822/62763/1/manuscript.pdf
Sun, L. and Fah, CT, 2020. Xiaomi-transforming the competitive smartphone market to become a major player. Eurasian journal of social sciences, 8(3), pp.96-110. https://eurasianpublications.com/wp-content/uploads/2021/02/EJSS-8.3.2.pdf
Wang, W., Fan, L., Ma, P., Zhang, P. and Lu, Z., 2017. Reward-penalty mechanism in a closed-loop supply chain with sequential manufacturers’ price competition. Journal of cleaner production, 168, pp.118-130. https://www.researchgate.net/profile/Peng-Ma-9/publication/319376250_Reward-penalty_mechanism_in_a_closed-loop_supply_chain_with_sequential_manufacturers%27_price_competition/links/5a04bceea6fdcceda02df11b/Reward-penalty-mechanism-in-a-closed-loop-supply-chain-with-sequential-manufacturers-price-competition.pdf
Winter, J., Battisti, S., Burström, T. and Luukkainen, S., 2018. Exploring the success factors of mobile business ecosystems. International Journal of Innovation and Technology Management, 15(03), p.1850026. https://cris.fbk.eu/bitstream/11582/314092/1/Winter_et_al_2018_preprint.pdf