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SUMMATIVE ASSIGNMENT
Gbolade Thomas
Durham University
AN INTEGRATED MARKETING COMMUNICATION PLAN FOR THE SALE OF XIAOMI
SMARTPHONES IN THE NIGERIAN MOBILE PHONE MARKET
Introduction
Xiaomi (/ˈʃjaʊmi/) is the number one smartphone maker in China and number four in the
worldwide smartphone market, according to the International Data Corporation (IDC)
2014 report. The smartphone maker, based on the World Street Journal (WSJ) report is
also the world’s most valuable technology start-up, raising $1.1billion and a valuation of
more than $46billion.
Xiaomi, which means ‘millet’ – a nutritious but inexpensive Chinese staple, was
established as a privately owned electronics company in China in 2010 and which it
established as its main market with 97percent of its shipments locally. The company
designs, develops and sells smartphones, consumer electronics and mobile apps. The
company, which sees itself as a mobile internet company, has as its unique selling point
(USP), the sales of high specification smartphones at low price tag. According to its CEO,
Lei Jun, Xiaomi does not expect to make money through its handsets but become
profitable through the provision of software and related consumer electronics services.
The company’s smartphones are technically comparable both in design and quality to
both Samsung and Apple phones, which are the number one and number two globally
ranked smartphone manufacturers according to the IDC Smartphone Vendor Market
Share 2015 Q2 report, but both of whom Xiaomi displaced in the Chinese mobile market.
Xiaomi phones are premium quality, with robust case, high quality screen and reasonable
battery life, and by way of strategic business plan, sold at near their actual cost in order to
make the phones attractive to their target customers. The smartphones run on its own
Android-based operating system, MIUI, and differentiates it from other products by being
able to get additional features that are not found on other standard Android devices.
Xiaomi smartphones therefore compete with Samsung and Apple, the global leaders, on
all indices with high technical features, innovative apps and snazzy design to appeal to
millennials and the young upwardly savvy middle class just entering the workforce which
it conscientiously cultivates. The company has adopted an expansion strategy of
consolidating on its home market of China and gradual international expansion into
emerging markets. Breaking from the trend of other smartphone makers, its products are
sold almost exclusively through its online stores and e-commerce sites. also d

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Xiaomi’s Strategic Marketing Plan
To become the number 1 smartphone company in China and number 4 globally, Xiaomi
prices its technically comparable smartphones, with similar specifications as Samsung
and Apple phones, at half the price of both phones. According to IT Telecom Digest
Xiaomi’s high-end 64GB Mi Note Pro smartphone cost $489 in China compared with $993
for a 64GB Apple iPhone 6 and $862 for a 32GB Samsung Galaxy S6. Similarly, Xiaomi’s
Mi3, according to NextBigWhat is touted as one of the fastest smartphones in the world
with a 2.3GHz processor, slim frame, 13 megapixels dual LED flash lights, 16GB storage
space and 3050mAh large battery compared to 1570mAh for the iPhone 5S and
2800mAh for Samsung’s Galaxy S5, but priced at half the prices of both phones. This
trend permeates the whole range of smartphones sold by Xiaomi as a marketing strategy.
In its April 2015 report IDC notes that sales of smartphones priced under $100 went up
from just 5percent in 2013 to capture 20percent share of the Middle East and Africa
(MEA) smartphone market in 2014 while Samsung priced in the higher-end $250 - $500
bracket saw their share of the overall market fall from 23percent in Q3 2013 to 18percent
in Q4 2014. The report notes further that majority of the growth in the smartphone sector
was witnessed in countries with large populations but low penetration rates. It cited
Nigeria, Kenya and Pakistan where smartphone shipments increased by 135percent,
112percent and 105percent year on year in 2014.
Xiaomi, by stepping in to provide a solution for the identified gap that existed in the largest
handset market in the world, provided the platform for middle/low income earners to
obtain high quality smartphone at affordable prices compared to similar products. The
company’s pricing strategy is likened to that of Amazon by focusing on making its profit
from selling apps, games and special Android themes rather than its hardware. This
strategy clearly differentiates Xiaomi from Apple who sell unique and innovative products
at a premium or Samsung whose low-priced models lack the features found in Xiaomi
models.

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Source: http://www.quora.com/What-is-the-marketing-strategy-behind-xiaomi-mobiles
Source: http://www.quora.com/What-is-the-marketing-strategy-behind-xiaomi-mobiles
This self-identified mobile internet company’s business strategy also ensures that its
phones are lowly priced through the adoption of innovative and social marketing and
promotions as a strategic brand process. The company sells its products almost
exclusively by cool social marketing and e-commerce sites. It pioneered and periodically
engages in what is called flash sales, whereby limited quantities of its smartphones are
sold during limited periods online, leading to great anticipation and urgency in consumers.
This strategy also ensures that supply does not outstrip demand. By focusing on e-
commerce and social marketing, the company eliminates added costs associated with
mainstream marketing such as warehousing, distribution, advertisement, Real Estate
costs, personnel and associated overheads; rather, Xiaomi relies on harnessing the
power of social media and active engagement with their customers’ online and social
forums which has led to the growth of a dedicated fan-base, active on social media who
actively push the company’s brands by word-of-mouth marketing.
Similarly, as a cost saving strategy, while the bigger phone manufacturers discontinue the
sales of a model after 6-8months in the market, Xiaomi’s models are sold for up to 20

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months, meaning component parts are bought from suppliers at reduced fall price while
the phone price stays the same.
Xiaomi’s active online engagements and interaction with customers and through word-of-
mouth marketing by millions of its dedicated fans, referred to as Mi-fans, ensured that its
smartphones were sold quickly and discussed all over their target market social media
space. Company announcements, messages, promotions and news items were
broadcasted online, on social forums and e-commerce sites, where its young and socially
vibrant customers could be found. These smartphones are equally cool and current to
align with the image and lifestyle of this fan-base. Chinamarketing compares these Mi-
fans, who are always present at the company’s product launches, to the hard-core Apple
advocates. By concentrating on its home market of China with 97percent of its shipments
locally, Xiaomi ensured the solidity of its market position through a synergy between its
products, brand identity and marketing style. Identification with its customers online
through innovative engagements and direct feedbacks helps project an image that
portrays Xiaomi smartphones as cool and fashionable. According to Xiaomi’s VP Global,
Hugo Barra, quoting Quora, describes Xiaomi as an e-commerce company that lives on
the internet and sells exclusively through e-commerce. He notes that the differentiating
theme that distinguishes them from Apple and other smartphone makers is that they had
the software engineering horse power of a Google, the design ambitions of an Apple and
the e-commerce platform and customer service focus of an Amazon.
Period Samsung Apple Huawei Xiaomi Lenovo* Others
2015Q2 21.4% 13.9% 8.7% 5.6% 4.7% 45.7%
2014Q2 24.8% 11.6% 6.7% 4.6% 8.0% 44.3%
2013Q2 31.9% 12.9% 4.3% 1.7% 5.7% 43.6%
2012Q2 32.2% 16.6% 4.1% 1.0% 5.9% 40.2%

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Source: IDC, Aug 2015
Xiaomi smartphones are usually unfavourably compared to Apple phones and
derogatorily referred to as ‘Apple of China’ due to similarities in the former’s design to
Apple’s, phone launch style and branding philosophy. Its online flash sale marketing
strategy is also described as ‘hunger marketing’ by deliberating releasing limited
quantities of their phones to consumers online to create artificial scarcity and buzz around
its products. Also, by focussing their marketing strategy exclusively on young internet
savvy customers, the company may be seen as alienating other segments of the market
such as older adults or economies where access to the internet is at its infancy. Critics
have also wondered for how long the company can sustain its global smartphone
leadership ranking position considering the saturation and shrinking Chinese smartphone
market, which is its main market. According to Forbes smartphone shipments in China in
Q4 2013 was down 4.3percent from 94.8 million in Q3 to 90.8 million phones while
shipments also fell by 9.8percent in Q1 2014 compared to Q1 2013.
Opportunity for Growth and Consolidation of Xiaomi Smartphones in Nigeria
Mobile Market
According to IDC, the growth in the worldwide smartphone market by 13percent year-on-
year (YOY) in Q2 2015, with 341.5 million shipments, was driven primarily by gains in
emerging markets. MEA smartphone shipments recorded a growth of 83percent in 2014
due to the increased availability of cheaper models and dual-sim devices. Majority of the
growth according to IDC (hhtp://www.idc.com/getdoc.jsp?containerId=prAE25583415)
was witnessed in countries that have large populations but low penetration rates. In its
July report, IDC indicates that smartphones accounted for 47percent of the handsets
shipped in Africa in Q1 2015, a growth that is being spurred by Google’s Android and
Apple’s iOS, with Android devices representing 89percent and iOS 7percent respectively.
The report notes the demand for low-priced smartphone in Africa, with almost half of all
smartphones shipped in the region (45.15percent) in Q1 2015 priced below $100.
Leading smartphone makers in the region during the quarter were Samsung, Tecno and
Apple, accounting for a combined market share of 55percent smartphone shipments in
Africa in Q1 2015.
Based on its global growth plan of expansion into the BRICS (Brazil, India, China, South
Africa) countries, Singapore, Taiwan, Indonesia and other emerging markets, Xiaomi
plans to take advantage of the enormous opportunities in the African smartphone market
by entering the market in Q4 2015, with Nigeria, having a population of over 142 million
active mobile being its target. Nigeria contributed significantly to this growth in
smartphone use in Africa, experiencing YOY growth of 135percent and 14percent of all
smartphone shipments in Africa during Q1 2015.
National Population Commission Nigeria, based on 2006 Population and Housing census
put Nigeria’s population at 140,431,790 people in 2006. The World Bank, however, puts
current estimate at about 173 million, which is the largest in Africa, with a gross domestic
product (GDP) growth of 6.1percent. According to the global body, the Services sector,
especially Telecommunications, Real Estate, Manufacturing, Construction and
Entertainment were the drivers of this growth. Africa’s largest economy, with a GDP of
$594.257billion, thus offers incredible expansion and consolidation opportunity for Xiaomi
smartphones. Hugo Barra’s assertion that the smartphone maker intends to use the same

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pricing model as China in foreign markets is in sync with the realities on ground in the
Nigerian mobile market industry.
Renaissance Capital report put Nigeria’s middle class population at about 23percent of
the country’s total population. This category of the populace is well educated, 92percent
have post college degrees and 48percent internet accessibility. They are equally active
on social media and e-commerce sites, both as a means of social interactions and
commercial activities. Ventures Africa notes that 38percent of Nigerians prefer to buy
products through the internet, with e-commerce transactions recording over $2million
deals per week and close to $1.3billion monthly, majority of whom are the middle class.
Renaissance Capital puts the average monthly income of Nigeria’s middle class at $480 -
$645. Telecommunications Statistics by the National Bureau of Statistics notes that the
telecommunications sector experienced a growth of 5.36percent in Q1 2015, representing
0.61peercent points from 4.75percent in 2014 but rose to 8.67percent in Q2 2015.
Similarly, the total number of subscribers increased to 127.61million from 2.27million in
2002 while the top smartphone brands include Samsung, Tecno, Apple, Blackberry and
Nokia. Nigeria’s smartphone market represents an attractive market for Xiaomi, though
these manufacturers already enjoy healthy head-starts. For instance Samsung and Nokia
have established offices/ retail outlets while Huawei and ZTE of China have set up mobile
handsets assembly plants.
Integrated Marketing Communication (IMC) Plan for Xiaomi Smartphones in Nigeria
Adoption of Xiaomi’s Unique Selling Point (USP) of high specification but low priced
smartphones would fit strategically into the Nigerian 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 Nigerian 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. The company consequently sells
its products in stores, brick-and-mortar retailers, online retailers and a telecoms operator
that sells Xiaomi’s smartphones in its stores. It also made heavy use of networking sites
like YouTube, Twitter, Facebook and Instagram.
To succeed in changing someone’s position on an issue, continue a favourable action or
buy a product or services rather than those of a competitor, researchers (Shannon 1996;
Pelsmacker et al 2010) have advocated the use of a marketing mix which allows the
organisation reach their targeted audience through a consistent and integrated marketing.
Madhavaram, Badrinarayanan and McDonald (2005) conclude that an effective IMC
strengthens a firm’s overall brand equity.

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As a mobile internet company and in being consistent with Xiaomi’s strategic plan of
connecting with the internet savvy middle class, which represents their target market in
Nigeria, the smartphone company’s main integrated marketing communication platform
would include internet/ interactive marketing, word-of-mouth and relationship with a
telecoms operator for in-store sales of Xiaomi smartphones.
Internet/ interactive marketing would involve the use of Xiaomi’s website as a primary
interactive tool for its customers to obtain product information, sales location and an
avenue to make purchases. Interactive customer support service is also incorporated
onto the website to attend to complaints and feedbacks. And since the website is the
most integrating and easily accessible of all possible marketing channels, it would serve
as the main sales outlet, showcasing all the different smartphone types and prices. Visual
representation of the phones would also be advertised on the site. The site, which
represents the company’s virtual store, would offer real time chat forums and
communities, where customers can chat with each other and Xiaomi representatives.
Use of flash sales on its website would help drive online traffic to the site and help build
an army of ardent followers. Dedicated online games are also incorporated onto the site
with access granted only on registration or ownership of a Xiaomi smartphone. Links to
Xiaomi’s social media sites such as Facebook, YouTube, Google+, Twitter, Instagram are
enabled to enable customers experience the company’s synergy across channels.
In line with its USP, Xiaomi smartphone sales in Nigeria have to be priced below those of
its competitors. Analysis of the top mobile brands in the country by TechCity indicates
Samsung, Tecno, Apple and Blackberry as top selling products in 2014. Similar review by
MISSTECHY based only on Android OS, similarly lists Samsung, Tecno, Infinix and HTC
as the popular brands in Nigeria for Q1 and Q2 2015. Starting price range for these
brands range between $55 and $970. Sales of these smartphones are done primarily via
both e-commerce sites and retail stores. However, new smartphone entrant, Infinix by
Google, has commenced billboard and radio advertisement of its products.
Based on site traffic, the top consumer electronics online e-commerce sites in the country
are Jumia.com and Konga.com. Jumia.com, which is a part of Jumia International, with
online presence in Egypt, Morocco, Kenya, Cote d’ Ivorie, Uganda and UK commands the
largest e-traffic in the country and with its spread in other parts of Africa, offers the
required African spread needed by Xiaomi.
Nigeria shares basic similarities with India in terms of a large population and highly
educated middle class and a preference for brick-and-mortar retail purchases.
Consequently, having recorded successes in India, Xiaomi should adopt similar IMC in
Nigeria for the sales of its smartphones. The company therefore needs to engage one of
the mobile operators to sell its smartphones in their retail stores.
Globacom Ltd (GLO), Nigeria’s 2nd
largest telecommunications operator by active
subscriber base, according to information from Nigerian Communication Commission
offers the market depth for sale of the Xiaomi phones. GLO is a privately held Nigerian
multinational company that has carefully incorporated local identification in its brand
marketing.

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The company whose headquarters is in Lagos operates in other West African countries of
Republic of Benin, Ghana and Côte d' Ivoire. Its brand colour of green draws sentimental
similarities with the Nigerian national colour of green-white-green and has consistently
used its marketing to drive home the point that it is a company owned by Nigerians. Use
of Nigerian artistes as brand ambassadors cements this local connection that has made
this carrier, with 31.2million subscribers (Q2 2015), achieve a dominant foothold with a
market share of 21percent. GLO’s reach, depth, local trust and brand identification offers
a retail platform for Xiaomi’s home-grown growth strategy of its quality and low price
smartphones.
Word-of-Mouth marketing would be achieved through the engagement of fans in online
activities such as twitter, research, test and public relations activities such as university
shows and contests. By making sure that they engage with their customers on social
media sites, taking suggestions and implementing achievable ones while providing that
wow factor in the Xiaomi smartphones, Xiaomi would be able to turn ordinary consumers
into Mi-fans; believers who spread the products. As a new product in the Nigerian
smartphone market, the creation of a cult followership would help create the desired
believability for the phones. The engagement of top Nigerian artistes as brand
ambassadors would also help push the level of acceptability of the phones.
The use of online promotions, giveaways, phone carnivals and active engagements with
the fans creates the opportunity for Xiaomi to build brand loyalty.
Summary
Companies employ several methods and strategies in marketing their products and
informing both existing and prospective customers about their products and why it is in the
customer’s interest to purchase same over those of their competitors. They, therefore, work
to establish a relationship which turns these customers into fans. This relationship involves
consistency in the planning, executing, pricing, promotion and distribution of brand ideas,
style of products and offered services in other to satisfy both individual and organisational
values and objectives. While different platforms exist by which companies market their
brand, an in-depth understanding of target customers enable companies make a
connection and pass on their message, the ultimate aim of which is to make their products
a chosen preference. The choice a company makes on the integrated marketing
communications mix to employ usually depend on an understanding of the targeted
consumer market, their specific needs and the medium or mix offerings or technology
which appeals to them in other to differentiate the organisation's market offering. The
synergistic integration of the appropriate marketing mix enables organisations provide clear
and coordinated promotional message to their target.
Xiaomi’s unique selling point is sales of high specification quality smartphones at prices
lower than the comparative product of their competitors while its target market base is the
young internet savvy middle class, i.e. the millennial generation, that grew up in an
electronics-filled and increasingly online and socially-networked world and who value
premium products at a discount. The company’s espoused strategy of not depending on its
hard-wares for profit but rather encourage this targeted sector of the economy to build a
lifestyle around all of Xiaomi’s market offerings enables the smartphone company dominate
its market. The disillusionment of Millennials with mainstream media marketing means that

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they view all such branding platforms with distrust; an understanding of which Xiaomi has
been able to build upon in its interaction with this demography. By actively engaging with
their customers’ online and integrating suggestions in their phone models, Xiaomi created
enthusiastic fans who market their products to friends and families.
Adoption of this strategy in the Nigerian mobile market and engagement of a mobile carrier
as source of retail sales outlet would enable Xiaomi smartphones reach the required depth,
spread and followership that have made them a dominant operator in the mobile industry.
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hugo-barra

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