Why Xiaomi Is So Successful? ||
The Success Strategy of Xiaomi || Real Marketing || Part: 2
Xiaomi’s pricing strategy make them most successful because Xiaomi continues to offer products with the best price to performance ratio. The company offer very high performance device but at lower prices than competitor. For keeping low prices, the company follows their new business model.
👉Many companies spend billions of
dollar on marketing for banding their product but at the end, this cost cut
from the consumer. But Xiaomi did not spend billions of dollar in marketing,
the company do very little advertising on social media.
👉To reduce cost, in initiating the
company did not open any store and sold their product online directly. As a
result, the company did not need to maintain huge inventory and could able to
cut huge cost of marketing intermediaries.
👉Xiaomi make profit less than 5% from the hardware purchase but then
tries to make profit from their customer during the uses period of software by
selling subscription or loot box, Internet services, showing ads like YouTube,
Facebook etc.
This kind of business model has
two goal: Acquisition and Engagement.
Acquiring as many customers as
possible and then making sure that those customers spend as much time and money
on the platform as possible. Acquisition is the cost and Engagement is the
profit. Acquisition achieved by lowering hardware price and Engagement is all
about software.
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