PARYANT MISRA
2020PGP224
Co-Create a Smart Phone Brand with Consumers via Social Media: A Case Study of
Xiaomi in China
1. The success of Xiaomi is not only based on their significantly lower prices but also on
service orientation of the business. Please discuss which elements are the most
important for the company’s success?
Ans:
Xiaomi is a brand which has revolutionized the smart phone industry by making
various changes in the modus operandi of the way services were provided in this
industry.
Apart from significantly reducing the prices of the phones while maintaining
specifications of market leaders, there were certain other changes made by the
company which were the reason behind the success of this company.
CUSTOMER ORIENTATION :
Xiaomi as an organization is extremely customer centric illustrated by the brand
going against the industry practise of aiming for profits in support of customer
needs. There was already a prevalence of major players in the market like Apple
& Samsung but these brands were out of reach for most, Xiaomi identified this
gap and positioned themselves as a brand that understands the issues that
customers face and come up with a solution that solves all major issues. They
involved customers in various stages of the life cycle giving rise to the
terminology prosumer.
S/D DOMINANT ORGANIZATION :
The main offering of Xiaomi is a product which meant that they could have been
excused if they were an organization with providing mobile handsets at its
forefront, but the brand being a customer centric one had a pretty good idea about
what they should do to ensure that their customers feel valued and the offering
that they bring in are one that have high rate of satisfying customer needs
DEVELOPING ROBUST SOCIAL MEDIA MECHANISM :
Xiaomi has built a robust social media mechanism through which customers can
voice their concerns, learn about the brand, its offerings
CO-CREATION OF VALUE:
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2020PGP224
Co-creation of value states that both the company and the customer ought to come
together and constantly improving the company offerings by involving the
customer in the
UNDERSTANDING CUSTOMER TOUCH POINTS:
Xiaomi understood the ever changing customer touch points and hence it built a
mechanism such that it suits appropriately to the current customer trends. They
understood the boom social media platforms are going to have in the future and
hence set up their entire business model in such a way that is catered across the
same.
BUILDING BRAND EQUITY:
Xiaomi has worked on building the brand equity through a medium which wasn’t
used by most of the companies i.e. social media. They used eWOM to spread
customer positive message of the brand across customer segments. Social media
forums, brand ambassadors were the key mode through which the brand marketed
itself.
2. Identify what are the main challenges for Xiaomi’s business model when
internationalizing into Western Countries? How can the company address and manage
them?
Ans:
The role that employees of Xiaomi play in maintaining the brand perception is of
great significance, the reasons for the same are categorized below
KNOWLEDGE:
Employees must have an in-depth knowledge about the brand and communicate the
same to the customers. As Xiaomi in China do not have an outlet to sell products,
most of the outlets that they have are for providing customer services to help with
repairs. So the employees of Xiaomi must have knowledge about the frequent issues
that customers face so that they can rectify. This plays a big role in ensuring good
service life quality as servicing for the products is a key aspect to continue the
customer life cycle
EMPATHY:
The people visiting the service centre of Xiaomi are doing so because they are facing
a problem with their device, and they are bound to be upset and angry, hence it is vital
for employees of Xiaomi to understand the feelings of the customer and be more
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2020PGP224
empathetic to their issues. If a customer were to come all guns blazing the employee
must ensure that he/she is providing ample support to the customer. This is key in
building long term customer relations as it has been proved that a positive experience
during the servicing stage positively impacts the customer satisfaction & loyalty
FREEDOM TO EMPLOYEES:
The employees must be afforded some amount of creative liberty when it comes to
solving customer issues, this will foster creativity & innovation which is more often
than not going to lead to maximum customer satisfaction.
COURTESY:
It is vital to ensure that the employees are courteous when talking to the customers,
they need to be dressed up appropriately and must ensure that they are being
chivalrous in their approach to customers
HIGHER CUSTOMER SATISFACTION:
1% rise in employee engagement results to an increase in customer satisfaction by
0.41% This indicates that a satisfied employee base is going to result in a satisfied
customer base. Hence the contribution of employees is quite significant when it
comes to customer satisfaction
COMMUNICATING COMPANY VALUES :
For Xiaomi there are multiple touch points through which customers come in contact
with the company, the service centres is the only way through which they come in
physical contact with the brand meaning that even if the other touch points are
communicating the appropriate values and physical touch point is signifying
something else, there is bound to be cognitive dissonance in the minds of customers.
Hence employees of Xiaomi are the torch bearers of the company core values to the
customer, if they fail to do so then the entire cycle of generating service gets
hampered
We have now seen what exactly the role is of employees in maintaining the brand
perception of Xiaomi, they are the one’s coming in direct contact with the customers,
they’re the one’s delivering the service to the customers.
3. Discuss the role of Xiaomi employees in the creation of a good quality service.
Discuss how they can influence perception of quality for the brand.
Ans:
As Xiaomi is developing as a brand in China, the natural step for them is to move into
Western countries and expand their market share. However they could face issues
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when it comes to a newer market that may be different that the social construct &
context of China.
The first thing that needs to be addressed is the difference in acceptance, usage &
penetration of internet. China has extremely deep internet penetration meaning that
for the same business model to be applicable in other countries there must be similar
level of internet penetration in the market.
In case there are similarities in the internet penetration, then the model used in China
could be extrapolated to be used in other countries, but if we’re assuming lower
internet acceptance then there ought to be wholesome change in the way the business
works.
**For the sake of this answer we’ll assume that the new market does not have the
same level of acceptance of online media as China
If the market does not have the requisite internet penetration, Xiaomi will first need to
prove itself as a reliable brand to the customers. In the Indian context, Ranveer Singh,
Sonu Sood have been roped in to build upon the brand equity. So this aspect of using
brand ambassadors can be continued in different locations.
There also will be limited brand awareness of Xiaomi in the new market for this they
could try to portray themselves as a value organization.
One thing that may need to be changed is the brick & mortar outlets, in such places to
build the brand equity Xiaomi would need have something to get the user traction.
These stores could be in limited numbers so as to not dissuade too much from the
USP of Xiaomi. Customer centricity & advocacy should remain the forefront of the
company irrespective of the location. Xiaomi can try to tie up with the big shots in the
e-market space in the said country which may help them to attain some amount of
equity.
