Xiaomi Corporation
Xiaomi is a Chinese electronics company which manufactures smartphones,mobile apps, and many more gadgets.
The company target is to provide maximum benefit from low price point. It is presently in perfect market.The starting range starts for smartphones start from ₹5999 to ₹32999.
The five economic concept followed by Xiaomi are:
1. Trade Offs : Due to Xiaomi pricing strategy people are facing trade offs while purchasing . The consumers are sacrificing evergreen brands like Samsung, Motorola, Sony and Nokia and preferring Xiaomi smartphones.
2.Non price determinants of Xiaomi Corporation
-low cost production.
-low cost production.
-nature to provide best quality at the price point of ₹5999-32999.
3.Understanding Consumer.
-The satisfaction consumer derives from the pricing of the product.
-Aim to provide commodity at a reasonable price as consumer allocate their income to maximize their satisfaction.
-To replace the cardinal utility of the consumer by ordinal utility.
-The satisfaction consumer derives from the pricing of the product.
-Aim to provide commodity at a reasonable price as consumer allocate their income to maximize their satisfaction.
-To replace the cardinal utility of the consumer by ordinal utility.
4.Demand and Supply.
From year 2015 after launch of Redmi note 4 Xiaomi has created a revolution in the Indian market by creating a mind set that the company offers best smart phones in lowest price bracket.This was the reason why it became the highest selling smartphone in India. After success of note 4 Xiaomi launched note 5 and note 5 pro. The demand was so much that it was unable to meet its demands so what Xiaomi did is it started pre-booking so that it will be able to meet the demands.
5.Income & Substitution Effect.
Xiaomi studied the Indian market and the distribution of Income. Income plays a major role in the substitution effect the more the income the more customer choose better commodity specially smart phones. But majority of Indians expect best smart phones in the price bracket of ₹ 10000-15000 so Xiaomi uses this as a great strategy to grab the market. There was a substitution effect as maximum consumer shifted from regular brands like Samsung, Sony, Motorola towards Xiaomi.
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