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1SITUATIONANALYSIS REPORTXIAOMI – REDMI NOTE SERIESMKTG1205B – SEM B – HN – GROUP 5TEAM XIAOmiumiuLecture : Ms. PHUONG PHUNGTeam members: CAO MINH TRA (s3915127) (Team Leader) HO TUAN ANH (s3903854) PHAM NGOC MINH (s3695318) NGUYEN THANH HUONG (s3808223) TRAN DUONG TRA MY (S3918858)TABLE OF CON...

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Situation Analysis Report

Xiaomi Redmi Note Series

SITUATION ANALYSIS REPORT XIAOMI – REDMI NOTE SERIES MKTG1205B – SEM B – HN – GROUP 5 TEAM XIAOmiumiu

Lecture: Ms. PHUONG PHUNG

Team members:     

CAO MINH TRA (s3915127) (Team Leader) HO TUAN ANH (s3903854) PHAM NGOC MINH (s3695318) NGUYEN THANH HUONG (s3808223) TRAN DUONG TRA MY (S3918858)

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Xiaomi Redmi Note Series

TABLE OF CONTENTS I. INTRODUCTION…………………………………………………………………………….... 1. Company Description……………………………………………………………………….... a) History………………………………………………………………………………….... b) Mission statement……………………………………………………………………….. c) When did they enter Vietnam?........................................................................................... 2. Product Description………………………………………………………………………….. a) Redmi Note Series in Vietnam………………………………………………………….. b) Market share…………………………………………………………………………….. c) Brand awareness………………………………………………………………………… II. MARKETING ENVIRONMENT……………………………………………………………. 1. Micro Environment……………………………………………………………………………. a) The company…………………………………………………………………………….. b) Marketing intermediaries……………………………………………………………….. c) Customers……………………………………………………………………………….. d) Competitors………………………………………………………………………………… 2. Macro Environment………………………………………………………………………….. a) Economic………………………………………………………………………………... b) Natural…………………………………………………………………………………... c) Technological……………………………………………………………………………. d) Cultural………………………………………………………………………………….. III. SWOT ANALYSIS…………………………………………………………………………… IV. CUSTOMER-DRIVEN MARKETING STRATEGIES (STDP)…………………………... 1. Segmentation…………………………………………………………………………………. 2. Targeting……………………………………………………………………………………… 3. Differentiation………………………………………………………………………………... 4. Positioning…………………………………………………………………………………….. V. CONCLUSION………………………………………………………………………………… VI. REFERENCES……………………………………………………………………………...... . VII. APPENDICES………………………………………………………………………………..

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Situation Analysis Report

Xiaomi Redmi Note Series

I. INTRODUCTION 1. Company Description 

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Xiaomi is a Chinese electronics company founded by CEO Lei Jun and eight other cofounders in April 2010. "Xiao" is a mountain-sized grain of rice, and "Mi" is "Mobile Internet." "Xiaomi" is a play on the phrase "Mission Impossible," reflecting the company's impending challenges in becoming the world's leading electronic corporation (Presthitha & Goswami 2021). Established in China with the headquarter located in Beijing, Xiaomi was regarded as a giant in the Chinese smartphone industry in 2014. Xiaomi has effectively established itself as one of the world's most powerful smartphone organizations due to its unstoppable success in the global smartphone industry (Presthitha & Goswami 2021).

a) History 2010 - 2013 :  Xiaomi was founded in China on April 6, 2010 by Lei Jun and his co-founder (Presthitha & Goswami 2021).  In 2010-2011, they successfully raised 131 million dollars in first-round funding from Qualcomm, Temasek, IDG Capital, Qiming, and Shunwei (Presthitha & Goswami 2021).  On August 16, 2010, the company launched its MIUI operating systems for the first time, followed by the release of its first smartphone in August 2011. (ABDULLAH 2020).  The Redmi Note series was first introduced in July 2013 and quickly became a hit, particularly in the Asian smartphone market (Hernaski 2021). 2014-2017  In 2014, Xiaomi announced its intention to enter the global smartphone market, with Singapore as its first target. Xiaomi has sold over 60 million devices as a result of the success of the Mi series (PTI 2015).  Xiaomi has officially entered the European smartphone market after dominating in Asia (Russell 2018).  With the success of the Redmi Note series, Xiaomi has passed Samsung to become the top smartphone company in India for the first time (Singh 2017). 2018 – 2021  Xiaomi successfully raised $10 billion in its IPO on the Hong Kong Stock Exchange, being the world's largest IPO raise since 2014. (Jethro & Shressie 2018). 3

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Xiaomi Redmi Note Series

The company then started to launch its smartphones in the European market (Deahl 2018), and expanded its reach to the US market through the Amazon platform (Russell 2018).

b) Mission statement: " Innovation for everyone" & "Making Quality Technology accessible to everyone." & "Just for fan "  

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Xiaomi plans to produce and develop a more advanced, user-friendly operating system that outperforms Google's original Android version. (AHmad 2014). Xiaomi's major objective is to produce innovative electronic goods at an accessible price that prioritize user experience and operational efficiency, allowing everybody to possess a smartphone and improving people's quality of life across the world (Mi 2021). Xiaomi considers their customers to be more than just regular customers, but also partners. They are trying to perfect their product and are fearless about testing new innovation ideas as a result of their strength and belief (Mi 2021).

c) When did they enter Vietnam?  According to Xiaomi, Xiaomi entered the Vietnam smartphone market in 2017 and sold their products through official retailers and eCommerce channels such as Lazada, Thegioididong, and FPT (Mistoreadmin 2017). With the introduction of Xiaomi, they launched a communication campaign called "Mi IS HERE" to introduce their first three products: Redmi 4A, Redmi Note 4, and Mi Mix (Viet 2017). Furthermore, Xiaomi would officially distribute in Vietnam via Digital World, and Vietnamese people would be able to buy their products and enjoy company service in Ho Chi Minh City, Hanoi, and Danang (VH 2017). 2. Product Description 

Since its debut in Vietnam in 2017, the Redmi Note series has established itself as one of the best-selling smartphones in the mid-range segment (MT 2017). The Redmi Note series, with its low price, high performance, and unique features from high-end smartphones, has not only allowed low-budget consumers to have a premium experience, but has also completely transformed the global smartphone industry (Archyw 2021). Each year, Xiaomi releases different versions of the new model (Redmi Note) to meet demand and adhere to the brand's mission, such as "Plus, S, Pro, Promax, 5G" (Hyun n.d.).

a) Redmi note series in VN 

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2017 ( Redmi note 4): With SnapDragon 625 processor, 4100 mAh battery, and Full-HD display, note four is considered one of the big hits in mid-range segments because of its high performance and unique features only found in high-end smartphones(Hernaski 2021). 2018 ( Redmi note 5 & 6 ): Continuing the previous version's achievement, the most successful of these note series comes from its IPS LCD screen with FHD+ quality, 18W 4

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Xiaomi Redmi Note Series

fast charging capabilities and dual-rear/front camera, which are considered the best deal in the mid-range segment(Hernaski 2021). 2021 ( Redmi note 10): These series are considered a king of the mid-range segment of smartphones because of their huge improvement and performance that surpasses some flagships. The series contains some overwhelming features such as a 108MP camera, 6,67 AMOLED 120hz screen display, and a 5,020mAh battery (Archyw 2021) . Overall, The Redmi Note series is considered one of the famous smartphones in the midrange segment, with a cheap price point just from 4,460,000 dong in the Vietnam smartphone market (Ly 2021).

b) Market share  As stated by Counterpoint 2021, Xiaomi accounts for 11% of the worldwide smartphone market share. On the other hand, with 7.2% smartphone market share in Vietnam, Xiaomi still retains the top five brands, ranking at 4 th, which has room to grow better in the future (StatCounter 2021). Being much higher than one of their main competitors, which is Vivo, Xiaomi is expected to take over the market share of the other same-segment brands due to the market saturation (TV 2019).

Figure 1: Vietnam’s 2021 smartphone market share (Source: StatCounter) c) Brand awareness  Xiaomi has now expanded its network to over 80 markets globally since its first foreign incursion into Singapore in 2014. Xiaomi first entered Vietnam in 2017 with the Redmi Note 4 and until now, it has gained a significant success in the market. Since it does not focus on developing physical stores, Xiaomi builds a very strong online network, for both selling and communicating purposes. since its entry into Vietnam in 2017, Xiaomi has developed a positive image among customers, ranking third among top smartphone vendors in the first quarter of 2021 (Anh 2021), ahead of other generic brands such as VSmart, Huawei, and Blackberry. Therefore, “The Apple of China” is surprisingly popular in providing technological products with a reasonable price, raising its brand awareness among related customers.

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II. MARKETING ENVIRONMENT 1. Micro Environment a) The Company 

Xiaomi's strategy of investing without control in a partner firm in order to form a "coownership" relationship has yielded a win-win situation (Yang, Ma & Chattopadhyay 2021). Xiaomi is led by creator Lei Jun, who has been president and CEO of the business since 2010. Mr. Wang Xiang, who also serves as Xiaomi's chairman, joined the company in 2015 after serving as senior vice president and president of Qualcomm Greater China (Mi n.d.). Xiaomi also promotes collaboration with small businesses and entrepreneurs. These are usually small firms that specialize in a particular product and concentrate on technology (Yang, Ma & Chattopadhyay 2021). Many members of the staff have come from a MiFan background, with a passion for technology and the same desire to break away from the traditional practices and prove it with perfect and unique products. Xiaomi's headquarters are in Beijing, China, and the corporation owns brand agencies around Asia-Pacific, India, and Brazil (Mi n.d.).

b) Marketing Intermediaries Since Redmi Note Series is from a foreign brand, people who wish to try out the latest products must use online intermediary networks. Popular e-commerce platforms include Shopee, Lazada, and Tiki in Vietnam; and eBay or Amazon globally. These are trustworthy websites that allow buyers to effortlessly purchase things and pay online without worry. In the marketplace, MI Store is known as being the most respectable and genuine distributor, distributing each smartphone version to the general public alongside stores such as FPT Shop, Dienmayxanh, Thegioididong, etc. c) Customers Xiaomi targets 2 main market categories: Consumer markets and International markets 

Consumer Markets

When it was first released in the China market, Xiaomi's target audience was the tech- savvy consumers. They reach customers from free software services and create online community platforms to listen directly to the needs and demands of their customers (Yang, Ma & Chattopadhyay 2021). After winning the heart of technology- savvy category, Xiaomi released a slogan "high value at a reasonable price" and passed it on to another group of customers. They are less tech acknowledged, live in more remote areas with lower incomes and are attracted by this significant slogan (Yang, Ma & Chattopadhyay 2021). 

International Markets 6

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Xiaomi entered the Indian market in 2015 and was well received by the public for the capability of 4G, which defeated the domestically produced brands (BBC News 2019). Since then, the company has widen its range in the Europe, the USA and Asia. By 2019, ShareSave is a brand new social e-commerce platform using befriending with users and letting them join the development process with Xiaomi as the core. This appears as a community of MiFan, where they can connect and share shopping experiences, reflecting Xiaomi's belief in the power of community (Xiaomi Team 2019). d) Competitors 

Direct Competitors

When Xiaomi phones first arrived in the Chinese domestic market, they faced competition from similar-segmented companies such as Huawei and Lenovo. Once established in the local market and adjacent areas, Xiaomi approached the worldwide market, where it faced two giants, Apple and Samsung. According to the latest statistics on the phone market in Vietnam June 2021, Apple leads with more than 36%, followed by Samsung and Oppo with 30% and 15% respectively. Xiaomi is currently ranked 4th in the top 5 most prominent and used phone brands in the country (StatCounter 2021). 

Indirect competitors

The Redmi Note Series has been a success with advanced design and quality that have pleased customers. However, it cannot avoid competition other devices that offer several similar functions as a smartphone today. For example, when it comes to photography features, many buyers will choose a camera since they believe the phone cannot satisfy their technological requirements. Especially in recent years, the film photography trend has reappeared and is favored by young adults considering the quality of retro photos that achieve outstanding quality of hue, brightness, and resolution (Nguyen 2021). Likewise, when it comes to other entertainment requirements, customers will prefer other specialized devices rather than the Redmi Note Series. They will choose virtual reality handheld gaming devices since the experience is novel and distinct from mobile game apps on phones; they will prefer to watch Netflix with family on TV or laptop due to its higher resolution and wider configuration.

2. Macro Environment a) Economic  Vietnam’s 2020 GDP per capita is 2,779$, which is approximately 63.8 million VND (CEIC Data n.d.). Despite the significant COVID-19 impacts, this shows a slight growth of 2.3% compared to 62.3 million VND in 2019. According to the World Bank (2021), Vietnam has recently transitioned from one of the world’s 7

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Situation Analysis Report

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Xiaomi Redmi Note Series

poorest countries to a lower-middle-income nation. The household’s average income per capita over the past ten years has changed substantially, from roughly 1.39 in 2010 to 4.19 million VND in 2020 (Statista 2020). Accordingly, this led to a rise in improving better personal life quality, being fulfilled by modern products and services. Vietnam is a low-middle-income country with a middle class figure of only 13% (World Bank 2021), and a rural population of 62.3% (Kemp 2021), which gives Redmi Note Series the opportunity to target those who need a cheap-but-powerful phone. The worldwide number of smartphones is expected to increase in 2021. This trend is also true in Vietnam, where the rate of penetration for smartphones is 9th worldwide with 63.1% (MIC 2021). However, not anyone can have access to high-end smartphones, namely Apple; therefore, Redmi Note Series has various priced products, making it easier to afford for every single market segment.

b) Natural 

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Smartphone manufacturers have a difficult task when plastic is the main material used, including the Redmi Note. The production of a smartphone is estimated to emit 16 kilograms of CO2 into the environment (Lovefone 2018). Xiaomi does not have a factory in Vietnam but expects to open one this year (Ho 2021), which means the company will have to think about sustainable development, including water pollution, waste and CO2 emissions. One important natural factor is the COVID-19. The pandemic has changed people's way of accessing electrical systems, as smartphones are being more commonly used worldwide, especially because of the lockdown situation (Deloitte Vietnam 2021). Xiaomi ran third amongst Vietnam's top smartphone vendors in the first quarter of 2021 – 79% higher than annual growth (Anh 2021).

c) Technological  Vietnam is one of the fastest mobile applications markets in the world with over 70% of the population owning a smartphone (TL 2020). Factors for this include innovative features, improved design, Internet access, etc. The Redmi Note Series is considered to be technologically advanced, especially when they focus on photography ability, making consumers impressed by those specifications being packed into such a wallet-friendly phone (Bush 2019a). One of the most recent Redmi generations is the Note 10 5G with brilliant features but priced at only 5 million VND.  In addition, technology is being applied throughout the daily life of human beings in this COVID-19 situation. In 2020, Vietnam's ecommerce market reached $11.8 billion, accounting for 5.5% of consumer goods and service retail sales, with more than half of the population online shopping (VietnamCredit 2021). Besides, the government announced that from 10th July onwards, Vietnamese people can sign up for the vaccination program online through the “Electronic Health Book'' application via smartphones (QA 2021).  Professor Nguyen Thien Nhan, member of the Politburo, Head of the Delegation of the City of Ho Chi Minh, said IT is being further developed and is expected to explode in future (Tuoi Tre 2020). 8

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Situation Analysis Report 

d) Cultural 

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Xiaomi Redmi Note Series

These factors help Redmi Note Series compete directly with large brands such as Apple or Samsung for its customized price and approach more potential market segments. Xiaomi also has an excellent chance to strongly invest in the Vietnamese IT industry in the near future.

It is undeniable, in the 4.0 trend, that the Vietnamese change their lifestyle from traditional to modern, to more advanced than ever before. Their behaviors also change accordingly. All the minor things such as daily interactions, shopping, transactions, etc. are available on digital platforms, particularly in this situation of pandemic lockdown. The culture is being more virtually transformed. China is considered the world’s largest manufacturing economy (IMF 2020). It therefore attracts many international businesses, which also increases the "Made in China" products (Andersson 2015). However, many people still believe that the label "Made in China" is of poor quality (Bush 2019b). Xiaomi is a Chinese Corporation, and therefore to some extent, it is affected by this consumer behavior, creating a challenge for Xiaomi’s market penetration and competition with big competitors in Vietnam.

III. SWOT ANALYSIS STRENGTHS

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Xiaomi has been one of the most prominent smartphone manufacturers. The Note series is made in massive amounts in China and is widely used all over the world. According to the official website of the Xiaomi community, the Redmi Note 8 is regarded as the top 3 best-selling smartphones in the first half of 2020.

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The Redmi Note series has been made available at a minimal price. Consequently, it helps them to obtain wholehearted support from middle and lower- class customers.

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Xiaomi currently dominates the Asian market, particularly China, which is one of the most massive and ideal marketplaces for every brand. As a consequence, they have established themselves as a formidable competitor to other high-end brands.

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Xiaomi, as one of the most popular smartphone manufacturers, intends to extend its distribution by focusing on offline retailers. It might lead to a significant increase in income and profit.

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Xiaomi devices are exclusively available for purchase online.

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