Xiaomi in malaysia sostac analysis edited

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Xiaomi SOSTAC Market Plan 1

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Xiaomi SOSTAC Market Plan 2
Xiaomi SOSTAC Market Plan

Introduction
Xiaomi is a Beijing-based Chinese electronics business that was founded in 2010.
It is now one of the globe’s top four handset makers. Xiaomi began as a start-up to
create mobile devices and launch a new Android-based operating system in Chinese
markets. It now makes and manufactures high-end handsets, cell phones, laptops,
household appliances, and various other items. In 2014, Xiaomi Malaysia held their
official grand opening. Xiaomi Malaysia’s marketing plan outlines how the corporation
may achieve its customer-centric strategic goals using specific marketing methods,
strategies, and tools (Rawal, Awasthi, & Upadhayay, 2017, 6). The marketing strategy’s
purpose is to reach out to a particular group with a solid and consistent message to
convert prospects into customers. The plan aims to give a framework for the
corporation to investigate various marketing options, set advertising goals, and assess
the competition.
Smith created the SOSTAC Concept in the 1990s. A marketing plan is a firm’s
entire business plan for connecting out to people and transforming them into the
clientele of its goods or services. The SOSTAC principle is implemented after studying
the company’s existing state, capabilities, and advantages, as well as how its brand is
perceived (Chaffrey and Smith, 2014, p7). From the situation analysis, the company
must determine its objectives or where it wants to be. After setting the objectives, the
model sets out the organization’s strategy and techniques for reaching those goals after
analyzing its situation and objectives. The following two phases involve putting the
process into action and monitoring its development to see if it is working as planned.
The business strategy, which is a plan that lists the type and schedule of marketing
activities, is guided by the marketing plan. Xiaomi’s Marketing Plan and Marketing
Mix looks at the company’s brand and the Xiaomi promotional strategies, which covers
the 4Ps. The brand’s success has been aided by various marketing strategies, including

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Xiaomi SOSTAC Market Plan 3

product/service creativity, marketing investment, and consumer experience. The
SOSTAC marketing plan is a prominent template for establishing marketing strategies
that help firms achieve their goals and objectives. The SOSTAC model is vital for
company analysis since it assists firms in better understand their operations and
customers. It specifically aids these companies in identifying their flaws, strengths,
opportunities, and dangers (Stephenson, R., 2021 p.2). Knowing these factors is crucial
for determining the company’s market presence. Recognizing the organization’s
vulnerabilities, for example, aids in the transformation of strengths and threats into
prospects. Companies must analyze enterprises using the SOSTAC model in order to
generate objectives and change their mission (Puertas 2021, p. 2). Firms keep track of
the progress of the systems in place to achieve this. In this sense, the research examines
Xiaomi’s performance in the Malaysian market using the SOSTAC mod

Situation Analysis
Smartphone use is one of the distinguishing forces in technological advancement
as the globe becomes closely intertwined. The percent of individuals in developing
markets who own and use a mobile phone has steadily increased over the last few years.
Smartphone adoption has been aided by the spread of low-cost mobile phones and
lower-cost service options in the Emerging economies. In 2020, the Asia-Pacific
region’s smartphone widespread adoption was 65 percent, with an anticipated growth to
80 percent by 2025. (Smartphones in Malaysia, 2022). Following the rising pattern of
smartphone adoption in the Asia-Pacific smartphone business, Malaysia’s smartphone
economy has grown at a consistent rate of roughly 5% per year (Smartphone users in
Malaysia, 2022). In 2019, the nation’s smartphone owners numbered around 18.2
million. In 2024, this number is expected to reach over 20 million. While over
86percent of mobile subscribers under the age of 20 already have a smartphone, only
31.6 percent of those over the age of 60 do (Smartphone users in Malaysia, 2022, np).
The same disparity may be found in income disparities: persons earning more than
5,000 Malaysian ringgit have the best likelihood of owning a smartphone.

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Xiaomi SOSTAC Market Plan 4

Nevertheless, the divide is narrowing, with roughly 60 percent of consumers earning
less than a thousand Malaysian ringgit owning a smartphone.
Xiaomi was named the best smartphone company in Malaysia (sell-in deliveries)
for two quarters in 2021, according to market research firm Canalys (Worldwide
smartphone market, 2022, np). Xiaomi has a 25 percent of the market and a 108 %
year-over-year rate of increase, according to the Canalysis research company. Xiaomi
has also developed swiftly in Southeast Asia, where smartphone sales climbed 106
percent year over year, resulting in a 23 percent of the market share (Worldwide
smartphone market, 2022, np).

Figure 1: Xiaomi Market share in Malaysia 2021
smartphone market, 2022)

Source: Canalysis (Worldwide

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Figure 2: Smartphone users in Malaysia 2017-2025

Xiaomi SOSTAC Market Plan 5

source: Statista, 2022

Xiaomi provides phones and other electronic gadgets at exceptionally low rates in
Malaysia, which is one of the firm’s strengths. This is critical for a few of reasons. First
and foremost, Xiaomi’s low prices enable them to compete for Malaysia’s
lower-income customers. Second, it enables them to penetrate historically underserved
communities where smartphones were formerly prohibitively expensive (Tabassum
and Ahmed, 2020, p6). For instance, Xiaomi is able to sell millions of gadgets in
Malaysia, allowing it to compete with luxury companies such as Apple and Samsung.
Another advantage is that, regardless of their actual prices, Xiaomi is known for
producing high-quality devices. Customers and tech journalists alike are continuously
impressed by the amount of value that the company’s smartphones can provide. This is
due in part to the high-performance specs of the individual parts used by Xiaomi in their
smartphones. Furthermore, Xiaomi smartphones are well-built from the ground up.
On the weaknesses side, Xiaomi’s product catalog, on the other hand, is limited in
terms of products and services, with reduced prices and no great customer assistance in
Malaysia. All of these elements have conspired to generate a negative brand image for

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Xiaomi SOSTAC Market Plan 6

the organization (Tabassum and Ahmed, 2020, p9). Because of these features, many
brand-conscious buyers regard the corporation to be a low-cost brand.

Objectives
Objective 1: to achieve 70% of the existing smartphone market share
Objective 2: Acquisition: Increase Xiaomi brand visibility from April 2022 through to
2025.
Objective 3. Diversification: Increase Xiaomi range of products in Malaysian market

Marketing Strategy
The organization will employ a variety of techniques in order to attain its
objectives. Online communities and discussions are the first method. There are many
different kinds of online communities and discussions. They can be established by
product users who are not looking for a financial gain or any kind of association with
the company. Others are designed by the organization to develop a direct and
straightforward contact between consumers and managers. There are other
communities dedicated to a specific type of goods or simply a brand (Chaffey, and
Smith, 2013, p8). All of these internet forums are of significant assistance and interest
to Xiaomi, because many parts of the firm can be enhanced as a result of user thoughts
and comments. The establishment of activities among customers, allowing members to
feel special for belong to that community, is one of the important aspects for the
sustainability of an online community (Panigrahi, 2019, np). These are the people who
will give the Xiaomi brand a distinct value because they will be used as a marketing
channel. The firm will also evaluate and consider the fact that the data obtained in
communities and discussions must be thoroughly analyzed in order to draw important
findings for the organization.

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Xiaomi SOSTAC Market Plan 7

Attraction marketing is the second strategy. The principle of the attraction
marketing technique is to attract attention by taking care of the picture, believing in
what it suggests, and connecting with its objective. A company that follows a close path
with its aim pursues the essential nature of the attraction marketing
technique (Ellegaard, and Ritter, 2006, p21). Additionally, the corporation will be able
to sell its cellphones and other products in restricted numbers and within very short
time frames by utilizing instant sales. This is a crucial sales approach that will enable
Xiaomi to save money on advertising since it generates a sense of urgency and
expectation among customers. Only a few numbers of things are made and sold, forcing
others to wait for the next round. The anticipation is always long and pressing. Many
people, particularly on social media, wind up unwittingly supporting Xiaomi items. As
a result, objectives 1 and 2 are met.

Segmentation, targeting, and positioning
Xiaomi categorization, targeted marketing and positioning are needed to assess the
firm’s target customer segment and deliver services that appeal to this group.
Mono-segment positioning will be used by the internet technology corporation, which
will appeal to the needs of a single consumer segment. By this strategy, Xiaomi
particularly targets a client niche that wants to utilize smartphones and other
technology items but does not have the financial means to do so.
MI has carved itself such a strong foothold in the Malaysian market that each
device is a big seller. Since they come up with such specs and high quality, the brand
has established a great reputation among clients. Their merchandise’ life cycle is
expected to be near-everlasting over the next few years. MI focuses on the middle class
and is known for being student-friendly.
Lowest Price: The emphasis is also on providing excellent smartphones at the
lowest possible price. Because of its minimal overhead expenses, the price of a MI
smartphone is virtually equivalent to the cost of its components and manufacturing,

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Xiaomi SOSTAC Market Plan 8

which is 60-70 percent less than the pricing of a phone of rival comparable quality.
Teenagers, who constitute the next generation of technologically inclined people, are
their key clientele. They are referred to as “fans” by MI.

Action: Marketing Programs
Product: Xiaomi can break into the Malaysian market with competitive pricing and
remarkable product offers, and carve out a position for itself in the subcontinent by
becoming the first among many to provide feature-rich smartphones at entry-level
prices. Because of Xiaomi’s high quality at cheap rates, a prosperous part of the
low-cost smartphone market could gain broad popularity. This product strategy is an
essential component of the company’s business model. The firm develops
market-leading smartphones and associated items, then sells them using its large fan
following and cutting-edge marketing strategies.
Price: The brand’s fundamental business plan in the Malaysian market should be
based on aggressive price reductions in order to extend its product lines. This pricing
structure aims to develop a presence in the market over time by offering low-cost
options to higher-priced products without sacrificing quality or functionality. Xiaomi’s
smartphone prices range from as low as RM749 to as much as RM1200 in 2021.
(Topic: Smartphones in Malaysia, 2022, np). This cost-effective pricing approach has
allowed the firm to become Malaysia’s number one smartphone company.
Place and Distribution Strategy: In Malaysia, the majority of sales are made
electronically rather than physically, which has benefited both the company and the
customers. It should, however, adjust its major focus to include offline markets as well.
Xiaomi seeks to create its position in the attractive foreign arena of Malaysia with
massive operations and winning market share through competitive pricing methods and
marketing techniques, with significant investments in product / process innovation.
Promotion tactics: Word of mouth and social media. As part of their sales strategy,
Xiaomi conducts flash sales, where they sell a limited number of products in a short

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Xiaomi SOSTAC Market Plan 9

period of time (Yan, Sokolova, Lyu and Huang, 2022). Xiaomi is also a firm believer in
marketing without the use of advertising. This method helps Xiaomi to save funds on
advertising because it increases consumer interest. MI has also been successful in
stimulating a MI fan community. Another area on which the digital strategy
concentrates is the usage of social media. One of the ways that adds the most benefit to
the business is the use of Facebook and Twitter to get information about its products
and to upgrade them. The usage of Facebook to contact with customers on a constant
basis (in order to gather feedback) has enabled the growth of new devices that meet
consumer demands. Xiaomi stands out as a one-of-a-kind firm that uses social media to
accomplish what few companies or enterprises can.
Search Engine Optimization (SEO) is a critical component of online driving sales.
Xiaomi should produce crucial terms for its brand goods and actively improve its
contents for simple and effective search in order to reap long-term rewards. The major
goal of this strategy is to boost site visibility and, as a result, traffic.

Control and Evaluation
The marketing plan’s last stage sets out how Xiaomi intends to evaluate and
monitor Malaysian accomplishment against the set objectives. The organization must
track the progress of sales volume in comparison to other brands in order to assess the
influence of its strategy and methods. This will reveal whether the company is
capturing market share in order to meet the objective 1 outlined above.
Monitoring Likes and Responses on social media for the Created Content; A large
number of likes or responses indicates great customer engagement with the information
presented.
Facebook: Facebook demonstrates a perfect potential as well as comprehensive
reaction mechanisms. The company will use the reaction to determine whether the
shared information is appreciated or hated by customers. Using Facebook analytics, the
company can also see all of the associated comments, responses, and shares.

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Xiaomi SOSTAC Market Plan 10

Monitor Mentions: Other businesses that do business with a company should be
the biggest supporters (Ashley and Tuten, 2014, p3). They play an important function
since they assist in the acquisition of products, which results in profit for the company.
To implement this strategy, Xiaomi will need to gather user feedback and insights into
the brand. It is important in monitoring the mention of the brand name by other
businesses for this reason. A large number of mentions, for instance, indicates a high
level of satisfaction and contentment with a service (Ashley and Tuten, 2014, p4).
Customers may choose to tag the corporate entity in order to recognize the company’s
great work. In this situation, more traffic is generated for the firm’s websites, and a
larger audience can be addressed through social media posting

Conclusion
Using the SOSTAC methodology, this research has highlighted and designed a
digital marketing plan for Xiaomi in Malaysia. Xiaomi must attempt to grow its sales
volume in order to improve its revenue as a result of the disruption and rivalry of the
market share. Xiaomi has promoted itself in the lower and mid-tiers of the market,
rather than establishing or attempting to position itself solely as a premium product
producer, which has proven to be one of its most valuable assets. The digital marketing
strategy’s goals are to increase market share by 70% by 2025, boost brand visibility in
Malaysia, and diversify the company’s products. The proposed tactics for achieving the
objectives include social media marketing using Facebook and Twitter, and expanding
from online to offline marketing. Other strategies include the attraction marketing. So
far, the company has used a unique combination of business and marketing techniques
to revolutionize the business in Malaysia and make it the number one smartphone
brand. The business has made its presence felt through a variety of marketing strategies,
including flash sales to create urgency. The corporation may gain a larger market share,
boost exposure, and introduce a wider range of products in the Malaysian market by
executing this strategy.

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Xiaomi SOSTAC Market Plan 11

Reference list
Rawal, P., Awasthi, A. and Upadhayay, S., 2017. Creating a hunger driven smartphone
market by Xiaomi. International Journal of Engineering Science and Computing,
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Chaffey, D. 2020. SOSTAC marketing planning model guide. Smart Insights. Released
on 19.20.2020.

SOSTAC® marketing planning model guide and the RACE Growth System

Stephenson, R., 2021. How to write a digital marketing plan using PR Smith’s
SOSTAC® planning model.
Puertas, M 2021, Digital marketing plan: case company: ProGrupper Oy,
www.theseus.fi.
Ellegaard, C. and Ritter, T., 2006. Customer attraction and its purchasing potential. In
22nd IMP Conference, Milan.
Ashley, C. and Tuten, T., 2014. Creative Strategies in Social Media Marketing: An
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Psychology & Marketing, 32(1), pp.15-27.
Panigrahi, A., 2019. A Case Study on Marketing Strategy of Xiaomi. International
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Statista. 2022. Topic: Smartphones in Malaysia. [online] Available at:

2022. Worldwide smartphone market. [online] Available at:

Yan, N., Sokolova, O., Lyu, D. and Huang, J., 2022. Xiaomi Smartphones Global
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