Improvement proposal of Xiaomi’s new product – Xiaomi Intelligent GPS Shoe Clip

Marketing
Name
Institutional Affiliation

Marketing
Task One: Introduction
Children and the senior citizens are more vulnerable to the risk of disappearing or getting kidnapped. A loss by disappearance or abduction of a loved one can be a traumatizing experience for the family. In light of these facts, our group developed an intelligent shoe clip that can be used to monitor and keep track of the user’s movements. Xiaomi Intelligent GPS Shoe Clip is synchronized with mobile apps on smartphones so that family members can easily track their loved ones regardless of the geographic location. In addition, the clip has an SOS button that is linked directly to the police station so that users can signal for help in case of an emergency. In addition, the clip is capable of collecting and storing the personal data of the user, which can be linked with police data for more effective responses to emergencies. The clip is portable, easy to conceal, and can be charged with a USB or directly through solar power.
During the presentations, the group proposed that the primary target market for the product could be families with young children and older adults. After research, the group has identified opportunities to include mental health patients. In Hong Kong, mental health is a major issue as evidenced by the fact that there are thousands of people suffering from various psychological disorders such as dementia, Alzheimer, bipolar disorder and autism among others. Xiaomi Intelligent GPS Shoe Clip will be marketed to these groups.

This strategy will increase the target customer base, which will, in turn, lead to more sales and profitability.
The group had proposed that the pricing strategy would focus on setting prices low so that most prospective customers could afford the product. The group has since then decided to focus on different prices for different target groups based on certain attributes such as social class and the need for prestige. The group recognizes that, in Hong Kong, there are rich families who only purchase premium priced products. For these consumers, high price equals tohighquality and enhanced utility (Callon, 2001). To target this high-end consumer group, a premium version of Xiaomi Intelligent GPS Shoe Clip will be developed. This version of the product will have additional features such as audio capabilities so that trackers can hear ambient sounds from the clip user’s movements. The high-end version will also be sleek in design and have different color variations (Weinreich, 2010). In effect, the premium version will enable the group to make more sales from the upper-class consumers while the ordinary version will enable the company to target the populous and price-conscious lower and middle-class consumers.
Regarding the issue of place strategy, the group had proposed to sell its product through an online store and a physical (brick-and-mortar) store. The former strategy would enable the company to target the younger, tech-savvy generation of consumers while the latter strategy would focus on the conservative consumers who prefer the traditional purchase model. The group has proposed an amendment to the initial place strategy. The new strategy will incorporate new distribution channels such use of wholesalers, departmental stores, supermarkets and other independent retailers (Marilen, Cristina & Claudiu, 2009). It will lead to rapid growth of brand awareness. It will also lead to more sales and high stock turnover rate.
Since there are other companies offering similar products as the Xiaomi Intelligent GPS Shoe Clip, the promotional strategies proposed during the presentation will be amended with the aim of positioning the product in the favorable light in the market. New promotional strategies that will be used include celebrity endorsement, mail order marketing, product giveaways, end-cap marketing and support for corporate social responsibility (Joyce & Woods, 2006). Another amendment to the initial proposal is that sales executives will be used to market the product. The group had rejected the idea of using sales executives because the strategy is too costly. However, it has been realized that although it is expensive to train sales agents, the strategy is rewarding in the long-term.
Task Two: Service-Dominant Logic (SD-Logic)
In this section, literature relating to SD-Logic will be reviewed to determine how key concepts can be incorporated into the marketing of Xiaomi Intelligent GPS Shoe Clip. Service-Dominant Logic is a framework for evaluating how increased focus on service creates value for an organization’s business model. The framework is based on the reasoning that value-creating processes are not only influenced by internal company activities but are greatly affected by external networks (Vargo & Lusch, 2004). The most important of these external networks relates to customer service. Accordingly, the core of SD-Logic is the increased understanding of value creation with the objective of enhancing customer service (Carter, Brooks, Catalano & Smith, 2007). It involves changing the business model from being focused on product development to being focused on service provision, hence the customer-oriented thinking of SD-Logic.
As a new paradigm shift in marketing perspectives, SD-Logic is based on several fundamental principles, which can be summed into four imperatives. First, service remains the quintessential basis for exchange between organizations and customers and entails application of specialized competencies for the benefit of both parties (Hochbaum, 2011). In this case, SD-Logic does emphasize the difference between products and service but focuses on their relationship where products bring value through the service they provide to the end consumer (Wayland & Cole, 2007). Secondly, the value cannot be created during the manufacturing process, but organizations can offer value propositions, which are assessed by customers to determine strategic fit. Third, organizations and customers are resource integrators, meaning that actual value is created jointly for and by both parties. It implies the need for strategic collaboration between the two parties in product development (Yoo, Donthu & Lee, 2000). Lastly, focus on sustained value for a customer represents a new source of strategic competencies for organizations. It leads to guaranteed uninterrupted flow of information, which helps companies to develop new capabilities for defending their positions in the market.
According to Lusch, Vargo and Wessels (2008), value chains have undergone considerable changes in the 21st century. It is, in part, because of the integration of international markets, shortening of product life cycles and the need to deal with peculiarities of changing customer needs. All these transformations have forced companies to re-evaluate their value chain activities to make them more adaptable and efficient. This growing trend is further fuelled by increasing customer powers, a reality that has been triggered by the availability of consumer information (Tedlow & Geoffrey, 2014). Due to advances in information and communication technologies, modern consumers can access and share information more easily. It has created a need for improved product and service offering. With this new reality, efficient production, product diversification, and differentiation are no longer enough to make organizations competitive.
Sustainable competitive advantages require the ability to reinvent the business model. As a way to enhance flexibility and gain a deeper scope of action, many organizations focus on service-based strategies. These strategies help businesses to ensure customer retention and extend portfolio and are, therefore, the focus on SD-Logic (Ryan & Jones, 2009). In the traditional orientation of organizations, there is a clear distinction between the producer who is considered to be knowledgeable, innovative and experienced in developing the product and the customer who is regarded as a passive consumer of the product (Lusch, Vargo &Tanniru, 2010). Consequently, the traditional organizational logic puts more emphasis on production efficiency and does not allow for integration of customer input into the production process. In contrast, the SD-Logic of marketing attempts to redefine the relationships between organizations and their customers (Kotler & Keller, 2009a; Kotler & Keller, 2009b). In this logic, the customer has been elevated from a mere consumer into a co-producer meaning that customer input is critical in product development (Lusch, 2011). In this sense, organizations have to communicate with their customers to improve product quality constantly.
Osborne, Radnor, and Nasi (2013) have stated that SD-Logic requires that customers be involved in product development projects. It, therefore, considers organizations as continuously learning entities that do not create value by themselves but can only propose offering to customers. Based on the proposed offerings, the customer gives feedback, which is used to refine the product and make it more acceptable to the customers (Naik, Raman & Winer, 2005). In marketing, this philosophy of product development is regarded as the ‘sense and respond’ strategy and is fundamentally distinct from the traditional ‘manufacture and sell’ philosophy. Essentially, SD-logic redefines organization’s objective from focusing on sales to maintaining mutually benefiting and long-term relationships with customers.
The marketing of Xiaomi Intelligent GPS Shoe Clip will incorporate principles of SD-logic by adopting the extended service marketing mix. The extended service marketing mix has three important elements: people, process, and physical evidence. The element of people describes the employees as value creators. Employees play an integral role not only in product development but also in the marketing and nurturing of strategic relationships with customers (Wieland, Koskela-Huotari & Vargo, 2016). Given this consideration, the success of Xiaomi Intelligent GPS Shoe Clip will depend on the availability of knowledgeable and motivated employees. The company will hire talented employees to fill different positions from product design to the front office and marketing. To employees will be provided with appropriate tools to enable them to perform optimally in their roles. They will also be given attractive compensation packages and other benefits to make them more loyal to the company.
The element of the process in the extended service marketing mix describes the way in which products are delivered to the customers. It entails customer service and ability to handle complaints and foresee issue long before they happen (Snyman & Kruger, 2004). Efficient processes coupled with clearly defined services lead to improved customer experience. Xiaomi will implement appropriate process strategies to help in identifying customer needs, handling of orders and responding to customer complaints. The company takes cognizant of the fact that demand for the intelligent shoe clip is that that the product has to be delivered in a manner that prioritizes customer service (Goldstein & Lee, 2005). Therefore, the process will be a critical component of the product’s blueprint wherein the company establishes all processes in advance of developing the product.
Physical evidence refers to the physical attributes, as well as the ambiance of the place where an organization interacts with customers (Yazdanparast, Manuj & Swartz, 2010). For the Xiaomi Intelligent GPS Shoe Clip, physical evidence will encompass both online and the offline retail stores. The company will provide pleasant waiting areas and attractive display of products. The staff will be provided with uniforms bearing the company’s logo. The website will be creatively designed to appear attractive to end users. The website will be enhanced with important features such as online payment capabilities.
An important aspect of SD-logic is ethical marketing, which describes a process that businesses stimulate customer interest in their products, build long-lasting customer relationships, and create value for other stakeholders. Ethical marketing helps companies to build strong brand equity, foster high levels of customer loyalty, create a positive workplace and avoid legal problems (Tokman & Beitelspacher, 2011). The aspect of ethical marketing will provide fundamental guiding principles in the marketing of Xiaomi Intelligent GPS Shoe Clip. The company will adopt the ethical principles of truthfulness, product quality, transparency and confidentiality of customers’ information. All these will be based on the concept of relationship marketing, which focuses on strategies for maintaining long-term customer engagement (Hastings, 2007). The company will also comply with the various laws, regulations, and standards established by professional organizations and the government. Any controversial ethical issues will be discussed honestly and openly during marketing decisions.
Another major aspect of SD-logic is internal marketing. It involves treating employees as customers of the company’s products and services (Luan & Sudhir, 2010). The objective of internal marketing is to help companies improve their communications with customers and other external stakeholders. Regarding the marketing of Xiaomi Intelligent GPS Shoe Clip, the company will use different internal marketing strategies aimed at enabling the employees to make powerful connections to the product. One such strategy will be involvement of employees in decision making. Regardless of their positions in the company, all employees will be allowed to give their input concerning various issues such as product development. Another strategy will be the provision of training and development opportunities to make employees more competent in their roles. This way, the employees will be able to engage positively with customers.

Task Three: Optimization of Customer Engagement
Xiaomi will optimize customer engagement concepts in the marketing of the intelligent shoe clip. By definition, customer relationship marketing refers to the process of creating the strong emotional connection between the brand and the customers. When customers are highly engaged, they are likely to make more purchases, promote the product and demonstrate greater brand loyalty. According to Kyrgidou and Hughes (2010), customer engagement gives opportunities for interacting with customers and strengthening relationships for long-term gains. Often, customer engagement is a result of positive customer experience. Thus, providing superior customer services is an integral component of customer engagement.
As a way to offer the best customer experience, Xiaomi has identified key touch points, which will be used in the launch of the product. The touch points correspond to any instance when customers come into contact with the brand (French, 2009). It could be prior to, during, and after the purchase. The main touch points are online platforms (social media, website, and emails), call centers, company stores, word of mouth marketing, points- of-sale, follow-ups and testimonials (Harvey, 2007). These touch points will be used to capture customer feedback and facilitate customer engagement. It will, in turn, be used to address the main issue of lack of information about customers.
The company will implement various strategies to drive customer engagement across these touch points. First, all online platforms such as company website and social media will be used to capture data about customers’ preferences and expectations so as to develop more satisfying products and services. The point of sale, call centers, and other touch points will be used to facilitate mapping of customer journey (Reimer & Kuehn, 2005). Secondly, customers will be offered with unexpected value to deliver exceptional customer experience. In particular, there will be a warranty of up to two years for the products purchased from the company. Lastly, customers will be encouraged to give feedback regarding their experience with the company (Kotler, Keller, Ang, Leong & Tan, 2012). As a means to determine the success of the customer engagement process, various metrics will be used. These include customer contact rate, customer satisfaction, time to first response, the number of resolved cases, average handle time, interactions per resolution and cases by time. These metrics will provide useful insights on the value of support that customers are getting and how issues are being handled. In effect, the metrics will show the success of the product when it is launched in the market.
Conclusion
The art of marketing has undergone a major paradigm shift with the central focus moving away from the mere exchange of the product to the idea of nurturing relationships and creating value for consumers. This change has had far-reaching implications for the formulation and implementation of marketing strategies. In general, the traditional notion of creating a product without involving consumers has been replaced by the need to engage customers in ongoing relationships right from product design and development to post-sale services. This way, businesses can develop products that meet customers’ expectations and respond quickly to changing market conditions. Xiaomi will incorporate concepts from the new paradigm shift to develop a robust marketing plan for the intelligent shoe clip.

Personal Reflective Statement
I found this course very informative and encouraging, and I believe my knowledge in marketing has increased extensively. As a result of attending classes and doing assignments, I have gained a lot of skills, which I will apply in my career as a marketer. Most importantly, my knowledge has expanded to include global approaches to the issue of marketing. To my surprise, I found out that the art of marketing follows heavily from other disciplines such as psychology. It hasmade marketing to become complicated in the same way as science-based courses such as engineering and medicine. A central aspect of the learning process was group work. Our group comprised of six members and they were all assigned different roles. However, members were to work together towards common goals in the spirit of teamwork. Reflecting upon my role as the group coordinator, I feel that it was suitable for my personality. It enabled me to develop my leadership skills.
The only challenge I faced was in working and communicating with group members in assertive ways. Occasionally, I found it difficult negotiating with members who felt unwilling to compromise on some issues. An important outcome of the group work is that we were able to prepare presentations for the class. The project was very successful and gave us an impetus to focus greater accomplishments. As a group, we were able to find that the rules of marketing have changed significantly and that the forces of globalization present immense opportunities, as well as threats for marketers. It has affected the way organizations make decisions. Overall, group members were very cooperative and helpful to each other. Although time was a limiting factor, the group managed to complete all assigned tasks within the deadline.

References
Callon, J. D. (2001). Competitive advantage through information technology, London: McGraw-Hill International. Retrieved 29th December 2016 from https://www.amazon.com/Competitive-Advantage-Through-Information-Technology/dp/0070112509Carter, B., Brooks, G., Catalano, F., & Smith, B. (2007). Digital Marketing for Dummies. New York: John Wiley & Sons. Retrieved 29th December 2016 from https://www.amazon.co.uk/Digital-Marketing-Dummies-Ben-Carter/dp/0470057939French, S. (2009). Critiquing the language of strategic management.Journal of Management Development, 28(1), 6–17. Retrieved 29th December 2016 fromhttp://www.emeraldinsight.com/doi/abs/10.1108/02621710910923836Goldstein, D., & Lee, Y. (2005). The rise of right-time marketing. The Journal of Database Marketing & Customer Strategy Management,12(3), 212–225. Retrieved 29th December 2016 from http://link.springer.com/article/10.1057/palgrave.dbm.3240258Harvey, P. (2007). Let every child be wanted: how social marketing is revolutionizing contraceptive use around the world. New York: Auburn House. Retrieved 29th December 2016 from https://www.amazon.com/Every-Child-Wanted-Revolutionizing-Contraceptive/dp/0865692823Hastings, G. (2007). Social marketing – why should the devil have all the best tunes? Boston: Butterworth-Heinemann. Retrieved 29th December 2016 from https://www.amazon.co.uk/d/Books/Social-Marketing-should-devil-tunes-Should-Devil/0750683503Hochbaum, D. (2011). Rating customers according to their promptness to adopt new products.Operations Research, 59(5), 1171–1183. Retrieved 29th December 2016 from https://pdfs.semanticscholar.org/c061/a57669269a49f9d1d04b9bb922c33cef7b2c.pdfJoyce, P., & Woods, A. (2006). Essential strategic management – from modernism to pragmatism. London: Butterworth Heinemann. Retrieved 29th December 2016 from http://irep.ntu.ac.uk/id/eprint/11589/Kotler, P., & Keller, K. (2009a). A Framework for marketing management. New York: Pearson Prentice Hall. Retrieved 29th December 2016 from https://www.amazon.com/Framework-Marketing-Management-Philip-Kotler/dp/0132539306Kotler, P., & Keller, K. (2009b). Marketing Management. Boston: Pearson Education International Pickton. Retrieved 29th December 2016 fromhttp://socioline.ru/files/5/283/kotler_keller_-_marketing_management_14th_edition.pdfKotler, P., Keller, K., Ang, S., Leong, S., & Tan, C. (2012). Marketing management: an Asian perspective. Singapore: Pearson Education South Asia Pte Ltd. Retrieved 29th December 2016 fromhttp://catalogue.pearsoned.co.uk/educator/product/Marketing-Management-An-Asian-Perspective/9789810687977.pageKyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: origins, core elements, and research directions. European Business Review,22(1), 43-63. Retrieved 29th December 2016 from https://www.researchgate.net/publication/247616087_Strategic_entrepreneurship_Origins_core_elements_and_research_directionsLuan, Y., &Sudhir, K. (2010). Forecasting marketing mix responsiveness for new products. American Marketing Association, 47, 444-457. Retrieved 29th December 2016 fromhttp://faculty.som.yale.edu/ksudhir/JMR-07-0407-Manuscript_final.pdfLusch, R. F. (2011). Reframing supply chain management: a service-dominant logic perspective. Journal of Supply Chain Management, 47, 14–18. Retrieved 29th December 2016 from http://sdlogic.net/uploads/3/4/0/3/34033484/reframing_jscm_lusch_2011.pdfLusch, R. F., Vargo, S. L., & Tanniru, M. (2010). Service, value networks and learning. Journal of the Academy of Marketing Science,38(1), 19–31.Retrieved 29th December 2016 from http://link.springer.com/article/10.1007/s11747-008-0131-zLusch, R. F., Vargo, S. L., &Wessels, G. (2008). Toward a conceptual foundation for service science: contributions from service-dominant logic. IBM Systems Journal, 47, 5-14. Retrieved 29th December 2016 from http://ieeexplore.ieee.org/document/5386536/?reload=trueMarilen, P., Cristina, N., &Claudiu, B. (2009). The role of strategic planning in modern organizations.AnnalesUniversitatisApulensis Series Oeconomica, 11(2),953-958. Retrieved 29th December 2016 fromhttp://www.oeconomica.uab.ro/upload/lucrari/1120092/40.pdfNaik, P., Raman, K., & Winer, R. (2005). Planning marketing mix strategies in the presence of interaction effects. Marketing Science, 24(1), 25-34. Retrieved 29th December 2016 fromhttp://gsm.ucdavis.edu/sites/main/files/file-attachments/planningmarketingmix.pdfOsborne, S. P., Radnor, Z., & Nasi, G. (2013). A new theory for public service management? Toward a (public) service-dominant approach.The American Review of Public Administration, 43(2), 135-158. Retrieved 29th December 2016 from http://www.paulallen.ca/documents/2015/07/osborne-sp-z-radnor-and-g-nasi-a-new-theory-for-public-service-management-toward-a-public-service-dominant-approach-2013.pdfReimer, A., & Kuehn, R. (2005). The impact of servicescape on quality perception. European Journal of Marketing, 39(7), 785-808. Retrieved 29th December 2016 from https://www.researchgate.net/publication/235262658_The_impact_of_servicescape_on_quality_perceptionRyan, D., & Jones, C. (2009).Understanding digital marketing: marketing strategies for engaging the digital generation. London: Kogan Page. Retrieved 29th December 2016 from https://www.amazon.com/Understanding-Digital-Marketing-Strategies-Generation/dp/0749453893Snyman, R., & Kruger, C. J. (2004). The interdependency between strategic management and strategic knowledge management. Journal of Knowledge Management, 8(1), 5–19. Retrieved 29th December 2016 from http://www.academia.edu/913750/The_interdependency_between_strategic_management_and_strategic_knowledge_managementTedlow, R., & Geoffrey, G. (2014). The rise and fall of mass marketing. London: Routledge. http://www.hbs.edu/faculty/Pages/item.aspx?num=1749Tokman, M., &Beitelspacher, L. S. (2011). Supply chain networks and service-dominant logic: Suggestions for future research.International Journal of Physical Distribution & Logistics Management, 41(7), 717-726. Retrieved 29th December 2016 from http://www.emeraldinsight.com/doi/abs/10.1108/IJPDLM-11-2012-0331?src=recsys&journalCode=ijpdlmVargo, S., &Lusch, R. (2004). The four service marketing myths: remnants of a goods-based manufacturing model.Journal of Service Research, 6(4), 324-335. Retrieved 29th December 2016 from http://sebokwiki.org/wiki/The_Four_Service_Marketing_Myths_%E2%80%93_Remnants_of_a_Goods-Based_Manufacturing_ModelWayland, R., & Cole, P. (2007). Customer connections: new strategies for growth. Boston, MA: Harvard Business School Press. Retrieved 29th December 2016 fromhttps://www.amazon.com/Customer-Connections-New-Strategies-Growth/dp/0875847994Weinreich, N. (2010). Hands-On Social Marketing: A Step-by-Step Guide to Designing Change for Good. London: Sage Publications. Retrieved 29th December 2016 from http://www.social-marketing.com/book.htmlWieland, H., Koskela-Huotari, K., & Vargo, S. L. (2016). Extending actor participation in value creation: an institutional view.Journal of Strategic Marketing, 24(3-4), 210-226. Retrieved 29th December 2016 from http://www.tandfonline.com/doi/abs/10.1080/0965254X.2015.1095225?journalCode=rjsm20Yazdanparast, A., Manuj, I., & Swartz, S. M. (2010). Co-creating logistics value: a service-dominant logic perspective. The International Journal of Logistics Management, 21(3), 375-403. Retrieved 29th December 2016 from http://www.emeraldinsight.com/doi/abs/10.1108/09574091011089808Yoo, B., Donthu, N., & Lee, S. (2000). An examination of selected marketing mix elements and brand equity. Journal of the Academy of Marketing Science, 28(2): 195-211. Retrieved 29th December 2016 fromhttp://link.springer.com/article/10.1177/0092070300282002