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Problems may arise when other high quality mobile phone manufacturers start tocopy the distribution strategy of Xiaomi, e.g. selling through geekbuying. They may need tospend more for priority listing and representation at these sites which may drive them awayall together, in this case they could also choose direct sales as they are now muchestablished as a brand and it will be easier to generate traffic to their own platforms.Alternatively they could copy strategies of Apple and Samsung who sell most of their phonesthrough value added (mobile subscription) partnerships with telecom companies, whilepopular in many countries there are huge margin implications with this approach.
How to lose points:1)Describe only 1 distribution channel2)Describe two, but without examples3)Describe two with examples, but with little knowledge on the cases.4)Do not discuss contextual conditions5)Fail to understand potential implications of contextual conditions6)Unclear arguments7)Woolly narrative Question 2; For a start-up discussed in the workshops, discuss one way to increase CustomerLifetime Value and one way to reduce customer acquisition cost, discuss benefits anddrawbacks.Ways to increase customer lifetime value;Reduce churn (customer service, favourable maintenance schemes, feedback cycles, etc.)Up-sell Unbundlecross-sellnext-sellreferralWays to decrease customer acquisition cost;Free mediaTargeted advertisingWord-of mouthActively manage review processUse of Dedicated onlineNext-sell; Benefits; Natural cycle where future earnings partly consist of existing customers. Given that youalready served these customers you know better what they want and through monitoringtheir behavior, (reviews, calls for maintenance/support, online monitoring, surveys) youhave a fair idea when and why they want to buy your product again. It creates a steady flowof income that can be partly predicted by the quality level of your product/services.Drawbacks;Managing the expectations of customers is key, you want to gently persuade them,preferable without them noticing to next-buy. If the lifecycle/quality of your product is toolow, i.e. requiring repeat purchase too soon, customers may go to a competitor. If yourlifecycle is too long you need to have a strong emphasis on maintenance/service etc. to
sustain your business model. Managing your product lifecycle hence is equally importantunderlining the importance of monitoring your customers carefully.