Question

Select TWO companies from the same industry. Select a country (other than the companies’ home country) that is a market for the companies. Discuss the demographic, cultural and economic characteristics, including how the local demographics and economics affect the value proposition of the product or service offered by the companies. What is each company’s value proposition? Include how each company adjusted its value proposition for the selected country. Research the demographic and cultural characteristics of the middle class in the country or countries you are evaluating?

Answer 1

Here we are taking an example of two companies Samsung and Xiaomi. both are well-established smartphone producer in the world. here the operating country is India. so if we want to explain the demographic status of India, it is the second-largest populated country in the world and it has a uniqueness of unity in cultural diversity. In this country, the lifestyle and the economic status presented by its 60-70% middle class dominated the population. here demand for smartphones is widely different from each other. price, shape, size, color, features, durability all these factors are one of the important aspects for each of the customers in terms of their requirements. so the demand for different models offered by these two companies is either on the basis of features been provided by their products or the price of the product in comparison. if demand for smartphone is 1 then the price factor itself having 0.5 share and other contribution been distributed. here the company choice is to depend on the area and the locality and that also determines the value proposition offered by the company and fitted to the customer's expectation.

In the case of Samsung, the value proposition is to provide the best quality to its customer, whereas in the case of Xiaomi it is focusing on its verity of products that fitted to each customer's demand and wallet. Samsung India still follows its value proposition of quality but by looking at the higher coverage verities is more to grab a major portion in the market. Xiaomi on the other hand always gives priority to the price and tries to capture the major portion of the market.

In India, middle-class people are having similar type of characteristics as the priority is the price of the product, feature of the product and finally money value of the product. here the culture is not having that much influence on their purchesing structure so the companies are not facing that much problemto deal with middle class customer in this country.