HUNGER MARKETING

the smartphone market structure and the

role of hunger marketing
WELCOME
GROUP 10
 Oligopoly is one of the structures which play an important
ABOUT role in studying market power, business behavior and the
performance of market players

iOS and Android partake in over 99% of the market

For any organization the key element which determines its

success is its marketing strategy

10
Hunger marketing strategy is one of the new concepts
SMART PHON
M A RET K E
smartphone market is oligopolistic

S T R UTC T U R
E
OLIGOPOLY /

Oligopoly refers to a situation in which a few firms dominate the market.

Any action on their part is likely to result in counter-actions by their rivals.
Two types of products exist on an oligopolistic market, homogeneous and heterogeneous.
• homogeneous: industrial products
• heterogeneous: house goods, cars, mobile phone industry.
 • Open vs closed (is it easy to enter the market or not)
• Partial vs full (based on price leadership)
• Perfect vs imperfect (classification is based on product

types /
differentiation)
• Syndicated vs organized (whether companies can coordinate
among each other)
• Collusive vs non-collusive (based on agreement and
understanding between companies)

criteria /
few number of firms
legal privileges
social media advertising
& CHARACTERISTICS
Interdependence:
Apple lowers its mobile phone price by 100 $, producers like Samsung will
be affected.
Few sellers:
Market is dominated by few firms.
Barriers to entry:
Barriers to enter the industry are high while exit is done easily.
Advertising
Each firm advertises products in different ways.
Competition
The competition is intense, and every move of seller immediately affects
rivals.
Price rigidity
Companies can not change the price how they want to.
Lack of Uniformity
Companies differ in terms of size
Explanation of terms of operating systems
a group of basic programs that allow the computer to
/ smartphones
conduct certain tasks and operations.

Comparison of operating systems

IOS used to have fewer functions to Android until
Iphone 6
Apple surpass Android Operating system in term of
superior design

Apple stays on shoulder with Android in the

oligopoly
Mobile operating system globally

Apple IOS and Android represents oligopoly or

more precisely duopoly.

Reasons:
The barriers to enter the market are too high.
Every move one makes affects the other
 hunger marketing in smartphone market

1 2 3 4

Theories of consumer Definition of hunger The case of Apple Arguments on hunger

buying behavior marketing and Xiaomi marketing
 Consumer buying behavior?
Economists assume that consumers are always in the thirst to
maximize their utility or satisfaction and determine their preferences
in a rational way, after engaging in search and evaluation of the
products available.

In practice, many decisions are made entirely by previous

behavior, or emotionally as instant responses, without thought, to
special offers of goods and services
 Rational customer behavior /
Mostly analyzed by Indifference Curve. It is a set of the
consumer’s preferences and choice relating to two goods that
are substitutes for each other. The consumer is assumed to
prefer more of both goods.

Criticism of IC analysis /
• nothing about the process by which preferences are set or
how preferences are changed.
• do not represent the process by which individuals
actually make decisions.
• consumers are not sufficiently well informed to be able
to make reasonable choices.
• purely utility-driven process and takes no account of
moral preferences or the notion of a hierarchy of needs.
• deals only with private goods that are consumed
instantly.
 Emotional customer behavior /

In contrast to rational decision making, emotional decision making is what people do without caution, but with feeling or emotion.
There are many external and psychological factors that affect customer buying behavior, such as emotions on judgments,
evaluations on future outcome, and decisions etc...
Hunger
Marketing /

Hunger marketing is a psychological marketing strategy that focuses

on the emotions, the desire of consumers, making them hungry thus
having a strong desire to buy products which other people also want
to buy.
1
Limiting stock: Many companies have not supplied their
items adequately. Because it is hard for consumers to get
and buy the product, they think that the item is really good
and popular.

Time limiting: phrases that raise the sense of urgency,

implying that anyone who wants a product should act very
quickly

types. Special discounts and temporary pricing: the strongest

technique of hunger marketing

Limit access to products: this can be done through

‘members only’ offers
2
Works best with a brand appeal

Brand loyalty can help Hunger Marketing initiatives gain traction.

At the same time, a good Hunger Marketing effort can make a brand
seem more desirable

Pitfalls

Overwhelming customer demand and technical issues. If the

company is not well-prepared, it would become chaotic. It’s
important to create loyalty and goodwill that builds a sense of trust

features. between consumers and brand to stave off this kind of resentment.
 APPLE’S
APPLICATION Apple is among the most influential brands that has

OF HUNGER successfully applied hunger marketing strategy,

especially in the case of Iphone products. From the

MARKETING
first Iphone to the most recent Iphone 11 series, these
products all saw the long line of customers and out-
of-stock in various stores on their first few days of
the official premiere.
''
Controls the relationship
between supply and demand

''

creates the illusion of a moderate shortage of products, thereby giving

consumers the illusion of product scarcity.
 /

Scarcity
The power of Apple
brand’s image

Consumers have formed an impression and great

loyalty to Apple products: futuristic, near-perfect
design, great performance and a break-through in
technology. In many people’s eyes, Apple is a display
of personality and a must-have item.
 MEDI Product branding should combine with
good information dissemination strategy,
Apple is brilliant at utilizing the media to
timing, format, and media planning,
keep the hunger for their products going.
A while keeping some secret before
branding for elements of surprise.
 Xiaomi's hunger marketing

Xiaomi is currently the world's fourth-largest smartphone brand. Xiaomi’s products are
now present in more than 90 countries and regions.
However, this private-owned company took only 5 years to achieve the top position.
Xiaomi’s success story can well be attributed to its excellent execution of the marketing
strategy, in which hunger marketing plays a crucial role.
Xiaomi’s Promotion Strategy -
Emotional Appeal for Social
Commerce

The name “Xiaomi”: kind and lovely, generous like a friend- Seven-color electric board:
pursuit of the details connotation, color highlight personality
 Social commerce /

Xiaomi’s homepage is a pure e-commerce store.

Xiaomi’s widespread presence on social network.

Each product has a social hub.

 Flash Sales
/
Xiaomi use online flash sales: Products are sold in limited quantities, at a
particular time, which creates periodic hype as flash sales open up each week.

Selling phones online helped the company reach out to wider audience base and
also keep the cost in control.
 Xiaomi’s Ecosystem Xiaomi’s strong fan base
Company makes use of “Customer-obsessed”
Cloud services, security app, music and video player, strategy which means that customers can involve
browser and many more common apps were developed by
the company
customer loyalty themselves completely in the designing and
development process where inputs from users can be
taken from online medium and ultimately
incorporating suggested change in new products.
"hunger marketing can be
double-edged sword"
 Advocates for hunger marketing

• Make the product constantly in a state of demand exceeding

supply.
• Limited supply of products can increase consumers'
understanding.
• Effective signaling device when production involves a substantial
fixed cost, while the price remains fixed across periods and
undistorted.
• Increase the acceleration of capital turnover for new product
development
Opponents

• Reduce brand loyalty as well as the reputation of the brand

• Competitors take advantage of this to occupy a larger market share
• If other companies can provide it, then the customer can easily
find a substitute at any time.
 In this study, the structure observed was the oligopoly, a market situation where only
few producers serve to majority of users. Mobile operating systems are the perfect
example, as iOS and Android partake in over 99% of the market, making it one of the
clearest oligopoly situations globally.

Some of the most common reasons why oligopolies exist at all are the high entry
barriers that disable other potential producers from entering the markets.

Apple applied hunger marketing strategy by giving consumers the illusion of product
scarcity. Apple takes pride in the simplicity and design, that enables easy and beautiful
user experience.

On the other hand, Xiaomi takes advantages of modern techniques, such as using
friendly e-commerce interface or having occasional flash-sales. It also building strong
customer base by having Xiaomi's ecosystem or Mi-fan community.

Conclusion
T H E
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