Xiameter Case

Debasish Sahoo | Roll 17098 | CBBS Make-up Assignment

GP:
1. Your assignment is to prepare strategy for Xiameter going forward in the face of moves by the competitors and
the parent company and happenings in the environment. All groups need to be ready for short presentations.
2. For preparing the guideline 1, of course you would need to understand why the company set up Xiameter in the
first place, the market, how did it accomplish the same, and achieved much improved results.

Who we are?

Low priced silicone product sales company focused on online sales with no technical service to the
customers.
Our Primary target group are the Price seekers: people who want silicone products at low price with
no innovation or additional service. This segment is approximately 30% of the total market for
silicones.

Where we are?

• 350 out of 7500 compounds present online

• Prices 10% - 15 % low
• Present in 50 out of 80 countries
• Restrictions on customers to have a minimum order quantity
• 1400 orders per month
• Strong acceptance in Asia
• 30% of company’s annual turnover.

Where we want to be?

• Continued market leader for the price-seeker segment

• Account for 50% of company’s annual turnover
• Increase number of online orders to 3000 Per month in next 3-5 years. (Current 1400/month)

How will we get there?

• Geographical expansion to other 30 countries

• Remove minimum order quantity restriction
• Increase compounds available online to 700
• Online sales of value added products
• Optional technical service
• Improved focus on Cost-Effective solution segment

Decisions

1. Not to close Xiameter Brand: The parent brand, Dow Corning, would get a reputation hit, if one of its
good performing sub brand is closed or sold.
2. Retain the low-prices strategy and not go for premium: The entire price seeker segment might be lost
and this segment is currently growing. Plus 30% of the current sales will be affected too.
3. Increase the Product Range:
Include Value-added specialty silicones sold under Dow Corning brand name.
Include non-silicone products outsourced through third parties and sold under the Xiameter brand name.
a. First mover advantage
b. Increased variety of sales, which in turn can lead to increased overall sales
 c. Non-silicon products gains can be passed on to the silicon products, thus lowering their prices
d. Need to standardize the quality: Since the non-silicone products are to be made and delivered
through 3rd party vendors, Xiameter needs to ensure the quality standards of these products, so
as to perfectly match its own product offerings. It can go into proper contracts with the 3rd party
vendors and offer help through its expertise to get to a standardized quality of non-silicon
products
4. Better Online Support Services:
a. More and better technical service: so that customers who can manage with and seek for small
technical support online are having their needs met (for example, cost-effective solution
segment)
b. Better offers like 24x7 support availability, real time tracking of order, no minimum order limit
(explained below).
5. Improved focus on Cost-Effective Solution Segment
This segment are gradually experiencing a mature market, right after Price Seekers. Since this segment
is focused on cutting costs, it could be better idea to teach them how to perform better by using no-frills
products. To account for their technical support assistance, couple of things that can be done are: better
product description, online tutorials, or their standard consultancy programs. In the longer run, when
online support services have been developed, this segment can be transferred to the Xiameter brand as it
will better with Xiameter competencies of assured good quality products at better offer with a good
online technical support system.
6. Small changes in existing business strategies
a. Increase upon the association of existing Xiameter customers. Offer them better offer for
increased quantity order and better online service performance. In fact they could extend this
offer (better offer, in terms of prices/complimentary product offerings/bundling, for larger
volumes) for to all their customers
b. Change the online minimum order limit: Establish a special charge for handling smaller orders
and remove the minimum order limit. This would reduce the perceived vulnerability for smaller
order
c. Increase products (Compounds) available for Xiameter from 350 to 700.
7. Geographical expansion: To address 2 main benefits:
a. Access to newer markets and segments
b. Solving the problem of shortage of raw materials: shortage of raw materials play a major role
in rising silicon products prices and thus switching of some customers and this raw material
cannot be substituted. Since silicon is a mined mineral, to tackle this the company can leverage
its existing worldwide network in many countries and try to buy silicon occurrence sources
(silicon-caves). This will help keep the raw materials availability in check and in-turn will
reflect on the price.
8. Marketing Strategy Adoption
a. Use the Brand Value strength as Xiameter is a mark of trust.
b. Claim to offer the best service and the best quality/price ratio plus other non silicone products.
c. Claim of offering advanced US quality and associated high quality R&D in their products
d. Improved marketing focus on Cost-effective solution segment and putting effort in educating
them to move to online-only service seekers.