AssignmentNo 3

Topic: Launch the Philips Color TV in Kerala

Submitted To:Hitesh Janjhi

Submitted by:Ratneshwar Mishara

Roll No: RT1901A-12

Introduction of Kerala’sKerala’s achievements in terms of some of the basic indicators of human development are well known and have been much commented upon. The life expectancy at birth of over 73 years in Kerala, well beyond what has been attained in the rest of India, compares well with Asian countries like South Korea, Malaysia and China. Importantly, however, these countries, unlike Kerala, were already on a path of economic growth. Kerala’s female-to-male ratio, at 1.058, is identical to that of Europe and North America. It is substantially higher than that for China (0.94) or for the rest of India (0.93). Further, Kerala is much ahead of other Indian States in achievingthe goal of universalising elementary education. The State ranked first among major Indian States in the Human Development Index (HDI) at the three time points of 1981, 1991 and 2001 (National Human Development Report, 2001,Planning Commission, 2002), but its per capita income lagged much behind the all-India average till recently. Implied in this phenomenon is a higher rate of translation efficiency in terms of public action, and ‘giving higher priority and precedence to the development of these services (such as education and health)’ in response to organised public demand (CDS-UN 1975). Such a pattern of development, defined by success in achieving a high quality of life without much success in economic growth,1 was raised to the status of a 'model' and the widely acclaimed CDS-UN (1975) study occupies an important place in the chain of intellectual events that culminated in a paradigm shift in development thinking.

Population: 31,841,374 (2008 Census)

Males : 15,471,420

Females : 16,369,955

RURAL-URBAN DISTRIBUTION OF POPULATION, KERALA, 2001

State / District   Population 0-6 Population Literates (Provisional)

    P M F P M F  P M F

Kerala

Total 31841374 15468614 16372760 3793146 1935027 1858119 25625698 12817963 12807735

Rural 23574449 11451282 12123167 2857686 1457233 1400453 18747212 9400183 9347029

Urban 8266925 4017332 4249593 935460 477794 457666 6878486 3417780 3460706

                     

Kasaragod Total 1204078 588083 615995 159002 81145 77857 896367 464844 431523

  Rural 970378 475196 495182 129732 66185 63547 713595 371861 341734

  Urban 233700 112887 120813 29270 14960 14310 182772 92983 89789

Kannur Total 2408956 1152817 1256139 279803 142625 137178 1988014 979240 1008774

  Rural 1196058 578544 617514 143151 72912 70239 965006 484664 480342

  Urban 1212898 574273 638625 136652 69713 66939 1023008 494576 528432

Wayanad Total 780619 391273 389346 104058 53116 50942 587030 308831 278199

  Rural 751007 376424 374583 100276 51198 49078 564260 296821 267439

  Urban 29612 14849 14763 3782 1918 1864 22770 12010 10760

Kozhikode Total 2879131 1399358 1479773 347146 177208 169938 2351548 1182906 1168642

  Rural 1777974 863632 914342 212940 108674 104266 1438978 727552 711426

  Urban 1101157 535726 565431 134206 68534 65672 912570 455354 457216

Malappuram Total 3625471 1754576 1870895 551525 281449 270076 2745398 1363647 1381751

  Rural 3269301 1581794 1687507 498753 254378 244375 2465937 1224864 1241073

  Urban 356170 172782 183388 52772 27071 25701 279461 138783 140678

Palakkad Total 2617482 1266985 1350497 318884 162406 156478 1951428 997503 953925

  Rural 2260907 1093515 1167392 279109 142083 137026 1666100 853039 813061

  Urban 356575 173470 183105 39775 20323 19452 285328 144464 140864

Thrissur Total 2974232 1422052 1552180 332459 169777 162682 2456081 1200247 1255834

  Rural 2134799 1018315 1116484 242262 123977 118285 1745189 852665 892524

  Urban 839433 403737 435696 90197 45800 44397 710892 347582 363310

Ernakulam Total 3105798 1538397 1567401 338924 173413 165511 2589038 1312657 1276381

  Rural 1628713 808609 820104 178029 91052 86977 1341273 684339 656934

  Urban 1477085 729788 747297 160895 82361 78534 1247765 628318 619447

Idukki Total 1129221 566682 562539 134177 68155 66022 885166 461260 423906

  Rural 1071628 538064 533564 127283 64687 62596 838010 437356 400654

  Urban 57593 28618 28975 6894 3468 3476 47156 23904 23252

Kottayam Total 1953646 964926 988720 212622 108358 104264 1674592 836491 838101

  Rural 1653838 817819 836019 180101 91917 88184 1417163 708695 708468

  Urban 299808 147107 152701 32521 16441 16080 257429 127796 129633

Alappuzha Total 2109160 1014529 1094631 226408 115752 110656 1768261 869440 898821

  Rural 1487703 712867 774836 158406 80925 77481 1249175 611331 637844

  Urban 621457 301662 319795 68002 34827 33175 519086 258109 260977

Pathanamthitta Total 1234016 589398 644618 127024 64568 62456 1054837 508153 546684

  Rural 1110218 529823 580395 114321 58107 56214 948138 456382 491756

  Urban 123798 59575 64223 12703 6461 6242 106699 51771 54928

Kollam Total 2585208 1249621 1335587 292599 149255 143344 2105396 1045009 1060387

  Rural 2119230 1021415 1097815 240099 122344 117755 1724816 854570 870246

  Urban 465978 228206 237772 52500 26911 25589 380580 190439 190141

Thiruvanantha- Total 3234356 1569917 1664439 368515 187800 180715 2572542 1287735 1284807

puram Rural 2142695 1035265 1107430 253224 128794 124430 1669572 836044 833528

  Urban 1091661 534652 557009 115291 59006 56285 902970 451691 451279

    Persons    Male Female  Persons   Male  Female  Persons   Male  Female

Total    31841374 15468614 163727603793146 1935027 1858119 25625698 12817963 12807735

Source: Directorate of Census Operations, Kerala

Death rate

6.4 deaths/1,000 population (1998)

Net migration rate(-)3.1 migrant(s)/1,000 population (1991 est.)

Of the emigrants from Kerala, 42.2% were Muslims, 36.6% were Hindus and 21.2% were Christians in

1992-93. The most preferred destination was USA (37.8%), followed by UAE (25.9%), Other Gulf

countries (13.0%), Oman (11.8%), Other Countries (7.5%) and Saudi Arabia(3.8%).

Sex ratio

Total population : 1058 Females/1000 Males

Age 0-6 : 987 Females/1000 MalesInfant mortality rate

Total: 14.1 deaths/1,000 live births (1997-1999)

Maternal mortality rateTotal: 1.3 deaths/1,000 live births (1990)

No of Villages: 1364

BackgroundRoyal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world’s biggest electronics companies and Europe’s largest, with sales of US$ 33 billion. Having activities in the three interlocking domains of healthcare, lifestyle and technology, the company

has 165,600 employees in more than 60 countries. Philips has products in categories like medical diagnostic imaging and patient monitoring, colour television sets, electric shavers, lighting and silicon system solutions.

Philips in India started operations in 1930, with 75 employees as “Philips Electrical Co. (India)Private Ltd”. Today, Philips India has grown to over 4,500 employees in 2003 with a turnover ofover US$ 333 million. Philips India is a leader in lighting, semiconductors, consumer electronics,medical systems, domestic appliances and personal care, with a wide range of internationallycurrent products backed by superior design and technology. Philips has seven manufacturing sites at various locations in India and a world class innovation campus and research and development centre in Bangalore contributing to over 20 per cent of Philips’ global resources for high-tech R&D and software development.

Philips has made an investment of over US$ 150 million in the Indian operations over the past five years. Philips has maintained a leading position in the semiconductor industry in India. Three out of five TVs in the country have Philips chips. Philip chips are present in the world’s thinnest watch made in India. Philips India has a leading market share in the juicer-mixer-grinder category and dry iron category.

India challenges

The Indian market for consumer electronics offers a lot of challenges. Several MNC consumer electronics players have entered the country leading to brand proliferation. There is immense pressure to lower price and to speedily introduce new products on the players, due to this high competition. The Indian consumer is price and value sensitive. More than 70 per cent of the population lives in rural areas which are difficult to reach. Philips India has leveraged some success factors to overcome these challenges.

Introduction of Philips1. Philips, a Global CompanyRoyal Philips Electronics is one of the world's biggest electronics companies and Europe's largest, with sales of US$ 33.9 billion in 1998. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 233,700 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, medical systems, business electronics, and IT services (Origin). Philips is quoted on the NYSE, London, Frankfurt, Amsterdam and other stock exchanges.

2. Global LeaderRoyal Philips Electronics is eighth on Fortune's list of global top 30 electronics corporations. We are active in about 80 businesses, varying from consumer electronics to domestic appliances,

and from security systems to semiconductors. We are a world leader in digital technologies for television and displays, wireless communications, speech recognition, video compression, storage and optical products as well as the underlying semiconductor technology that makes these breakthroughs possible. We have world class solutions in lighting, medical systems (particularly scanning and other diagnostic systems) and personal and domestic appliances where our investments in design and new materials are critical to success. Translated into figures, we produce over 2.4 billion incandescent lamps every year, and some 30 million picture tubes; and each day, our factories turn out more than 50 million integrated circuits. Around 2.5 million heart procedures (scans and interventional procedures) on X-ray equipment are carried out each year using our technology. One in seven television sets world-wide contains a Philips picture tube, and 60 percent of all telephones contain Philips products. Thirty percent of f offices around the world are lit by Philips Lighting, which also lights 65 percent of the world's top airports, 55 percent of soccer stadia, and 30 per cent of hospitals.

Factors for success Localization and portfolio management

Philip has developed products for the Asian market based on consumer needs. Instead of bringing ‘European’ products to Asian consumer; Philips has succeeded by recognising different cultural and lifestyle needs and customising products and technologies for the people who buy them. For example, when the audio equipment worldwide shifted to CD systems, Philips India developed a combined tape recorder and CD player since both media were prevalent in the country.

• Rated No. 16 in the Economic Times Brand Equity – India’s Most Trusted Brands 2003 survey• Recognised by Business World magazine as “The Most Respected Company in India in theConsumer Durables Sector” in 2002• Philips India’s Philips Software Centre (PSC) was placed in the top five in the Business World-Grow Talent “Great Places To Work” survey

Philips has introduced televisions with improved audio facilities like external sub-woofers and Woox technology; this is based on the insight that most Indians like to “hear” television. Philips televisions have on-screen display in regional languages. Several other products are localised, including toasters, steam irons, ovens, mixer-grinders and dry irons. In semiconductors, Philips is developing “Made in India” applications for Asia Pacific and global solutions like CORDECT and microcontroller-based solutions. Philips has product offerings across all price and performance points for the wide Indian market. Its product portfolio includes global products that cater to “anywhere in the world” consumers, as well as high-reliability and styling products for the mass consumer base.

Global technology supportPhilips has brought global technology to Indian consumers at affordable prices. It has been instrumental in bringing latest technologies like integrated wireless FM, digital widescreen TVs, high-definition rear projection TVs with DVD, amongst several others to the Indian consumer.

Tapping rural India

Marketing Mix

In order to assess the buyer behavior towards certain critical aspects of marketing, the preferences of the consumers is directly related to:

1) Price2) Quality3) Credit4) Variety5) Dealer advice6) Specific brand.

PURCHASE BEHAVIOR:Rural people can buy only from three places includes:1)From the shop in the same village2)Weekly bazaar3)From the shop of nearby town.

Rural market shares of all-India consumer electronics market (%)

Radio 70

Mono Systems 45

Stereo Systems 30

Black & White Televisions 35

Color Televisions 19

SEGMENTATION: Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. They are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way and

promoted in a certain way.

The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behavior; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment.

Segments based on Income Plasma: Income group of more than 50,000 LCD: Income bracket of Rs 20,000 and above Slim: Consumer in the income bracket of Rs 9000-15000 Flat: Consumer in the income bracket of 7000-12000 Conventional: income bracket of Rs 3000-6000

Segments based on social class Plasma: rich class LCD: upper middle class and rich class Slim: middle class Flat: middle and lower middle class Conventional: lower economic class.

Benefit Segmentation: Conventional, Flat screen Slim, LCD, and Plasma can also segmented on the basis of benefits that an end consumer would receive from them.

User Status: TV market can be classified into non users of TV and potential users in term of graduating to a higher segment like slim, LCD, Plasma from basic conventional TV

Loyalty status: On the basis of Loyalty status

Hardcore Loyal: brand loyal to Videocon for a long time in terms of purchasing products of Philips Shifting Loyal: who shift loyalty from other brands to another Switchers: not loyal to any brands so attract them to Philips and convert they brand loyal.

TARGETING:Once the firm has identified its marketing-segment opportunities, it has to decide how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, better-defined target groups.

The decisions involved in targeting strategy include:* Which segments to target?* How many products to offer* Which products to offer in which segments

In premium segments like flat screens and FDPs the growth in sales has been many times the industry growth. More importantly, high end product sales are no longer restricted to metros. Consumer in tier-2 cities and in rural areas seems to be as evolved in lifestyle needs. The consumer profile, too, has changed. Higher disposable incomes, greater aspirations and younger demographic have increased demands for the technologies. And Philips is targeting this segment.

POSITIONING:Positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market.

Once the competitive frame of reference for positioning has been fixed by defining the customer target market and nature of competition, marketers can define the appropriate points-of-difference and points-of parity associations.

Points of Parity (POPs) are associations that are not necessarily unique to the brand but may infact be shared with other brands. They represent necessary-but not necessarily sufficient-conditions for brand choice.

Points-of-Difference (PODs) are attributes or benefits consumers strongly associates with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand. Videocon's POD is the quality product with low cost. With the strong backward integration Videocon can provide the products with low cost. Thus, Videocon is positioned itself as a reliable and value-for-money product.

4P’s

The 4Ps includes the Product, Price, Place and promotion. 1. Product Mix - To increase its penetration in rural and semi-urban markets, Philips has

specially designed products specifically targeted at the semi-urban and rural consumer in India. For example it has created a specific brand ‘Vardaan’ in its colour TV range, targeted at the rural and semi-urban markets. To counter the power supply problem in rural India, Philips has customised its televisions to work on a voltage range of 90 volts to 270 volts, thereby eliminating the need for a voltage stabiliser. Philips also launched the world’s first “Free Power Radio”,which has become very popular in the rural market.

Product mix is the set of all product and items a particular seller offers for sale. Product mix consists of various product lines.

The width of a product mix refers to how many different product lines the company carries. The Philips television has product mix width of five lines. I.e. plasma, LCD, Slim, flat and Conventional.

The length of a product mix refers to the total number of items in the mix. i.e. for the line of LCD the length is 2 as it has two items 50” PDP and 42” PDP.

The depth of the product mix refers to how many variants are offered of each product in the line.i.e. For LCD the depth will be 2. As Philips is offering only one product in 50” PDP and 42” PDP.

The three product-mix dimensions permit the company to expand its business in three ways.

It can add new product lines, thus widening its product mix. It can lengthen each product lines. It can add more product variants to each product and deepen its product mix.

Width, Length & Depth Width = 5 (Plasma, LCD, Slim, Flat, Conventional)

In the product mix of Philips, it is having 37 different models, which gives them their product line Depth.

PLASMA Plasma television technology is similar to the technology used in a fluorescent light bulb. The display itself consists of cells. Within each cell two glass panels are separated by a narrow gap in which neon-xenon gas is injected and sealed in plasma form during the manufacturing process.

The main advantage of Plasma over CRT technology is that, by utilizing a sealed cell with charged plasma for each pixel, the need for a scanning electron beam in eliminated, which, in turn, eliminates the need for a large Cathode Ray Tube to produce video images. This is why traditional televisions are shaped more like boxes and Plasma televisions are thin and flat.

Advantages of Plasma Television:

Largest Screen Formats.Superior Contrasts.Versatile.Capable Of Displaying Full HDTV & Dtv Signal.Capable Of Displaying Xga, Svga & Vga Pc Signal.

Wide Viewing Angle.

Wide Rage Of Richer Color Over 16 Million.Superb Realistic Images.Less Expensive Than Lcds.Life More Than 30,000 Hours.Wide Screen Aspect Ratio around 16:9.Perfect Flat Screen.

Uniform Screen Brightness.Slim & Space Saving Design.

50" PDP

Integra 5010000:1 Contrast Ratio3:2 & 2:2 Pull DownHDMI Compatible3-D Video Noise ReductionPC Input

42" PDP

16.77 Million Color10000:1 Contrast Ratio3.2 & 2:2 Pull Down

1500cd/m2 BrightnessHDMI Compatible3-D Video Noise Reduction

LCD

The flab’s are out and now technology has switched over to sleek and slim products, LCD being the prominent amongst them. LCD technology is the recent breakthrough in consumer electronics and because of its esteemed advantages this segment is growing day by day.

Videocon are launching this range under the sub brand “Integra”. “INTEGRA” term indicates the integration of various systems connectivity with LCDTV. This is an integration of best sound quality and excellent picture quality. What is TFT-LCD?

Meaning of this term is Thin Film Transistor–Liquid Crystal Display. TFT technology used in this category offers the best image quality in flat panels. This technology is also called as Active Matrix Technology. 40" LCD 32" LCD 26" LCD 20" LCD 19" LCD Slim With Continuous Research & Development Videocon brings a revolutionary advancement in physics & brings new Slim & Trim Television.

The Most significant feature of the Slim & Trim Television is its one kind of super slim picture tube technology. This has enables us to make the TV 42% Slimmer. Slim Picture tube is a product with reduced depth providing the TV and monitor producers with opportunity to design Slim, flat and stylish TVs comparable to plasma or LCD panels maintaining Good picture Quality 29" SLIM & 21" SLIM

Flat Philips Bada Woofer with Surrounds Bass Technology. Bass Amplification by Dynamic Alignment (BADA) woofer is a revolutionary technology that offers a new sound to create an unbelievable sound space .Philips unique Bazoomba Woofer Technology.Videocon's superior Bazoomba Woofer Technology incorporates a unique conjugate arrangement of Woofer motors that ensures rich bass reproduction. The Bazoomba Woofer Technology

Enables the generation of the lowest bass frequencies from a small enclosure (Bazoomba tube). Enables cleaner and tighter bass reproduction due to acoustic cancellation of distortion in the even harmonics 29" TFT ,21" TFT ,15" TFT ,Conventional TV ,21" FFST,20" CONV,14" CONV.

1. Pricing - Philips has also structured the pricing of products to make them affordable for the target audience in small towns and rural areas. For example, Philips introduced a portable CD system, at an affordable price of US$ 83 for the semi-urban and rural customers.

The pricing of the Philips’s various models is as following. Plasma TV : Rs. 59,990 - 2, 40,000

LCD TV : Rs. 28,400 – 89,900

Slim TV : Rs. 10,400 – 18,900

Flat TV : Rs. 5,500 – 18,400

Conventional TV : Rs. 4,600 - 9,500

Affordability- The prices of the product are setup according to the disposable income of the people.

2. PLACE-Philips has one of the largest distribution networks with high penetration levels in the rural and semi-urban areas. To enhance its distribution and logistics network and increase the geographical reach of its products, Philips carried out an extensive product wise mapping exercise over 540 districts across India. Major retailers were identified and a key account management approach was adopted to strengthen the distribution channel. Philips has plans to serve over 4,200 towns in semi-urban areas.

Availability- Easy availability of the product should be ensured. To tap 45 villages in kerala Philips has setup 10 regional offices.

3. PROMOTION- Philips has introduced innovative promotion campaigns especially for rural markets. The Consumer Electronics and Lighting divisions of Philips have launched integrated rural marketing programmes, which are spread across semi-urban towns having a population below 50,000. Local Indian management runs the operations of Philips India. This enables Philips to understand local customer insights and fine-tune its strategy to cater to local market dynamics.