philips report by kashan pirzada

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Saleha sultana

Mr. Kashan Pirzada

MBA 4-B

BAHRIA INSTITUTE OF MANGEMENT & COMPUTER SCIENCES, KARACHI 2

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DEDICATION

I dedicate this report to my beloved parents and my respected teacher Mr. Kashan Pirzada.


ACKNOWLEDGEMENT

First of all I owe dear Almighty Allah who gave me strength,

knowledge and tenacity to undertake and successfully

accomplish the project. Secondly I would like to thank respected

teacher Mr. Kashan Pirzada for invaluable and priceless

teaching and guidance through out the semester. It is due to his

efforts that an initially so difficult ‘International Business

Analysis’ course, became easy and intelligible for us.


LETTER OF TRANSMITTAL

May 30, 2008

The honorable Mr Kashan PirzadaHead of Marketing, Management sciencesBahria UniversityKarachi

Respected Sir

It is my honor to transmit to you this Philips report that you had assigned me for IBA.

All statistical data used is authentic and real as on April 30, 2008. All issues that were relevant to the topic have been covered in this report in great detail.

I hope this report is acceptable to the business department of BAHRIA UNIVERSITY and to you, keeping in view the scope of my limited knowledge. Thank you for giving me the opportunity to extend my learning ability and to experience the practical and research world’s life. I found that the report is both entertaining and challenging. Handling the intricacies involved with the whole procedure has been learning experience.

Sincerely,

Saleha


LETTER OF ACKNOWLEDGEMENT

May 30, 2008

Respected Sir

This report is a international business analysis and a success story of Philips. The material compiled and presented in this report is a result of exhaustive work.

This report has proved to be a great experience. For this, I would like to thank our course instructor “Mr. Kashan Pirzada” for providing us the opportunity, as well as his guidance in the light of his vast experience.

Sincerely,

Saleha


LETTER OF AUTHORIZATION

May30, 2008

Respect Mr. Kashan Pirzada,

As authorized by our teacher Mr. Kashan Pirzada, I decided to analyze Philips success story.

As part of this project, this Report contains an introduction of the company, along with the introduction of the prducts, company analysis, look at the important key activities regarding product development process, finally conclusions and recommendations.

Sincerely,

Saleha


TABLE OF CONTENTS

S.NO PARTICULARS PAGE. NO

1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.

AbstractIntroduction

History at glancePhilips Pakistan looking to the future

Philips Pakistan dealing withPhilips Pakistan today

Mission statementCompany objectives

Best StrategyBusiness

Lighting about PhilipsProduct sector overview

Structure of Philips PakistanSegmentation

Suggestions for segmentationPositioning

Suggestions for positioningFinancial strategy

HR strategyBibliography

910121516192021222426323334384244464748


ABSTRACT

Royal Philips Electronics is ninth on Fortune's list of global top 30

electronics corporations. Philips is active in about 60 businesses,

varying from consumer electronics to domestic appliances and from

security systems to semiconductors.

This report contains both local and global perspectives of Philips

operations which make Philips a global leader in electronics industry..

It contains facts about the steps Philips is taking for the development

of their employees, to make good relationships with customers,

dealers, suppliers and employees. I have also discussed about the R&D

department, global production centre and also what initiatives Philips

is taking in order to create superior customer value.


INTRODUCTIONINTRODUCTION

oyal Philips Electronics of the Netherlands is one of the world’s

biggest electronics companies and Europe’s largest, with sales

of EUR 32.3 billion in 2001. It is a global leader in color

television sets, lighting, electric shavers, medical diagnostic imaging

and patient monitoring and one-chip TV products. Its 186,090

employees in more than 60 countries are active in the areas of

lighting, consumer electronics, domestic appliances, components,

semiconductors, and medical systems. Philips is quoted on the NYSE

(symbol: PHG), London, Frankfurt, Amsterdam and other stock

exchanges.

R

Global LeaderGlobal Leader

Royal Philips Electronics is ninth on Fortune's list of global top 30

electronics corporations. Philips is active in about 60 businesses,

varying from consumer electronics to domestic appliances, and from

security systems to semiconductors.

Philips is 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.

Philips has world class solutions in lighting, medical systems

(particularly scanning and other diagnostic systems) and personal and


domestic appliances where Philips 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 intervention

procedures) on X-ray equipment are carried out each year using our

technology.

One in seven television sets worldwide contains a Philips picture tube, and 60 percent of all telephones contain Philips products.

Thirty percent of offices around the world are lit by Philips Lighting,

which also lights 65 percent of the world's top airports, 55 percent of

soccer stadium, and 30 per cent of hospitals.

The strength of Philips' global operations is reflected in its (value-

based) leadership position in many of the markets in which it is active:


HISTORY AT GLANCEHISTORY AT GLANCE

Founded as a Lamp Factory 1891

Chemistry Laboratory Established. 1908

Became a Limited Company. 1912

Break-through in Lamp making 1913

Glass Factory Established. 1916

Marketing Companies throughout the world. 1919-

1926

Formed as holding company. 1920

Branched setup world-wide 1927-1930

Innovative discoveries (Recording, Transmission, Energy Efficient

Lamps) 1960s

The foundations for what was to become one of the world's biggest

electronics companies were laid in 1891 when Gerard Philips

established a company in Eindhoven, the Netherlands, to 'manufacture

incandescent lamps and other electrical products'.


The company initially concentrated on making carbon-filament lamps

and by the turn of the century was one of the largest producers in

Europe.

Developments in new lighting technologies fueled a steady program of

expansion, and, in 1914, it established a research laboratory to study

physical and chemical phenomena, so as to further stimulate product

innovation.

Marketing companies had already been established in the US and

France before the First World War, and in Belgium in 1919, and the

1920s saw an explosion in their number.

Philips' first electric shaver was launched in 1939, at which time the

Company employed 45,000 people worldwide and had sales of 152

million guilders.

Science and technology underwent tremendous development in the

1940s and 1950s, with Philips Research inventing the rotary heads

which led to the development of the Philips have electric shaver, and

laying down the basis for later ground-breaking work on transistors and

integrated circuits. In the 1960s, this resulted in important discoveries

such as CCDs (charge-coupled devices) and LOCOS (local oxidation of

silicon).

Philips also made major contributions in the development of the

recording, transmission and reproduction of television pictures, its

research work leading to the development of the Plumbicon TV camera

tube and improved phosphors for better picture quality.


The flow of exciting new products and ideas continued throughout the

1970s: research in lighting contributed to the new PL and SL energy-

saving lamps; other key breakthroughs came in the processing,

storage and transmission of images, sound and data where Philips

Research made key breakthroughs, resulting in the inventions of the

Laser Vision optical disc, the Compact Disc and optical

telecommunication systems.


Philips Pakistan – Looking to thePhilips Pakistan – Looking to the FutureFuture

At the Time of Independence – Philips had a Sales Office 1947

(LHR)

Operations 1949 (KHI )

Establishment as Manufacturers 1954

Set up of Four New Factories ( Lamp, GLS, C.E)

1970

Listing on Karachi Stock Exchange

1971

DAP Factory Productions 1987

Refrigerator Factory Inauguration

1992

De-merger of Refrigerator Business

1997

Outsourcing Of Medical Business 1998


Philips Pakistan Is dealing with :Philips Pakistan Is dealing with :(Lightning, S&V, D.A, Projects )(Lightning, S&V, D.A, Projects )

Philips Electrical Industries of Pakistan is operating locally with three

core Business Units – Consumer Electronics, Domestic Appliances and

Lighting. During the course of its years in Pakistan Philips has evolved

from being the biggest name in Lights to earning a reputation in

Consumer Electronics and

Domestic Appliances as well, No matter what the consumers needs

are, Philips Pakistan is equipped to satisfy them with the latest range

of innovative new products and solutions.

Philips Pakistan has a deeply entrenched presence in the country since

the time of its independence. Philips had a sales office in Lahore at the

time of Pakistan's independence in 1947. Two years later, Philips

Electrical Company started operations in Karachi. In 1954, Philips

Electrical Industries was established as a manufacturer of radio sets. In

1970, the Philips' manufacturing base grew sharply, as four new

factories were set up for the production of Audio-Video products, Glass

shells, Lamps and Plastic, Metalware and Luminaire products.

Down the years, Philips has continued to focus on innovation and

providing the consumer with the very best in technology. Philips

continues to evolve in response to the dynamism in the market and at

the same time retains the qualities that made it a global leader in the

industry.

Philips Lighting is one of the largest Lights Manufacturers and Suppliers

in Pakistan. Their product quality and technology is beyond compare. It

would be sufficient to say that Philips is THE name in Lights across the

world and Pakistan is no exception.


The future is bright for Philips Lighting as newer opportunities present

themselves for further expansion and growth. They are focused on

introducing the latest in Lighting Technologies to the Pakistani market

and on Making Things Better in every way they can. Their commitment

is clear from the projects that they are executing across Pakistan,

lighting the largest stadiums and cities in the country. Philips Lighting

maintains a bright outlook on the future of Pakistan and are geared up

to play their part in the development of the country.

Philips Consumer Electronics is one of the largest Electrical/Electronics

companies in Pakistan, with a clear leadership in Monitors, and a

strong presence in Sound & Vision products. Philips has immense

opportunities for growth in this market and is continuously innovating

to introduce the latest technology to the Pakistani Consumers in

integration with their global launches.

The future of the market in Pakistan is very secure. The market is

ceaselessly metamorphosing and the needs of the consumer are under

continuous transformation. Philips Consumer Electronics sees the

market developing and gaining momentum in the future. They believe

there is still a lot of potential for growth in the CE segment, especially

now that the consumer is more enlightened about new technology and

the variety of choices available to him.

Philips is striving to capture the market by bringing value not only to

the upper segment consumer but also to the general masses of

society, who are starved for technologically advanced products. Their

objective is to provide the masses with easily attainable technology,

which will keep them abreast of the wave of innovation. Furthermore,


they are providing the highest value in conjunction with top-of-the-line

technology.

Philips Domestic Appliances has also built up a name for itself in

providing high quality home-use items. Their product range comprises

of a wide range of products that can fill your life with convenience.

Philips Irons are renowned worldwide for their excellent quality. Their

Kitchen Range is very comprehensive and of the highest quality. It

includes home use products like Sandwich Makers, Toasters, Blenders,

Juicers, etc. Other home use items include Air Coolers, Vacuum

Cleaners, etc.

Philips Domestic Appliances is focused on providing the latest home

use technology to its consumers and in the future it plans to ensure

that the Pakistani consumer always has the very best in Home

technology.

Overall Philips Pakistan is looking to the future with high hopes and

aspirations. They are ceaselessly endeavoring to provide the consumer

with the best of life and will continue to engage in ventures that enable

them to do so in conjunction with their philosophy of “Making Things“Making Things

Better”.Better”.


Philips Pakistan –TodayPhilips Pakistan –Today

Head Office : Karachi

Branches : Lahore, Pindi, Peshawer

Distribution Points : 11

Product Line : - Lightning

Lamp

Luminaries

Gear

- Color/ Black/ & White Television

- Computer Monitor

- Mobile Phones

-Refrigerators

-DAP Product

Employees : 972


MISSION STATEMENTMISSION STATEMENT

“TO BE BETTER THAN“TO BE BETTER THAN

THE PRESENT BEST”THE PRESENT BEST”

The Philips commercial group is dedicated to achieving lasting quality

excellence. Every employee strives to understand and exceed both

customers' and co-workers' requirements. We continually strive for

improvement and error-free work.


Company ObjectivesCompany Objectives

Brand BuildingBrand Building

Philips' brand name is the company's most important asset. It guides

the direction of and shapes the content of its activity, from R&D to

delivery of world-beating products and customer service.

Philips has spent substantially on supporting its brand throughout the

world promoting the company theme of "Let's Make Things"Let's Make Things

Better"Better" the company wide promise that was launched in 1995.

Philips' branding efforts must embrace a large spectrum of products,

from shavers to semiconductors; from televisions to toasters; and from

light bulbs to laser modules. Let's Make Things Better provides a

campaign platform for each of Philips' product groups and allows for

the opportunity to feature key Philips products such as Flat TV and CD-

Recorder.

Advertising campaigns are created by Philips' two global advertising

agencies: DDB and D'Arcy, with global media strategy, planning and

buying from Carat International.


“BEST”“BEST”

BBUSINESS USINESS EEXCELLENCE THROUGH XCELLENCE THROUGH SSPEED AND PEED AND TTEAMWORK EAMWORK

The BEST program is Philips’ chosen path to achieve business

excellence. It describes a set of methods and tools by which they

continuously improve their efforts. Previous successful initiatives are

incorporated in the program to make sure they learn as much as

possible from their successes in the past.

Business ExcellenceBusiness Excellence

They are all committed to improving processes in-line with the

company’s strategic targets. To this end, Philips has adopted BEST to

reach this goal. It is their ambition to be one of the best companies in

the world: the best to trade with, work for, and invest in.

Philips Measures:Philips Measures:

Customers are fully satisfied by the quality of Philips' products and

services Employees develop and use their full potential Shareholders

get a premium return on their investment Suppliers choose to work

with us as this generates superior value for both The larger community

appreciates our contribution to the quality of life.


Speed and TeamworkSpeed and Teamwork Speed and Teamwork lie at the heart of the BEST initiative. Each and

every individual within Philips knows that only by fully cooperating and

working together we are able to perfect our business processes.

That's why we focus on:

Working smarter and reducing the cycle-time of processes

Working in teams and learning from the best practices of

others

The tools and approaches in the BEST initiative all are based on these

two focal areas and all fit in the improvement cycle:

"Plan - Do - Check - Learn""Plan - Do - Check - Learn"

The 1990s was a decade of significant change for Philips. The company

carried out a major restructuring program to return it to a healthy

footing. And more recently it has been concentrating on its core

activities. Today, Philips is at the leading edge of the digital revolution,

introducing world-class products that are helping to improve people's

lives as we continue into the new millennium.


BUSINESSBUSINESS

A Serious ResponsibilityA Serious Responsibility

Philips is at the forefront of new technologies, offering an exciting

range of products that enhance people’s lives. Philips anticipates

people’s needs and develops new products to meet those needs. The

Company is dedicated to innovation that is environmentally sound –

both in terms of the products it makes and how it makes them.

With a sharp focus on environmental improvement for 30 years, Philips

works continually to enhance the environmental performance of

products, processes and services. In fact, taking care of the

environment is an essential part of Philips’ company strategy.

Philips is committed to becoming the world’s leading Eco-efficient

Company in the electronics and lighting industries. To realize this

vision, the Company initiated a pragmatic approach in 1994 and

defined measurable targets, laid down in four-year action programs.

Eco-Vision, the present program, has two main components – one

product-related and the other production.


As a member of the World Business Council for Sustainable

Development, Philips knows sustainable development is one of the key

challenges facing the world, and its action programs are designed to

meet this challenge.


LIGHTNING ABOUT PHILIPSLIGHTNING ABOUT PHILIPS

Philips is number one in the global lighting market, a position

supported by leadership in innovation combined with a systematic

approach to seeking out new market opportunities. Its strategic

ambition is to set the pace in the lighting industry as the first-choice

innovative partner for the supply of creative and cost-effective lighting

solutions.

The division’s products are found all around the world: not only

everywhere in the home, but also in a multitude of professional

applications, for example 30 per cent of offices, 65 per cent of the

world’s top airports, 30 per cent of hospitals, 35 per cent of cars and

55 per cent of football stadiums (seven of the ten at the 2002 SoccerSoccer

World CupWorld Cup in Japan/Korea).

Products include a full range of incandescent and halogen lamps,

compact and normal fluorescent lamps, high-intensity gas-discharge


and special lamps, fixtures, ballast, lighting electronics and automotive

lamps.

Important Market Introductions of Important Market Introductions of Recent Years:Recent Years:

Halogená offers consumers in the U.S. whiter light and a lifetime

about three times longer than standard incandescent lamps.

The ALTO T8 fluorescent lamp, which contains the least mercury

of all comparable lamps on the U.S. market while maintaining its

superior performance, is being installed in all newly constructed

WalMart stores in the U.S.

Ecotone Ambiance, a compact, energy-saving lamp on the

European consumer market, has the same shape and gives the

same natural soft light as the Philips Softone.

The CLEO Natural range of tanning lamps which apply the latest

scientific and medical knowledge in providing a sensible,

effective tan in a soft and gentle way.

MasterColour CITY extends to outdoor applications the excellent

"white light" color properties and high efficacy of the existing

MasterColour indoor range.

Metronomis outdoor luminaires reflect a modern vision of

architectural urban lighting, in which leading-edge technology is

combined with a clear and elegant design.


The TL5 office lighting system, consisting of the T5 small-

diameter (16mm) fluorescent lamp along with efficient TL5

fixtures incorporating sophisticated lighting controls, provides

high-quality lighting and minimizes energy demands.

The UHP (Ultra High Power) lamp is currently the leading product

in the market for digital data projection in beamers connected to

PCs.

Electronic ballasts for TL5 and PL-T/C lamp circuits (e.g.

miniature HF-Matchbox), and electronic gear for operating HID

lamps.

The recently launched e-Kyoto electronic ballast weighs 58% less

and uses 20% less energy than electromagnetic ballasts.

VisionPlus lamps increase road safety by giving 50% more light

on the road, a 10-20 meter longer beam and better reflections

from roads and signs; Xenon automotive lamps give more than

twice as much light as conventional halogen lamps while using

only half the energy.

The division’s extension of its LumiLeds JV with Agilent Technologies in

the field of LEDs (light-emitting

diodes) strengthens its leading

position in this field and

underlines its confidence in this

technology being applied to an

increasing range of applications.


Philips Lighting employs some 47,000 people worldwide. Manufacturing

operations in the Netherlands, Belgium, Germany, France, the United

Kingdom, Poland, the United States, Canada, Brazil, India, Indonesia,

Thailand, the People’s Republic of China, South Korea, Spain and

Mexico.

Our Halogená Classic light bulb lasts two

years and is ideal for hard-to-reach fixtures.

Its Long Life means less hassle and lower

maintenance as well as energy savings over

standard incandescent bulbs. The Halogená Classic provides crisp,

white light, and is available in 60, 75, 100 and 150 watt bulbs. Use it

for table lamps, hanging pendants, ceiling fixtures, outdoor lighting,

commercial downlights, or any hard-to-reach fixture.

INDOOR & FLOOD SPOTINDOOR & FLOOD SPOT

The versatile Halogena Indoor Floodlight and

Spotlight reflector lasts up to 50% longer

than standard incandescent reflectors. That's

up to 3000 hours of brighter, whiter light!

Save time with fewer light bulb changes to

your hard-to-reach fixtures. When the time does come to change bulbs,

this reflector's easy-to-grip shape makes for quick installation and

removal.


BRILLIANT CRYSTALBRILLIANT CRYSTAL

Thousands of Americans - and millions more on TV - welcomed the new

millennium with Halogená Brilliant Crystal, a

brand-new light bulb that was specially

designed to light up the world-famous New

Year’s Eve Ball in Times Square, New York.

Being facetted, it is ideal for any application

in which sparkle, dazzle and brilliance are

desired, such as in chandeliers, or in outdoor

decorative situations.

STYLIZED FLAMESTYLIZED FLAMEHalogená Stylized Flame is an elegant Long Life alternative to standard

decorative incandescent bulbs. Its Long Life

means less hassle and lower maintenance as

well as energy savings. Available in both

candelabra and medium base, the Stylized

Flame provides a direct replacement to

standard incandescent decorative lamps and

is ideal for chandeliers, sconces or any

decorative fixture. Stylized Flame can also be used with a dimmer

swich, which provides additional energy savings.


TRADITIONAL FLAME & SPOT LIGHTTRADITIONAL FLAME & SPOT LIGHT

Halogená® Postlight's and Traditional

Flame's Long Life mean they last longer than

standard and decorative incandescent

lamps. Their crisp, white halogen light

provides an elegant sparkle for indoor and outdoor applications. Both

are also dimmable, which adds design flexibility and energy savings to

these premium bulbs.


Structure of Philips PakistanStructure of Philips Pakistan

Structure is based upon “something made up of a number of parts that

are put together in a particular way”.

An organization structure defines how job task is formally divided,

group and coordinated.

Organization comprises of normally three types of structure

Process/functional structure

Product based

Matrix structure

As an over all Philips follows Process Structure, but as far as their

marketing department is concern they are following Product Based

Structure.

An organization chart and associated information that shows who

reports to whom and how task are both divided and integrated.


SegmentationSegmentation

Small opportunities areSmall opportunities are often the beginning ofoften the beginning of

great enterprisesgreat enterprises (Demosthenes)

A Company that decides to operate in a broad market recognizes that

it normally cannot serve all customers in that market. The customer

are too numerous, dispersed, and varied in their buying requirements.

Some competitors will be in better position to serve particular

segments of that market. The company, instead of competing every

where, needs to identify the most attractive market segments that it

can serve effectively.

Markets Segmentation can be define as “ dividing a market into

distinct group of buyers on the basis of needs, characteristics, or

behavior whom might require separate product or service”.

Organization done segmentation on the basis of:

Demographic

Geographic

Life style/ Psychographic

Usage

Benefit

Social class


Philips SegmentationPhilips Segmentation

Different variables are used to segment consumer markets for Philips

product.

Philips commonly use

Usage

A brief discussion on the above basis adopted by Philips for their

Lightning Products are given below

Usage:Usage:

Market can also be segmented into light-, medium-, and heavy user

groups of the product. Light user are those user who buy products

occasionally as far as medium user are concern they buy company

product but not as much as heavy users does. Heavy users are often a

small percentage of market but account for the high percentage of

total consumption.

Philips has extended their user segmentation in terms of

Volume segmentation

Brand segmentation

Product user segmentation

Loyalty segmentation

Volume Segmentation:Volume Segmentation:


This style of segmentation attempts to identify frequent user of

product, category or brand. This approach shows how much share it

holds in the market.

Brand Segmentation:Brand Segmentation:

The marketer is generally most interested in determining to

understand those consumers who purchase Philips brand are different

from those who are buying competitors brand. Basically in case of

Philips lighting (bulbs. tubelights, energy savers) there is no other

competitor in market except for the smuggled goods come from

Afghanistan and China.

Product user segmentation:Product user segmentation:

Philips marketers are interested in segmenting product users on the

basis of any such distinguish Demographic or Psychographic

characteristics. Example of this segmentation done by Philips is of

users of their normal yellow bulb v/s Philips whitening bulb. Prices are

same but the purchase preferences are different.

Loyalty Segmentation:Loyalty Segmentation:

Philips lighting products are segmented by consumer loyalty patterns.

Consumers can be loyal to brand and other entity

Suppose there are five brands A, B, C, D, E. buyers can be divided into

four groups according to their brand loyalty status

Hard-Core LoyalsHard-Core Loyals


Consumers who buy one brand all the time. Thus a buying pattern of A,

A, A, A, A, A might represent a consumer with undivided loyalty to

brand A.

Split LoyalsSplit Loyals

Consumers who are loyal to two or three brands. The buying pattern A,

A, B, B, A, B represents a consumer with a divided loyalty between A

and B.

Shifting LoyalsShifting Loyals

Consumer who shift from favoring one brand to another. The buying

pattern A, A, A, B, B, B would suggest a consumer who is shifting brand

loyalty from A to B

SwitchersSwitchers

Consumers who show no loyalty to any brand. The buying pattern A, B,

C, D, B, E.


Suggestions for the PhilipsSuggestions for the Philips Lighting SegmentationsLighting Segmentations

It has been observed that the usage segmentation perform by the

Philips for its products is best possible choice, but as far as market is

concern the new concepts are emerging day by day. Advent of new

technologies, globalization and increased competition gives an

opportunity to the company to redesign its marketing strategy

regarding to segmentation to cope up with a competitor and for the

smooth functioning of the company.

For this purpose some of the effecting ways of segmentation are

Benefit segmentation

Life style/ Psychographic

Social class

Season

Benefit SegmentationBenefit Segmentation

A powerful form of segmentation is to classify buyers according to

different benefits they seek from the product. Each benefit-seeking


group had particular demographic, behavioristic and psychographic

characteristics

Benefits

Segments

Economy (low

price)

Energy savers

Demographic

Large families

Teens, young

adults

Behavioristic

Heavy users

Light users

Psychographi

c

Conservative

High sociability

active

The previous table gives guide line as to how to capture the eyes of

consumer towards the benefit they can get from the Philips lighting.

Some of the basic benefits of

Energy saversEnergy savers

For energy savers the benefit they are getting is that it saves

40% of the electricity

Long life (Avg. 8000 hrs)

Provide crisp white light

Available in different shapes and sizes

Tube lightsTube lights

Spread light in wider area

Economical

Save electricity

Long life (Avg. 3500 hrs)

Easily available


BulbsBulbs

Available in different watts

Most economical

Easily available

Hence on the basis of these attractive benefits attention of the

customer can be captured.

Life Style/ PsychographicLife Style/ Psychographic

People coming from the same sub-culture, social class and occupation

may lead to quiet different life style. A person’s life style is the

person’s pattern of living in the world as expressed in the person’s

activities, interest and opinions.

Life style portrays the “whole person” interacting with his or her

environment. Marketers will search for relationship between their

products and life style group.

From the on going paragraph it shows an implementation for the

Philips marketer’s to segment their “Energy savers” on life style basis

as this item has a tendency to show a unique way of living and displays

one’s life style.

Social classSocial class

Social class have different characteristics first, person within each

social class tend to behave more a like than person from two different

social classes.


It shows distinct product and brand in areas such as home furnishing,

décor its includes interior, exterior activities.

So the Philips marketers has to segment their product according to the

targeted segment social classes. Social class can be divided among

four classes.

Product Upper Middle Working LowerEnergy saver x xTube light xBulb

Seasonal SegmentationSeasonal Segmentation

In our view segmentation can also be done on the bases of season. In

winter the use of lights is more than summer. Because in winter the

duration of night is more, so there is a potential market for lighting

products.


PositioningPositioning

“You should never go into“You should never go into battle before you win thebattle before you win the

war”war”

Effective product positioning is a key ingredient for successful

marketing today. Product positioning is closely linked with market

segments. Product position is the place that it occupies related to

competitors in a market as perceived by the relevant group of

customer.

Positioning is the act of designing the company’s offer and images so

that the target market understand and appreciate what the company

stands for in relation to its competitors. The company’s positioning

must be routed in an understanding of how the target markets define

value and makes choices among vendors.

Philips Positioning StrategyPhilips Positioning StrategyPhilips is making positioning of their products on the basis of


Usage

Against competitors

Benefits

Usage: Usage:

Many of the Philips products are sold on the basis of consumer usage

situation such as in offices Philips sold their branded table lamps

through direct marketing.

Against competitorsAgainst competitors

As a matter of fact there is no competitor of Philips lighting products

other then smuggled products, which is threatening for the company.

So Philips is looking towards the weak point of their competitors and

make positioning of its product on basis of it.

BenefitsBenefits

Philips also positions its product on the basis of benefits. For example

Philips marketers surveyed the hotel (Sheraton) and have been found

that consumption of electricity was very high, which increased their

utility expenditure. Philips then suggested them to use energy savers

as they are long lasting and also save their electricity cost.


Suggestion for PositioningSuggestion for Positioning

Philips must carefully select the ways in which it will distinguish itself

from competitors. A difference is worth establishing to the extent that

it satisfies these following criteria

Important: The difference delivers a highly valued benefit to a

sufficient number of buyers.

Distinctive: The difference either isn’t offered by others or is

offered in a more distinct way by the company.

Superior: The difference is superior to others ways to obtain the

same benefits.

Communicable: The difference is communicable and visible to

buyers.


Preemptive: The difference cannot be easily copied by

competitors.

Affordable: The buyer can afford to pay for the difference.

Profitability: The company will find it profitable to introduce.

After seeing ways of positioning adopted by Philips, it can be seen very

clearly that they have left a very important technique of it that is

Position on Product Feature

Position on Product Features:Position on Product Features:Features are characteristics that supplement the product’s basic

functioning. Most of the Philips lighting product can be offered varying

features. The starting point is a stripped-down, or “bare bones”,

version of the product. The company can create additional versions by

adding extra features such as

Performance

Durability

Reliability

Style

Design

Features are a competitive tool for differentiating the company’s

product. Some companies are extremely innovative in adding new

features to their research.

How can Philips identify and select appropriate new features? One

answer is for the Philips to contact recent buyers and ask them a series

of questions.


1. How do you like a product.

2. Any bad features

3. Any good features

4. Are there any features that could added that would improve your

satisfaction


FINANCIAL STRATEGY

Financial strategy is the most important and integral part of any firm

that how a firms earn profit and how it does make the investments.

This is a very confidential part of any firm’s financial strategy.

Philips key financial strategy is to maintain a solid financial base that

enables it to strike a balance between enhancement of short term

profitability and forward looking investment for long-term, stable

growth. With a view to future growth, Philips implements large amount

of its profit in R&D. at the same time it maintains positive free cash

flow in automotive operations. Our management policies give priority

to cash flows to enable us to respond quickly to changes in the

operating environment and to steadily increase corporate value for the

stakeholders. In their view, sacrificing long-term growth to boost short-

term profits is not an appropriate financial strategy for the

manufacturing industry. They believe the sector should create markets

based on new technologies.


HUMAN RESOURCE STRATEGY

Philips pursues its objective of providing employees with the climate

and opportunity in which individual learning can be induced and

employee’s career growth can be achieved within their personal

capacity for development.

With increasing demand of their products and the enhanced production

is necessary to meet this

demand the manpower has

increased. They have

inducted management staff in

the departments including

sales, product development,

finance, maintenance, quality

assurance, etc. the human

capital is being upgraded

continuously by developing

people internally as well.

They firmly believe that the

quality of their products

depends on the quality of

their people.

They also send their

employees to different foreign

training programs and also organize training programs within the

country. In addition, a major program is also carried out for the

induction of apprentices and their in-house training to meet the

growing needs of manpower for production.


BIBLIOGRAPHY

WEB LINKS

The sources which I used in order to gather all the data are as follows.

http//www.phlips.com

BOOKS

International management by Hodgetts.

International business by Hugman and Hodgetts.


philips report by kashan pirzada

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