Kerala’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 achieving
the 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.
Background
Royal 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 of
over 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 internationally
current 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.
Factors for success
Localisation 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 the
Consumer 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 support
Philips 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) Price
2) Quality
3) Credit
4) Variety
5) Dealer advice
6) Specific brand.
PURCHASE BEHAVIOR:
Rural people can buy only from three places includes:
1)From the shop in the same village
2)Weekly bazaar
3)From the shop of nearby town.
Rural market shares of all-India consumer electronics market (%)
Radio 70
45
Mono Systems
30
Stereo Systems
35
Black & White Televisions
19
Color Televisions
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 50
10000:1 Contrast Ratio
3:2 & 2:2 Pull Down
HDMI Compatible
3-D Video Noise Reduction
PC Input
42" PDP
16.77 Million Color
10000:1 Contrast Ratio
3.2 & 2:2 Pull Down
1500cd/m2 Brightness
HDMI Compatible
3-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 [Link]'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.