Philips Report by Kashan Pirzada

Saleha sultana
Mr. Kashan Pirzada
MBA 4-B
B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 2

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 Pirzada

Head of Marketing, Management sciences
Bahria 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. Abstract 9
2. Introduction 10
3. History at glance 12
4. Philips Pakistan looking to the future 15
5. Philips Pakistan dealing with 16
6. Philips Pakistan today 19
7. Mission statement 20
8. Company objectives 21
9. Best Strategy 22
10. Business 24
11. Lighting about Philips 26
12. Product sector overview 32
13. Structure of Philips Pakistan 33
14. Segmentation 34
15. Suggestions for segmentation 38
16. Positioning 42
17. Suggestions for positioning 44
18. Financial strategy 46
19. HR strategy 47
20. Bibliography 48

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.

INTRODUCTION
R
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.
Global 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 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 the
Future
 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 :
(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
Better”.

Philips 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 STATEMENT
“TO BE BETTER THAN

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 Objectives
Brand 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
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”
B USINESS E XCELLENCE THROUGH S PEED AND T 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 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:
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 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"
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.

BUSINESS
A 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 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 Soccer
World 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

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 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 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 FLAME
Halogená 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 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 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.

Segmentation
Small opportunities are
often the beginning of
great 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 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:
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:

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

C, D, B, E.

Suggestions for the Philips
Lighting 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 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 Demographic Behavioristic Psychographi

Segments c
Large families Heavy users
Economy (low Conservative
price) Teens, young Light users
Energy savers adults 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 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 lights
≈ Spread light in wider area
≈ Economical
≈ Save electricity
≈ Long life (Avg. 3500 hrs)
≈ Easily available

Bulbs
≈ 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/ 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 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 Lower

Energy saver   x x
Tube light    x
Bulb    
Seasonal 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.

Positioning
“You should never go into
battle before you win the
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 Strategy
Philips is making positioning of their products on the basis of
≈ Usage
≈ Against competitors
≈ Benefits
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 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.
Benefits
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 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:

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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Saleha sultana

Mr. Kashan Pirzada

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 2

I dedicate this report to my beloved parents and my respected teacher

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 3

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.

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 4

May 30, 2008

The honorable Mr Kashan Pirzada

It is my honor to transmit to you this Philips report that you had

I hope this report is acceptable to the business department of

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 5

May 30, 2008

This report is a international business analysis and a success story of

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 6

Respect Mr. Kashan Pirzada,

As authorized by our teacher Mr. Kashan Pirzada, I decided to

As part of this project, this Report contains an introduction of the

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 7

S.NO PARTICULARS PAGE. NO

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 8

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

This report contains both local and global perspectives of Philips

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 9

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

Philips is a world leader in digital technologies for television and

Philips has world class solutions in lighting, medical systems

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 10

Translated into figures, we produce over 2.4 billion incandescent lamps

Around 2.5 million heart procedures (scans and intervention

One in seven television sets worldwide contains a Philips picture tube,

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

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 11

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-

Formed as holding company. 1920

Branched setup world-wide 1927-1930

Innovative discoveries (Recording, Transmission, Energy Efficient

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 12

Developments in new lighting technologies fueled a steady program of

Marketing companies had already been established in the US and

Science and technology underwent tremendous development in the

Philips also made major contributions in the development of the

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 13

B AHRI A IN STI TUTE O F MAN GEMEN T & C O MPUTER SC I EN C ES, K ARAC HI 14

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

 Operations 1949 (KHI )

 Establishment as Manufacturers 1954

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

 Listing on Karachi Stock Exchange

 DAP Factory Productions 1987

 Refrigerator Factory Inauguration

 De-merger of Refrigerator Business

 Outsourcing Of Medical Business 1998