PROJECT REPORT

ON

MARKETING MIX
OF

Submitted to:
Prof. Poonam Chandel

Submitted by:
Mukesh kumar
BBA 2014-2017
Abhilashi Institute Of Management Studies
Nerchwok
 PREFACE
This project has been taken with a view to make a study on the
Marketing Mix of Philips India Ltd. The present study creates
awareness about the Marketing Mix put forth by Philips India
Ltd.

It also provides knowledge to the readers about the electronic

industry, Position of Philips India ltd., Marketing strategies
implemented by Philips.

The present is the effort to formulate the strategy of marketing

mix to stay strong and to grow in the market for Philips.
 ACKNOWLEDGEMENT

A project is never the work of an individual. It is more

over a combination of ideas, suggestions, review,
contribution and work involving many folks. It cannot
be completed without guidelines.
First of all we would like to express our sincere
gratitude to Mr ABHISHEK SINGH (branch
manager) Philips India Ltd, for giving us the opportunity
to make this project and helped in every way possible.
Last but not the least our sincere thanks to our class
mates and friends who helped us in completing this
project.
 CERTIFICATE OF GUIDE

TO WHOMSOEVER IT MAY CONCERN

This is to certify that the project report titled Markitng Mix at philips prepared by
MUKESH KUMAR is an original work. This project was undertaken for Philips under my
guidance for Bachelor of Business Administration (BBA).

Head of the Department

MRS. POONAM CHANDEL

 DECLARATION

I do hereby declare that the dissertation title a project report on MARKETING MIX AT
PHILIPS is a record of bonafide work done by me under the supervision of Mrs. POONAM
CHANDEL H.O.D. of AIMS NER CHOWK and submitted to H.P.U. in partial fulfillment of the
requirements for the award of degree of BBA.

Date: Mukesh Kumar

Place: MBA 4rth Semester
Roll No.:41MB5013016
 CONTENTS

1. About the consumer electronic industry

2. About Philips
3. SWOT Analysis
4. Marketing Mix
5. Marketing Mix of Philips
6. BCG Matrix
7. Questionnaire
8. Conclusion
9. Bibliography

ABOUT THE CONSUMER ELECTRONIC

INDUSTRY
The consumer electronics industry is maturing at an incredibly
rapid rate. Demand for consumer electronic goods had
always been there, but it really has reached its peak in the past
few years. This has subsequently triggered the expansion of the
consumer electronics industry, which is turning into the
foremost profitable markets in world market.
In the last few years, there has been dynamic technological
progress. The consumer electronics industry continues to be
employing advanced engineering to manufacture electronic
goods which is reaping massive profits as a result. People today
live extremely hectic lives to keep up with the pace of the
world. A busy way of life calls for some form of fun. It is
essential to invigorate the brain and ease out anxiety and
stress since bottled up tension can be harmful to health.
Innovative products have been developed which provide people
with various kinds of enjoyment.

Apart from home entertainment, there are more electronic

goods which have become a necessity in our daily life.
Consumers are increasingly becoming dependent upon
electronic goods in their daily lives since it saves them
considerable time and energy. Consumer electronic goods have
come to the forefront in making the effort for a man simpler
and perfect. These machines have become a part of our
everyday routine and its now tough to imagine a life without
them. The consumer electronics industry has definitely
responded to the requirements of time. World-class
correspondence equipment like cellular phones, fax machines
and computers are also needed in our daily lifestyles, which is
bringing society closer every day.
There are various causes of the development of consumer
electronics industry. The consumer electronics industry provides
us with a huge selection of goods for daily use. These are found
in many areas of life which includes office, communications,
and entertainment. The need for many of the most popular
electronic goods in our everyday life has added to the
expansion of the consumer electronics industry.
Popular consumer electronic goods include essential
equipments like televisions, personal computers, radio,
mobiles, microwaves, stereo systems, refrigerators, washing
machines as well as other gadgets.
The need for consumer electronic goods has drawn huge
amount of investments for this business. These investments
have successively triggered the expansion of this business. The
story of consumer electronics around the world hasnt followed
a straight path. Different countries have climbed the corporate
ladder of success in this field of electronics faster compared to
others in different periods. Often, its been the United States of
America while sometimes Asian countries like Japan and China
took over as the biggest providers of consumer electronic
goods. However, there were additional nations as well like
Ireland and others who had shocked society with their
accomplishments in the field of electronics. US consumer
electronics experienced tough competition from the Chinese
and Japanese manufacturers in the 1960s. As a result, the
consumer electronics industry of the USA diminished, but by
the 1980s, the industry again gained its former position. The
United States consumer electronics industry is the worlds
premier consumer electronics industry.

Innovation of Consumer Electronics

Even if you might have asked it a decade back, situation

wouldve been noticeably diverse; yes, Im talking about the
situation of consumer electronics. When compared to those
bygone days, todays consumer electronics industry has
succeeded to such a position in which innovation runs the
motivator, the gas behind everything that is instinctive and
sophisticated. We now inhabit an era of extreme gadgetry
pleasures with music systems, cell-phones, Audio Players, Pads,
desktops, plasma Televisions, etc. Moulding the consumer
electronics saga. Honestly put, existence without these items
would end up in chaos!
Whats the specialty for these products and services? Would it
be really difficult to exist without having these? Contemplate!
Would you live without these? Absolutely not! Todays
technology has advanced at such a amazing speed that we
dont have any idea when and just how we submit to them in
the process. Items are constantly being developed every day,
keeping in mind what buyers desire. Be it in your new kitchen
or maybe your living room, in your telecommunications routine
or perhaps entertainment necessities, the existence of
consumer electronics now can be experienced anywhere. Credit
goes to the key consumer electronic product developers that
leave no stones unturned to give the best in the market
industry to their clients.

Aided by the advent of cyberspace, it is less difficult for

consumers to get the merchandise of their choice
instantaneously. By simply browsing on the internet you can
end up with a lot of information about your specific products.
Another highlight is consumer electronic news reports to aid
you on the net that will keep you up to date regarding the
latest happenings around the world of consumer electronics.
Consumer Electronic updates also can be very therapeutic for
you in enlightening you about the most recent releases by
means of similar manufacturers.

CONSUMER ELECTRONIC INDUSTRY IN INDIA

The electronic industry in India took off around 1965 with an
orientation towards space and defence technologies. This was
rigidly controlled and initiated by the government. This was
followed by developments in consumer electronics mainly with
transistor radios, black and white TV, calculators and other
audio products. Colour televisions soon followed. In 1982 a
significant year in the history of TV in India the government
allowed thousands of colour TV sets to be imported into the
country to coincide with the broadcast of Asian games in New
Delhi. 1985 saw the advent of computers and telephone
exchanges, which were succeeded by digital exchanges in
1988. The period between 1984 and 1990 was a golden period
for electronics during which the industry witnessed continuous
and rapid growth.

From 1991 onwards, there was first, an economic crisis

triggered by the Gulf War which was followed by political and
economic uncertainties with the country. Pressure on the
electronic industries remained though growth and
developments have continued with digitalisation in all sectors,
and more recently the trend towards convergence of
technologies. After the software boom in mid 1990s Indias
focus shifted to software. While the hardware sector was
treated with indifference by successive governments. More over
the steep fall in custom tariffs made the hardware sector
suddenly vulnerable to international competition.

CURRENT SCENARIO

In recent years the electronic industry is growing at a brisk

pace. It is currently worth US$ 32 billion and according to
industry estimates it has the potential to reach US$150 billion
by 2012. The largest segment is the consumer electronics
segment. While is largest export segment is of components.

The electronic industry in India constitutes just 0.7% of the

global electronic industry. Hence it is miniscule by international
comparison. However the demand in the Indian market is
growing rapidly and investments are flowing into augment
manufacturing capacity.

The output of the electronic hardware industry in India is worth

US$11.6 billion at present. India is also an exporter of a vast
range of electronic components and products for the following
segments.

Display technologies
Entertainment electronics
Optical storage devices
Passive components
Electromechanical components
Telecom equipment
Transmission and signalling equipment
Semiconductor designing
Electronic manufacturing services

This growth has attracted global players to India and leaders

like Solectron, Flextronics, Sony, Panasonic, Philips, Nokia,
Elcoteq and many more have made large investments to access
the Indian market. The consumer electronics Korean companies
such as LG and Samsung have made commitments by
establishing large manufacturing facilities and now enjoy a
significant share in the growing market for products such as
Televisions, CD/DVD players, Audio equipment and other
entertainment products.

Consumer electronic goods are those which dont wear out

quickly, yielding utility over time rather than at once. They can
be further classified as either white goods, such as
refrigerators, washing machines and air conditioners or brown
goods such as blenders, cooking ranges and microwaves or
consumer electronics such as televisions and DVD players.
Such big-ticket items typically continue to be serviceable for
three years at least and are characterized by long inter-
purchase times.

Performance

In the past 10 years, the global market has witnessed a surge

in demand as economies such as Brazil, Mexico, India and
China have opened up and begun rapid development,
welcoming globalization with lan. The consumer durables
industry has always exhibited impressive growth despite strong
competition and constant price cutting, and the first contraction
since the 2001 dot-com bust has been due to the global
recession. Given the strong correlation between demand for
durables (both new and replacements) and income, the
industry naturally suffered during the 2008-2009 period.
However, projections for current year going forward are very
optimistic, as consumers resume spending, and producers
launch new enticing variants to grab new customers. Leading
players include Sony Corporation, Toshiba Corporation,
Whirlpool Corporation and Panasonic Corporation.

Developing countries such as India and China have largely been

shielded from the backlash of the recession, as consumers
continued to buy basic appliances. In fact, China has been
ranked the second-biggest market in the world for consumer
electronics. Despite the recession, their strong domestic
economy and growing high-income population have buoyed
demand leading to aggressive market growth.

There is growing interest for new age products such as LCD-TVs

and DVD players. Meanwhile, the penetration of the basic,
largest dollar items such as ovens, washing machines and
refrigerators is also increasing. India too, has witnessed a
similar phenomenon, with the urban consumer durables market
growing at almost 10 %p.a., and the rural durables market
growing at 25% p.a. Some high-growth categories within this
segment include mobile phones, TVs and music systems.

The Indian consumer durables industry has witnessed a

considerable change in the past couple of years. Changing
lifestyle, higher disposable income coupled with greater
affordability and a surge in advertising has been instrumental in
bringing about a sea change in the consumer behaviour
pattern. Apart from steady income gains, consumer financing
and hire-purchase schemes have become a major driver in the
consumer durables industry.

In the case of more expensive consumer goods, such as

refrigerators, washing machines, colour televisions and
personal computers, retailers are joining forces with banks and
finance companies to market their goods more aggressively. In
addition, change in policy, such as the WTO FTA in 2005
resulted in zero customs duty on imports of all telecom
equipment, thereby improving the pricing and affordability of
imported goods.

Challenges
The biggest threats to the local industry going forward are
supply-related issues pertaining to distribution and
infrastructure, as well as demand issues due to competition
from imported goods. The lack of well developed distribution
networks makes it especially challenging to penetrate the
fastest growing rural areas economically. In addition, regular
power cuts and poor road linkages make systematic production,
assembly and delivery problematic.

On the demand side, customers have increasing choice from

both domestically produced and imported goods, with similar
features. This homogeneity makes it difficult for players to
remain ahead of the competition.

MNCs hold an edge over their Indian counterparts in terms of

superior technology combined with a steady flow of capital,
while domestic companies compete on the basis of their well-
acknowledged brands, an extensive distribution network and an
insight in local market conditions. The largest MNCs
incorporated in India are Whirlpool India, LG India, Samsung
India and Sony India and home-grown brands are Videocon,
Godrej Industries and IFB.

Future Prospects

Overall, the industrys future remains robust, and interested

applicants will benefit from a holistic learning experience; Many
of the research, sales, marketing and advertising related roles
will necessitate a good on-the-job learning of target audiences,
who may well be a totally new segment, based in never-before
visited Class II and III towns. In addition, those with technical
backgrounds will be able to leverage their knowledge and
experience to constantly develop and innovate the product
variants. With more MNCs growing their Indian businesses,
there is great potential to also learn best-in-class systems and
management skills.
Royal Philips Electronics

Royal Philips Electronics of the Netherlands is a diversified

Health and Well-being company, focused on improving
peoples lives through timely innovations. As a world
leader in healthcare, lifestyle and lighting, Philips
integrates technologies and design into people-centric
solutions, based on fundamental customer insights and
the brand promise of sense and simplicity.

Headquartered in the Netherlands, Philips employs over

120,000 employees with sales and services in more than
100 countries worldwide. With sales of EUR 22.3 billion in
2010, the company is a market leader in cardiac care,
acute care and home healthcare, energy efficient lighting
solutions and new lighting applications, as well as lifestyle
products for personal well-being and pleasure with strong
leadership positions in male shaving and grooming,
portable entertainment and oral healthcare.

Global Footprint
Philips is a global leader across its healthcare, lighting and
lifestyle portfolio. It is the worlds largest home healthcare
company, being number one in: Monitoring systems,
Automated External Defibrillators, Cardiac Ultrasound, and
Cardiovascular X-ray.
 We are number one in lamps in Europe, Latin America
and Asia Pacific and number two in North America; in
Automotive lighting, we are leading in Europe, Latin
America, Japan and Asia Pacific.

We are number one in the electric shavers and male

grooming category globally.

Businesses
Healthcare

Philips simplifies healthcare by focusing on the people in

the care cycle patients and care providers. Through
combining human insights and clinical expertise, Philips
aim to improve patient outcomes while lowering the
burden on the healthcare system. Advanced healthcare
solutions are a fundamental part of the portfolio for both
healthcare professionals and consumers, to meet the
needs of patients in hospitals and at home. Philips
Healthcare employs approximately 35,500 people
worldwide.

Lighting

Philips Lighting is the leading provider of lighting solutions

and applications both for professional and consumer
markets, transforming how lighting is used to enhance the
human experience in the places where people live and
work. Whether at home, on the road, in the city, shopping,
at work or at school, we are creating lighting solutions that
transform environments, create experiences, and help
shape identities. We serve our customers through a
market segment approach which encompasses Homes,
Office and Outdoor, Industry, Retail, Hospitality,
Entertainment, Healthcare and Automotive. For these
segments we provide a wide range of offerings from across
the entire lighting value chain - from light sources,
luminaries and lighting controls to lighting solutions and
services. Philips Lighting employs approximately 53,000.

Consumer Lifestyle

Guided by the brand promise of sense and simplicity and

the consumer insights, Philips Consumer Lifestyle offers
rich, new consumer experiences that meet consumers
desire for relaxation and improving their state of mind.
Philips also responds to the consumer's desire for wellness
and pleasure by introducing products that meet the
individuals interests in terms of their body and
appearance. Philips Consumer Lifestyle employs
approximately 17,700 people worldwide.

Innovation

50,000 registered patents illustrate the innovative nature

of the company. Philips currently holds around 36,000
registered trademarks, 63,000 design rights and 3,900
domain names.

Philips has adopted an Open Innovation strategy which

leverages the joint innovative power of partnering
companies and researchers to bring more innovations to
the market effectively and faster.

In 2010, Philips invested EUR 1.58 billion in Research and

Development.

Philips is internationally recognized as a global leader in

design, receiving a variety of international awards each
year. For example:

2010 if product design competition: 28 design awards

Sustainability

Sustainability is at the centre of Philips strategy. Philips is

committed to reducing its environmental footprint in all
aspects of its business: in its products, manufacturing, and
procurement, as well as in the communities where the
company acts and in the working practices of its
employees.

All Philips products go through an EcoDesign process,

identifying environmental impact in terms of energy
efficiency, hazardous substances, take-back and recycling,
weight and lifetime reliability. Philips processes on Green
Product sales are verified annually by an independent third
party and published in the Annual Report.

Philips aims to combat global healthcare challenges by

focusing on delivering better quality healthcare at lower
costs, also in the emerging markets, such as China and
India.

Philips also takes a leading position in educational

programs, showing its stakeholders that energy efficient
solutions are simple, easy and actionable and make
economic sense for national and local governments,
businesses, schools and individuals.

Mission
"Improve the quality of peoples lives through timely
introduction of meaningful innovations."
 Vision
In a world where complexity increasingly touches every aspect
of our daily lives, we will lead in bringing sense and simplicity
to people.

Behaviours

Eager to win

Take ownership

Team up to excel

Brand Promise
We empower people to benefit from innovation by delivering on
our brand promise of sense and simplicity. This brand
promise encapsulates our commitment to deliver solutions that
are advanced, easy to use, and designed around the needs of
all our users.

MID TERM (2013) PERFORMANCE TARGETS

Philips business portfolio is well positioned in highly attractive
markets and geographies to capitalize on global trends. The
large majority of the business has the right fundamentals for
profitable organic growth.

Philips mid-term performance goals are:

Comparable sales growth of 4-6%, assuming real GDP

growth of 3-4% per annum

Reported EBITA margins of 10-12% for the group

15 17 % for healthcare

8 10 % for consumer life style

 8 10 % for lighting

Return on investment capital of 12 14 %

Building the Leading Brand in Health and Well-Being

We seek to improve the quality of peoples lives through

focusing on their health and well-being. Quite simply, we want
to help people live a healthy, fulfilled life.

By health we mean not only medical-related aspects of

health, but also keeping fit, eating a healthy diet, and generally
living a healthy lifestyle.

By well-being we mean general sense of fulfilment, feeling

good and at ease. Well-being also refers to a sense of
comfort, safety and security people feel in their environment
at home, at work, when shopping or on the road.

Our focus on Health and Well-being automatically implies that

we contribute to building a sustainable society.

Business Highlights in Q3
As the global leader in patient monitoring, Philips introduced
the benefits of mobility to hospitals with the global launch of a
compact, wearable patient monitor, the IntelliVue MX40.

The monitor enables remote mobile monitoring of patients in a

supervised recovery environment, giving clinicians the freedom
and flexibility to spend more time with patients.

Philips introduced the Perfect Care, a revolutionary iron that

uses a new steam technology, allowing the user to iron all of
their clothes at one low temperature setting. Philips is the no. 1
brand in ironing worldwide.

Combining its expertise in healthcare and lighting, Philips is

developing a blanket that wraps babies in healing light, to
make significant advances in the treatment of bilirubinemia or
neonatal jaundice. Bilirubinemia affects 60% of full-term
newborns and 90% of premature babies.

The battle of perception

Philips has been a household name in India for 75 years, but
consumers associated the brand more with tube lights and
transistors than cutting-edge technology.
That's ironic, considering the company has made its mark
globally as a technology leader -- it invented the cassette
recorder, the compact disc and the DVD; the last in association
with Sony.
But a survey by advertising agency JWT, which held the Philips
account from 2001 (it has recently moved to Madras), revealed
that Philips technology was seen as reliable but not state-of-
the-art.
Clearly, Philips needed an image makeover. It began by taking
the technology route. Post-2001, advertising campaigns
emphasised the company's technologically-advanced features.
Philips was the first audio company to launch an MP3 player
(May 2002), and it made sure its communication played that
up: "Don't buy a system if it doesn't have an MP3 player." Then
there was the October 2002 campaign, in which a little boy
uses the power of the music system to nudge the cookie jar off
the top-most kitchen shelf.
"We were constantly refining the image of the company in the
minds of the consumer, making it more modern," explains
Tarun Rai, senior vice president, JWT.
But that wasn't enough. That's where in-store displays and
promotions that demonstrated the abilities of Philips products
came in. In October 2003, JWT broke the "Ramu kaka" ad,
where the manservant inadvertently inserts a roti into the DVD
player.
The tagline made the message clear: "The new Philips DVD
player plays anything". The campaign proved immensely
popular -- it was used in other Asian countries as well -- and
Philips wasn't slow in leveraging its appeal. At live demos,
customers would be invited to slip rotis into the player, creating
a buzz around the product and the brand.
But that would probably appeal more to families and Philips
needed to reach out to the youth, its target customer base. So
it went to where the action was -- colleges and rock festivals.
Philips set up stalls, complete with a professional DJ. Youngsters
were invited to man the console, while the DJ gave them tips on
mixing and spinning. "We had huge walk-ins and could provide
an involvement and experience with the brand," says
Shivkumar.
Clinch the dealer
Philips has successfully played the price card, but not all price
cuts have been due to better or cheaper technology. In some
segments like radios, it did away with trade discounts and
passed on the savings to the customer.
Two years ago, Philips' radios sold at Rs 600 -- a huge premium
compared to the Rs 200 or so that other brands cost. In mid-
2003, the company slashed the price to Rs 400 and even
introduced new models at the Rs 160 price point, especially
targeting the non-urban youth segment.
Not surprisingly, dealers were upset at their shrinking margins.
Some started stocking competing brands, only to return, claim
company officials, when they found volumes were increasing
exponentially.
"They soon realised it was more profitable to sell Philips radios
because the turnover is much higher," points out Gunjan
Srivastava, business head, audio consumer electronics.
Radio sales in themselves are not significant for Philips -- they
account for about 15 per cent of the audio business. But, as S
Nagarajan, head sales and service, explains, they help
penetration and distribution of other products, such as DVDs,
colour televisions and mini music systems.
To ensure that happens, Philips changed its distribution
strategy around two years ago. Distributors are now allocated
smaller geographical territories so they can concentrate on
getting firmer footholds in their areas.
Distributor in upcountry markets, who were earlier, allotted five
or six districts are now given only two or three. And not all are
given the entire product range.
"We allocated only some products so that the focus is sharper"
explains Nagarajan.

Creating the value proposition

Philips realised early on that maintaining the price-quality
equation is critical. That's especially true of the minis (DVD and
VCD hi-fi systems) segment, which accounts for a quarter of the
audio market in value terms.
Even as Philips constantly raised the technology bar (MP3
players, deeper bass, sleeker, more streamlined systems), it's
kept its prices competitive. The company prices its minis at Rs
8,000-25,000, compared with the market range of Rs 7,500-
30,000.
Moreover, prices have been falling by 10 per cent on average
every year. Of course, that's true for other brands as well but,
as Shivkumar points out, Philips "found the sweet spot at which
youngsters could buy".
How did it do that? By ensuring that it was neither perceived as
a price warrior like Aiwa or Sansui nor prohibitively expensive --
Sony products are on average 10 per cent more expensive.
Philips also brought in help from outside. In late 2002, it tied up
with Countrywide and Citibank to provide accessible finance
schemes for its products.
Compared to equal monthly instalments of about Rs 1,000
earlier, the new schemes let customers pick up state-of-the-art
sound machines for as little as Rs 333 a month - that too,
without a down-payment.
Has that helped? Consider: Philips entered the minis segment
only in 2000, a year behind Sony. But it's now carved up the
market with Sony, with 45 per cent share each.
The company also paid close attention to customer feedback. It
has ramped up the number of service centres across the
country to 190, from 125 two years ago. Today, over 900
technicians now attend to complaints, up from 600 in 2002.
The increased attention to the customer pays off in many ways.
Realising that many customers were using the DVD player to
play music discs, Philips decided to offer two speakers with
built-in amplifiers, along with the player.
For just Rs 500 more, customers could get two benefits:
enhance their music playback and, when used to play movie
discs, get home theatre-quality sound. The response to the
scheme has been encouraging, says Srivastava.
He adds that the company is now considering building the
amplifier into the player to further improve the sound.
Product innovation has helped in rural markets, too. Based on
customer research, in early 2003 Philips launched a radio with
TV tuner -- this way, customers who didn't own a TV set could
at least listen to television programmes.
VISION 2010

As part of Philipss "Vision 2010" strategy, Philips Electronics

India Limited had fuelled the company's growth plans in India
with a marketing outlay of Rs 100 million for a series of five
mega 'Philips Simplicity programs.'

These programs reflected the company's renewed focus on

the consumer lifestyle, healthcare and lighting sectors.

Philips announced its "Vision 2010" strategy to further

position the company as a market-driven, people-centric
organization and a structure that fully reflects the needs of
its customer base, while also increasing shareholder value.

Linking the strategy to India, Philips Electronics India Ltd.

continued to transform, adapt and adapt to the changing
needs of their consumers across Healthcare, Entertainment,
Domestic Appliances and Lighting sectors.

Vision 2010 is a natural progression in their long stated

journey towards being a company that is focused around the
consumer in three core areas of Healthcare, Lighting and
Consumer Lifestyle. The road ahead is exciting and the
timing is just right for Philips to emerge as the leading
Healthcare and Lifestyle company.

The strategy provides a collective focus for their Consumer

and Healthcare businesses. The brand promise of 'Sense and
Simplicity' encapsulates Philipss commitment to deliver
products and solutions that are advanced, easy-to use and
 designed to meet the needs of all the users wherever in the
world they may be.

Over the years, Philips has come up with several products

and initiatives to improve the lives of the masses. The rural
thrust with affordable and accessible products is one prong of
Philips India strategy, and the other is of course the focus on
urban markets. Here too, innovation and convenience are the
guiding principles for growth. In the healthcare arena, Philips
is looking at growth and garnering customer confidence
through new forms of organization; new products; innovative
business models and original channels of distribution.

STRENGTH
Brand As Philips entered the Indian market before 120 years,
they exactly know the behaviour of the Indian consumers. So
according to the consumers requirements the Philips company
has positioned its brand in the market and in the consumers
mind. Now in Indian context, Philips means a brand that can be
relied upon and the consumers in India belive on this brand. It
has become a house hold brand. The main advantage is that the
diversed product line of the company. It has almost all the
products which are used by everyone in the house and also the
products for general use. For ex. Philips has lighting solutions,
trimmers, electric toothbrush, led lamps, mixers, home theatres,
iron box, mp3 player, DVD player etc,. which includes all the
possible products which is used by all members of the house. So
indirectly this factor is affecting the minds of the people which is
making the Philips to grow in the market.

Quality The brand name of the company stays fit in the

consumers mind. And the main reason for that is the quality of
the product which is produced by the company directly or
indirectly with the brand name of Philips. Even though the
company is a old player in the Indian market, with out the right
quality it could not reach the position that it is there now. The
Indian customers are mainly price sensitive at the same time
they also give importance to the quality and this is the main part
which made Philips gain a huge market share.

Service The service is a extra credit given to the customers by

the sellers in order to gain the good will and to get the consumer
in to good terms with the company who will in future will become
a loyal customer of the company. Here the company always tries
to make a point that, once a consumer uses the product of the
company he should not even think of the other brand. If that is
the quality and service provided to the consumer he will never
leave and go the brand. So, here service plays a big role and that
is the streangth of Philips as they provide a good after sales
service to the consumers. They have their own exclusive service
centers and linked with many big names in the market in order to
give the service.

Distribution channel A strong distribution channel is like a

solid nerve system of the human body. So if the company has a
strong distribution channel the selling of the products becomes
easy. Philips has 8 intermediaries in Bangalore and every 1person
for a district in Karnataka and this acts as a strong hand of the
company. They depend on their distribution channel heavily and
till date the results are positive from them.

WEAKNESS
Limited stock availability in the company The company
has a very strong distributing channel which will help them in
selling the Philips products in a good pace. So when the situation
is good for sale the availability of goods becomes a real problem
and this poses a big question in front of the company. The Philips
is also facing the same problem in recent years. As almost 70
80 % of the products are imported to India, the problem of stock
availability is more. The importing norms will have different rules
and regulations to the company that they can import only certain
volume of particular products in a mont or something like that. So
the estimation will always not help in importing the goods.
Because the human psychology plays a huge role in this decision
making. So it is very difficult and hence this problem is breaching
the Philips India limited.
 Limited product line Though the company has a strong
product line, the marketing heads in the company are of a
opinion that the product line of the company should be increased
in order to give the customers what they really want. This is a
right thought that the growing population in India wants some
newness in the products and they like it to be unique from others.
So increasing the product line may attract many more consumers
towards the company in the recent years. As the product line is
limited in a particular sector boredom of buying a same type of
product has come into the consumers mind.

OPPORTUNITY
The company is mainly concentrated upon the health care and
lighting sector through which the company got a brand name
which is very much in the minds of the consumers. So, now at
this point of time if the company introduces as many as
household appliances, into the market, it will gain a huge market
share in terms of household electronic appliances. This step will
be a wise move by the company.

Another huge opportunity with the Philips company is that of

making the pricing methods by acquisition. If the company
acquires any local company and make them produce the products
of Philips in their plant which will reduce the cost of the product
drastically. Philips has done many such things in the past time for
ex acquiring Preethi Company in the South India which helped
them to reduce and stabilize their pricing method.
 THREAT
The big threat and challenge of the Philips Company is that of
the China made products which have a intense effect in the
Indian market. Because of these products the Philips Company is
facing a huge problem in the Indian market. This problem is
mainly concerned on the pricing methods of the company. The
consumers expect that the price of the Philips company should
also be reduced. But Company is not in a position to do so.
MARKETING MIX
Putting the right product in the right place, at the right price, at
the right time.

The marketing mix is a business tool used in marketing

products. The marketing mix is often synonymous with the 'four
Ps': 'price', 'promotion', 'product', and 'place'.

The term "marketing mix" was coined in 1953 by Neil Borden in

his American marketing association presidential address.
However, this was actually a reformulation of an earlier idea by
his associate, James Culliton, who in 1948 described the role of
the marketing manager as a "mixer of ingredients", who
sometimes follows recipes prepared by others, sometimes
prepares his own recipe as he goes along, sometimes adapts a
recipe from immediately available ingredients, and at other
times invents new ingredients no one else has tried.

You just need to create a product that a particularly group of

people want, put it on sale some place that those same people
visit regularly, and price it at a level which matches the value
they feel they get out of it; and do all that at a time they want
to buy. Then you've got it made!

The marketing mix and the 4 Ps of marketing are often used as

synonyms for each other. In fact, they are not necessarily the
same thing.
"Marketing mix" is a general phrase used to describe the
different kinds of choices organizations have to make in the
whole process of bringing a product or service to market. The 4
Ps is one way. And the 4ps are :
 Product
Place
Price
Promotion

Product
What does the customer want from the product? What
needs does it satisfy?
What features does it have to meet these needs?

Are there any features you've missed out?

Are you including costly features that the
customer won't actually use?
How and where will the customer use it?
What does it look like? How will customers experience
it?
What size(s), colour(s), and so on, should it be?
What is it to be called?
How is it branded?
How is it differentiated versus your competitors?
What is the most it can cost to provide, and still be sold
sufficiently profitably? (See also Price, below).

Place
Where do buyers look for your product or service?
If they look in a store, what kind? A specialist boutique
or in a supermarket, or both? Or online? Or direct, via a
catalogue?
How can you access the right distribution channels?
 Do you need to use a sales force? Or attend trade fairs?
Or make online submissions? Or send samples to
catalogue companies?
What do you competitors do, and how can you learn
from that and/or differentiate?

Price
What is the value of the product or service to the buyer?
Are there established price points for products or services in this
area?
Is the customer price sensitive? Will a small decrease in price gain
you extra market share? Or will a small increase be indiscernible,
and so gain you extra profit margin?
What discounts should be offered to trade customers, or to other
specific segments of your market?
How will your price compare with your competitors?

Promotion
Where and when can you get across your marketing messages to
your target market?
Will you reach your audience by advertising in the press, or on TV,
or radio, or on billboards? By using direct marketing mailshot?
Through PR? On the Internet?
When is the best time to promote? Is there seasonality in the
market? Are there any wider environmental issues that suggest or
dictate the timing of your market launch, or the timing of
subsequent promotions?
How do your competitors do their promotions? And how does that
influence your choice of promotional activity?

The marketing mix model can be used to help you decide how
to take a new offer to market. It can also be used to test your
existing marketing strategy. Whether you are considering a new
or existing offer, follow the steps below help you define and
improve your marketing mix.
1. Start by identifying the product or service that you want to
analyze.
2. Now go through and answer the 4Ps questions as defined in
detail above.
3. Try asking "why" and "what if" questions too, to challenge your
offer. For example, ask why your target audience needs a particular
feature. What if you drop your price by 5%? What if you offer more
colours? Why sell through wholesalers rather than direct channels?
What if you improve PR rather than rely on TV advertising?

The marketing mix helps you define the marketing elements for
successfully positioning your market offer.
One of the best known models is the Four Ps, which helps you
define your marketing options in terms of product, place, price
and promotion. Use the model when you are planning a new
venture, or evaluating an existing offer, to optimize the impact
with your target market.

MARKETING MIX OF PHILIPS

The different product lines of the Philips
Company are:
Imaging Systems
Home Healthcare Solutions
Patient Care and Clinical Informatics
Television
Personal Care
Audio & Video
Multimedia
Domestic Appliances
Health &
Wellness
Accessories
Lamps
Consumer Luminaries
Professional
Luminaries
Lighting
Electronics and Controls
Automotive Lighting
Packaged LEDs
LED solutions

This comes under 3 main heads. That is Healthcare, consumer

lifestyle, lighting.

Koninklijke Philips Electronics N.V. (the Company) is the parent

company of the Philips Group (Philips or the Group).The
management of the Company is entrusted to the Board of
Management under the supervision of the Supervisory Board.
Philips activities in the field of health and well-being are
organized on a sector basis, with each operating sector
Healthcare, Consumer Lifestyle and Lighting being
responsible for the management of its businesses worldwide.
The Group Management & Services sector provides the
operating sectors with support through shared service centres.
Furthermore, country management organization supports the
creation of value, connecting Philips with key stakeholders,
especially our employees, customers, government and society.
The sector also includes pension.
Also included under Group Management & Services are the
activities through which Philips invests in projects that are
currently not part of the operating sectors, but which could lead
to additional organic growth or create value through future
spin-offs. At the end of 2010, Philips had 118 production sites in
27 countries, sales and service outlets in approximately 100
countries, and 119,001 employees.

HEALTH CARE
Healthcare challenges present major opportunities in the long
term
Addressing the care cycle our unique differentiator
Home healthcare is a core part of our healthcare strategy
Improved market leadership in core businesses

Introduction

The future of healthcare is one of the most pressing global

issues of our time. Around the world, societies are facing the
growing reality and burden of increasing and in some cases
aging populations, as well as the upward spiralling costs of
keeping us in good health. Worldwide, many more people live
longer with chronic disease such as cardiovascular diseases,
cancer, diabetes than in the past. Aging and unhealthy
lifestyles are also contributing to the rise of chronic diseases,
putting even more pressure on healthcare systems. At the
same time the world is facing a global and growing deficit of
healthcare professionals. In the long term, these challenges
present Philips with an enormous opportunity. We focus our
business on addressing the evolving needs of the healthcare
market by developing meaningful innovations that contribute to
better healthcare, at lower cost, around the world.

Healthcare landscape

The global healthcare market is dynamic and growing. Over the

past three decades, the healthcare industry has grown faster
than Western world GDP, and has also experienced high rates
of growth in emerging markets such as China and India. Rising
healthcare costs present a major challenge to society. The
industry is looking to
Address this through continued innovation, both in traditional
care settings and also in the field of home healthcare. This
approach will not only help to lighten the burden on health
systems, but will also help to provide a more comforting and
therapeutic environment for patient care

About Philips Healthcare

Philips is one of the top-tier players in the healthcare

technology market (based on sales) alongside General Electric
(GE) and Siemens. Our Healthcare sector has global leadership
positions in areas such as cardiac care,
Acute care and home healthcare. Philips Healthcares current
activities are organized across four businesses:
Imaging Systems: interventional X-ray, diagnostic X-ray,
computed tomography (CT), magnetic resonance (MR), nuclear
medicine (NM) and ultrasound imaging equipment, as well as
womens health
Patient Care & Clinical Informatics: cardiology informatics,
including diagnostic electrocardiography (ECG); enterprise
imaging informatics, including radiology information systems
(RIS) and picture archiving and communication systems (PACS);
patient monitoring and clinical informatics; perinatal care,
including fetal monitoring and Philips Childrens Medical
Ventures; and therapeutic care, which includes cardiac
resuscitation, emergency care solutions, therapeutic
temperature management, hospital respiratory systems, and
ventilation
Home Healthcare Solutions: sleep management and
respiratory care, medical alert services, remote cardiac
services, remote patient management
Customer Services: consultancy, site planning and project
management, clinical services, Ambient Experience, education,
equipment financing, asset management and equipment
maintenance and repair
Products and services are sold to healthcare providers around
the world, including academic, enterprise and stand-alone
institutions, clinics, physicians, home healthcare agencies and
consumer retailers. Marketing,
Sales and service channels are mainly direct. The United States
is the largest healthcare market,
Currently representing close to 43% of the global market,
followed by Japan and Germany. Approximately 20% of our
annual sales are generated in emerging markets, and we
expect these to continue to grow faster than the markets in
Western Europe and North America. Philips Healthcare employs
approximately 35,500 employees worldwide. With regard to
sourcing, please refer to sub-section 5.3.3, Supply
management, of this
Annual Report.

Drive performance

Continue to drive operational excellence and improve

Margins: We are building on successful initiatives to structurally
reduce our overall cost structure and
Improve our organizational effectiveness. We are improving our
margins through better product reliability, improved pricing
initiatives, optimization of low-cost country sourcing, and
increases in our service productivity and operational efficiency.
In 2010 we continued to improve the efficiency and
effectiveness of our organization, not only in response to the
current economic climate, but, even more importantly, to
further strengthen our position for the future. We continued to
manage costs and reorganize our business, both to meet
customer and market demands, as well as to enable profitable
growth. In addition, we continue to drive the pace of
operational
Improvement. Our Quote to Cash program has driven
fundamental changes within our organization, focusing
On process standardization and simplification. A direct result of
those efforts was the formation of a centralized Commercial
Operations organization with the primary goal of making it
easier for our customers to do business with us.
Drive emerging market growth: We continue to make key
acquisitions to meet the diverse and growing needs of the
different markets around the world. For example, our
acquisition of Shanghai Apex Electronics in 2010 provides high-
quality value ultrasound transducers, enabling Philips to further
support the use of
Ultrasound, a widely used diagnostic procedure that provides a
critical yet affordable and mobile modality for early diagnosis
and real-time imaging. The acquisition marks another step in
Philips expanding presence in emerging markets,
complementing the acquisition of healthcare informatics
company Tesco

Informatics in Brazil and the expansion of our clinical

informatics portfolio with the acquisition of Wheb Sistemas, a
leading Brazilian provider of clinical information systems.
Continue to pursue integration of our recent acquisitions: In
2010 we successfully completed steps to integrate
Prior-year acquisitions including Inner Cool Therapies Inc., a
pioneer in the field of therapeutic hypothermia,
And Traxtal, a medical technology innovator in image guided
procedures. This included the launch of the Philips Inner Cool
RTx Endovascular System to help enhance patient care by
managing therapeutic hypothermia.
Consumer Lifestyle
Leading positions in categories such as male shaving and
grooming, coffee appliances and oral healthcare
Further decisive action taken to reduce our exposure in the
Television business
Increased focus on growth, taking a granular approach by
making clear investment choices
Expanded business creation capabilities in emerging markets
and investment in key enablers to accelerate growth

Introduction

Across the world, consumers aspire to improve their health and

feeling of well-being, but struggle to balance this with the
increasing complexity of their lives. This trend is creating a
large and growing market in the developed and especially in
the emerging economies, where Consumer Lifestyle can
benefit by delivering health and well-being solutions with
advanced technology that meet peoples needs. We strive to
understand consumer needs and translate those insights into
breakthrough, meaningful innovations. Our competitive
advantage is our solutions that are easy to experience,
advanced and designed around the consumer. This strength is
galvanized by our powerful global brand, our understanding of
the markets we operate in and the many synergies with our
channels, partners and supply chain.

Helping people achieve a healthier and better life

Consumer Lifestyle makes a difference to peoples lives by

making it easier for them to achieve a healthier and better
lifestyle. We believe that sense and simplicity can be the goal
of technology and apply that principle to create life enhancing
solutions.

Tracking trends and identifying opportunities

Consumer Lifestyle works together with Philips Design to

monitor trends ranging from consumer tastes to design
aesthetics. With its global footprint, Consumer Lifestyle is well
positioned to understand emerging needs in local markets.
Country organizations are our interface with the consumer,
allowing us to accurately identify local needs, tastes and
commercial opportunities.

Applying insights to develop innovative solutions

We apply a rigorous product development process when

creating new value propositions. At its heart are validated
consumer insights, which show that the propositions meet a
market need. The combination of insight, simplicity and
innovation differentiates us from our competition and creates a
platform for sustainable business success.

Where we play

We are active in our four value spaces in health and wellbeing:

Healthy Life, Personal Care, Home Living and Lifestyle
Entertainment, complemented by Accessories. This portfolio is
aligned with our brand equity and enables us to provide our
retail customers with a highly relevant and attractive product
portfolio. We focus on premium propositions with our
differentiating brand promise of sense and simplicity,
relevant to the target group. In focusing on the domain of
health and well-being, we are tapping into significant trends
such as consumer empowerment, growth in emerging markets
and aging populations that will have a major impact on
society in the future.

Healthy Life

The Healthy Life value space takes a holistic approach to

enhancing consumers health, addressing the needs for mental
and physical health and for healthy relationships.

Personal Care

The Personal Care value space addresses the consumer need to

look and feel your best and so helps people feel more
confident.

Home Living

The Home Living value space addresses consumers pressing

need to have more time to spend on themselves or with family
and friends. We do this by creating high quality solutions that
enable quick and convenient cooking, preparation of
beverages, cleaning, caring and home comfort.
Lifestyle Entertainment
Lifestyle Entertainment is about enjoying entertainment and
the little events in everyday life: sharing time with family and
friends, having time off from a hectic schedule, and moments of
comfort, fun and caring.

About Consumer Lifestyle

The Philips Consumer Lifestyle sector is organized around its

markets, customers and consumers, and is focused on value
creation through category development and delivery through
operational excellence.
The market-driven approach is applied with particular emphasis
at local level, enabling Consumer Lifestyle to
Address a variety of market dynamics and allowing the sales
organizations to operate with shorter lines of
Communication with the sectors six businesses. This also
promotes customer-centricity in day-to-day operations.
In 2010 the sector consisted of the following areas of business:
Health & Wellness: mother and child care, oral healthcare
Personal Care: shaving and grooming, female depilation, hair
care, vita light, skincare Domestic Appliances: kitchen
appliances, beverages/ espresso, garment care, floor care,
water, air
Television
Audio & Video Multimedia: home audio, home video, home
cinema sound, portable audio and video
Accessories: on-the-go accessories, together @ home
accessories, personal displays, speech processing

Drive performance

Further increase cash flow by aggressively managing cash

targets: We strictly managed working capital, which has been
negative in many recent quarters. We effectively managed our
credit and risk, including significantly
Reducing overdue customer payments. There was an increase
in the number of suppliers using supplier finance, which
reduced total cost in the supply chain. As part of Philips drive
to harmonize supplier terms, we improved overall payment
terms by 7 days.
Continue to reduce fixed costs and improve the overall agility
of the cost base: We acted fast in the downturn and are
benefiting from improved gross margin and a lower cost base,
supporting year-on-year EBITA margin
Improvement. We continued to manage costs via our Earn 2
Invest Program, reinvesting savings to drive growth.
Strengthen excellence in execution and further develop
sense and simplicity as a competitive edge: We have
implemented an improved management decision support
system with granular insight into integral
Performance per business, market and customer down to
product level. We are also striving to install a return
On investment (ROI) culture in order to drive, and increase
resources for, more effective advertising and promotional
campaigns.

Lighting

Lighting industry undergoing a radical transformation

Important global trends underpinning strategy
Winning in LED

Introduction
A number of global trends are changing the way people use
light. Lighting solutions are transforming urban
Environments, creating livable cities through the use of light to
enhance safety, municipal identity and residential
well-being; consumers are increasingly applying lighting to
create their own ambience at home as a statement of their
lifestyle; building owners and retailers are recognizing the
benefits of energy-efficient lighting in reducing their operational
costs; and schools are learning how lighting can improve
education. At the same time, more and more people are keen
to help tackle the issues of climate change and rising energy
costs. Many countries and regions have introduced legislative
measures to address energy consumption and the emission of
greenhouse gases, which are linked to climate change. In
particular, 2010 saw further legislation to phase out old,
incandescent lighting and other energy-inefficient forms of
electric lighting. Philips will continue to play significant role in
encouraging and enabling the switch to energy-efficient lighting
solutions, helping our customers to save on energy costs while
making a positive contribution to the environment. Another key
development is the ongoing trend toward custom solutions.
Increasingly aware of the possibilities beyond standard
solutions, consumers, businesses and national and municipal
authorities demand highly adaptable lighting solutions which
they can use to customize their indoor and outdoor
environments as and when they desire. Flexible and dynamic,
our LED lighting solutions allow a much higher degree of
customization and provide significantly greater possibilities for
ambience creation than solutions based on conventional
technologies.

About Philips Lighting

Philips Lighting is a global market leader, with recognized

expertise in the development, manufacturing and
Application of innovative lighting solutions. We have pioneered
many of the key breakthroughs in lighting over the past 100
years, laying the basis for our current position. We address
peoples lighting needs across a full range of market segments.
Indoors, we offer specialized lighting solutions for homes,
shops, offices, schools, hotels,
Factories and hospitals. Outdoors, we provide lighting for public
spaces, residential areas and sports arenas. We also help to
make roads and streets safer for traffic and other road users
(car lights and street lighting). In addition, we address the
desire for light-inspired experiences through architectural
projects. Finally, we offer specific applications of lighting in
specialized areas, such as horticulture, refrigeration lighting
and signage, as well as heating, air and water purification, and
healthcare. Philips Lighting spans the entire lighting value chain
from lighting sources, electronics and controls to full
applications and solutions via the following businesses:
Lamps: incandescent, halogen, (compact) fluorescent, high-
intensity discharge
Consumer Luminaries: functional, decorative, lifestyle, scene-
setting
Professional Luminaries: city beautification, road lighting,
sports lighting, office lighting, shop/hospitality lighting, industry
lighting
Lighting Systems & Controls: electronic and electromagnetic
gear, controls, modules and drivers
Automotive Lighting: car headlights, car signalling, interior
Packaged LEDs
LED solutions: modules, LED replacement lamps

Simply enhancing life with light

Philips Lighting is dedicated to enhancing life with light through

the introduction of innovative and energy efficient solutions or
applications for lighting. Our approach is based on obtaining
direct input both from customers and from end-
users/consumers. Through a market segment-based approach,
we can assess customer needs in a targeted way, track
changes over time and define new insights that fuel our
innovation process and ultimately increase the success rate of
new propositions introduced onto the market. We aim to be the
true front-runner in design-led, market and consumer-driven
innovation both in conventional lighting and in solid-state
lighting while continuing to contribute to responsible energy
use and sustainable
Growth. We believe the rise of LED; coupled with our global
leadership, positions we well to continue to deliver on our
mission to simply enhance life with light.

At Philips CL, the consumer facing units can be found in the

Sales Organizations (SOs) that are the local representations of
Philips CL and the business functions (BFs) that support
operations. The involved BFs are:
Direct Sales
Marketing Communication
Marketing Intelligence
Consumer Care

The assessment of Philips CLs structure was focused on the

above parties. The results are based on five interviews, one
with an employee at a SO and one at each of the involved BFs.
The interviewees commented on the structure of Philips CL and
how it had changed from 2007 to 2009. To make the
assessment, the recordings and notes from the interviews were
reviewed for comments on how well their BF was integrated
with the other parties involved in providing the consumer
experience. If an interviewee described a situation of clear
functional silos or full integration, the statement was evaluated
as respectively stage 1 or stage 4. A not as clear statement was
examined for a statement of whether collaboration was
managed informally or formally (e.g. formal category meetings)
resulting in an assessment of respectively stage 2 or stage 3.
Since the results are non-normally distributed and the scale is
ordinal, the median of the resulting scores is used as the overall
score for Philips CL.

Shah et al. (2006) stated that the processes for developing

and sustaining customer relationships differ from those aimed
at the execution of efficient customer transactions. More
consumer-centricity implies that the number of unique products
and services increases. Unique personalized products and
services generally require communication across organizational
boundaries since the delivery of these products and services is
more complex than that of standard products (Kumar A., 2007;
Kates & Galbraith, 2007). While making the management of
consumer information within the company more complex, the
increased number of personalized products and services also
require more consumer information than the delivery of
standard products and services. This is because personalized
product and services require detailed consumer information
(Vesanen, 2007). A way to obtain this increased amount of
information is to build a relationship with the consumer that
enables the company to learn about the consumer and build
consumer profiles. The processes that manage this relationship
and disseminate the consumer information within the company
are called customer relationship management (CRM) processes
(Payne & Frow, 2005). Hence, when the relationship with the
consumer becomes more important, the CRM processes also
become more important. While a number of processes can be
stated that play a role in the transition form product- to
consumer-centricity, in literature, there is agreement that the
CRM processes are among the key processes for consumer-
centric companies (Shah, Rust, Parasuraman, Staelin, & Day,
2006; Kates & Galbraith, 2007; Kumar A. , 2007; Kumar &
Petersen, 2005). This study will therefore focus on CRM in the
process domain.
Payne and Frow (2005) state that: CRM is a strategic approach
that is concerned with creating improved shareholder value
through the development of appropriate relationships with key
customers and customer segments. Excellent CRM should
therefore boost Philips CLs ability to become more consumer-
centric. When determining the performance of a CRM program,
five distinctive processes should be taken into account (Payne
& Frow, 2005):
1. The strategy-development process that includes not only a
business strategy but also a consumer strategy
2. The value creation process that is at the heart of the
exchange process
3. The multichannel integration process that encompasses all
the consumer touch points
4. The information-management process that includes the data
collection and data analysis functions
5. The performance-assessment process that ties the firms
actions to performance

Boulding, Staelin, Ehret, and Johnston (2005) commented that

companies should benchmark their processes to examine their
consumer-centricity. Since the strategic domain is partly
represented by the analysis of Philips CLs organizational
culture, and the performance assessment process is linked to
financial metrics, both the above described processes are not
researched within the process domain. The analysis will focus
on the value creation process, the multichannel integration
process and the information-management process.
 BCG MATRIX

High Low
Stars Question Mark

High
Health care Personal care

Cash Cow Dogs

Low
Lighting Home appliances

Cash cows are units with high market share in a slow-

growing industry. These units typically generate cash in
excess of the amount of cash needed to maintain the
business. They are regarded as staid and boring, in a
"mature" market, and every corporation would be thrilled to
own as many as possible. They are to be "milked"
continuously with as little investment as possible, since such
investment would be wasted in an industry with low growth.

Dogs, or more charitably called pets, are units with low

market share in a mature, slow-growing industry. These units
typically "break even", generating barely enough cash to
maintain the business's market share. Though owning a
break-even unit provides the social benefit of providing jobs
and possible synergies that assist other business units, from
an accounting point of view such a unit is worthless, not
 generating cash for the company. They depress a profitable
company's return on assets ratio, used by many investors to
judge how well a company is being managed. Dogs, it is
thought, should be sold off.

Question marks (also known as problem child) are

growing rapidly and thus consume large amounts of cash,
but because they have low market shares they do not
generate much cash. The result is large net cash
consumption. A question mark has the potential to gain
market share and become a star, and eventually a cash cow
when the market growth slows. If the question mark does not
succeed in becoming the market leader, then after perhaps
years of cash consumption it will degenerate into a dog
when the market growth declines. Question marks must be
analyzed carefully in order to determine whether they are
worth the investment required to grow market share.

Stars are units with a high market share in a fast-growing

industry. The hope is that stars become the next cash cows.
Sustaining the business unit's market leadership may require
extra cash, but this is worthwhile if that's what it takes for
the unit to remain a leader. When growth slows, stars
become cash cows if they have been able to maintain their
category leadership, or they move from
brief stardom to dogdom.
As a particular industry matures and its growth slows, all
business units become either cash cows or dogs. The natural
cycle for most business units is that they start as question
marks, and then turn into stars. Eventually the market stops
growing thus the business unit becomes a cash cow. At the end
of the cycle the cash cow turns into a dog.
The overall goal of this ranking was to help corporate analysts
decide which of their business units to fund, and how much;
and which units to sell. Managers were supposed to gain
perspective from this analysis that allowed them to plan with
confidence to use money generated by the cash cows to fund
the stars and, possibly, the question marks. As the BCG stated
in 1970:
Only a diversified company with a balanced portfolio can use its
strengths to truly capitalize on its growth opportunities. The
balanced portfolio has:

stars whose high share and high growth assure the

future;

cash cows that supply funds for that future growth; and

Question marks to be converted into stars with the

added funds.
Relative market share

This indicates likely cash generation, because the higher

the share the more cash will be generated. As a result of
'economies of scale' (a basic assumption of the BCG
Matrix), it is assumed that these earnings will grow faster
the higher the share. The exact measure is the brand's
share relative to its largest competitor. Thus, if the brand
had a share of 20 percent, and the largest competitor had
the same, the ratio would be 1:1. If the largest competitor
had a share of 60 percent; however, the ratio would be
1:3, implying that the organization's brand was in a
relatively weak position. If the largest competitor only had
a share of 5 percent, the ratio would be 4:1, implying that
the brand owned was in a relatively strong position, which
might be reflected in profits and cash flows. If this
technique is used in practice, this scale is logarithmic, not
linear.
On the other hand, exactly what is a high relative share is
a matter of some debate. The best evidence is that the
most stable position (at least in Fast Moving Consumer
Goods FMCG markets) is for the brand leader to have a
share double that of the second brand, and triple that of
 the third. Brand leaders in this position tend to be very
stableand profitable; the Rule of 123.
The reason for choosing relative market share, rather than
just profits, is that it carries more information than just
cash flow. It shows where the brand is positioned against
its main competitors, and indicates where it might be
likely to go in the future. It can also show what type of
marketing activities might be expected to be effective.

Market growth rate

Rapidly growing in rapidly growing markets, are what
organizations strive for; but, as we have seen, the penalty
is that they are usually net cash users - they require
investment. The reason for this is often because the
growth is being 'bought' by the high investment, in the
reasonable expectation that a high market share will
eventually turn into a sound investment in future profits.
The theory behind the matrix assumes, therefore, that a
higher growth rate is indicative of accompanying demands
on investment. The cut-off point is usually chosen as 10
per cent per annum. Determining this cut-off point, the
rate above which the growth is deemed to be significant
(and likely to lead to extra demands on cash) is a critical
requirement of the technique; and one that, again, makes
the use of the BCG Matrix problematical in some product
areas. What is more, the evidence, from FMCG markets at
least, is that the most typical pattern is of very low
growth, less than 1 per cent per annum. This is outside the
range normally considered in BCG Matrix work, which may
make application of this form of analysis unworkable in
many markets.
Where it can be applied, however, the market growth rate
says more about the brand position than just its cash flow.
It is a good indicator of that market's strength, of its future
potential (of its 'maturity' in terms of the market life-
cycle), and also of its attractiveness to future competitors.
It can also be used in growth analysis.
For the Philips company in particular,

Question mark - Personal care

Star - Health Care

Cash cow Lighting

Dogs - Home appliances

Personal care is an area from which the company gets a

very less profit. There may be many reasons for that. For ex,
the profit margin may be less or people are not aware of it.
Whatever be the reason the products which comes under
personal care do not give much profit to the company even
though the product resides in the market there is not much
use of it. The only use is that they can boast about their
diverse product line and nothing more than that. So, we have
positioned this particular personal care in the place of
question mark to show the non performance of the particular
line of products.

The Philips Consumer Lifestyle sector is organized around its

markets, customers and consumers, and is focused on value
creation through category development and delivery through
operational excellence.
The market-driven approach is applied with particular emphasis
at local level, enabling Consumer Lifestyle to
Address a variety of market dynamics and allowing the sales
organizations to operate with shorter lines of
Communication with the sectors six businesses. This also
promotes customer-centricity in day-to-day operations.
In 2010 the sector consisted of the following areas of business:
Health & Wellness: mother and child care, oral healthcare
Personal Care: shaving and grooming, female depilation, hair
care, vita light, skincare
 Domestic Appliances: kitchen appliances, beverages/
espresso, garment care, floor care, water, air
Television
Audio & Video Multimedia: home audio, home video, home
cinema sound, portable audio and video
Accessories: on-the-go accessories, together @ home
accessories, personal displays, speech processing

We have positioned the health care as a star of Philips. This

is the line where the company is getting enough profit and
are putting their all worth to improve this line. Health care of
the Philips is so famous all over the world. Their maximum
revenue is coming from the health care and they want to
improve that also.

Philips is one of the top-tier players in the healthcare

technology market (based on sales) alongside General
Electric (GE) and Siemens. Our Healthcare sector has global
leadership positions in areas such as cardiac care,
Acute care and home healthcare. Philips Healthcares current
activities are organized across
Four businesses:
Imaging Systems: interventional X-ray, diagnostic X-ray,
computed tomography (CT), magnetic resonance (MR), nuclear
medicine (NM) and ultrasound imaging equipment, as well as
womens health
Patient Care & Clinical Informatics: cardiology informatics,
including diagnostic electrocardiography
(ECG); enterprise imaging informatics, including
Radiology information systems (RIS) and picture archiving and
communication systems (PACS); patient
monitoring and clinical informatics; prenatal care, including
fatal monitoring and Philips Childrens Medical Ventures; and
therapeutic care, which includes cardiac resuscitation,
emergency care solutions, therapeutic
Temperature management, hospital respiratory systems, and
ventilation
Home Healthcare Solutions: sleep management and
respiratory care, medical alert services, remote cardiac
services, remote patient management
Customer Services: consultancy, site planning and project
management, clinical services, Ambient Experience, education,
equipment financing, asset management and equipment
maintenance and repair

Philips Lighting is a global market leader, with recognized

expertise in the development, manufacturing and
Application of innovative lighting solutions. We have pioneered
many of the key breakthroughs in lighting over
The past 100 years, laying the basis for our current position. We
address peoples lighting needs across a full range of market
segments. Indoors, we offer specialized lighting solutions for
homes, shops, offices, schools, hotels, factories and hospitals.
Outdoors, we provide lighting for public spaces, residential
areas and sports arenas. We also help to make roads and
streets safer for traffic and other road users (car lights and
street lighting). In addition, we address the desire for light-
inspired experiences through architectural projects. Finally, we
offer specific applications of lighting in specialized areas, such
as horticulture, refrigeration lighting and signage, as well as
heating, air and water purification, and healthcare. Philips
Lighting spans the entire lighting value chain from lighting
sources, electronics and controls to full applications and
solutions via the following businesses:
Lamps: incandescent, halogen, (compact) fluorescent, high-
intensity discharge
Consumer Luminaries: functional, decorative, lifestyle, scene-
setting
 Professional Luminaries: city beautification, road lighting,
sports lighting, office lighting, shop/hospitality lighting, industry
lighting
Lighting Systems & Controls: electronic and electromagnetic
gear, controls, modules and drivers
Automotive Lighting: car headlights, car signalling, interior
Packaged LEDs
LED solutions: modules, LED replacement lamps

Home appliances

Philips Design is one of the longest-established design

organizations of its kind in the world. It is headquartered in
Eindhoven, the Netherlands, with branch studios in Europe, the
US and Asia Pacific. Its creative force
Comprises designers, psychologists, ergonomists, sociologists,
philosophers and anthropologists working
Together to understand peoples needs and desires in order to
generate designs which support people in?
Accomplishing and experiencing things in natural, intuitive
ways. Philips Designs forward-looking exploration projects
deliver vital insights for new business development, supporting
the transformation towards a health and wellbeing company. In
focusing on the domain of health and well-being, we are
tapping into significant trends such as consumer
empowerment, growth in emerging markets and aging
populations that will have a major impact on society in the
future.
Healthy Life
The Healthy Life value space takes a holistic approach to
enhancing consumers health, addressing the needs for mental
and physical health and for healthy relationships.

Personal Care
The Personal Care value space addresses the consumer need to
look and feel your best and so helps people feel more
confident.
Home Living
The Home Living value space addresses consumers pressing
need to have more time to spend on themselves or with family
and friends. We do this by creating high quality solutions that
enable quick and convenient cooking, preparation of
beverages, cleaning, caring and home comfort.
Lifestyle Entertainment
Lifestyle Entertainment is about enjoying entertainment and
the little events in everyday life: sharing time with family and
friends, having time off from a hectic schedule, and moments of
comfort, fun and caring.
 Questionnaire
1. How does it feel to compete with Videocon and other
competitors in India?

In the statistics, Videocon is the toughest competitor

of Philips India Ltd. But in practice, Videocon acts as a
partner of the company. Philips Company gives the TV
panel to the Videocon in order to market the product
of the Philips. Indirectly the Philips company is getting
the marketing done by the Videocon company. So in
practicality the Philips company is not directly
competing with the Videocon company.

2. Where has the electronic market headed in India?

Does the entry of Sony and Panasonic threaten Philips?

The electronic market in India is heading in a very

good way. The boom in the electronic market is huge
in this time. A very good opportunity for all the
electronic manufacturers in India to have a good profit.
The disposable profit of the consumer of India is rising
day by day and the trend to have sophisticated
electronic gadgets in the house hold is becoming more
and more day by day.
The entry of the MNC companies to the Indian market
do not put a lot of competition to the Philips as Philips
is dealing in the Indian market for the past 120 years
and they know how exactly to deal with the situations
in the Indian market. So entry of some MNCs like Sony
 or Philips is not such a huge competition or head
breaking situation. So, there is no huge threat from the
entry of the companies like Sony or Panasonic.

3. Is Philips India profitable yet? Where do you see the

company in the next few years?

Surely the Philips India is profitable at the current point

of time. As they know the true nature of the market
they are strong in their footholds and they are good at
it. So profit will not be a matter of fact at any point of
time to Philips.
We can see the company as a leader in the market for
consumer goods-electronics in the Indian market in
next few years.

4. What do you see as the greatest challenge of Philips in

India?

The company was situated in India before 120 years.

So the behaviour of the consumers in the Indian
market is well known to the company. The maximum
part of consumers are those who give much
importance to the price of the product than to the
quality. So price becomes the main factor in this
context. Even though the company knows very well
about the behaviour of the consumers, the changing
trend of the consumers in India is very drastic and this
becomes the challenge to the Philips. As pricing is the
main factor, because of the entry of the China
products, the value of electronic items has gone very
low and hence it forces the quality products also to
 reduce their prices. But the Philips company did not do
this. They stick to their pricing policy which sometimes
causes problems.

5. Which is Philips main line product?

The mainline products are the products which give the

profit to the company and help to acquire the market
share.
The mainline products of the Philips company are : Iron
box, Mixers, Home theatres, DVD players, Trimmers
and Shavers, Radios.
Lighting as a whole is the main line product of Philips.
They are dealing with this from a long time and so
they are experienced in this line of products and most
importantly they have a very good brand name in
lighting solutions. So this becomes their mainline
product

6. What are you going to do to strengthen the mainline

products?

In order to strengthen the mainline product of the

company the company has to introduce new products
every six months. This will help the company to make
a new obsolescence stage for the company in the
product life cycle. If they introduce the new products
every 6 months, there will be newness in the products
which will help them to improve their sales.
7. What are you doing to improve reach?

The Philips Company wants to improve the reach to

the consumers by improving the distribution channel.
So for this they have 8 distributors for the cities and 1
for every district. This will increase the sales volume of
the products of the company and every consumer can
be reached by this type of distribution channel. They
also focus on the modern traders that are the Girias,
Croma etc. from which they get a nice share.

8. To whom is the product aimed?

The Philips Company targets the market of a product

according to the products. They mainly deal with the
household products and so they target that set of
consumers who are especially concerned about the
interior of the house. And also to the organizational
consumers they target a certain product.

9. How does the firm plan to position the product within

the market?

Positioning is a strategy by which the company keeps

the products in such a position where the consumers
want to see it. So the strong foothold of the Philips
Company is its quality. So they thought that
positioning their products in the way of good quality is
the best way and Philips Company is positioning its
products as a good quality product. Its uniqueness is
another plus point. They have a unique identity in the
market and they are kept it up as a positioning
strategy. The brand and design of the Philips Company
 is the real and strong way of positioning the product of
the Philips Company.

10. What differential advantage will the product offer

over your competitors?

The quality and service is the one thing that the Philips
Company stands out from its competitors. The way the
company gives the service is really very good and the
consumers appreciate this. They always concentrate
on the customers and they will see from the
customers point of view.

11. What kind of promotion do you follow?

Philips plans the promotions in different ways. One of

the ways is that of seasonal wise. For ex, if there
comes Diwali, they will set such promotional activities
which suits the occasion. In other kind of promotional
activities, like giving discounts, giving adds in different
Medias, newspaper ads, free with one product.

12. Where do buyers look for your product or service?

Philips Company has a exclusive outlet for the Philip

products which is called as Philips arena which is
situated in every city. So buyers will contact this arena
for buying. The advantage of buying from here is that
they will get a proper servicing to their products and
all the required transactions will be fast when
compared to the other places. Buyers also can reach
any other retail outlets in the city which deals with the
 Philips products. For the rural areas, the dealers will
have many sub-dealers to make the product reach the
rural places.

13. Do you need to use the sales force or attend trade

fairs?

This depends on the particular products. If the product

is newly launched, they have to be displayed in the
trade fairs in order to take the products into the minds
of the consumers. If not sales force plays a major role
in the selling of the product.

CONCLUSION

Philips is Indias largest and most preferred lighting and

health care instruments company.
Through its strategic long-term tie-ups with key and
critical auxiliary manufacturers, Philips provides its
customers many benefits.
The brands vision is to deliver excitement to the
consumers, by providing comfort at its best.
Complete control over core components and
technology.
The company has strong potential to grow and that
through greater innovations.
 In addition to corporate sector the company has the
option to step into the local household by
understanding their psychology.
In short it can be said that the company is still growing
by making constant efforts.

BIBLOGRAPHY

Book:

Philip Kotler, Marketing Management, 13th edition

Websites:

www.philips.co.in
www.india.philips.com
en.wikipedia.org/wiki
www.encyclopedia.com

Magazines:

India Today
 Business world