Osram Sylvania

Positioning Innovation Based on Consumer

Insight
08 March 2017
Comparative Analysis of our recommendation viz-a-viz
Team-1s recommendation

Key Question Team 1 Our Recommendation

Page 2
 Sylvanias positioning strategy should be done through a
holistic rather than independent decision approach

Pr
B2B od Ef
uc fec
VS t P tiv
B2C os e
itio

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ni

Strategic Analysis

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ng

tio ies
va nc
Hedonic New Brand

ng
n o te

ici
VS VS

In pe

Pr
m
Utilitarian Sub Brand

Co

&
es
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ur
Co

at
Fe
Target Market
&
Target Segment
Consumer Insight

Sylvanias decision has to strike a balance between whats good for the company, and
features customers value
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 Moreover, they should target Asia and Europes Residential
Lighting Control Market
A B2C business model will tap into the Fast growth for the next 18 years will make
Residential Lighting market this market even more attractive
MKT Size MKT Size
$ 43 BUSD $ 60 MUSD
CAGR (2012-30): 20%

Asia; 40%

All Other; 26% Lighting; 74%

Residential Europe; 38%
$ 1597 Mn

USA; 22%

$ 642 Mn

Residential B2C $ 258 Mn

$ 60 Mn $ 104 Mn
Office B2B Smart Lighting
Asia & Europe:
Architectural B2B ~80% of With 17% market share, Sylvania can earn
Shop B2B Residential Lighting $270 MUSD by 2030(1)
Hospitality B2B High growth
Outdoor B2B/ B2C US:
Revenues can increase even more by gaining
Industrial B2B Flat last 5 years
market share from GE, which hasnt launched a
smart lighting solution

Targeting Residential Lighting Control Market in Europe & Asia has huge potential
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(1) Conservative revenues estimate

Family men with college education, between 25-44 years old
and an income > $70 KUSD are Sylvanias best bet
Gender Yearly Income Education

(49%) (51%) Graduate Degree 21% (19%)

40K 50K
35% (15%) 4-year College
50K 60K 40%(17%) Some College 35% (35%)
No College
60K 70K 26% (16%)

34% 25% 70K 80K 25% (14%)

33% (33%)

17% (14%)
Over 80K 12% (39%)

Employment Age Number of Family Members

Number in Family

(88%) (12%) Under 25 8% (4%) (48%) (43%) (10%)

25 - 34 18% (20%)
30% 23% 35 - 44 16% (18%) 25% 32% 41%
45 - 54 38%
(26%)
55 - 64 52%
Unemployed Employed (20%) 5+ 3-4 1-2
65+ 86% (12%)

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People who value more the experiential aspects of our
product, are similar to our defined customer target segment

Cluster 1 Cluster 2
(Energy Savings) (Experiential)
Age 38 37
Male 53% 63%
Age: the younger the
better
Expected Price $164 $181
Less price sensitive
Willing to Pay $177 $198
Household: the
Household Size 2.9 3.4 bigger the better

Reasons to Purchase Cluster 2 Type of Message

Set a better mood at home 97% Hedonic
Improve quality of light 76% Hedonic
Aesthetic appeal of home lighting 57% Hedonic
Make social events more fun 57% Hedonic
Easier to control lighting 54% Utilitarian
Energy cost savings 47% Utilitarian
Improve productivity in work 45% Utilitarian/Hedonic

Based on our research, Hedonic Customers are the best type of customers to target
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 Sylvania must prioritize the GO signals valued by Hedonic
customers, and inhibit the STOP signals for the Utilitarians

Cluster 1 Agree to
Hedonic Go-Signals

Features to Cluster 2
1 (Energy Pay List
prioritize (Experiential)
Savings) Price
Interested Hedonic
Set a better
Prospects Customers 8% 97% 80%
mood at home
Improve
24% 76% 70%
quality of light
Ad
va
n ta
2 i ty ge
Utilitarian Go-Signals

b i l
a
rial Rogers 5
T

Com
attributes
Uninterested Utilitarian that

p
Prospects Customers

lity
lexit
influence

atibi
adoption

p
Com
Observability
Stop > Go Stop < Go
Inhibit STOP signals for Utilitarian customers: Price and switching costs to a new system
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The $200 price point should remain to maximize gains and
develop a Premium Product image
Agree to
Reason to Purchase Utilitarian
10.8 Pay List
10.0 IQ Control Vs. Hedonic
Price
9.5 9.2
8.5 8.1 Improved Quality of Light 70% Hedonic
Aesthetic appeal 71% Hedonic
Make Social Events Fun 93% Hedonic
Energy Cost Savings 66% Utilitarian
Better mood 80% Hedonic
Easier control 69% Utilitarian
Improved productivity 69% Utilitarian
Cluster 2 (yellow) will appreciate as traditional 68% of Utilitarian customers are ready to pay
products shift from lowinvolvement to the list price for IQ Control with its respective
lifestyle products features

Pricing Decision
$200
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Sylvania should go for B2C and innovate to survive, while
developing a new set of core competencies

Drawbacks B2B B2C Insight

Implementation Steps to Success
Core Competency B2C marketing competency
Low

New Business Lighting Data Business

Opportunities Opportunity 1 Develop demand creation skills

Brand Image Better brand image with B2C

2 Develop new channels

Market Expansion Not limited to Home
Automation market
Develop emotionally resonant
Threat from low cost Same 3 brand image
players
B2B

B2C

Focusing on B2C segment and reshaping their core-competencies to align with the changing market
trends is an important aspect for companies in which are in a highly innovative market

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The brand should be Sylvania IQ Control, based on our
market research data and the Brand Architecture framework
Brand Equity

Sylvania Corporate brand Corporate vs Sub Brand

Highest willingness to buy. Inconsistent brand positioning.

Marketing economies of scale. Hedonic Attributes

Par with GE & Philips. Sub Brand e.g. Samsung Galaxy

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Our Positioning Statement will focus on the hedonic-
lifestyle features and ease of use

To young professionals with family,

Sylvania IQ Control is a life-style
lighting product that creates the right
ambiance for a better mood

Page 11