One of the most essential parts of managing a successful company is how successfully it manages to launch and market a new product in the market. It depends on the company whether they want marketing to be done individually for every product or in a set for a group of similar line products.
The main reason of promoting a new product is to attract new customers to the company and make majority of your target market aware of the company’s latest product. Without that there is a very minimum chance of you getting the attention of your focus group.
Marketing is important for both, the product and the company that sells it. Branding is very important for the establishment and identity of a new product. Selling a product under a global brand gives your product worldwide recognition, which automatically helps in more sales. If the product is successful, you will have a product that sells for itself! Also, a new and innovative product gives more recognition to a brand and brings more audience.
The product which I chose is a 3 in 1 kitchen appliance and the company I chose for the marketing, launch and sales of this product is Philips.
In this report, my goal is to find out how compatible is my product with the company I chose to sell it. I have to figure out how much that brand helps in establishing my product, and also that how my product is capable of increasing the brand value and audience of the respective company. For that I have done the company analysis and product analysis and finally the marketing strategy.
Philips is a world-wide renowned company for the simplicity and innovation they put in their products. The company has a rich profile, and some of its important aspects are briefly explained below.
Philips’ marketing strategy
Philips as a company believes in “Improving people’s lives through meaningful innovations”. Philips promotes themselves as a consumer-led company, thus all the R&D (research & development) processes are based on creating products that are aligned with the current needs and demands of the consumers. Philips distributes their products not only through physical stores but also through modern medium, like e-marketing, via their website. The company website provides detailed product information and prices, along with the latest promotional offers available. The website also helps in informing availability of their products in different countries world-wide.
Philips has a wide product variety available for all types of customers in the market. Philips products are basically divided into the following categories-
Mother and child care products: Feeding bottles, tethers and skin care products.
Personal care: Shavers, hair styling products, hair removers, etc.
Lighting: Apart from fixtures and mood lighting they also provide car lights. Recently they have started using LED lights.
Audio and video products: Television, stereo, etc.
Home appliances- Kitchen appliances, vacuum cleaner, ironing machine, etc.
Phones & desktops.
Accessories: USB, remote control, electronic toothbrush, etc.
Philips uses Price differentiation strategy for setting price of their products. the price of Philips products are different in different countries, due to the use of different currencies and variation in the government regulations in different parts of the world. It is visible on Philips website also that there is a difference in the prices of the same product in different countries.
Philips also uses the price differentiation strategy for a product in the same country. They will have different price for the same product, depending upon the version and quality of the product.
The main headquarters of Philips is located in Amsterdam, Netherlands. Philips being a world renowned company, has its stores in more than 100 countries of the world (Australia & New Zealand, Brazil, Canada, Mainland china, France, Greece, Hong Kong, India, Italy, Israel, Mexico, Pakistan, Poland, US, etc.), divided into 5 regions- North America, Latin America, Middle-East & Africa, Europe and Asia-pacific. They have special promotional activities like contests, discounts, coupons, etc. during all festive seasons, to boost their sales. Philips also manages their sales through E-commerce.
Philips promotes its brand and products through a lot of mediums. They use billboards, print media, electronic media and internet for advertising their product. Being such a big company Philips always has to maintain their unique and new PR strategies and campaigns. Some of the best examples of Philips campaigns are-
The product launch of kitchen appliance ‘Air fryer’ was very successful, as they promoted it as a product which helps in a healthy and convenient way of cooking.
Another promotional campaign was for Aurea T.V., where they hired a model for the promotion, as their promotional theme for the T.V. was ‘seduction by light’.
Type of audience
Philips deals with a wide range of target market, differing in age, culture, sex, status, etc., but most of the customers are loyal because they are satisfied with the brand promise that Philips fulfil. Philips products are not for conservative or sceptic audience. Philips audience are the people who believe in the brand, but are also willing to try the new innovative products that Philips comes up with. Philips products can be used at any time of the family life- cycle. Thus people around the world buy 1 million Philips consumer products every day.
Philips is a very strong brand name. It has positioned itself as a high quality and innovative brand. Their tag line is “sense and simplicity”, and that is exactly what they deliver through their products.
One of the very important features of Philips is that they make useful, healthy, eco-friendly and innovative products. Their mission is to make cities liable by providing healthcare products, managing essential resources (like lighting) and supporting independent living.
Philips increased its brand value by 8% to USD 8.3 billion in 2008. It was ranked 43rd most valuable brand in the inter-brand 2008 ranking of best global brands.
Now-a-days due to increasing industrialization there is immense competition in every industry. There are a lot of companies making same products and trying to sell it in the market.
It is the same with Philips. Philips has some direct competitors like Samsung, L.G., Sony and Panasonic who all make a wide variety of products. Apart from that it has some indirect competitors for various products, like-
P&G and Braun for ‘Male dry shaving appliances’
Oral B for ‘Power toothbrush’
KENWOOD for ‘Food Preparation’
KRUPS for ‘Drip filter coffee’
Wide variety of consumer lifestyle products and home appliances.
Strong research and development processes.
Simplicity and innovation as the theme of every product
Large number of loyal customers
Present in many countries around the world.
Reputed and renowned brand name.
Large base of copyright patents.
Late in development of new products.
Distribution channel is not extensive.
Price is comparatively higher than the competitors.
The ever changing needs and preferences of the market.
Increasing awareness of environmental friendly products.
Changing government regulations.
Dealing in different currencies of the world.
Economic recession in future leading to less product consumption.
Adapting to the fast changing business environment.
Product- The product is basically a 3 in 1 kitchen appliance. It consists of a coffee maker, toaster and a skillet. An additional accessory (spatula) is available with the product. The specifications of the product are as follows:untitled.46.jpg
Materials: ABS plastic, non-stick metal skillet, rubber stands.
Temperature control knob for toaster
Color schemes: Pink & white, yellow & white, Blue & black and Orange & white.
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The product is precisely targeted for audience who are always busy in their work life, and has no time in the hectic mornings to prepare a proper breakfast. The target market is bachelors who may be studying or working; or newlyweds. People who are innovators will definitely try this one. Acoording to the price, middle class and lower upper class will buy the product.
This appliance is definitely cheaper than the price of a coffee maker, a toaster and a pan separately.
Komal appliance 3.jpg
As this a product for working generation, the placement should be done in metropolitan cities. This product has no boundaries of religion or community so it can be presented in any country which is developed or developing. A high end mall is very good place for this product, as every one visits malls on weekends.
The key point for promotion will be its compact design and easy usage. This product is 3 in 1, thus it can do 3 tasks in the time of 1 and save time, which is the highlight of the product. The product will be marketed as ‘The appliance of youth’.br4dvb 5.jpg
It can be launched in a set of color schemes and graphics. So any gender or culture audience can buy it. It can be promoted through commercials, print media and billboards. Side 1.jpg
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SWOT of the product
New and innovative concept
Saves time and money due to its 3 in 1 applaince concept, which can attract the target market.
Available in different colors and design, so audience has a freedom of choice.
Simple interface and easy usability.
Not fully developed and tested
A large number of market is not the focus of product.
Can be advertised as ‘ The appliance for fast pace lifestyle’
Many features can be improvised and then the company can come up with a new and improved version of the product.
There is no similar product in the market, so there is no comparison bar for setting the cost.
People may be apprehensive about a new concept, thus the product can fail in the market.
There is no reason for audience to trust a new product without any brand name or garuntee.
Possibility of the idea being copied by other companies.
Marketing plan for product launch
Competitors- Philips being a very reputed and experienced company in the household appliance sector has to face stiff competition from other companies, like BRAUN, Morphy Richards, etc. However the 3 in 1 appliance (coffee maker + toaster + skillet) is a novel idea which is first of its kind in the industry. This appliance, therefore, will give Philips the first mover advantage and competitive edge over its competitors.
Target the ideal customers- The appliance has a limited range on the target customer profile, but under Philips, who has a very strong and loyal customer base, it will still have a large number of audiences fitting in the customer range. Below are the exact details of what the audience will be like.
Age: 18- 30 year old is the main age group for this product.
Household income: As this product is a worldwide launch, a fix house hold income can’t be estimated. But the target market for this appliance is the families from upper middle class and lower upper class.
Geographical location: The product is such that it can be used all around the world, by people of any nationality or culture. Philips products are sold in more than 100 countries around the world, thereby providing a huge customer base for the product.
Work situation: the work situation of the target market can be of 2 types-
Young adults staying away from their family for studies.
People who have a 9 to5 job and very hectic mornings.
Create a unique value proposition- This appliance has a lot of special features that set it apart from other company products and gives Philips an advantage of coming up with a one of its kind new and innovative appliance.
Saves time: the product can perform three different tasks, meant for three different kitchen products, in the time of one, due to its 3 in 1 engineering feature. This saves a lot of time and energy of the user. it can be healthy in a way because those who used to skip there proper breakfast because of hectic mornings will now be able to get an ideal breakfast without compromising much on time.
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Saves money: It obviously saves a lot of money if you can just buy 1 product instead of three! Philips products are mostly a little high prized compared to other brands, because of its product quality and brand name. This may cause losing some customers who have a lower budget. But this 3 in 1 appliance is an exception, as it will cost efficient compared to the price range of other Philips products. here is the approximate difference-
Good quality toaster (49 S$) + good quality coffee maker (49 S$) + an average skillet (50 S$) = approximately 150 S$
Whereas, the 3 in 1 appliance, roughly, will only costs around 80 S$, saving approximately 50- 70 S$.
Compact design: In today’s world everybody wants a product which consumes less space and is easily movable. Plus the ideal market for this product will potentially be the people living in apartments or condos, which mean they will not have a lot of space in their kitchen for bulky appliances. This product surely is a relief for them, because like all other Philips products, this one is also compact.
Easy and quick: As all the processes of the appliance are engineered to be automatic and has storage for water / milk and coffee; there is any need of adding the ingredients every time you use the appliance.
Easy cleaning: The material of the appliance is glossy plastic on the outside and the inner parts like the storage of coffee and water are detachable; also the skillet is removable. So it becomes very easy for the user to clean the appliance from outside and inside. Moreover, there are rubber stands under the appliance so that it’s easy to shift and clean the bottom surface of the product.
Opportunity of choice: Philips has always given choices of colors to the users in most of their products. But this product is one step ahead. It not only has color preferences but also comes in 3 different graphics on the outer body- plain, waves and floral designs. People always love to be able to choose their favourite from all the given choices, than being forced to buy a product which has no color/ design preferences.
Uniformity: The product can be a huge success in the market because of 1 more reason- coffee is a worldwide beverage, thus giving the product a good chance of being accepted all over the world.
Marketing strategy and tactics- As mentioned in the report earlier, Philips pays a lot of attention on how well the product is marketed and launched; and spends accordingly on the promotion. This can be very beneficial for promoting a new product in the market, under the brand name of Philips.
The target market being a new age generation, the strategy will be more concentrated on usage of modern age media like internet & social network website. Apart from that Philips already has its own official website which is very explanatory of its products.
The usage of print media like newspapers and magazines etc. is also necessary to spread the product information to a large number of audiences.
Outdoor advertising like Billboards, bus-stops advertisements near universities/ colleges and central business district is very important to reach the exact target market.
Lastly one of the most used advertising sources, television commercials, can also be used for a better marketing of the product experience.
Testing concept and marketing approach- Testing of the product can be done through a lot of mediums.
Philips places its products in famous retail outlets, like big bazaar in India or courts in Singapore, which are nationally recognized and visited by many people. This gives Philips products an opportunity to come across a large number of audiences.
The same tactics can be used for the testing of the new product. the 3 in 1 appliance can be displayed on a stall in these stores and people by passing the stall can see the demonstration of the working appliance, as well as can use it themselves to better understand the features of the products.
Online surveys can be done asking suggestions about the concept and aesthetic appeal of the product.
Lastly, Philips can give a money back or product exchange guarantee to first 10,000 customers of the appliance, all over the world. They can ask those customers for their feedback on what they felt went wrong and accordingly do changes in the product, if needed.
Rolling out campaign- This is the time when Philips brand name plays a very important role. There are 3 ways of campaigning for the appliance-
Showing testimonials of the users of the product on T.V. commercials. This way people will relate more to the product.
Sponsoring an event related to cooking/ cookery shows for e.g. – Master Chef, so at the end the show will advertise Philips kitchen appliances, including the 3 in 1 appliance.
Sponsoring a cookery competition, and giving the product as a gift to the winner.
Know your product lifecycle- Any product has 4 main phase of its life. Below is the chart showing the lifecycle of the sales of any product.
Introduction- First six months, sales of the product will be slow. Buyers who are innovators will mostly use the product.
Growth- With the increasing promotion by Philips, after six months of launch, the product will have increasing sales. By then people who are loyal to the Philips brand will start buying it.
Maturity- By now everybody see the product as an established and reliable product. Now the product will reach the peak sales and also the onset of decline due to the possible launch of similar products by the competitors.
Decline- this is the time when the product loses its novelty factors and there will be a need to rethink the product attributes and come up with a better version as soon as possible.
In the end I think that Philips as a brand is perfect for the kind of product I have designed. It really will help the product with the brand name of Philips. Similarly I think Philips can also gain more number of audiences because of my product.
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