improvements after first scan

8/9/2019 Improvements after first scan

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A Cutting-edge Company

Ann-Cathrin Starosky s1897624

Marloes Thijssen s1863584

Robert van Kasteel s1651552

John Hein s1942727


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Table of Contents

Page

1 Introduction...........3

1.1 History of Philips.............3

1.2 Products .... .3

1.3.1 Values..... .4

1.3.2 Vision 2010........ .4

2 Philips performance over the past 5 years......5

3 Philips Strengths.....6

4 Marketing strategy...........7

4.1 Segmentation, Targeting and Positioning............7

4.2 Product Strategies.........8

4.3 Market entry and distribution strategies.........9

4.4 Promotion Strategies.......11

4.5 Pricing Strategies....... .12

5 Conclusion......12

6 Appendix A(SWOT-Analysis)...........................................................................14

7 References.......................................................................................................15


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Royal Philips Electronics of the Netherlands is a diversified Health and Well-being company, focused on

improving peoples lives through timely innovations. 1 Philips is the world leader in lighting, healthcare

and lifestyle. Philips headquarter is located in the Netherlands; additionally Philips is located in more

than 60 countries worldwide with approximately 128.000 employees.2

1.1 History

Anton and Gerard Philips established Philips & Co. in the year 1891 in Eindhoven, the Netherlands. First

Philips & Co. produced carbon-filament lamps and became one of the largest carbon-filament lamp

producers in Europe. In 1910 Philips employed 2000 employees and was the largest single employer in

the Netherlands. Later in 1914, the company began selling the X-ray and radio technology, which was

the first innovation of Philips. Until today, the list of inventions has grown impressively. The inventions

of Philips consist of many breakthroughs and enriched peoples everyday lives.

In the early years Philips established a research laboratory to stimulate product innovation as well as to

study physical and chemical phenomena. Due to this laboratory Philips discovered numerous of well

known products. Furthermore, Philips was one of the companies which became involved in the earliest

experience in the television and radio production. Over the years, the product range became

increasingly larger. They introduced the electric shaver in 1939, the Compact Audio Cassette in 1963,

the Compact Disc in 1983 and several other important innovations. The companys growth was

enormous.

In the 21st

century Philips continued to grow and change. A long time people saw Philips just as a simple

electronic producer, but a few years ago Philips started projecting a new image that highlights the

products in the areas of Lifestyle and Healthcare. In 2004 Philips exposed the new brand promise of

sense and simplicity.3 In September 2007, Philips communicated its Vision 2010 strategic plan to

further grow the company with increased profitability targets. As part of Vision 2010, the organizational

structure was simplified per January 1, 2008 by forming three sectors: Healthcare, Lighting and

Consumer Lifestyle. These steps further positioned Philips as a market-driven, people-centric company

with a strategy and a structure that fully reflects the needs of its customer base. With this set of

businesses, Philips aims to build the leading brand in Health and Well-being.4

1.2 Products

The product range of Philips is divided into seven categories, which are Sound and Vision, Personal

Care, Mother and Child Care, Household Products, Lighting, PC Products and Phones and Accessories.

Under the category Sound and Vision are products like televisions, home theatre, blue-ray and DVD,

1http://www.philips.com/about/company/companyprofile.page

2http://www.philips.com/about/company/companyprofile.page

3http://www.philips.com/about/company/history/ourheritage/index.page

4http://www.philips.com/about/company/history/ourheritage/index.page

Comment [J1]: Has established subunits

Comment [J2]: subordinates

Comment [J3]: inaugurated

Comment [J4]: uprise


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MP3 players are summarized. Other products of Philips are mens shaving, hair care, coffee makers,

toasting, energy-saving lamps, car lamps, phones. These are just a few of Philips whole product range.

The sector with the most earnings is the Healthcare sector with an EBITA of 452 million euro in the 4 th

quarter of 2009. 5 Philips has not only a great product range, but they are also well-known all over the

world and sell their products in a great variety of countries, like for instance Germany, Canada,

Australia and India. The market cluster with the most sales in the 4th

quarter of 2009 was Western

Europe with sales of 2,832 million euro. Another big market with 1,794 million euro sales was North

America. 6

1.3.1 ValuesThe strategy update Vision 2010 laid down the values which reflect the ambitions Philips has The

values are called the four Ds and act like a compass for the company to guide how to behave and to

remind them of the attitudes they should have towards their work, customers and other employees.

With Vision 2010, we are putting people right at the center of things, with Health and Well-being as

our overarching theme. We are thereby putting into practice our mission: improving the quality of life

through the introduction of meaningful innovations. (Gerard Kleisterlee, President and CEO of Royal

Philips Electronics)

1.3.2 Vision 2010

Delight Customers

We anticipate and exceed customer

expectations

y We demonstrate Passion for Philips andsense and simplicity

y We create superior customerexperiences, based on deep insights

y We act as One Philips ambassadors allthe time

Deliver great results

We continually raise the bar

y We play to win big and always setambitious targets

y We challenge the status quo andexperiment with new ways

y We take clear decisions and implementwith speed and discipline

Develop people

We get the best from ourselves and each other

y We attract the best players to createstrong diverse teams

y We take risks by giving people stretchassignments to accelerate their

development

y We personally invest significant time tocoach and recognize people

Depend on each other

We deliver more value by working as One Philips

y We think as One Philips and act asowners

y We trust and empower each other tocontribute our best

y We team up and allocate resources tothe most promising opportunities

(Source: http://w ww.philips.com/about/company/missionandvis ionvaluesandstrate gy/values.page )

In addition to the Vision 2010 Strategy Philips has a specific mission and vision of how they will work in

the future. The mission of Philips is to "improve the quality of peoples lives through timely introduction

5http://www.newscenter.philips.com/main/confidential/resources/corporate/quarterly_results/R_4Q09.pdf

6http://www.newscenter.philips.com/main/confidential/resources/corporate/quarterly_results/R_4Q09.pdf

Comment [J5]: encompassed

Comment [J6]: Diverse AWL 6

Comment [J7]: prestigious

Comment [J8]: Enormous AWL 10


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of meaningful innovations."7

Furthermore, Philips vision is that In a world where complexity

increasingly touches every aspect of our daily lives, we will lead in bringing sense and simplicity to

people.8

2. Philips performance over the last 5 yearsTo discuss the overall performance of Philips over the last f ive years, we have looked trough all available

annual reports. Here we found all the data we needed to analyze the performance.

Philips is a brand that is known all over the world and is one of the largest electronics companies in the

world. In recent years Philips has gone through a transformation that has given the company a more

balanced portfolio of businesses in the domain of well -being and health. These and the other Philips

businesses have been able to develop and improve their market share during the last five years. Since

2005 Philips has made some significant acquisitions, with the biggest being the acquisition of Genlyte

and Respironics in 2008. These two acquisitions are the reason why over 50% of Ph ilips global sales aregenerated by activities in which they are the world market leader. As a result of these acquisitions

Philips has amassed an exceptional range of well-respected brands, including Lightolier, and makes up

the worlds largest integrated lighting solutions provider. As a consequence of this, Philips has build up

an extensive portfolio combined with a g lobal commitment to sustainability.

In 2009, Philips had sales that exceeded 23 billion. Philips has done quite well over the last few years

with steadily increasing sales since 2005 from 25 billion to 26,7 in 2007, until a 4% decrease in 2008

due to the economic malaise. Over the last five years Philips has always been profitable, with profits

even as high as 5 billion in 2006, except from 2008 when there was a global recession. In 2009 the

recession was still felt although there was a minimal profit of 424 million, but this was mainly due to

several layoffs. Philips has also become very aware of the environment in these last couple of years and

this is why they additionally started to sell Green products in 2006. They set a few targets for themselves

over the period 2007-2012 (as can be read in the annual report of 2006), for example that they wanted to

double their revenues from Green products to 30% of total sales, and double their investment in making

Green innovations. Finally Philips has done very well the last couple of years and exceeded expectations

by bringing revenues of Green products to 30,9% in 2009, and investing 409 million in Green in 2009

as to the 284 million of 2008.

That Philips has done well over the last five years is also noticeable in the brand value of the Philips

which has increased gradually.

Value of the Philips brand (Amounts in USD billions) (www.philips.com)

7http://www.philips.com/about/company/missionandvisionvaluesandstrategy/index.page

8http://www.philips.com/about/company/missionandvisionvaluesandstrategy/index.page


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(all figures and data comefrom wwwphilips com)

3. Philips strengthsTo determine the companys international competiveness at the marco -level we want to use Porters

Diamond In this model there are a couple of characteristics that explain the competitiveness of a firmThe Factor conditions are strong which for Philips means that they are very good at innovation and have

advanced research and development labs Another important thing is that Philips has highly skilled

people in these R&D labs The company also has a strong position in their main markets

with a grea t

demand for their products in Europe and North -America Because of the large home market in Europe

this gives Philips a cost advantage and a lot of experience

Porters Five-Forces model focuses at the meso level of a companys marketing strategy9

Because

Philips is such a large company and a respected global brand

it has a lot of bargaining power over its

suppliers This is mainly because there are only a few companies that sell electric shavers and Philips is

the market leader in almost every part of the world Due the companys size it is able to produce in large

quantities and therefore it can buy resources in bulk at a lower price at the same time There is however

the presence of a substitute namely the normal razor But most buyers are not will ing to substitute as

they find the electric shaver more convenient Another strength of Philips is that they are very well

established in their main markets

and have build up a strong reputation and market base Their brand

identity is good and a lot of customers are loyal to the brand This makes it hard for other companies to

enter this market and try to decrease Philips market share The perceived value is the customers overall

evaluation of the product offered by the firm10

In Philips case the customer buys a Philips product

because they expect it to deliver a certain levelof standard

Furthermore Philips has a good acquisition strategy This way they expanded their product market and

segment

9Essentials of Global Marketing 2008 (Svend Hollensen), p 78

10Essentials of Global Marketing 2008 (Svend Hollensen), p 83

5.9 6.77.7 8.3 8.1

0

5

102005

2006

2007

2008

Comment [J9]: Utilize AWL 6

Comment [J10]: Component AWL


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4. Marketing StrategyAfter having introduced the company of Philips, its product range and its global presence as well as

having studied the past five years and the firms nation al and international competiveness, we will

analyze in the following section relevant marketing topics and tools.

Philips, as being the largest electronic company in Europe, offers a gigantic range of products. These are

divided into the three major segments: Healthcare, Lightning and Lifestyle. We decided to focus on the

Lifestyle segment and more specific on electric shavers in this report.

4.1 Segmentation, targeting and positioningA commonly wrong assumption is that companies should try to win as many customers as possible

without performing a detailed targeting of the market. Certainly a great customer base is one of the most

important aims of any profitable company, but to ensure long-term success, it is impossible to serve all

customers equally. That means that it is crucial to define a target group to be able to p roducecompetitive, tailor-made and delighting products.

To determine which segment Philips serves, we firstly want to divide the market into segments. The

plainest distinction which can be made in the world of razors is between manual blade shavers and

electronic shavers. While Philips focuses only on the electrical shavers segment there can be made even

more distinctions. The two most common options are rotary shavers and foil shavers, furthermore there

can be differentiated between wet- and dry-use shavers. Although the company has a great range of

products which are differentiated in uncountable specific features, all of the products belong to the group

of rotary shavers for which the company once became so famous under the Philishave brand name.

However, wet- as well as dry-use shavers are being produced.11

To further determine the target group we want now to go into more detail concerning societal aspects.

The major part of shaving products produced by Philips is aiming at the male population. Nevertheless

the company is aware of the potential of the female serving market and pays growing attention. Currently

there is a special product group called female depilation offering epilators, lady shavers, bikini

trimmers as well as partially so called IPL hair removal systems. Moreover there is a complementary

mens grooming segment with different kinds of hair trimmers. Nevertheless we want to focus in our

report on the mens shaving section which offers products from 30 to 250. Due to the uncountable

number of blade shaver offers and the great advertisement campaigns many people, especially younger

generations, prefer this cheaper option. To be precise, only 18 percent of all men use solely electrical

shavers.12 Therefore the targeting group can be summarized as the wealthy segment of males between 35

and 54 which can afford to buy these premium razors. But what should not be neglected is that there is

also a great amount of women who still prefer male shavers.

To make Philips targeting more clearly we want to include the companys position in the world market.

On 9th

of May 2007 the company was able to announce that it had reached the phenomenal production

11http://www.shavers.co.uk/introduction_to_electric_shavers.php

12http://www.businessweek.com/magazine/content/07_24/b40 38413.htm

Comment [J11]: Include a - and it is AWL 1


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line of 500 million electric shavers. Certainly, with more than 70 years of heritage and sales of razors in

56 countries worldwide the company is the global market leader in electric shavers. The value

proposition of the razors is very high as the formerPhilishave company aims at the highest premium

segment in this market

4.2 Product strategiesIn the following we want to go into more detail regarding marketing management. We have already

discovered that Philips is aiming at the upper class of society with premium products, but we want to

figure out to what extent the company takes action in favor of its customers in comparison to the interest

of the organization and society as a whole.

After analyzing the situation we came to the conclusion that Philips chose a combination out of the

Production Concept, the Marketing Concept and even of the Societal Marketing Concept. To explain this

let us begin with the Production Concept. In this concept the most valuable aspect is continuousimprovement and innovation of the product. Philips has clearly proven that it is an innovative company,

as it was the first who started with the production of rotary shavers. But there were several other

innovations which contributed to the current position as a market leader. The latest innovation is based

on the cooperation with Nivea. To reduce skin irritations and improve the feeling of shaving the

companies developed a razor with implemented Nivea-products such as lotions. Another example is the

newest flagship of the razor segment, the Arcitec. This razor is the first rotary razor with three

independently flexing heads which ensure an excellent shaving result. However, what is most important

is that the company has never forgotten that customers do not want an innovative razor, but much more

an excellent shaving result. This means that Ph ilips is aware of the so called marketing myopia.

What goes along with the Marketing Concept is related to our last point. Philips slogan is sense and

simplicity and this comprises the importance to satisfy the true customers needs. It is not the main goal

to design the most innovative razor on the market, but much more the most effective one. It is not about

the way to get somewhere, but about the result. And therefore Philips is not trying to establish new

customers needs which might be irrelevant at the second glance, but it is trying to develop products

tailor-made to the customer segment resulting in delighted consumers. A very important evidence that

the Marketing Concept is applied is the fact that Philips refers its decisions to direct market research. In

2006 the company conducted intensive market research interviewing 5000 men about their true problems

and needs concerning the perfect shaving experience. The outcome was a not very hidden problem, but

still it opened a true opportunity to outperform competitors. Many customers claimed that it was

extremely difficult to get a satisfying shaving result on the neck under the chin. Philips took this issue toheart and invented the new arcitec which is able to deal with this problem better than any other s haver in

advance. Another indicator are the four Ds representing Philips values:Delight customers, Deliver great

results, Develop people and Depend on each other13

.

13Philips, Annual Report 2009

Comment [J12]: create


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Finally, we also found indications of the Societal Marketing Concept as we consider the Philips

Company as a whole. In recent years Philips emphasized sustainability very much and included it in

important performance goals. The EcoVision4 targets for example include the doubling of revenues

from green products to 30% of total sales, a doubling of the investment in so called green innovations to

a cumulative 1 billion euro and an improvement of operational energy efficiency by 25% as well as a

reduction of CO2 emissions by 25% (Annual Report 2009).

Additionally it is important to consider the general and after-sales service of the company. As Philips

shavers segment is a relatively strong Product-dominant entity the level of services is rather low.

Nevertheless the company tries to achieve high customer satisfaction through additional services like

shaving advice via video tutorials on the webpage, the ability to register products to stay up to date about

the latest news and innovations, very user-friendly and effective buyer's guide with comparison function

of the features of all models and consultations for every kind of customer and the possibility to join clubs

like thePhilishave Collectors Club (PCC).14

4.3 Market entry and distribution strategiesSo far we have addressed the first p of the 4P-Marketing mix; the Product. In the next step we want to

address the place more detailed. Currently Philips has sales and service outlets in 100 countries, 127

production sites and 7 research laboratories in Europe, North America as well as Asia. One important

aspect which enabled Philips to internationalize more easily is its great range of products. The company

had the ability to enter markets which were especially attractive to specific products. That means for

instance if one country had a weak industry for light bulbs, Philips could enter this market and achieve

relatively easy strong positions due to good market research, analyses and decisions regarding the

country of internationalization. Through this early presence in many different countries the company was

able to establish a good brand image and reputation resulting in opportunities for other products, as

management could use the already established wholesaler, retailer and supplier networks. Additionally,

this meant that Philips often had the chance to enjoy first-mover advantages.

In the history of Philips the company has completed a great amount of mergers and acquisitions.

Amperex, Magnavox, Signetics, Mullard, VLSI, Agilent Healthcare Solutions Group, Marconi Medical

Systems, Agilent Technologies and Respironics, Inc. to name just a few.15 These new acquired

companies definitively provided Philips with local knowledge, acceptance in the market and essential

relations with suppliers.

To describe the current situation we want to apply the model introduced by Uppsala. He used four

different stages to describe the mode of entering international markets. From the first to the fourth stage

the level of commitment is steadily increasing. Philips can be classified as a member of the third as well

as the fourth stage. Stage three implies the establishment of foreign sales subsidiaries and stage four the

14http://home.wanadoo.nl/philiclub/indexeng.htm

15http://www.answers.com/topic/philips#Acquisitions.2C_subsidiaries_and_spinouts

Comment [J13]: subsequent

Comment [J14]: achieves

Comment [J15]: various

Comment [J16]: State of affairs


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establishment of production and manufacturing units. As Philips has sale subsidiaries in 100 countries

and produces in 127 places, we can assume that a great percentage of the 100 countries of sales have also

production sites. However, we have to focus on Philips Shavers, which are being sold in 56 countries, but

currently only produced in two production centers for shavers, which are Drachten in the Netherlands

and Zhuhai, China.16 This means, that Philips follows a relatively strong export mode strategy with high

flexibility, low risks and low control.

The remaining question is which are these 56 countries Philips is selling electrical shavers in? The most

important markets for this product segment are definitively Europe and the USA in which the company

was selling razors under the name Norelco. But also the Asian market is getting more important as there

was a significant 11 percent increase in value only in the year 2006.17 In 2004 both Europe and China,

due to its great population, contributed 34 percent of the total sales. The USA is the third most important

region with 26 percent of total sales, followed by the Middle East together with Africa and Latin

America, with 2 and 4 percent respectively.18 The underlying reason why Philips does not enter the

electrical shaver market in India and China as intensively as it does in Europe and America are the

following: Firstly it was proven by research that Chinese man have in general less hair than men in other

cultures. Moreover their hair is thicker and grows more slowly, so that there is no need and demand for

three headed, expensive razors like the arcitec.Nevertheless Philips will offer two headed razors as well

as the arcitec as the premium razor on the market to be present in the China. Concerning the Indian

market there has been determined another problem. Due to the fact that it is still possible to get a shave

at the corner stand for 20 rupees, or 50 cents the Indian population has not yet the wantand therefore

the demandwhich is crucial to sell the shavers.

The primary channel Philips uses to sell its products is certainly through a tremendous network ofretailers. For instance, if you go in a random city into a random electronic store the chances to find

Philips electronic shavers are extremely high. To put it briefly, Philips follows the intensive coverage

approach. Moreover Philips uses the internet effectively to sell products. Unfortunately is it only

possible to buy products from the online shop from 47 out of the 56 countries Philips sells razors in.

While this form of e-marketing is already well established and contributes essential stakes, the m -

marketing techniques have not been adopted, yet.

Adaption takes most obviously place in the United States, as the company is selling razors there under

the brand name Norelco. However, this adaption is steadily reduced due to the fact that Philips is aiming

to unify all products under one brand name. 19 Another adaption is the special offering of two headed

razors for the Chinese market.20 But, to put it in a nutshell, there is in general no need to adapt razors to

different cultures, as the demand for having an excellent shaving result is the same througho ut the world

16http://www.answers.com/topic/philishave

17http://iavbbs.com/gflinn/news.htm

18Essentials of Global Marketing 2008 (Svend Hollensen), p. 476

19http://www.answers.com/topic/philishave

20http://iavbbs.com/gflinn/news.htm

Comment [J17]: Virtual marketing


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and the products are greatly standardized throughout the world. Differences might only occur in the

promotion of the product in different cultures, which we will address under the following topic.

4.4 Promotion strategiesFinally one of the most important questions arises when a company is facing its promotion opportunities.

In 2006 Phillips has chosen to follow the Straight extension strategy as it decided to steadily reduce its

last major adaption to the US market. The brand name Norelco will be changed in two steps from

Philips-Norelco to simply Philips in order to unify the products and benefit from the more positive

associations of the great companys brand name. In other words this means that until 2006 there was

used to some extend the Promotion adaption strategy. An additional positive effect will be a reduction of

promotion costs as these can be more standardized.

This leads us to the next topic of promotion: standardization. As we have already discovered, human

demands for shaving results are similar throughout the world. Nevertheless it can be essential to the

products success to adjust advertisements to cultural differences. Still, Philips did not see the need to

adjust its commercials to a great extent besides of the language.21

But, what Philips does is advertising through effective co -operations. The probably most famous channel

of promotion is Philips connection to world class sports. One important example emerged out of the

Philips Sport Club, the soccer club PSV (Philips Sport Vereniging), which is currently one of Europes

top clubs. Philips owns also the naming rights of the Philips Stadium, which is the teams home stadium

in Eindhoven. Moreover the company has the naming rights of the Philips Arena in Atlanta (Georgia)

and even the Australian premier basketball league is named Philips Championship. In total the company

has sponsored uncountable sports events, teams and even music events. The most current and success ful

campaign was started in 2006 in partnership with AT&T and the Williams F1. Therefore Philips is now

sponsor of one of the Big three F1 teams and attracts a lot of attention.22

The company uses this

valuable partnership by developing razors with the Williams F1 design in order to address this huge fan-

base as well as younger generations.

Lastly we also want to mention Philips involvement in several Hollywood movies like the James Bond

movie A View to a Kill and The Long Wait. Moreover the company uses extensively television, full -

page magazine and billboard advertisements. The budget for advertising and sales promotion was 804

million euro in 2009 (2008: 949 million ).

21Essentials of Global Marketing 2008 (Svend Hollensen, p.479-480

22http://www.answers.com/topic/philips#Sports.2C_sponsorships_and_naming_rights


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4.5 Pricing strategies

A major element in marketing is pricing; this is because the price of a product has an immediate impact

on other aspects of the marketing process. As well as having an impact on profit, a higher or lower price

of a product can also change gross margins and sales volumes.

One of the strategies that Philips is using is skimming. Skimming means you sell your product at a high

price to achieve high profits. Philips puts quality in this case before quantity, with a higher price but also

a high quality product which is appreciated by their buyers. This and the fact that the company is aiming

at the top level of the market is the explanation why Philips can ask these high prices because their

aiming at the top of the market. People want to pay more for their electric shaver, because Philips is an

innovator and they know that it is a quality product. For example they have a special electric shaver that

moisturizes your skin while you shave, by dispensing a NIVEA conditioner. This way you get a smooth

shave and your skin gets looks after at the same time.

Another strategy is market pricing; with market pricing the company bases its price on similar products

in the target market. Philips as one of the market leaders in electric shavers can put up competitive prices.

And, as seen with their skimming approach, people are willing to pay their prices as they know that

electric shavers are that costly.

6. ConclusionPhilips is the largest electronics company in the world. They made a positive transformation over the

years and became market leader. The company has been profitable over the last couple years except in

years of global recession. In this assignment we focused on the Lifestyle segment, in particular electronic

shavers.

It is crucial to define a target group to be able to produce tailor-made and delighting products. Males,

who are able to afford premium razors are the target but without neglecting the great amount of women

who prefer male shavers.

An important aspect is that the company has never forgotten that the customers mainly want an excellent

shaving result, they are aware of marketing myopia. They focus on the effectiveness of the product and

therefore they try to develop products tailor-made to the customer segment resulting in delighted

consumers.

Philips invented the new arcitec which solves the problem of getting a satisfying shaving result on the

neck under the chin. Another indicator are the four Ds representing Philips values: Delight customers,

Deliver great results, Develop people and Depend on each other.

One important aspect which enabled Philips to internationalize more easily is its great range of products.

Philips follows a relatively strong export mode strategy with high flexibility, low risks and low control.

The primary channel Philips uses to sell its products is certainly through a tremendous network of

Comment [J18]: Components AWL 3

Comment [J19]: expensive

Comment [J20]: state of the art

Comment [J21]: tremendous

Comment [J22]: and variety


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retailers. Philips follows the intensive coverage approach. Moreover Philips uses the internet effectively

to sell products.

As there is no need to adapt razors to different cultures, as the demand for having an excellent shavingresult is the same throughout the world, the products are greatly standardized throughout the world. But,

what Philips does is advertising through effective co-operations. The probably most famous channel of

promotion is Philips connection to wor ld class sports. Moreover the company uses extensively television,

full-page magazine and billboard advertisements.

One of the pricing strategies that Philips is using is skimming. Skimming means you sell your product at

a high price to ach ieve high profits. Another strategy is market pricing, with market pricing the company

bases its price on similar products in the target market.

Philips strengths are innovation, advanced research and development labs. Another important thing is

that Philips has highly skilled people in these R&D labs. Philips also has a strong position in their main

markets, with a great demand for their products in Europe and North-America. Because of the large

home market in Europe Philips has a cost advantage and a lot of experience. To put it in a nutshell,

Philips has truly selected an appropriate marketing strategy which results can be seen in the profitability

of the company.

Comment [J23]: exchangeable

Comment [J24]: powerful

Comment [J25]: enjoys

Comment [J26]: gained


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Appendix

SWOT-Analysis

Strengths (internal)

y Strong position in main marketsy Good geographical diversification (25% of

sales is generated in emerging countries)

y Great innovation capabilityy Good acquisition strategy (new products)

Weaknesses (internal)

y The consumer lifestyle division is sensitive tothe economic slowdown

y Sensitivity towards the rate of the dollary Lack of brand recognitiony Products marketed under different names then

Philips

Opportunities (external)

y Philips is a strong global brand which makes iteasier to differentiate and launch new products.

y A lot of potential in the long term (populationaging is positive for the health care sector)

y Rising demand for health care equipmenty Growing awareness for energy efficient

lighting

Threats (external)

y Highly competitive market (especially in theelectronics market)


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References

Websites

Philips

URL: www.philips.com/about/company/companyprofile.page

URL: www.philips.com/about/company/history/ourheritage/index.page

URL: http://www.philips.com/about/company/missionandvisionvaluesandstrategy/index.page

URL:www.newscenter.philips.com/main/confidential/resources/corporate/quarterly_results/R_

4Q09.pdf

Shavers.co.uk

URL: www.shavers.co.uk/introduction_to_electric_shavers.php

Businessweek

URL: http://www.businessweek.com/magazine/content/07_24/b4038413.htm

Philipshave collectors club

URL: home.wanadoo.nl/philiclub/indexeng.htm

Answers.com

URL:www.answers.com/topic/philishave

URL: www.answers.com/topic/philips#Sports.2C_sponsorships_and_naming_rights

URL: www.answers.com/topic/philips#Acquisitions.2C_subsidiaries_and_spinouts

URL: www.answers.com/topic/philips#Sports.2C_sponsorships_and_naming_rights

Others

URL: www.avbbs.com/gflinn/news.htm

ibliography

Essentials of Global Marketing 2008 (Svend Hollensen)

Principles of Marketing, Eleventh Edition (P. Kotler and G. Armstrong)

Pictures

URL: http://www.designawards.com.au/images/INDUSTRY/Philips%20Arcitec.jpg

URL: http://farm4.static.flickr.com/3365/3453191149_c0c94ea346_o.jpg

improvements after first scan

Documents