Slides based on the case study mentioned in the Philip Kotler book.

2. The company provides a rich
and diverse portfolio to its
customers to choose from.

3. Gerad Philips Frederik Philips

4. Mission
“Improve the quality of
people’s 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.”

5.  Founded in 1891.
 The first product manufactured by it were the carbon
filaments.
 Manufactures more than 50,000 products.
 Currently employs around 1,22,000 people.
 The company has aligned itself as a health and well-
being company.
 For years, the company has innovating and
introducing newer products into the market.

6.  The company operates in following 3 categories:-
1.Healthcare
2.Lighting
3.Consumer lifestyle

7.  The company has been consistently ranked high in
the healthcare sector.
 The company provides products in sectors such as
cardiology oncology, orthopedics radiology etc. to
name a few.
 A belief that the company can make a difference by
removing boundaries in healthcare with its
innovative and affordable technology solutions.

8.  The company also organizes various campaigns
from time to time to create awareness about various
diseases.
Breast Cancer awareness campaign organized in India

9.  Philips lighting is a leading provider of solutions and
applications for both professional and consumer
markets.
 With the new lighting technologies, such as LED
Philips continues shaping the future with its new and
ground breaking new lighting applications.

10.  The company’s consumer lifestyle portfolio is further
divided into following sub-portfolios:
1.Healthy living space ex:- Water purifiers
2.Home living ex:-LCD TV’s
3.Personal care ex:-Grooming kits
4.Interactive living category ex:-Go gear MP3 player

11.  The company intends to make consumer lifestyle
portfolio as its point of difference(POD).
 This will help the company in competing with its
various other competitors such as Samsung, LG etc.
 The company aims to deliver deeper experiences in
touch with the social and emotional needs of its
customers in their homes: right from a cup of coffee
in the morning , to a relaxing evening with an Aurea
TV.

12. The company faces the following issues:-
1.The company faces stiff competition from its
Japanese counterparts as they provide products at
relatively lower prices.
2.The company has its products in too many
domains.
As a result the company needs to run separate
marketing campaigns for its varied product mix.
This not only increases the company’s
expenditure but also makes it difficult for the
company to have an integrated brand image.

13. Following are the solutions to
the previously mentioned
problems:-
1.The company can shut down
its smaller inefficient units and
instead have bigger automated
plants. This will help the
company on cutting down on its
cost.
2.The company has started
sharing its R&D expenses with
other large corporations to cut
down on its own cost.

14.  Strengths:
1.Huge investments in R&D
2.Highly innovative products
3.Effective communication
4.Strong brand equity
5.Copyright patents (Philips is the world’s largest
patent applicant at the European Patent Office)

15.  Weaknesses:
1. Higher priced products
2.Competitive leadership
3. Weaker distribution networks than competitors

16.  Opportunities
1.Increasing industrialization in developing countries.
The company can capture markets of such countries.
Ex:- Introduction of modular switches for its Indian
market.
2.Higher demand for more energy efficient lighting
sources.

17.  Threats:
1.Competition
2.Exchange rate fluctuations
3.Lower cost competitors

18. Question 1: Evaluate Philips “sense and simplicity” strategy.
What are the risks the company faces in using this tagline.
Answer 1
1. They would compromise on the advancement of
technology in order to stick to its tagline of “sense and
simplicity”.
2. It would give an impression of technically less advanced
products being made available in the market by the
company.
3. Therefore the company has changed its slogan from
“sense and simplicity” to “innovation and you.”

19. Question 2: What strategies can be used to compete with Japanese
manufacturers.
Answer 2:
The biggest advantage which Japanese competitors have is a lower
price tag.
Philips can overcome it in the following manner:
The company should highlight its “ innovation and you” tagline. The
company should be able to effectively communicate to the customers
that even though their products are costlier, they are worth the extra
amount to be paid because they are quite technically advanced.
The customers should be convinced that the extra amount paid is
worth the product they purchase.

20.  Founding fathers
 History
 Mission and Vision
 Target sectors-healthcare , lighting and consumer
lifestyle
 Problems faced with solutions
 SWOT analysis
 Answers to the questions of case studies

21. Created by Prasham Bhargava, VIT Pune during
a marketing internship under Prof. Mathur ,IIM
Lucknow.