It is a Philips case study based on PHILIP KOTLER KEVIN LANE KELLER Book

1. PHILIPS CASE STUDY
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2. PHILIPS
sense and simplicity
DIVISIONS
 Philips Consumer Electronics
 Philips Lighting
 Philips Medical Systems
 Philips Domestic Appliances and Personal
Care
 B2B
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3. INDUSTRY ELECTRONICS
Founded Eindhoven, 15 May 1891
Founder Gerard Philips
Frederik Philips
Headquarters Amsterdam, Netherlands
Area served Worldwide
Key people Jeroen van der Veer(Chairman)
Frans van Houten (CEO)
Products Home appliances
Lighting
Medical equipment
Revenue €21.39 billion (2014)
Operating income €486 million (2014)
Profit €415 million (2014)
Total assets €30.97 billion (2014)
Total equity €10.86 billion (2014)
Number of employees 116,000 (2014)
Slogan "Innovation & You"
Website www.philips.com/global/
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5. 5

6. 8/29/2016
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7. (1910 to 1950s)
 Philips Metal Filament Lamp Factory Ltd. was
founded in Eindhoven in 1907.
 That was followed in 1912 by the foundation of
Philips Lightbulb Factories Ltd.
 In 1920s,Philips started to diversify its product
range.
 In the 1920s, the company started to
manufacture other products, such as vacuum
tubes.
 In 1939 they introduced their electric razor, the
Philishave.
 In 1949, the company began selling television
sets.
Vacuum Tubes.
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8. 1990 TO 2015
 In may 1990 when company
posted losses of $2.6 billion,top
management launched a major
initiative known as”Operation
Centurion”.
 In 1999,Philips embarked on a
worldwide marketing campaign
and changed their company’s
image to a technology-oriented
company rather than a market –
oriented one.
 In 2001,Philips launched a
company wide restructuring
program called “Towards One
Philips’(TOP) under CEO
Gerard Kleisterlee to foster
greater co-operation.
 The program helped not only in
lowering costs but also promoted a
spirit of collaboration.
 In January 2011 Philips agreed
to acquire the assets of Preethi,
a leading India-based kitchen
appliances company.
 In March 2012 Philips
announced its intention to sell,
or demerge its television
manufacturing operations
to TPV Technology.
 April 2013, Philips announced a
collaboration with Paradox
Engineering for the realization
and implementation of a “pilot
project” on network-connected
street-lighting management
solutions. This project was
endorsed by the San Francisco
Public Utilities
Commission (SFPUC).
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9. TARGET APPLICATIONS IN THE PROFESSIONAL
MARKET ARE DECORATIVE OUTDOOR AND
SHOP LIGHTING…
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10. ..creating new lighting
possibilities
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11. CASE STUDY
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12. REVENUE
• Globally,Philips derives 34 percent of its revenues from lighting ,in
India,the figure is 58 per cent.
• In Health care,the global contribution is 40 per cent.In India it is 18 per cent
• In Consumer lifestyle,the company gets 26 per cent of its overall
revenues,in India,it is 24 per cent.
• Totally the Indian unit closed the fiscal ended march 2012 with revenues of
Rs 5,579 crore,growing at a clip of about 23 per cent per annum.
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13. PHILIPS
GROWTH OVER THE YEARS
1891 1912 1920 1939 1949 1963 1982 2000 2011 2015
ACQUIRED
THE ASSETS
OF PREETHI.-
INDIA BASED
KITCHEN
APPLIANCES
COMPANY
LAUNCHED COMPACT
DISC.
.
INTRODUCED
THEIR
ELECTRIC
LASER.
STARTED
MANUFACTURING
VACCUUM TUBES.
.
.
PHILIPS
WAS
FOUNDED. PHILIPS
LIGHTBULB
FACTORY
COMES
INTO
EXISTANCE.
PHILIPS
BEGAN
SELLING
TELEVISION
SETS.
INTRODUCED
THE
COMPACT
AUDIO
CASSETTE
TAPE
FOLLOWED
BY “RADIO
RECORDER”
FEW YEARS
LATER.
PHILIPS
BOUGHT
OPTIVA
CORPORATION
ACQUIRED
VOLCANO
CORPORATIO
N
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14. Solutions
 Philips embarked an improvement
program called BEST (Business
Excellent through Speed and
Teamwork).
 Have several tools and approaches as a
part of BEST.
 Some of them are:
• Philips Business Excellence Model
(PBE)
• Process Survey Tools(PST)
• Balanced Scorecard (BSC).
Problem
 Philips was successful since its
inception, but its faced poor financial
performance during the 1990s due to
several reason:
• Fall of market share.
• High Manufacturing Costs.
• Lack of competitive product price
• Growing competition and Rapid
changes in the external environment
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15. STRATEGY OF PHILIPS
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16. 8/29/2016
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17. …cont’d
RETAIL
Emerging
urbanization ,
population
growth and
new demand.
AUTO
Philips
offers best-
in-class
lightning
solutions in
OEM & OES
e.g. Hyundai
INDUSTRY
Requires better
illumination for
performance
Reduces operating
cost
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18. HEALTHCARE
Supports hospitals and
diagnostic centre
medical equipments
providers for experience
of care
Anesthesia
Cardiology
Critical care
Home respiratory care
Radiology
PERSONAL
CARE
Market leader in male
grooming equipments
Personal care product is
introduce in Tier 1 &
Tier2 cities
Trimmers
Razors
Wet & Dry electric shaver
Steam Iron
Hair dryer & straightner
HEALTH CARE & PERSONAL CARE SOLUTIONS
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19. Questions
raised at
the end of
mini case

20. Q.1 Evaluate Philips "sense and simplicity" strategy. What are the
risks the company faces in using the tagline?
Strategy –
Philips sense and simplicity
strategy was based around a
marketing insight they
obtained from a market
research on their consumer
segment. Philips wanted to
make the technology hassle
free and easy to access.
Risks –
1) They would compromise on the
advancement in technology in
order to make things simpler.
2) They would give the impression
of a less advanced electronics
manufacturer, because of it's
simple design and features.
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21. Q2. What strategies can Philips follow to ward off competition from
Japanese manufactures of consumers electronics?
The major advantage that
Japanese manufacturers
have over Philips
is their ability to keep their
prices lower.
if Philips were to emphasize
adherence to
quality, simplicity of design, the
multi-lingual instructional
manuals, and the sense that
their products provide more value
for money, they would have an
advantage. The ‘Sense
and Simplicity’ campaign is all well
and good, but Philips should take
care to ensure that
advertisements are designed in
such a way as to ensure that
customers understand the
products in exactly what the
company wants them to.
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22. Summary
BMW’s
Logo

23. Thank you
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24. Created by Kouts Kumar, IET Lucknow,
during a marketing internship under
Prof. Sameer Mathur, IIM Lucknow. 24