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Marketing Strategy

Formulation &
Implementation
MM-II Assignment II

Section A

Group 12

Ankit Kapoor (13)

Chandni Kripalani (25)

Mohit Bahl (37)

Rinkesh Garg (49)

Vinay Ajmera (62)


Marketing Strategy formulation & Implementation
Philips India

Executive Summary

Our objective in this assignment was to devise a marketing strategy for the mp3
players of Philips India Ltd. In this process we studied the varied elements of
the marketing mix and how they interact in the case of the digital music player
industry.

The methodology given in the course outline has been strictly followed for this
assignment. The Indian mp3 player industry promises tremendous growth in the
future which had opened new opportunities for the companies. The industry
witnessed a growth of 116% in 2007 and promises a compounded growth of
77% till 2010. Using its technical expertise in a technology driven industry,
Philips can capture a good portion of the market. However, the competition is
intense and Apple enjoys a substantial 70 % of the market. Therefore, Philips is
required to continually redefine its offerings, in order to stay relevant in the
market.

In this assignment, we have taken these considerations into account and framed
a strategy for the company with respect to its product, price and promotion.
Widespread growth of internet has made it an important marketing tool and
thus, we have formulated an online marketing plan for the company as well. We
have also devised a budget for the above mentioned plans.

With the help of product innovation, new pricing and distribution strategy,
Philips can attempt to increase its market share and reap benefits of the growing
mp3 players industry.
Marketing Strategy formulation & Implementation
Philips India

About the Company

Mission Statement

We improve the quality of people's lives through the timely introduction of meaningful
technological innovations.

Vision Statement

In a world where technology increasingly touches every aspect of our daily lives, we will be
a leading solutions provider in the areas of healthcare, lifestyle and enabling technology,
aspiring to become the most admired company in our industry as seen by our stakeholders.

Company Strategy

• Increase profitability through re-allocation of capital towards opportunities offering


more consistent and higher returns
• Leverage the Philips brand and our core competencies in healthcare, lifestyle and
technology to grow in selected categories and geographies
• Build partnerships with key customers and suppliers, both in the business-to-business
and business-to-consumer areas
• Continue to invest in maintaining world-class innovation and leverage our strong
intellectual property position
• Strengthen our leadership competencies
• Drive productivity through business transformation and operational excellence
Marketing Strategy formulation & Implementation
Philips India

Situation Analysis

Globally, the top 10 MP3 brands control 96% of the market.

These brands in descending order, are as follows-

Portable MP3 2004 $396,559,700 Portable 2003 $848,118,469


Player Total MP3 Player
Total
1 Apple 1 Apple
2 Other 2 RIO
3 Sony 3 iRiver
4 Rio 4 RCA
5 RCA 5 Digitalway
Top Five Brands 70.20% $278,384,909. Top Five 86.40% $732,774,357.21
4 Brands 6

6 Archos 6 Creative
Tech Labs
7 Creative 7 Samsung
Labs
8 Samsung 8 Nike-
Philips
9 Panasonic 9 Memorex
10 Nike 10 Archos
Tech
Top Ten Brands 68.70% $272,436,513. Top Ten 96.00% $814,193,730.24
9 Brands
Source: TWICE’s 2003-2004 Market Share Reports by
Category

The Indian music industry will grow to Rs. 4100 crores in 2009 from Rs 1,450 crore in 2005.
And this growth will be mainly driven by by mobile music, which will account for 88 per
cent of the music industry’s revenues. Mobile music will be driven by all formats like
ringtones, ringback tones, full track audio and video downloads. However, online music
sales will remain minimal for the next three years.
Marketing Strategy formulation & Implementation
Philips India

Digital music sales surpassed physical music in sales in India in 2007.

The sale of digital music has a direct impact on the MP3 player industry. So it is assumed
that follows a similar trend as the sale of digital music.

With prices coming down due to lower cost of storage, the MP3 player market is growing
exponentially. As per IDC estimates, in India the market for MP3 players witnessed a growth
of 116% in 2007, and the demand will continue to surge to 73,34,000 units by 2010, at a
CAGR of 77%.
Marketing Strategy formulation & Implementation
Philips India

The players in the domestic market include-

 Apple
 LG
 Philips
 Sony
 Toshiba
 Samsung
 Creative
 iRiver
 Archos
 The brands like Philips, Apple, Creative, Sony and Samsung have the main market
share.

Porter’s five forces

Buyers Power: Supplier Power:

(i) No single consumer has any power over The components needed to produce a portable music
the production levels or prices of the various player include:
products offered. Almost all units of MP3
players are sold through: • hard drive or flash memory
• processing chips
a. Philips Franchisee stores • user interface units
b. Philips Exclusive outlets • general
c. Multi-brand outlets • Assembly, and design ability.
d. Online marketplace
Most of these units are sold directly from Since Apple enjoys an almost 90% market share in
the producer. the hard drive based market, they have considerable
buying power over the suppliers.
(ii) In case of IPOD switching cost of Smaller players in the portable music market, such as
changing over to another mp3 player is high Phillips would have difficulty acquiring the deals
as the player only supports proprietary Apple can receive.
Marketing Strategy formulation & Implementation
Philips India

music, but this is not the case for other mp3


players.

Degree of competitive rivalry: Barriers to entry

The expected yearly growth of the industry The barriers to entry are:
is around 20%. (i) Technical Knowhow: However, this may be
outsourced as well
• Competition in the mp3 market is going to
be fierce (ii) Brand Positioning: Apple relies heavily on
franchising and advertising on television and
• Lower prices billboards.

• Newer and better features (iii) Component prices: Through its volumes, apple is
• Technology will characterise the able to claim the lowest prices.
industry.
(iv) Market share is locked in with higher switching
costs (once consumer has purchased a variety of
proprietary music
Threat of substitutes:

(i) Convergence: cell phone and an audio player in the same device

(ii) Flash based players and hard drive based players are substitutes for one another

(iii) Portable video players having features of an audio player.


Marketing Strategy formulation & Implementation
Philips India
Marketing Strategy formulation & Implementation
Philips India

Swot Analysis

Strengths Weakness

 Advancement of technology  Lower variety as compared to


competitors
 Substantial investment in R&D
leading to breakthrough inventions  Low awareness of Philips mp3
like CD-RW and DVD players

 Long presence in the country (75


yrs)

 High Brand awareness

 Efficient supply chain and wide


distribution networks

 One of the earlier entrants in the


mp3 segment

Opportunities Threats

 Growing market - Significant  Cell phones with music players


growth for mp3 players in the past
year.  Fierce competition of existing players

 Rising sales of digital music  Entry of new players like Microsoft


Zune
 Institutional sales - for e.g. Diwali
gifts to the employees.  Rapidly changing technology - high
product obsolescence
Marketing Strategy formulation & Implementation
Philips India

Goals & Objectives

Objectives

 To position Philips as a market-driven, people-centric company

 Fully reflect the needs of its customer base, while also increasing shareholder value.

Goals

 Increase sales by 20%

 Double the market share to 8% by 2008-09. i.e. 400000 units

 EBITA to exceed 10% through improved margin management, product improvement


and cost savings.

Segmentation

Characteristics Product

They look for portable music players;


inexpensive options to play music on the
Daily Commuter move. Basic Audio Players

Extensive users, brand loyal, Prefer


Dedicated MP3 player over the hybrid
Serious Audiophile type Hard Drive Based Player

They look for portable music players;


that are light and easy to carry with Micro hard drive based
Travel Mate reasonable capacity to carry music player

They look for compact music players;


with shockproof operations, where music
Workout does not skip with jerks; also they look
Companion for the shuffle option Flash-based players
Marketing Strategy formulation & Implementation
Philips India

They look for relatively inexpensive


music players, with stylish looks, Micro hard drive based
Light Listener interchangeable covers player
Marketing Strategy formulation & Implementation
Philips India

Product analysis

Product mix width - 2

Product mix Depth - 5 for audio and 8 for audio/video players.

We can see that the audio/video line has a greater variety. The reason being that this is the
latest in this technological warfare and tough competition exists from other competitors in
the same category.

Also this segment is growing at a rapid pace.


Marketing Strategy formulation & Implementation
Philips India

Philips India offers MP3 players under the product category of Portable Audio and Video
Products. This category broadly includes 4 heads:

i. MP3 Players

ii. Audio/Video Players

iii. Radio/cassette recorders

iv. DVD Players

The product chosen by our group covers the first 2 i.e. MP3 players and Audio/Video
Players. Audio/Video Players have been included because these players not only offer the
basic features of a MP3 player, but also additional features like videos, built in speakers and
LCD display. Philips has a total of 13 products under these 2 heads. The company offers a
variety of features to serve the needs of different customers at affordable prices. The basic
features differentiating the products are:

1. Memory: The memory of the products offered by the company ranges from 1GB
to 8 GB. The basic MP3 players which are also called flash audio players have a
maximum memory of 4 GB. Flash audio/video players have memory ranging
from 4 GB to 8 GB.

2. Video playback: The audio video players offer videos and movies playback. The
products are capable of playing back latest video formats such as MPEG 4 and
WMV.

3. Battery Back up – The lower end items offer an average battery back up, while
the higher end audio video players offer a 15 hours music or 4 hours video
playback which is in sync with the current scenario in the industry.

4. FM Tuner – Philips has products which also offer FM tuner along with MP3
playback in order to compete with other players in the industry.
Marketing Strategy formulation & Implementation
Philips India

Product Levels

Core benefit Music


Basic product A portable music player
Expected product Good quality sound, Easy to carry and
operate. Good battery life, Durable, clear
display
Augmented product Video, FM, Voice recording, games
Potential product Camera, Bluetooth, GPS

The portable mp3 players are currently in the growth stage of product life cycle.

MP3 players are products which are mainly based on technology. The life cycle of the
technologies used plays an important role in managing the product line.
Marketing Strategy formulation & Implementation
Philips India

The above technology product life cycle shows that they are 2 types of customers:

Early Adopters: who accept the technology when it is in the growth stage. This is majorly
happening for flash audio players. The audio players have found a lot of adopters. Philips
has a sufficient range in this product line,

Late Adopters: who accept the technology after it has been widely accepted and the prices
have also decreased. This is happening for audio video players. Although, these players have
had a significant acceptance, it is quite low as compared to audio players.

In the future, the strategy will be to focus on these late adopters because the prices are
expected to fall and people are now more willing to accept to new technology. Video players
have been accepted by early adopters and soon they will come to a point when this would
become a basic feature desired by users.
Marketing Strategy formulation & Implementation
Philips India

Pricing

PROMOTION
P HIGH LOW
R Rapid Skimming Strategy Slow Skimming
I HIGH (RSS) Strategy (SSS)
Rapid Penetration Slow Penetration
C
Strategy (RPS) Strategy (SPS)
E
LOW

Currently, Philips is following a competitive pricing strategy as its prices are marginally
lower than its major competitors. Also its promotion is very low as compared to other major
players. So we can say that Philips is following a slow skimming strategy.

The new product should be launched with a Rapid skimming strategy. The new features
should be used to charge a premium and establish it as a status symbol. Heavy promotion
should be done to generate high awareness.

The prices of other products will match those of the competitors.

MP3 Players Was Now Percentage Reduction

Samsung-YP-T10QB (2GB) Rs. 6,900 Rs. 6,550 5.3%

Samsung-YP-U3 (1 GB) Rs. 3,300 Rs. 3,149 4.8%

Samsung-YP-K5Q (2GB) Rs. 9,000 Rs. 8,699 3.5%

Samsung-YP-T9A (4GB) Rs. 15,000 Rs. 8,149 84.1%

Samsung-YP-K3QB (2GB) Rs. 5,500 Rs. 5,449 0.9%

Sony-NW-E005F/V Rs. 6,990 Rs. 3,990 75.2%

Sony-NWZ-S616F/B Rs. 9,990 Rs. 7,990 25.0%

Sony-NWZ-S615F/S Rs. 7,990 Rs. 5,990 33.4%

Sony-NW-A805/V Rs. 7,990 Rs. 5,990 33.4%

MP3 Players Was Now Percentage Reduction


Marketing Strategy formulation & Implementation
Philips India

Sony-NW-A806/W Rs. 9,990 Rs. 7,990 25.0%

Sony-NWD-B105F/B Rs. 4,990 Rs. 4,490 11.1%

Sony-NWD-B103F/W Rs. 3,990 Rs. 3,490 14.3%

Sony-NW-E003F/G Rs. 5,990 Rs. 2,990 100.3%

Transcend-T.sonic 840 (2GB) Rs. 5,500 Rs. 3,200 71.9%

Transcend-T.sonic 840 (4GB) Rs. 6,925 Rs. 4,200 64.9%

Transcend-T.sonic 610 (1GB) Rs. 3,200 Rs. 1,750 82.9%

Transcend-T.sonic 820 (2GB) Rs. 2,795 Rs. 2,700 3.5%

Transcend-T.sonic 610 (2GB) Rs. 4,500 Rs. 2,250 100.0%

Transcend-T.sonic 820 (4GB) Rs. 7,000 Rs. 3,495 100.3%

Transcend-T.sonic 630 (2GB) Rs. 4,800 Rs. 2,250 113.3%

Creative-ZEN (4GB) Rs. 9,999 Rs. 6,800 47.0%

Creative-ZEN V PLUS (2GB) Rs. 8,890 Rs. 4,999 77.8%

Creative-ZEN V PLUS (1GB) Rs. 3,999 Rs. 3,650 9.6%

Creative-Zen Stone Plus (2GB) Rs. 4,990 Rs. 4,399 13.4%

Creative-Zen Stone (1GB) Rs. 2,599 Rs. 2,100 23.8%

Creative-ZEN V PLUS (4GB) Rs. 11,890 Rs. 7,999 48.6%

Creative-ZEN Vision (30GB) Rs. 18,990 Rs. 11,500 65.1%

Apple-iPod Shuffle (1GB) Rs. 2,700 Rs. 2,699 0.0%

Apple-iPod classic (160GB) Rs. 20,500 Rs. 18,999 7.9%

14.1%
Apple-iPod nano (8GB) Rs. 11,400 Rs. 9,995

Apple-iPod classic (30GB) Rs. 14,600 Rs. 12,995 12.4%

Apple-iPod Touch (16GB) Rs. 23,600 Rs. 21,500 9.8%

Apple-iPod Touch (8GB) Rs. 17,700 Rs. 16,500 7.3%


Marketing Strategy formulation & Implementation
Philips India

The above table shows the reduction in the prices of MP3 players of major players in the
industry. It is clearly evident that there is a significant reduction in prices, reaching even 100
percent for a couple of products. On the basis of this information, we predict that Philips
shall also reduce its prices in order remain competitive. The following table summarises the
pricing strategy of Philips:

Current Prices in August Prices in January


Prices 2008 2009

SA 1356 2,499 2,250 1,999

SA 2315 2,999 2,749 2,499

SA 4325 4,990 3,499 2,999

SA 3025 4,300 4,000 3,499

SA 3325 5,999 4,499 3,499

SA 3345 6,999 5,999 4,499

SA 6045 8,999 8,000 6,999

SA 6185 15,999 13,499 10,999


Marketing Strategy formulation & Implementation
Philips India

It is assumed that some older models would be discontinued on account of continuous


technology advancement in this sector. The introduction of new models during the year is
another reason for lowering the prices. The new models would be introduced at above the
current prices.
Marketing Strategy formulation & Implementation
Philips India

PLACE

Philips has set up a chain of its company owned stores called Philips Arena. There are
currently over a 100 Philips Arena stores. Apart from these its products are available through
various exclusive Philips outlets and MBO’s throughout the country. Its distribution network
covers over 540 districts across India.

With the advent of modern retail in a big way Philips has to make its presence at stores like
Croma, Next, Reliance Digital and Electronics Bazaar. It has to employ a key account
management approach.

Philips has 103 service outlets which provide service support to its consumers.

Channel Design

Philips India Philips India Philips India


Ltd Ltd Ltd

Agency C&F agents

Distributors
Arena/Moder Exclusive
n Retailers retail stores/

Exclusive
retail stores/

Consumer Arena Arena


Marketing Strategy formulation & Implementation
Philips India

Product Development

The current features being offered by Philips are unable to differentiate it significantly from
its customers.

Areas where Philips lags behind its competitors:

o Battery life

• Apple’s video ipods offer a battery life of around 30 hrs whereas a comparable
product from Philips has a battery life of around 15 hrs.

• Recharge time is also greater by almost an hour in case of Philips

o Storage Capacity

• The maximum capacity offered by Philips is 8GB whereas Apple has touched
160 GB.

• Even one of its greatest threats, mobile phones now come with 8GB storage
capacity

o Looks & Design

• Philips mp3 players are bigger in dimension as compared to almost any of its
competitors

• Heavier - Lack sleekness

• Models available only in one colour

Areas where Philips has an upper hand


Marketing Strategy formulation & Implementation
Philips India

o Display

 First to introduce an LCD display.

 One of the largest display screens.

 Good clarity

o Others

 Built in speakers

 Introduced Games

 Sturdier than its competitors

The New Product

The shortcomings should be kept in mind for developing the new product.

Accordingly, the new product shall have the following features

Change in looks

A much sleek design

Lightweight

Different body colours - for e.g. Apple nano comes in 5 colours.

Approximate dimensions

Weight 120 gm
Width 60 mm
Depth 8 mm
Height 110 mm
Marketing Strategy formulation & Implementation
Philips India

Battery life to be at least doubled to match Apple’s 30 hrs. Charging time to be reduced.

Storage capacity to be at least 40 GB

Differentiating Features

• Touch screen to be introduced +3500

• Camera - at least 2 megapixels to be included + 2000

• Bluetooth + 1000

• GPS

• WiFi +800

• E-Mail service

Cost

These differentiating features coupled with improvements in other areas like battery life and
storage capacity will allow us to charge a premium.

A comparable product, excluding the differentiating features mentioned above would cost
around Rs. 20000. These features would cost us an additional Rs. 7300. We would go in for a
much higher price along with heavy promotion i.e. rapid skimming strategy.
Marketing Strategy formulation & Implementation
Philips India

Promotion

Advertising Agency

Philips hires an external agency to handle its entire advertising effort. The current advertising
agency for the company is Mudra Communications Pvt. Ltd.

The promotion strategy will be based on the five M’s of advertising

Mission

To create brand awareness and knowledge

To establish the product as a status symbol and create a liking, desire and preference.

To create a perception that the company is charging higher price for superior features and
quality.

Money

Very high competition and low awareness.

New features are being introduced

Frequency - Advertise heavily (Rapid Skimming Strategy)

Message generation and Evaluation

The advertisements will position the brands in such a way that it first highlights the brand
Philips and then focuses on the features. Also the heavy advertising for the new product will
have a roll over effect on the other products creating greater acceptance for them.

Media
Marketing Strategy formulation & Implementation
Philips India

Magazines

Philips will advertise with 2 magazines that include articles regarding latest electronics, at
first, to check which one of them is most effective for advertising into, in the future. It will
place these advertisements @ Rs. 50000/issue/advertisement alternatively in each month (i.e.
6 ads per magazine)

Newspapers

Phillips will utilise 3 major and popular dailies to advertise its products. It will place these
ads every Sunday (ie 52 days) @ 450 cm/sq inch

TV

TV advertisements must be included to increase mass awareness. It will thus advertise once a
week (i.e. on 52 days) in a mix of 3 popular news and sports channels (during popular
programmes and matches) around 2 times a day.

Internet

Internet plan has been enumerated below. For the purpose of promoting the website, the
company will pay a popular search engine such as google money according to the pay-per-
click mechanism. The cost per click is approximately Rs. 5 per click. (It is assumed that the
website generates 100 clicks/day).

Promotions

(i) Free leather case worth Rs. 500 for MP3 players with MRP exceeding Rs. 10,000.

(Cost to the company for the leather case = Rs. 100. Expected Sales= 4,00,000 units. It is
expected that the value of 20% of the units are greater than Rs. 10,000)

(ii) With every MP3 player, Phillips gives its customers 1 MP3 of 100 songs each. (Cost to
the company for the leather case = Rs. 5, songs cost assumed to be negligible, as they will be
culled out from employees songs libraries)
Marketing Strategy formulation & Implementation
Philips India

Sales Force

The company will require sales force to serve as an interface between the company and the
distributors. It is assumed that they will employ a sales force comprising of 30 executives @
Rs. 15,000 per month.

Publicity

The publicity will be carried out through word of mouth through ‘viral marketing’. This will
be done by encouraging forum discussions through social networking website’s and will be
carried out through the web research staff. As such this segment has not been taken
separately and the cost is assumed to be nil.

Web Research

The web research staff of 4 executives will be carrying out all the web promotion activities
and monitoring the customer’s needs and expectations from the website though comments
and suggestions received via participation in the website’s consumer research questionnaire.
Additionally they will also be involved in promotion in the social networking website’s as
mentioned above.

Promotional Program’s- Events

MP3 Mania' programme targeting the youth which is the key target segment for the
company. The ‘MP3 Mania' programme which was launched in Chennai, Mumbai,
Bangalore and New Delhi. The concept was to go to youth hang-outs, schools and colleges,
and educate the youth about the technology behind mp3’s. The program helped the company
notch up a 45 per cent share in the MP3 market.

The Philips Mahasangram Integrated Marketing Programme: A key reason behind this
initiative seems to be the growing potential of the rural market. Launched in July, 2002 was
introduced to promote a entirely new set of products to meet the requirements of rural
customers. The aim: To aggressively push the company's sales in the rural/semi-urban
segment with a clear focus on rural towns with a population of less than 5,000 and semi-
urban towns with a population between 5,000 and 50,000.
Marketing Strategy formulation & Implementation
Philips India

Print Campaigns: The current marketing campaign of the company is Sense and simplicity.
The rationale for the campaign is to portray that technology can be advanced and simple at
the same time. It can be easy to experience. It can be designed around people. [Annexure
No.2]

Other print Campaigns

Let's make things better: This was the longest campaign of Philips and was used as a
promotional programme for the entire gamut of consumer electronics. They wanted to
emphasise that they are the innovators of audio cassette, mp3 players, the compact disc and
the co-inventors of the DVD. They portray themselves, through this campaign to be devoted
towards improving processes. [Annexure No. 2]
Marketing Strategy formulation & Implementation
Philips India

Website Review

Philips has a website already in place. It is quite an extensive website and has all the
company and product information. If the company adds price information and payment
mechanisms, it will be able to immediately start selling online. It can thus very easily get the
following benefits-

1. Get a new distribution channel and thereby increase market reach. This channel is
accessible round the clock, all days of the week in those areas where physical outlets
have not been established.

2. Visibility- In the ubiquotous market, philips will be able to get a competitive edge. It
can claim greater presence among the current market as well

3. Establishing and maintaining business relationships- Philips can use the website to
create new business relationships with its suppliers and institutional clients.

4. It can promote relationship building with its partners and customers.

5. Reduction in cost

Concerns

1. in order to establish a web presence it is essential for the content to be comprehensive


and easy to understand. This would be able to improve page views and hence, the
site’s traffic.

2. It might eventually conflict with the sales from its physical distribution channel
network.

3. It will have to face and try to counter huge amount of competition from the online
sector.
Marketing Strategy formulation & Implementation
Philips India

Comment on the website appearance

• The website has very light tones and colors such as light blue’s and grey’s

• It is representative of its latest advertising campaign of sense and simplicity as well.

• The website seems simple, yet it is modern in features.

• The text is very organised.

• Links are placed to connect to its global website’s to cull out financial and other
company information.

At the same time, finding information within links is a cumbersome process. It does take a
while to find specific information within the website, although the search bar has been
provided for the purpose.

Comparative Website Statistics

Reach for Philipsindia.com:

Percent of global Internet users who visit this site

Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change

N/A* 0.00005%% 0.000175% 35%

Reach for Apple.com:

Percent of global Internet users who visit this site

Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change

0.935% 0.94% 0.994% 3%

Traffic Rank for Philipsindia.com:


Marketing Strategy formulation & Implementation
Philips India

Alexa traffic rank based on a combined measure of page views and users (reach)

Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change

N/A* 1,061,544 452,984 142,656

Traffic Rank for Apple.com:

Alexa traffic rank based on a combined measure of page views and users (reach)

Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change

103 104 87 3

Page Views per user for Philipsindia.com:

The number of unique pages viewed per user per day for this site

Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change

N/A* 2 3.4 No Change

* Daily values are not available for sites ranked outside of the Top 100K.

Page Views per user for Apple.com:

The number of unique pages viewed per user per day for this site

Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change

4.2 4.1 4.2 2%

Measures:

Phillips must improve the content on its website and start online sales in order to increase its
traffic statistics. It must thereby, include the following-
Marketing Strategy formulation & Implementation
Philips India

Product information (mp3 players)

• All the products are listed on the website.

• Features for the products are listed via listing and downloadable pdf documents

• Comparison among products across technical features has been given, which is an
excellent feature.

• The pictures for the product are clear, and a 360 degree view of the same is available.

• The page is printable, which is a useful tool

Disadvantages-

• The main disdvantage is that the prices of all the products is not mentioned on the
website.

• List of physical outlets/stores from which the product will be available is mentioned
but requires the customer to feed in a lot of product information before receiving the
information.

Customer Support

• Support link is given alongside every product

• The link gets directed to FAQ’s immediately

• A provision is given whereby in case of unfulfilled service needs, two telephone


lines, website link, and email helpline is mentioned.

The disadvantage is that the website mentions that the customer needs to have the following
data handy-

- The model number of the product

- The date of purchasing

- The serial number of the product.


Marketing Strategy formulation & Implementation
Philips India

At most times, this information is not readily available with the customer.

Payment

The company needs to provide a payment mechanism that is both secure and convenient. It
may use any or all of the following for payment purposes-

Credit cards

Electronic Transfers

Electronic wallets, checks etc

Near cash credit card is the best way for the company [Annexure 3]

Philipsindia.com has a traffic rank of: 68452,984

Apple.com has a traffic rank of: 87

The aforementioned fact reveals that in order to reach the level of its nearest competitor,
Phillips would have to realign and redesign its website to attract more visitors and increase
page views.

Delivery

In order to prevent channel conflicts, Phillips must make use of its current delivery network
to send the goods to the customers.
Marketing Strategy formulation & Implementation
Philips India

Feedback and review

In order to ensure the reliability and relevance of data, the company has already instituted
measures to receive feedback from its customers. This has been done via a questionnaire that
can be voluntarily filled by the customers. [Annexure 4] The information received will be
used by the company to improve its online and general operations.

Website Promotion

1. Besides improving content, Phillips will have to engage in Promotion to increase the
awareness of the online selling facility:

2. Blogs- Articles in other blogs/websites include the company’s website link. This will
help to increase website visits and page views.

3. Pop-up Banners

4. Registering with search engines with tools such as keyword search, sponsored links

Online selling strategy

The website of Philips is already in place and which is having a good impact on the visitors.
Certain things can be taken care as talked about above and the site can be improved. For
online selling we should have certain additions like the –

1) The payment mode should be mentioned.


2) Online selling option to be added which is clearly visible.
3) Terms and conditions.
4) Method explaining the procedure of online selling, etc

Online selling is an innovative idea and will be becoming a trend in the coming years. So it is
good to start as early as possible. The impact of internet can be judged by the growth rate of
internet users in the table below.
Marketing Strategy formulation & Implementation
Philips India

YEAR Internet Users Growth


1998 1,400,000 -
1999 2,800,000 100
2000 5,500,000 96
2001 7,000,000 27
2002 16,500,000 136
2003 22,500,000 36
2004 39,200,000 74
2003 37,00,000 -6
2005 42,000,000 14
2006 54,000,000 29

For promoting the online selling strategy by Philips India our target market are the people
who are having the knowledge of internet and are able to operate it. Thus we will be targeting
the internet population of 54 million. This will be done advertising through the medium of
internet marketing as well as other promotional activities.

Internet marketing will include –

1) Blog marketing – This will help to promote our product to more of a active
population on internet and it will cover ¼ th of the internet user population.
Exhibit can be referred. This will be made effective through various
techniques like banners, sponsored links, etc.
2) Banners and pop-up’s can be placed on the site most visited and these sites
can be identified through the table below.
Marketing Strategy formulation & Implementation
Philips India

Rank Online Activities % undertaking % Sites


in 2007 undertaking
in 2006
1 E-mailing 95% 94% Gmail, yahoo, rediff, etc
2 Job search 73% 53% MonsterIndia, Naukri.com, etc
3 Instant messaging 62% 37% Yahoo, gmail, msn
4 Check news 61% 48% Timesofindia.com,hinduonline.com,
etc.
5 Online music 60% 49%
6 Chatting 59% 57%
7 E-greeting 58% 57% Indiatimes.com, etc
8 Check sports 57% 35% Cricinfo.com, etc
9 Online games 54% 34%
10 Dating/Friendship 51% 27% Orkut, hi5, etc
Marketing Strategy formulation & Implementation
Philips India

Other uses of the site –

Interaction between customers can be encouraged.

Reviews of the customer about the product can be obtained.

Customer grievances can be considered online.

Mode of payment –

As given in Annexure 3, the various modes of online payments are analysed and we found
that the payment through credit and debit card, stored value, etc are best.

The option of basket can also be induced where the goods can be put in the basket and then
all the goods can be purchased at one time.

Marketing Budget
Marketing Strategy formulation & Implementation
Philips India

Annual
Expense Description Cost per unit Total
Research

Web
research 4 Executives Rs. 11,000/Person/Month 528,000.00

TOTAL 528,000.00

Media

Rs.
50,000/Issue/Advertiseme
Magazines 2 Magazines x 6 Issues nt 600,000.00

Newspapers 52 Daysx 3 Newspapers 450/cm sq 70,200.00

52 Daysx 3 Channels x 2 Times 78,000,000.


TV a Day 2,50,000/30 Sec 00

Internet 100 Clicks/Day Rs 5/Click 182,500.00

Promotions 80,000 Units Rs 100/Case 400,000.00

2,000,000.0
4,00,000 Units Rs 5/cd 0

81,252,700
TOTAL .00

Sales Force

5,400,000.0
Expenses 30 Executivesx12 15,000/month 0

5,400,000.
TOTAL 00

Publicity Through Word of Mouth -

TOTAL 0.00

OTHER N.A -

87,180,700
TOTAL .00
Marketing Strategy formulation & Implementation
Philips India

References

Books

Phillip Kotler- 12th Edition.

Marketing Management- Readings

Websites

www.philips.com

www.apple.com

www.npithub.com

www.alexa.com

www.contentsutra.com

www.indiahousing.com

www.consumercharts.com

www.indiastats.com
Marketing Strategy formulation & Implementation
Philips India

Annexure
Marketing Strategy formulation & Implementation
Philips India

Annexure 1
Marketing Strategy formulation & Implementation
Philips India

Annexure 2
Marketing Strategy formulation & Implementation
Philips India

Annexure 3
Marketing Strategy formulation & Implementation
Philips India

Annexure 4

How
did
you
arriv
e at
this
web
site?

By typing a website address (e.g. www.philips.com)

I have the Philips website stored in 'my favorites' (stored website links)

Through a search engine (e.g. Google)

Through a link on another website

Through a link in an e-mail

How often have you visited this website in the past 3 months?

This is my first visit ever

This is my first visit in the past 3 months

2 to 5 times in the past 3 months

5 times or more in the past 3 months

You arrived at this website through a link on another website. What type of website was this?

Another Philips website

An online shop/retailer/dealer

A website for product reviews and comparisons

A website from a Philips partner

A forum/blog/community website

A job board
Marketing Strategy formulation & Implementation
Philips India

Other (please specify)

Please indicate if this visit is primarily for:

Business reasons (I come here for my work)

Personal/private reasons (I come here for my personal life)

Which of the following statements best describes the main purpose of your visit to this website?

To browse/to find (information on) a specific product/service I am interested in

To find information on a product/service I already own or use

To find service or support on a product I already own or use

To buy/order a product/service

To find out more about Philips as a company

To understand more about 'Sense and Simplicity'

To find a job/to find out more about career opportunities at Philips

To contact Philips for service or support

To contact Philips for other reasons

Nothing in particular, I'm just checking out the website

Other (please specify)

Strongly
Strongly
Agree Neutral Disagree disagree
agree

The menus, buttons and links in this website are easy


to understand

The structure of this website is well-organized

This website is user friendly

This website is well designed (look & feel)


Marketing Strategy formulation & Implementation
Philips India

I did not have to wait long for the pages to load


Marketing Strategy formulation & Implementation
Philips India

Annexure 5

Philips Sa6185 Sony NW A808 Apple ipod touch Samsung YPP2CB

Display

Type Flash Flash Flash Flash

Memory

Capacity (GB) 8 8 8 8

Number of Songs 2000 2000 2000 2000

Expandable Memory

Display

Display LCD LCD


Colour or
Colour Colour Colour Colour
Monochrome
Display Size (Inch) 3.5 2 3.5 3

Display Resolution 320x240 240 x 320 480 x 320 480 x 272

Audio Features
AAC, ACC
MP3, WMA, AAC, Protected, MP3,
Audio Format MP3, WMA,
WAV, WMA, MP3 Linear-PCM and MP3 VBR, Audible,
Supported OGG
ATRAC Apple Lossless,
WAV and AIFF
Voice Recorder ---

FM Radio

FM Recorder ---

Visual Features

Photo Viewer
Photo Format JPEG, BMP, GIF,
JPEG JPEG JPEG
Supported TIFF, PSD and PNG
Video Player
Video Format DVD,AVI,MPEG1,2,4, MPEG4, AAC-LC M4V, MP4 and
SVI, WMV
Supported MOV,WMV and RM and AVC MOV
Battery

Rechargeable Battery

Battery Type Inbuilt Inbuilt Inbuilt Inbuilt

Standard Battery Type Li Polymer Li Ion Li Ion Lithium Polymer


Marketing Strategy formulation & Implementation
Philips India

Battery Life for Music


15 30 22 35
Playback (Hours)

4 8 5 5
Battery Life for Video
Playback (Hours)
Recharging Time
4 3 3 4.5
(Hours)
Type of Charging USB Charging USB USB Charging USB

Sound Settings

Equalizer

Preset Options 6 6 --- ---

Keypad Features

Hold Key --- ---

Requirements
Mac OS X v10.3.9
or later, Windows
Windows XP (SP2 or Windows XP,
Operating System --- Vista, Windows XP
above), Vista 2000, ME, VISTA
Home and
Professional SP2
PC Interface USB 2.0 USB 2.0 USB 2.0 and Wi-Fi USB 2.0

Connection Options

Bluetooth

WiFi

USB

Security Features

Password Protection --- --- ---

Colour
Number of Colour
--- 1 1 3
Options Available
White, Black,
Colour Options Black Black Black
Red Wine
Additional Features

Contacts

Calendar ---

Games

Clock

Machine Dimensions

Width (mm) 39 44.5 61.8 100


Marketing Strategy formulation & Implementation
Philips India

Dimensions

Depth (mm) 153 9.6 8 9.9

Length (mm) 43 88 110 52

Weight (Grams) 153 53 120 85

In the Box

Earphones

USB Cable ---

Carrying Case ---

More Features
Touchscreen
Touchscreen, You Display, 3D
Unique Feature Tube and Web Sound, Bass
Browser Extension, 16: 9
wide screen
After Sales Service
Warranty Period
--- 1 1 1
(Years)