Running head: PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

Philips Shavers Case:

Maintaining Shaving Leadership in the World Market
International Marketing Assignment 3
Candidate: Emad AbouElgheit
ISM - International School of Management
Doctor of Philosophy (Ph.D.)

Presented to: Professor Peter Horn

8 November 2012
Word Count: 3,549

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

Abstract
The giant conglomerate, Phillips is the worlds number one player in electric shaving
products. Aiming to maintain this stage and sustain future growth, the company needs to pause
and reevaluate its product and marketing communication strategies. Tough competition and
strong consumer preference to wet shaving products are reasons that drive the company to spot
key strategies that can help maintaining its global market position. The paper evaluates three
marketing campaigns by Phillips targeting different consumer group, as well as its current
product development and marketing strategic alliances, and finally analyses the internet
marketing strategies as a part of the whole global distribution strategy. The paper finds critical
success factors for Phillips are illustrated in; increasing the global adoption for electric shavers,
especially in younger consumer groups, and lifting a very weak current market position in
women electric shavers market. The paper concludes by other branding and internet marketing
recommendations.

Keywords: Phillips, Philishave, Norelco, Marketing, Strategy, Global Marketing, Campaign,

Product Communication, Brand Communication, International Marketing, Internet Marketing,
Online Marketing, Distribution, Advertising, Case Analysis

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

Philips Shavers Case:

Maintaining Shaving Leadership in the World Market
International Marketing Assignment 3
Introduction
While the global shaving market still can be divided into two main categories of wet
shavers and dry electric shavers, this line is disappearing gradually with the introduction of water
proof and moisturized electric shavers as well as vibrating electric wet shavers. Phillips, Gillette
and Remington have been key innovators for this evolution. The world market for men electric
shavers can be described as oligopolistic with Phillips and Braun combine a total of around 75
percent of the global market share.1 It can be concluded that it is extremely tough for new
entrants to compete within this category, especially in developed markets where the two global
players have established strong footsteps. There is an almost equal global demand for wet
shavers in compared with dry electric shavers.2 In terms of supply, China and Netherlands
produce a combined 60 percent of the total world exports. Europe accounts for about 47 percent
of the world demand, followed by North America (25 percent), and Asia (24 percent) in the year
2011. The top global target markets for imported electric shavers include; the United Stated,
Germany, Hong Kong and Japan.3
Key success factors for male and female shavers depend primarily on an ongoing
superior product innovation, marketing and brand building, product quality and establishing
long-term relationships with customers, retailers and suppliers.4 Phillipss sales soared to new
levels when the new rotating round head was introduced in the year 1939, and again with the
introduction on the two-headed model - called Egg - in the 1995s, the Philishave 3 in the

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

1960s, and introducing the CoolSkin with Nivea moisturizer in 1998. Another common critical
success factor for men and women shavers is marketing.
For men shaving, ease of use and speed illustrated another critical success factor. This
can be illustrated in the electronic technology of the cordless shavers in the 1980s.5 Men also
require innovative skin and cut protection solutions. Manufacturers have realized critical brand
positioning and product strategies that separate men and women shavers. Product shelf space,
packaging, marketing message and product designs have to be studies more carefully. For
example, women shavers require more innovative designs to enable easier body reach and
handling. Women bodies require 18 times more surface areas than men with head and face only.
Women also have dryer skin and different types of hair growing in hard-to-reach places.6 Brands
for women cannot be marketed or sold next to mens products.7
Comparing global consumer preference between wet and dry shavers, male consumers in
developed markets started to shift preference to wet shaving since the 1970s. Electric shavers
consumer preference can be illustrated primarily in convenience of use. Older consumer
segments prefer electric shavers over wet shavers due to having a good look with efficiency, and
time saving.8 Younger consumers care more about having a perfect and groomed look that is
difficult for electric shavers to provide, as well as lower prices. Accordingly, a key success factor
would be in the innovation of more ease of use and convenience features for electric shavers.
Another marketing key success factors for male electric shavers is the time to market and ceasing
seasonal demand in Christmas and fathers day.9

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

Analysis
Competitive Environment & Market Share
A shocking statistic by Statista a Dowjones partner - showed Phillips/Norelco market
share of women electric shavers in the US between 2004 and 2008 is less than three percent. The
market is dominated by Remington/Rayovac brands with a market share of over 60 percent
followed by around 35 percent for Conair.10 According to a consumer research published in
2011, Panasonic and Braun were the best women electric shavers as per consumer reviews.11 On
Amazon.com, reviews also indicated Braun at the top where Phillips/Norelco came on the
second place.12 Gillette owned now by Procter and Gamble has been doing extensive
research and development to penetrate the women shaving market. Efforts have been clearly
translated into sustainable growth.13
Product & Sourcing Strategies
Phillips adopted an incremental product innovation strategy14 like many other
competitors in the shaving industry. Phillips also uses a standardized product strategy that
leverages common global consumer needs to enable the maximum economies of scale and
efficiency.15 The same electric shaving products are introduced in all global markets with the
same features and characteristics.16 The company has many manufacturing facilities across the
globe. Electric shavers in specific are manufactured in Canada and the United Kingdom.17
Phillipss men electric shavers product line includes more than seven different products.
However, products within the product line and their breadth differ from a country to another.
Also, product bundle or extensions within the same product differs as well. For example, Phillips

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

7000 series do not exist in Australian markets; also, Sensotouch 3D bundle includes four
different models in the USA while includes only three in Australia.18
Phillips is a leader in outsourcing in both product components and business process. The
increasingly-adopted trend by Phillips in recent years now accounts for 90 percent of total
product components. This is enabled by outsourcing, long-term partnerships, Original Equipment
Manufacturers and Original Design Manufacturers.19 Not only product outsourcing, Phillips also
does Business Process Outsourcing. For example, their entire information technology
infrastructure in Australia is run by IBM.20 A trend that is usually popular in personal care
commodity products including Phillips competitors such as Braun.21 Braun on the other hand
adopts a clearer incremental innovation in their branding strategy. Braun offers series One,
Three, Five, and Seven with more advanced features and higher price for newer models. 22
Overall, Phillips is a conglomerate diversification leader operating in a vast range of
products and services. A strategy that is extended to its men electric shavers category and
leveraged in the 1980s by more related diversification to product line bundles as well as targeting
new young demographic and new markets in Asia.23 Global pricing contract strategy is adopted
by Phillips, price for Sensotouch 3D shaver is found to be the same across all Phillips online
stores worldwide.
Product & Brand Communication Strategies
From a general perspective, Phillips positions its electric shavers brands around comfort
and smooth shaving,24 while Braun positions it more around a bundle of benefits of shaving
performance and comfort. The later also offered a solution for busy lifestyle users with the
MobileShave product. Braun also leverages the country of origin effect emphasizing on the
German-made shavers.25

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

Phillips adopts a straight extension strategy in its product-communication philosophy

having a standard product and as well as standard promotion.26 Global branding strategy is clear
in selling electric shavers under one brand name and image in all global locations, as well as
offering highly-standardized products. This has been extended to its marketing campaigns
strategy. For example, the cross-nations rowing boat campaign in this case is pretty much
standardized with almost no adaptation for each local market, deciding not even to translate the
brand slogan. Adaptation is primarily in local language and using the Norelco brand in the US
version since it is already perceived for a long time as an American brand and has more
awareness than Phillips in the US market.27 The campaign kept both brands in what can be
concluded as a phasing out attempt by Phillips to unite all products in the US under Phillips
brand name. There were also internal concerns at Phillips regarding phasing out the brand name
Philishave28 which the company decided to phase it out completely in the year 2006.29
The rowing boast campaign has a subliminal creative appeal relating power, teamwork
and synchronization of the four-mean rowing team with their precise strokes to the Tri-headed
new shaver by Phillips. Targeting males, the campaign emphasized power, manhood, and athletic
look. The creative was a mix between emotional and rational appeals in including small close-up
photos of the new product and educating text about its benefits. Phillips assumed a great degree
of homogeneity between Western European consumers and North American ones.
In terms of Phillips campaigns targeting, the rowing boat campaign segmented the global
population based on demographic targeting younger males with middle to high income levels.
While in the gift campaign, it clearly targeted female US consumer households with middle to
high income level positioning the product as a perfect gift for their male partners in seasonal
occasions such as Christmas or fathers day. In the gift campaign, the creative took a strong

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

emotional and delicate appeal targeting females with an elegant and sleek look gift showing the
wrapping ribbon details. The campaign related the positive emotions for females to receive gifts
as a way of showing love and commitment. As for the WilliamsF1 campaign, the target group for
it was the global young demographic males with sport and automotive interests. The campaign
leveraged the co-branding between Phillips and WilliamsF1 and the sport champion celebrity
endorsement. The appeal here is more of a self-actualization with a champion status appealing to
the young youth across the globe. Integrating the two brands is successful in relating sport cars
engine performance to electric shavers engines. Standardizing this campaign isnt dominant as
the other previous two. Global promotion adaptation is found to show the speeding car only
without the celebrity as the US campaign.
In terms of pricing strategy, Phillips as a market leader is able to follow a global price
leader strategy having the upper hand in controlling the global price.30 This is clearly supported
by the ability of the company to increase product price to boost its research and development and
marketing during the 1980s.31
Internet Marketing and Distribution
As a general strategy for Phillips shavers, the company adopts a mass distribution
multichannel strategy having its products on most global retailers shelves both in stores and
online. No physical Phillips-owned stores were found which matches Phillipss strategy to
establish strong alliances with suppliers and retailers and outsourcing whenever possible.
However, in terms of their direct distribution strategies eliminating intermediaries, Phillips has
its own online stores in some country websites, and it doesnt have a direct relationship between
having that country among developed markets and being an emerging market. For example
countries like Canada32 and Hong Kong33 didnt have online store within their country websites.

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

Phillips online stores exist in the US, Netherlands, Germany, UK and few other European
countries. In countries where no online stores such as Australia, Phillips referred its customers to
nearest retailers to their addresses. Phillips products are also found in key online global
merchants such as Amazon, BestBuy and eBay. In major market such as the US, Phillips
provided retailer finder features at the website besides having an online store.
Consistent with Phillips global strategy, all international websites are found to be highlystandardized in terms of brand image and positioning. However, some degree of marketing
message adaptation is found to suite each specific local market. For example, the Middle East
website is found to have a lot less products mix and simpler web navigation contents,34 while the
Netherlands website had the maximum product variation and a commercial oriented homepage
with direct shopping call-to-action buttons.35
Conclusions
Phillips is so far behind competitors in female electric shavers category. Despite of its
leading global position in male electric shavers, lagging behind in a related and large market
becomes a huge hindrance to its sustainable growth. It can be concluded that Braun is leading
the Asian market share36 due to its women products success there. It is clear that Phillips/Norelco
brands are not perceived as even being in the women shavers category which requires a totally
different thinking to build awareness among that global segment and reposition the brand.
Product mix is not found to be consistent among international markets. While having
similar global groups in terms of income, culture and lifestyle worldwide, products offered in
each market differs in an inconsistent or illogical way.

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Criticizing marketing campaigns, while they can be perceived as effective independently,

they do not share a common and consistent brand promise. Main brand positioning by Phillips is
about ease of use and comfort, while campaigns are found to be more about sport, adventure and
power. This does not help establishing a solid brand image and perception among global
consumers. In terms of product-communication strategies, Phillipss weak position in the Asian
market is due to putting too much focus on communication message and appeal to the Western
culture. No enough message adaptation or consumer research is made to appeal to consumers
outside the developed markets. These strategies are not found to be integrated with Phillips
strategic alliance strategies. Phillips partnered with Nivea in a production alliance aiming to offer
a new product within a related diversification strategy and use Niveas expertise in the
complementing components for the new product. The new CoolSkin shaver carried a new benefit
to consumers backed by an innovative alliance. The relationship between the two companies in
such alliance is supposed to last along all the product lifecycle. Both brands share the success
and risks of the new product performance. On the other hand the marketing strategic alliance
between Phillips and WilliamsF1 is a sponsorship in nature where Phillips co-brands and become
visible in WilliamsF1 audience. The aim from such alliance is to appeal more to a specific target
segment, position the brand as a true global one, and increase sales through advertising. the
relationship in such alliance lasts as long the campaign or sponsorship contract lasts and it
doesnt harm any of the two brands significantly in case of campaign failure.
Internet marketing strategies and distribution is not found to be consistent or strong
enough. Online shops do not exist where huge e-commerce readiness is available in markets such
as Canada and Australia. The company seems to still depend primarily on brick and mortar
retailers. Braun for example provided consumers with a more attractive web experience using

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virtual and video demos for products. While lagging behind competitors in internet marketing,
the company succeeded in integrating its brand positioning around comfort and ease of use in
consumers own shopping experience by allowing filtering products search by the same
characteristics.37
Phillips conducts an excellent sourcing and alliance strategies. Outsourcing 90 percent of
components and services leaves management to focus on product innovation. An argument that
is supported by even with a low market share, Phillips still offers the most innovative women
hair removal machine in the market, and was able to lead product innovation in the global
market.
Recommendations
Maintaining global electric shaving leadership is illustrated in two key initiatives for
Phillips to start. First; the company should motivate the global adoption for electric shavers
against wet shavers for men. Second; Phillips should focus its product and marketing activities to
penetrate the global women segment and replicate the success of its mens shaving products.
To increase the adoption of electric shavers, Phillips should continue to focus more on
the younger segment. Brand should be repositioned more towards the WilliamsF1 initiative
around fun, sport and adventure. Product design should continue to be futuristic and sleek.
Diversification should be around young males use. For example; product variations should be
around different real-life situations such as; taking the enough time to have the perfect electric
wet shave in preparing for a date, late wake up and going to work quick and comfortable shave,
and mobile on the car and on the road shave. Each of these situations would require additional
complimenting products that Phillips can diversify into and leverage its successful alliances. For

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example; in a perfect and longer time home shave, Phillips can complement the product with all
the necessary grooming components for hair and face groomers. Lotions and aftershave products
should be cross-sold to complete the experience. For mobile shaving, Phillips should ready its
products with a car charger and small pocket size. Instead of regular disposable batteries,
chargeable built-in batteries should be installed to leverage the ease of use.
Pulling more consumer demand into dry shaving will require rethinking the
communication strategy towards a habit formation advertising strategy. Repetitive and educative
campaigns should inform consumers about valuable benefits of dry shaving versus traditional
wet shaving. Benefits such as time saving, long-term cost savings, no skin problems, and being
in control to have a perfect look with no changeable razor, shaving gel and water should be
leveraged and emphasized. Celebrity endorsement and expert testimonials are considered to be
valuable supportive strategies for such campaigns.
Entering the womans world is the true success factor for Phillips to set global
competition apart. If Phillips has a closer market share among women electric shavers groups, it
will sustain a long-term competitive advantage. In order to do that, research and development for
womens products should be focused on by management. Like Procter and Gambles experience
with Gillette women shavers, Phillips should continue to invest more in womens specific
electric shavers need. Communicating these values for women should be done in separate
campaigns with focused targeting and brand positioning. A strong brand promise for women that
is derived by extensive research and development should be communicated properly. The value
proposition here is not just having a perfect and pain-free shaving experience, the brand promise
should go beyond that to another long-term promise such as reducing hair regrowth. Cutting

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edge technology here is the key. Free trials and demonstrations should be provided for
consumers and opinion leaders to test both short-term and long-term brand promise.
Regarding internet marketing and distribution strategies by Phillips, the company needs
to complete its e-commerce penetration in markets where consumers are ready for. Untapped
huge e-shopping money is waiting for a proper e-shop with a compelling user experience. The
company should focus on reducing its dependence on retailers by establishing more attractive
and accessible e-shops in its local websites. Clearly information technology assets can be easily
replicated at multiple country websites at low cost instead of building each local e-shop from
scratch. When market size isnt enough to carry on its own local e-shop, Phillips can create
regional e-shops that are accessible from multiple country locations that share similar languages
and consumer aspects. Integrate Phillips global points of sale and electronic inventories with
third-party retailers should reduce inventory cost, labor time, and increase efficiency. Properlyrun inventories can act as hubs to ship either to physical retail stores, directly to consumers
through owned e-shops, or third-party e-tailers. Phillips should engage its consumers more in
social media. User reviews, blogs and product reviews should be the top focus and driver for
internet marketing strategies. In personal care products, consumers will put high weight in their
decision making process for previous buyers reviews and rating to such products, especially
with top of the line high priced electric shavers. Accordingly, Phillips should allocate a dedicated
team to build and maintain the companys online presence, find new trends, engage audience,
and respond to negative consumer feedback. Social media channels can also act as source for
Phillips research and development team to open a conversation with buyers, consider their
feedback and suggestions to implement in future product versions.

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Phillips needs to rethink its extreme standardization strategies in marketing campaigns.

While at the same time it needs to tie all campaigns not only by creative and look, but by main
brand positioning and core message. If Phillips decides to continue building brand for men
around sport, fun and adventure, it should be visible not only in certain campaigns, but in
websites, e-shops, packaging and all other communication channels. Local - specially emerging markets can have special characteristics and appeals that do not necessarily tie to Western
appeals. Local consumer researches should be conducted in each local market to understand
more cultural and behavioral decision making aspects. Translating ad contents is defiantly not
enough to adapt to local cultures. Imagery should be carefully-selected to show local real-life
users instead of only Western models. Message and appeal about the sexy girlfriend can be
adapted to a beautiful wife for consumers in more conservative markets. WilliamsF1 sport could
not be popular or even known in some emerging markets. Instead, different sport or celerity can
create more impact. In short, the outer frame of brand promise, image and theme should be one
across all markets. But contents, messages, imagery, and channels can be adapted to each local
market.

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End Notes
1

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

Parker, P. M. (2010). The World Market for Electric Shavers and Hair Clippers with SelfContained Electric Motors and Parts Excluding Blades and Cutting Heads: A 2011
Global Trade Perspective. Global Trade Perspectives, N.PAG.

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

Boston.com. Gillette sharpens its focus on women. Accessed April 1st 2012 <
http://www.boston.com/business/articles/2009/01/04/gillette_sharpens_its_focus_on_wo
men/?page=full>.

Kruger, R. M. (1998). Razor sharp. Discount Merchandiser, 38(1), 69.

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

10

Statista.com. Market share of womens electric shavers in the U.S. in 2004 and 2008, by
manufacturer. Accessed April 4th 2012 <

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

16

http://www.statista.com/statistics/220280/market-share-of-the-shipment-leader-forwomens-electric-shavers/>.
11

ConsumerResearch.com. Women's Shavers: Reviews. Accessed April 1st 2012 <

http://www.consumersearch.com/womens-shavers>.

12

Amazon.com. Top Rated in Women's Electric Shavers. Accessed April 1st 2012 <
http://www.amazon.com/gp/top-rated/hpc/3778651>.

13

Boston.com. Gillette sharpens its focus on women. Accessed April 1st 2012 <
http://www.boston.com/business/articles/2009/01/04/gillette_sharpens_its_focus_on_wo
men/?page=full>.

14

Hollensen, S. (2007). Global Marketing. London, UK: Prentice Hall.

15

Gabrielsson, P., Gabrielsson, M., Darling, J., & Luostarinen, R. (2006). Globalizing
internationals: product strategies of ICT manufacturers. International Marketing Review,
23(6), 650-671. doi:10.1108/02651330610712157

16

Philips.com. Philips. Accessed April 1st 2012

http://www.philips.com/about/company/businesses/suppliers/aboutsupplymanagement.pa
ge >.

17

Wikipedia. Philips. Accessed April 1st 2012 http://en.wikipedia.org/wiki/Philips>.

18

Philips.com. Philips. Accessed April 1st 2012

http://www.philips.com/about/company/businesses/suppliers/aboutsupplymanagement.pa
ge >.

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

19

17

Philips.com. Philips. Accessed April 1st 2012

http://www.philips.com/about/company/businesses/suppliers/aboutsupplymanagement.pa
ge >.

20

Wikipedia. Philips. Accessed April 1st 2012 http://en.wikipedia.org/wiki/Philips>.

21

Braun.com. Braun. Accessed April 1st 2012 http://braun.com/ar_ap/male-grooming/seriesshavers.html>.

22

Braun.com. Braun. Accessed April 1st 2012 http://braun.com/ar_ap/male-grooming/seriesshavers.html>.

23

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

24

Philips.com. Philips. Accessed April 1st 2012 http://braun.com/en_ca/male-grooming/seriesshavers.html >.

25

Braun.com. Braun. Accessed April 1st 2012 http://braun.com/en_ca/male-grooming/seriesshavers.html>.

26

Hollensen, S. (2007). Global Marketing. London, UK: Prentice Hall.

27

Wikipedia. Norelco. Accessed April 1st 2012 http://en.wikipedia.org/wiki/Norelco>.

28

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

29

Wikipedia. Philips. Accessed April 1st 2012 http://en.wikipedia.org/wiki/Philips>.

30

Hollensen, S. (2007). Global Marketing. London, UK: Prentice Hall.

31

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world
market. Prentice Hall.

PHILIPS MAINTAINING ELECTRIC SHAVING LEADERSHIP

32

Philips.com. Philips. Accessed April 1st http://www.philips.ca/index.page

33

Philips.com. Philips. Accessed April 1st http://www.philips.com.hk/c/en/

34

Philips.com. Philips. Accessed April 1st http://www.mea.philips.com/>.

35

Philips.com. Philips. Accessed April 1st http://www.philipsstore.nl/store/

36

Hollensen, S. (2007). Philips Shavers Case: Maintaining shaving leadership in the world

18

market. Prentice Hall.

37

Philips.com. Philips. Accessed April 1st http://www.philipsshop.co.uk/store/catalog/sensotouch3d/category/SENSOTOUCH_3D_SHAVING_SU_GB_SHOPPUB/GB/en?navCount=0