The Marketing mix of Philips analyses the 4Ps of Philips, including the Product, Price, Place, and Promotions. Philips is an international brand established in 1891 by the father-son duo Fredrick and Gerard Philips. It is a Dutch company specializing in Consumer Lifestyle and Health care products. The demand for consumer goods and electronics variety is growing daily, as consumers are interested in sound and helpful products, which has led to the expansion of electronic items in the market. Philips’ strategy is to supply breakthrough products with better services and reasonable costs through innovative and scientific ideas and technology.
Philips’ chief competitors are as follows:
- Sony Corporation
- LG
- Panasonic
- Nokia
- Samsung Electronics company
- Videocon
- BPL
About Philips
- Type: Multinational corporation
- Industry: Healthcare, lighting, and consumer
- Founded: 15 May 1891
- Founder: Gerard Philips and his father Frederik
- Headquarters: Amsterdam, Netherlands
- Area served: Worldwide
- Key people: Frans van Houten (Chairman) and Roy Jakobs (CEO)
- Number of employees: 74,300+
Table of Contents
Philips Product Strategy
Philips is one of the biggest companies in the world to deal in the electronics industry. The zeal to find and launch new and innovative products has peaked as various companies compete against each other to reach new heights in the electronic industry. Philips has employed advanced engineers and the latest technology to manufacture better and new items so consumers’ daily lives become much more accessible.
Philips has a diverse product mix spans several segments, mainly focusing on healthcare technology and consumer electronics.
The new Product Mix of Philips in 2023 is as follows (Source).
- Healthcare Technology: Philips is significantly involved in the healthcare industry, providing advanced medical technologies and services. This includes diagnostic imaging, image-guided therapy, patient monitoring, and health informatics. They are known for their commitment to patient safety and quality, exemplified by their continuous innovation and adaptation in this sector.
- Consumer Electronics: Philips also has a strong presence in the consumer electronics market. A notable venture in this segment is their partnership with TP Vision, which is responsible for designing, manufacturing, and selling Philips-branded TV and audio products. A recent development is integrating Exeger’s solar cell technology, Powerfoyle, into Philips consumer electronics. Starting with sports headphones, this innovation emphasizes sustainability and user experience, providing devices that both indoor and outdoor light can power.
- Smart Home Products: Philips is known for its range of smart home products, especially lighting. The Philips Hue line, for example, offers a variety of intelligent lighting solutions that blend technology with everyday living.
- Global Presence and Localization: Operating in over 100 countries, Philips tailors its offerings to meet the specific needs of various regions. This includes adapting products, branding, and marketing strategies to align with local cultures and consumer behaviors.
- Sustainable Impact and Corporate Responsibility: Philips is focused on creating value with sustainable impact. They are dedicated to improving people’s health and well-being through integrated solutions that combine technology with deep clinical and consumer insights. Their approach encompasses patient safety, supply chain reliability, and a simplified operating model to enhance efficiency and effectiveness.
Philips continues to evolve, leveraging its strong brand and innovation capabilities to meet the changing needs of the healthcare sector and consumer electronics market.
Philips Place Strategy
Philips Company was founded in the city of Eindhoven and later spread its wings to at least a hundred other countries worldwide. It employs nearly 120,000 people in the sales and services section. Philips is engaged in developing designs, manufacturing, and sales of various products, devices, and instruments and, therefore, has set up huge plants and warehouses for this purpose. For the whole marketing strategy of its products, it has appointed local distributors and sales subsidiaries.
Besides dispatching the goods, the wholesalers and the retailers provide extra services like installing products and servicing. Many retail shops offer spare parts of the products that are very helpful for the customers. The success of the company can be attributed to its distribution strategy. It has set various marketing objectives and goals for each of its channels, which has led to growth in sales figures and has strengthened the company’s brand image. It has recently increased its service centers from 125 to 190 with 900 technicians for product complaints and providing help.
The goods are also dispatched through direct sales via the Internet. Phillips has an official website where consumers can make purchases of the desired goods from any part of the world. It has also joined other shopping sites that sell its items through their portals. The Internet has proved to be a significant distribution channel and an information-collecting center for the brand. Thus, the company’s distribution centers, retailers, departmental stores, and the Internet are essential for reaching consumers. Lately, the brand has changed its distribution policy by allocating small territories to the distributor, who will become responsible for a firmer grip to increase brand awareness in their region.
Philips’ place strategy, focusing on how and where it markets and sells its products, can be summarized in the following key points:
- Global Presence with Local Adaptation: Philips operates in over 100 countries, tailoring its product offerings and marketing strategies to align with local cultures, consumer behaviors, and regulatory environments. This localization approach ensures that Philips’ products and services are relevant and appealing to diverse markets worldwide.
- Strategic Partnerships for Distribution: Philips frequently engages in partnerships to expand its distribution networks. This includes collaborations with hospitals, clinics, and healthcare providers for its medical equipment and alliances with businesses and e-commerce platforms for its consumer electronics and smart home products.
- Direct-to-Consumer Sales Channels: Philips leverages e-commerce platforms and direct online sales to reach consumers. This approach has been efficient in regions where digital shopping is prevalent, allowing Philips to engage with and sell to its customers directly.
- Innovative Retail Experiences: Philips has created innovative retail environments and experiences in many markets. These showcase their products and educate consumers about their features and benefits, enhancing customer engagement and brand loyalty.
- Supply Chain Management and Agility: Philips is focused on improving its supply chain reliability and agility. This includes transitioning to a dedicated end-to-end supply chain by business, which helps better manage supplies, ensure timely deliveries, and respond swiftly to market changes.
These strategies collectively contribute to Philips’ ability to effectively distribute and market its diverse range of products across different regions while adapting its product offering to local market conditions and consumer preferences.
Philips Pricing Strategy
Philips has decided to keep its pricing policies simple to survive in this competitive market. As buyers can purchase from numerous companies, Philips has decided that it will not compromise on the quality of the goods even if some of its products are higher priced than its competitors. However, most of its products have a competitive pricing strategy where the items are priced at a nearby range from the competitors. When the prices are nearly the same, the consumers have the option of purchasing better quality products. Hence, Philips has maintained its hold as the market leader and generated higher sales and revenues for its company. In some cases, to generate sales, the company also has a flexible pricing policy that gives discounts to bring down the prices to some extent.
Philips’ pricing strategy reflects its positioning as a premium brand that balances innovation, quality, and consumer value. Here’s a breakdown of its crucial pricing tactics:
- Value-Based Pricing: Philips often employs value-based pricing, particularly in its healthcare and technology segments. This approach involves setting prices based on the product’s perceived value to the customer rather than solely on production costs. By emphasizing the quality, innovation, and benefits of its products, Philips can justify a premium price point.
- Product Line Pricing: Philips uses product line pricing to offer different product versions at various price points in its diverse product range. This strategy caters to a wide range of consumers, from those seeking basic functionality to those desiring high-end features.
- Competitive Pricing: In highly competitive segments, such as consumer electronics, Philips adjusts its pricing in response to market conditions and competitors’ pricing strategies. This approach helps Philips stay competitive while maintaining its brand value.
- Psychological Pricing: Philips sometimes employs psychological pricing strategies, setting prices slightly lower than a round number (e.g., $99.99 instead of $100). This can make a price appear significantly lower in the eyes of the consumer and can be particularly effective in the consumer goods market.
- Dynamic Pricing: In specific segments, Philips might use dynamic pricing, which involves adjusting prices based on demand, market conditions, and other external factors. This is especially relevant in fast-moving markets where technology and consumer preferences rapidly evolve.
Philips’ pricing strategy is dynamic and multifaceted, reflecting its status as a global health technology and consumer electronics leader. The company strategically leverages its competitive advantage and pricing models to maximize market penetration, profitability, and customer satisfaction across its diverse product portfolio.
Philips Promotion Strategy
Philips promises its customers qualitative goods, and its brand promise is “Sense &Sensibility.” Philips is a leading world company that has adopted the eco-design process. It has joined active programs for “Green Product Sales” verified by an independent third party to give it authenticity. Under this, it takes care of energy efficiency, reliability, waste, and recycling.
Philips has taken active steps to redefine its company’s image. It has created some very innovative ads. Actor Ranbir Kapoor is in Philips LED ads, while Alia Bhatt and Arjun Kapoor are in some of its other ads. The promotional activities are on various television channels, radio, Internet, magazines, and newspapers. The brand has played its price card, offering discounts and coupons under its sales schemes and marketing channels. It has even allowed schemes of part or monthly payments to some of the products.
The brand has been acting as a sponsor for various events, sports facilities, and sports clubs. In 2008, it renewed its “FI partnership.” It also has the naming rights of “Atlanta’s Philips Arena.” The brand also sponsored the league team of “Australian Rugby “from 1988 to 1993. It is also the major sponsor for “The Monster of Rock Festival.”
Some Recent Video ads and Print ads for Philips are:
https://youtu.be/N7PpJpMifSg
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