Philips is a Dutch multinational conglomerate headquartered in Amsterdam, Netherlands that was founded in 1891 by Frederik Philips and his son Gerard Philips. Once started as a bulk manufacturer, it became one of the largest electronics companies in the world, employing over 75,000 people across 100 countries, generating revenue of €18.121 billion in 2018. With an IP Portfolio of 71,000 patent rights, 47,000 trademarks, 92,000 design rights, and 4,900 domain, Philips is one of the most innovative companies in the world. Currently, the company is highly focused in the area of health technology, with other divisions being successfully divested.
It is organized into two main divisions – Professional Healthcare, which includes clinical applications, consulting and services, healthcare informatics, etc. and Consumer Health and Well-being, which provides for its household products and domestic appliances.
PSV Eindhoven, the Dutch football team, is owned by Philips and was founded in 1913. PSV Stands for The Philips Sport Vereniging.
After the first few difficult years and near bankruptcy, in around 1895, Philips looked for many new business ideas and expanded the business rapidly, resulting in the foundations\ of Philips Metal Filament Lamp Factory Ltd. in 1908, and the Philips Lightbulb Factories Ltd. in 1912. Later, it acquired many new businesses and came out with new innovative products. The current CEO of the company is Frans van Houten
Business Divisions
Lighting– Being the leading provider of both applications and lighting solutions in both the professional and consumer market, Philips is enhancing the human experience by transforming how light is used in places where we live and work. Philips has segmented its customers through a market segment approach that incorporates industry, retail, hospitality, entertainment, homes, offices, healthcare, and automotive.
Whether you are at your home, traveling on the road or in your city, shopping, at your office, or school, for each of this segment, Philips has a wide range of offerings from light sources, luminaires and lighting controls to lighting solutions and services. Its lighting is transforming the environments, creating experiences, and identities. It includes products such as Indoor & Outdoor Luminaires, Conventional & LED lamps and tubes, and lighting controls and electronics.
Healthcare– Philips is simplifying healthcare by focusing on both patients as well as the care providers. Philips aims to improve patient outcomes by combining human insights and clinical expertise, thereby lowering the burden on the healthcare system. For meeting the needs and demands of patients in hospitals or under home care, Philips has created advanced healthcare solutions, which are a must for both healthcare professionals and consumers. It includes products such as computed tomography, clinical informatics, diagnostic ECG, hospital respiratory care PET Scanner, CT Scanner, SPECT Gamma camera, etc.
Consumer Lifestyle– Fulfilling its brand promise of “sense and simplicity,” by using the consumer insights and feedback from its sales force, Philips Consumer Lifestyle develops products offering experiences that meet consumers’ needs and demands. It includes products such as television, air fryer, blu-ray disc, DVD, electric razor, Screen phone, etc.
Access the company’s Financial Statements 2019 here
Philips Marketing Mix Strategy
Product- Philips is one of the leading consumer electronics brands consisting of three business divisions mentioned earlier in its marketing mix product portfolio. Each business division caters to its product line targeting different audiences.
Philips Consumer Lifestyle division products – DVD player, home cinema sound, TV, headphone, hair removal kit, electric toothbrushes, shaver and grooming kits, bottle warmers and sterilizers, pumps and care, air purifiers, kettles, vacuum cleaners, drives and storage, home entertainment accessories, cables, etc.
Philips Healthcare division – Computed tomography, Clinical informatics, Diagnostic ECG, Hospital respiratory care, PET scanner, CT scanner, SPECT Gamma camera, etc.
Philips Lighting division – Indoor & outdoor luminaires, solar lighting, LED lightenings, etc.
Other products and services – Philips also offer professional services to meet various business needs such as project services, lifecycle services, Philips lighting capital, advisory services, etc.
Pricing- The company competes with different brands such as Sony, LG, Samsung, etc. and thus, follows a competitive pricing strategy. It differentiates itself from its competitors by focusing on superior quality products at almost similar prices. For the innovative range like an air fryer, electric shavers, and products in healthcare and lighting division, it follows a premium pricing model. For increasing its sales on e-commerce platforms, it follows a flexible pricing policy providing discount rates and coupons.
Place– Philips currently operates in over 100 countries and uses both direct and indirect distribution channels. It owns branded stores in various countries that sell directly to consumers. The company also uses its strong network of local distributors and sales force to connect with its customers.
For businesses such as Healthcare and Lighting, the company directly engages with business houses and contractors to increase its distribution network. Along with setting up small retail stores across both rural and semi-urban areas, it also ties up with small retail stores and e-commerce platforms to increase its brand awareness and sell its products.
Promotion- The company uses a multi-channel sales approach to promote its brand and products by displaying advertisements on TV, radio, print, and social media, sponsoring events, and tying with different sponsors as part of its promotional strategy. For endorsing its brand, it has hired celebrities such as Virat Kohli and Alia Bhatt for its promotion.
Philips also offers various discounts and coupon cards as a part of its selling scheme. It further sponsors multiple events and sports teams like F1 races, Australian Rugby, and Indian Commonwealth games.
To resolve customers’ issues and connect with people in a better way, the company is highly active on social media platforms, which also helps in increasing its brand awareness. Even under its brand proposition ‘innovation and you,’ it creates various engaging campaigns and advertisements focusing on how their products make people’s lives better.
Also Read – Nestlé – The Global FMCG Brand Providing Good Food And Good Life
Success factors
Focus on consumer needs – Philips’ mantra has been to bring both people and innovation together and create the next generation of technology. This mantra is perfectly encapsulated in its tagline’ change and you’, a simple message that summarizes its philosophy of developing products that helps in improving people’s lives.
Their ambitious goal is to improve the lives of 3 billion people a year by 2030. These sorts of pledges help the brand to be at the top of its game. With its complete focus on fulfilling consumers’ needs and understanding their problems, Philips tries to search solutions for issues that sometimes they don’t even realize exist, or that they believe can’t be solved.
Utilizing its salesforce – Philips manages to remain agile and locally relevant across the globe because of its salesforce, which helps it in staying much ahead of its competition. Salesforce provides the company with a deeper level of understanding of its customers in individual markets so that it can cater to its needs and meet their demands.
For collecting data from the salesforce, it created a collaborative tool called Sales Cloud that provides employees, real-time customer insights by bringing together data and information that provides a holistic 360-degree view. This data also provides insights about evolving customer needs and future opportunities to the product groups and R&D department.
Focus on technology and a strong R&D – The technologies developed at Philips aims to facilitate healthy living. With considerable investments in R&D, focus on technology and innovation has become the most significant point of differentiation for the brand from its competitors. Using its cloud-based technologies, the company has managed to create more effective and low-cost health solutions for its consumers leading to both environmentally progressive and innovative solutions.
Being one of the foremost innovators in lighting technology, Philips has enabled newer and more efficient use of lights transforming the world both practically and visually.
Conclusion
Philips, as a company, has always strived to be the best at what they do, and even after achieving the desired results and ‘making things happen,’ it tries to better it by adding ‘sense and simplicity.’ It has, over time, realized its responsibility towards customers, environment, local communities, partners, and shareholders, than merely meeting the needs of the balance sheet and to fulfill the duties. It has evolved continuously to meet the changing needs and demands of customers, and in doing so, it has prepared to go all out, making ‘innovation accessible to us.’
