The company is undertaking aggressive retail expansion across metros and tier II cities through its Philips Light Lounges and Light Shoppes. A Light Lounge is an experience zone which gives customers a see, touch and feel experience of a diverse range of world-class home decorative lighting concepts from Philips such as Ledino, Living Colors, Ecomoods, Kidsplace, Aquafit and Classic ranges. Also, consumers receive expert advice in choosing the right lighting design solutions to meet their unique requirements. The product range at the Philips Light Lounge starts from Rs 575 and extends up to Rs 40,000. The retail expansion plans will be supported by on-ground activation.
In a market cluttered with many lighting brands such as Havell's, Bajaj, Osram, Eveready besides many local brands, Philips claims that its strategy of venturing into newer territories has helped it to retain the top slot. The market for decorative lighting in India is currently inundated with unbranded cheap imports that do not always satisfy energy efficiency and safety norms. Philips differentiates its offerings through innovation in design, energy efficiency and application of its global lighting application expertise, says Sharma.
According to Sharma, another focus area for Philips is the personal care products business. Products such as hair dryers for women and personal grooming kits for men are seeing much demand with changing lifestyles and increased disposable incomes. which, according to him, is yet another fast growing segment in the country. Growth in personal care products will be spurred by the youth who are fashion conscious, have deep pockets and want to experiment, he says.
For the first time in its history, Philips this month got a celebrity as its brand ambassador. Actor John Abraham will be endorsing the Philips range of men's grooming products and can be seen in a new TV commercial. The brand is also routing a substantial portion of its media spends online to reach out to the young and the affluent. These are men and women in the age group of 16-25 years from SEC (socioeconomic class) A who use the internet to get information for their daily needs. We will target this lot seriously, says Sharma.
Philips has always been at the forefront of healthcare diagnostics and the company is now all set to penetrate tier 2 and 3 cities targeting small nursing homes and diagnostic centres with its healthcare solutions. The Indian healthcare sector is expected to reach $280 billion by 2020 and Philips healthcare strategy is to excel in the high-growth sector of home healthcare. Although still at a nascent stage in India and other emerging markets, home healthcare is gaining ground and offers tremendous growth potential. Philips Home Healthcare provides innovative solutions for the home that connect patients to their healthcare providers and support independent living for seniors and the chronically ill.
While Philips' healthcare business accounts for 20% of the company's overall revenues in India, the lighting business accounts for more than 50%. Philips' lighting business operations stood at Rs 2,000 crore last year. According to industry estimates, Philips has a 30% market share.
The Philips brand with its 'Sense and Simplicity' tagline has an envious history in India, but in recent times, it has been overshadowed by the multitude of new brands entering the country. Jagdeep Kapoor, chairman and managing director, Samsika Marketing Consultants, is of the opinion that in order to appeal to the youth it's almost compulsory for old brands in electronics space to project a contemporary image. For instance, over the years, Godrej has done a good job in terms of making a heritage brand contemporary. Also, LG and Samsung have managed a higher recall from the time they entered India. Philips is undoubtedly a trusted brand but it needs to become more contemporary now. This is because the communication focus in this space has moved from functionality to style and eventually to lifestyle now, he adds.
Philips' creative duties are handled by Mudra Communications. Nirmal Pulickal, executive creative director, North and East, Mudra Communications, thinks that advertising in consumer electronics space always focuses on product features and this will continue. Pulickal, however, believes that the Philips brand continues to enjoy high brand recall. Philips continues to be visible with the right associations. For example, the brand enjoyed good recall throughout its association with ICC World Cup.