The strategic process culminates in deriving a bubble-matrix, in which the competitive pressures in the marketplace are juxtaposed against factors like the company's core competence, consumer needs, market attractiveness, and growth prospects. The bubble-matrix then provides a positive indication of the position of the company vis-a-vis the competition, in any given product category.p``As a result of the VBM exercise, we have not only been able to choose the category we want to be present in but also decide our strategy such that we have an edge over the competition in the market,'' says Philip India's (DAP), senior marketing manager, Saujanya Shetty.

The product policy for 1999-2000, based on the bubble-matrix, has identified the keyPhilips products to be pushed this year as: irons, mixer grinders, toasters, ovens and hair-driers.

The genesis of the matrix

The division adopted the exercise following a similar move by Philips Worldwide. The VBM exercise in India follows close on the heels of a programme initiated exclusively by the domestic appliances division in India in 1996-97.

Although the first two years in the Indian market after the division's launch-1993 to 1995-registered smooth sailing, it was not too long before sales hit a bump. The key issue: the division had a scattered focus with a bulky product portfolio comprising more than 36 products. So, while the company grew by almost 100 per cent in 1993-94 and 1994-95, growth rates plummeted to two to three per cent in 1995-96.

``It was time to take stock,'' says Shetty. ``Rather than spread ourselves too thin. It was also time to start concentrating on a few relevant product categories,'' she adds.

Subsequently, the DAP resorted to an internal exercise that ratedits different products on a cross-matrix-consumer needs were plotted against growth prospects. The result was a list of key product categories, popularly referred to as ``staples'' internally. ``Staples are product categories that are expected to spearhead maximum growth within the market in the immediate future,'' defines Shetty.

Following the initial exercise in 1996-97, the division moved away from products such as shavers, kettles and coffee-makers. Categories like irons, and mixer-grinders were identified as staples, with most of the competitive energies being devoted to these product categories, over the year.

In contrast, products like hand-mixers and citrus press have been relegated to the niche category on account of the fact that they are low on the list of consumer needs and the current state of the market development is not high.

``A staple once identified is rarely exited. The exercise also helps us arrive at emerging staples, or categories that are expected to do well in the immediatefuture. There is a place for diversification as well, whereby new product categories are constantly scrutinised by the company,'' says Shetty.

For example, blender bars, rice cookers, juicer/mixer/grinders and food processors have been identified as emerging staples by the company this year. It is possible to revisit any category which has been exited in the past if the matrix indicates any potential in the future. This can be done by accommodating the given category as an emerging staple.

If the surge in marketshare figures across categories is any indication, the DAP seems to have done well to focus on the matrix. Sample this: Philips mixers are expected to grow at a rate of 11 per cent this year as against a 7.9 per cent rate of growth in 1997.

In the case of irons the growth rate has moved from 14 per cent in 1997 to 15 per cent in 1998 and an expected 17 per cent in 1999. `` We are growing at a steady rate of 25 per cent to 30 per cent per annum since last year,'' claims Shetty. And that's just thekind of staple growth Philips is looking for..