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Big vision: Philips targets semi-urban markets

06-April-2004
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Big vision: Philips targets semi-urban markets

From consumer insights to design proposition, the domestic appliances division of Philips India Ltd is implementing new marketing initiatives with a view to spur volume growth from 15 per cent to 20 per cent in the urban markets and 30 per cent volume growth in the semi-urban markets in 2004. For the purpose, Philips India has increased its budget on new marketing initiatives from 7 per cent to 9 per cent of its overall sales turnover.

As part of the strategy, Philips India Ltd business head (domestic appliances and personal care) Rakesh Sharma said: “To start with, we are planning to increase our number of retailers from 20,000 to 35,000 and brand corners from 60 to 200 within premium retail outlets and traditional dealer showrooms across the country within a year. In addition, we also have 75 exclusive shop-in-shops just to market Philips’ domestic appliances within premium retail stores across the country which will be duly expanded depending on the expansion of the premium retail stores.”

Philips India is also planning to strongly focus on the semi-urban markets to increase distribution reach of its basic appliances such as dry irons and mixer grinders among others to meet growing demand for the products. This will be done by way of expanding the number of distributors from 80 to 120 within a year. With the move, Philips hopes to garner volume growth of 30 per cent of its basic appliances in the semi-urban markets.

According to Mr Sharma: “Currently, our domestic appliances division contributes around five per cent to Philips’ overall sales turnover. We have a market share of nine per cent in the Rs 900-crore domestic appliances segment. By implementing new initiatives we hope to spur our marketshare to 12 per cent within a year.

Mr Sharma explained that of Philips’ overall sales turnover, 50 per cent of the contribution comes from domestic appliances which are being locally manufactured. The reason being that with the move, Philips will be able to meet the evolving needs and requirement of consumers by way of conducting ‘Application Process Programme’ through Application Lab and Philips’ in-house capabilities. “Further, Philips India has recently reduced its supply chain cost by way of reducing its logistics cost by about 50 per cent to make its operations more efficient,” he added.

According to Mr Sharma, Philips India Ltd is planning to focus on conducting youth marketing programmes targeted at young executives and young boys between 15 to 18 years of age to market its highly premium product such as Philips Phili Shave.

To create awareness about Philips’ premium domestic appliances such as juicers, mixer grinders and steam irons, the company is planning to launch new mass media advertising campaign soon, he summed up.

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