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Philips to scale up retail outlets for DVD range

10-June-2004
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Philips to scale up retail outlets for DVD range

Philips India Ltd, a subsidiary of the Netherlands-based Royal Philips Electronics, plans to take its DVD range to 20,000 outlets by the year-end from 8,000 now.

Mr Gunjan Srivastav, Business Head, Audio, said, "Philips is a leader in the DVD segment. The strategy until now was to phase out the VCD base and to launch DVD systems. But now, it is targeting Sony's base. We plan to take share away from Sony and use that for moving into the DVD format in coming months."

In March, Philips sold 14,060 units as against total sales of 27,844 units, thereby retaining its 50.5 per cent share.

According to Mr Gautam Dalal, Brand Manager, DVD and Home Theatres, "The segmentation is distinct and all models have a defined target audience."

The DVD 625K model is priced at Rs 4,990, and is targeted at consumers who want to replace their VCR players with DVD ones. The DVD 727K, priced at Rs 8,990, is targeted at consumers who are keener on sound effects. This model comes with the `surround sound' feature.

The premium level DVD 590M, priced at Rs 9,990, is targeted at consumers who want something different. This model is vertically styled, and thus takes care of space constraints, Mr Dalal said.

The strategy is to educate consumers about the advantages of DVD over VCD. The positioning, therefore, revolves around the `King of Playability' tag. In a bid to push the `value for money' proposition across consumers, the new series of ads for DVDs, created by JWT, features the price element as part of the `King of Playability' proposition. "Our earlier DVD ads, including the roti ads, emphasised on the playability technology, but after bringing down the entry level pricing to Rs 3,990, we thought this kind of pricing should be highlighted as well," Mr Dalal said.

The DVD players are also set to play at 110V, keeping in mind the rural players. "We are targeting high volumes to achieve economies of scale. The channel margins are kept thin to ensure consumer gets the best price," he added.

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