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Philips banks on vardaan for higher volume

18-February-2004
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Philips banks on vardaan for higher volume

With the consumer electronics industry battling growing price erosions and obsolescence, Philips India has chalked out a clearly segmented and aggressive strategy for 2004. The company is targeting touching volume sales of 5.5 lakh CTVs this year, up from four lakh last year. It expects its Vardaan range of CTVs, specially targeted at rural and semi-urban markets, to contribute at least 73 per cent to overall sales.

Philips’ 2004 strategy will focus on in-depth consumer studies, product innovations and aggressive market expansion. It has chalked out a clearly segmented marketing strategy with products targeted at each: Price conscious (78 per cent of the market, targeted by the Vardaan range), Performance (14 per cent of the market, mainly the replacement market) and Pride (eight per cent, which covers high tech products, LCD, Plasma and Projection TVs).

Shivaumar, vice-president, consumer electronics, said, “Relevant and speedy innovation and the ability to change models quickly keeping in mind the consumer needs is the only mantra to succeed in an industry where the life span of products is often even less than six months.” The CE industry has been seeing an average 10-15 price erosion annually, while in the DVD and cellphones segments it is as rapid as 5-10 per cent a quarter.

With a clear brand positioning — picture clarity — in place across categories, the company has also hiked its ad budget for this year to Rs 32 crore, from Rs 26 crore last year. It will seek to convey this message consistently through its advertising, the first of which will break next month.

Philips is targeting the rural and semi-urban markets aggressively through its Vardaan range, which consists of 4 models in the price range of Rs 5690 (14 inch) to Rs 10,990 for the 21 inch Real Flat CTV. ‘‘Wall paintings and radio advertising are being used as the route to address these markets.

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