Philips seeks a stronger grip on Asia-Pacific<\/p>\n
Philips, one of the world's top consumer product
\nmanufacturers, invited members of the press from at least 10
\ncountries in the Asia-Pacific region to Hong Kong on Aug. 18 and
\nAug. 19 to get a glimpse of the company's vision and its latest
\nproducts. The Jakarta Post reporter Ardimas Sasdi
\nattended the event and filed this report.<\/p>\n
HONG KONG, China (JP): Today's consumers are discerning and
\nwant to know everything about a product before spending their
\nhard-earned money on it. Quality, ease of use, superiority and
\nprice; these things count.<\/p>\n
The world's top producers of consumer goods are fully aware of
\nconsumers' demands, and strive to meet these demands in order to
\nspur their sales.<\/p>\n
"Nowadays, especially in such a competitive environment as the
\nworld of consumer electronics, companies have to compete on all
\nfronts. Consumers can always find a product that sacrifices
\nquality for price and is therefore cheaper, or a product that
\noffers other functionalities," said Gavin Proctor, Philips'
\nTaipei branch manager for design.<\/p>\n
"So what makes the difference today? Design does," he said.<\/p>\n
Gavin, who joined Philips several years ago, said the company
\nalways tried to explore customers' existent and latent needs.
\nThis means knowing more about people -- physically, emotionally,
\nintellectually, socially and culturally -- in order to identify
\nwhat they really need and what their aspirations are.<\/p>\n
In order to achieve these goals, Gavin and his team of 450
\nexperts from traditionally nondesign related disciplines, such as
\nanthropology, sociology, psychology, trend analysis and visual
\ntrend analysis, work to study and satisfy consumers' demands and
\naspirations. These experts collaborate with designers and
\ntechnologists in the creation of products.<\/p>\n
Are all these efforts enough? Not for Philips. In extremely
\ncompetitive and nearly saturated markets, companies have to go
\nfurther.<\/p>\n
"We must inject more meaning and emotional appeal into our
\nproducts in order to woo customers," said Aaron Boey, director
\nand vice president of brand management at Philips Consumer
\nElectronics (PCE) Asia-Pacific Pte. Ltd.<\/p>\n
Like many European companies, Philips is often associated with
\nhigh-quality and expensive products, an assumption considered by
\nPhilips executives as misleading.<\/p>\n
In Indonesia, Philips -- which employs 233,700 people and
\nsells and services its products in 150 countries worldwide -- is
\nbetter known for its household appliances, including lamps, rice
\ncookers, blenders, hair dryers and irons.<\/p>\n
"We have a wide-range of products. Our prices for the same
\nclass of products are competitive with those of Panasonic, Sony
\nand Toshiba," said Cosmas Subagus, a senior executive at Philips
\nIndonesia.<\/p>\n
To build and strengthen its image among customers in the Asia
\nPacific, Philips launched a promotional campaign at the country
\nand regional level in 1998. With the help of this campaign,
\nPhilips Indonesia is optimistic that by the year 2003 it will be
\none of the top three consumer electronics companies in the
\ncountry, along with Sony of Japan and Goldstar of South Korea.
\nPhilips is currently in the top 10 consumer electronic companies
\nin Indonesia, with a market share of between 3 percent and 4
\npercent.<\/p>\n
Star products<\/p>\n
The ongoing campaign also includes the promotion of Philips'
\n"star products" with "star features and technologies", and a
\nstudy on teenagers as potential customers.<\/p>\n
Philips' 1999 star products, scheduled to be available at the
\nend of this year or early next year, include Digital Video Disk
\n(DVD) 955, a 29-inch real flat TV which delivers sharp pictures
\nand perfect images from any angle of the TV screen, a 72-inch
\nflat TV which can be hung on the wall like a painting and serve
\nas a home cinema, a compact disk recorder and a Xenium mobile
\nphone.<\/p>\n
However, the price for the higher-end products are steep,
\nespecially by Indonesian standards. A high-resolution flat plasma
\ntelevision, for example, costs US$15,000 (about Rp 133 million),
\nwhile the 65-inch projection TV costs "only" $12,000.<\/p>\n
Philips is also launching the Building the Philips Consumer
\nBrand in Asia-Pacific campaign in an effort to strengthen its
\nposition in the region.<\/p>\n
"We have become more consumer sensitive and want to build
\nPhilips' Asian brands," said Aaron Boey, a Malaysian university
\ngraduate who is responsible for strategically positioning and
\nbuilding the Philips brand throughout the Asia-Pacific region.<\/p>\n
To gain insight into customer satisfaction, guidance on the
\nproduction of new products and global consumer and segmentation
\nstudies, Philips also conducted 14,000 interviews in 17
\ncountries.<\/p>\n
The integrated promotional drive comes under the main team of
\n"human, imagination and seduction", and covers print and
\nbroadcast media, outdoor advertising, the Internet, youth
\nprograms on MTV and e-commerce. The cost of this drive across the
\nAsia Pacific will come to some $80 million.<\/p>\n
This advertising campaign makes Philips the largest advertiser
\nin Pan-Asian media and places the company among the top three
\nadvertiser in all key markets in the region.<\/p>\n
Headquartered in Eindhoven, the Netherlands, Philips Consumer
\nElectronics is a business unit of Royal Philips Electronics of
\nthe Netherlands, one of the world's largest electronic companies
\nand Europe's largest such company, with sales totaling more than
\n$33.9 billion in 1998.<\/p>\n
Potential markets<\/p>\n
Frans van Houten, Philips managing director for consumer
\nelectronics in the Asia Pacific, Middle East and Africa, told the
\npress Philips invested millions of dollar in factories and other
\nprograms, including advertising, to grab a bigger market share in
\npotential markets in the Asia Pacific, such as China and India --
\ntwo major Asian countries which are prime targets for Philips.<\/p>\n
"China is the fastest growing market in the Asia Pacific, and
\nwill become the single largest market in the world within five
\nyears," Van Houten said.<\/p>\n
In China, Philips' market share for consumer electronic
\nproducts grew by 1.5 percent in the first quarter of 1999 to 6.4
\npercent. It has the top market share for personal computer
\nmonitors in the country.<\/p>\n
India, with a population of over 800 million, is another
\npotential market for Philips. The company's market share in India
\ngrew 0.8 percent in the first quarter of 1999 to 10.3 percent.<\/p>\n
Singapore, Hong Kong and Taiwan are presently Philips'
\nstrongest markets for DVDs, while Australia, New Zealand,
\nThailand and China are seen as growing markets.<\/p>\n
Indonesia was formerly among Philips top three potential
\nmarkets along with China and India, but its potential was damaged
\nby the economic crisis which hit the country in July 1997.<\/p>\n
In general, the Asia-Pacific region is gaining importance for
\nPhilips in technology, product development, manufacturing and
\nrevenue.<\/p>\n
"Philips has emerged from the regional economic turmoil of
\n1999 stronger and more determined to strengthen its position as a
\nglobal consumer electronics player," said van Houten, adding that
\nPhilips Consumer Electronics has done exceptionally well in terms
\nof sales in the first half of 1999, exceeding the budget forecast
\nby 27 percent.<\/p>",
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