Philips seeks a stronger grip on Asia-Pacific
Philips seeks a stronger grip on Asia-Pacific
Philips, one of the world's top consumer product
manufacturers, invited members of the press from at least 10
countries in the Asia-Pacific region to Hong Kong on Aug. 18 and
Aug. 19 to get a glimpse of the company's vision and its latest
products. The Jakarta Post reporter Ardimas Sasdi
attended the event and filed this report.
HONG KONG, China (JP): Today's consumers are discerning and
want to know everything about a product before spending their
hard-earned money on it. Quality, ease of use, superiority and
price; these things count.
The world's top producers of consumer goods are fully aware of
consumers' demands, and strive to meet these demands in order to
spur their sales.
"Nowadays, especially in such a competitive environment as the
world of consumer electronics, companies have to compete on all
fronts. Consumers can always find a product that sacrifices
quality for price and is therefore cheaper, or a product that
offers other functionalities," said Gavin Proctor, Philips'
Taipei branch manager for design.
"So what makes the difference today? Design does," he said.
Gavin, who joined Philips several years ago, said the company
always tried to explore customers' existent and latent needs.
This means knowing more about people -- physically, emotionally,
intellectually, socially and culturally -- in order to identify
what they really need and what their aspirations are.
In order to achieve these goals, Gavin and his team of 450
experts from traditionally nondesign related disciplines, such as
anthropology, sociology, psychology, trend analysis and visual
trend analysis, work to study and satisfy consumers' demands and
aspirations. These experts collaborate with designers and
technologists in the creation of products.
Are all these efforts enough? Not for Philips. In extremely
competitive and nearly saturated markets, companies have to go
further.
"We must inject more meaning and emotional appeal into our
products in order to woo customers," said Aaron Boey, director
and vice president of brand management at Philips Consumer
Electronics (PCE) Asia-Pacific Pte. Ltd.
Like many European companies, Philips is often associated with
high-quality and expensive products, an assumption considered by
Philips executives as misleading.
In Indonesia, Philips -- which employs 233,700 people and
sells and services its products in 150 countries worldwide -- is
better known for its household appliances, including lamps, rice
cookers, blenders, hair dryers and irons.
"We have a wide-range of products. Our prices for the same
class of products are competitive with those of Panasonic, Sony
and Toshiba," said Cosmas Subagus, a senior executive at Philips
Indonesia.
To build and strengthen its image among customers in the Asia
Pacific, Philips launched a promotional campaign at the country
and regional level in 1998. With the help of this campaign,
Philips Indonesia is optimistic that by the year 2003 it will be
one of the top three consumer electronics companies in the
country, along with Sony of Japan and Goldstar of South Korea.
Philips is currently in the top 10 consumer electronic companies
in Indonesia, with a market share of between 3 percent and 4
percent.
Star products
The ongoing campaign also includes the promotion of Philips'
"star products" with "star features and technologies", and a
study on teenagers as potential customers.
Philips' 1999 star products, scheduled to be available at the
end of this year or early next year, include Digital Video Disk
(DVD) 955, a 29-inch real flat TV which delivers sharp pictures
and perfect images from any angle of the TV screen, a 72-inch
flat TV which can be hung on the wall like a painting and serve
as a home cinema, a compact disk recorder and a Xenium mobile
phone.
However, the price for the higher-end products are steep,
especially by Indonesian standards. A high-resolution flat plasma
television, for example, costs US$15,000 (about Rp 133 million),
while the 65-inch projection TV costs "only" $12,000.
Philips is also launching the Building the Philips Consumer
Brand in Asia-Pacific campaign in an effort to strengthen its
position in the region.
"We have become more consumer sensitive and want to build
Philips' Asian brands," said Aaron Boey, a Malaysian university
graduate who is responsible for strategically positioning and
building the Philips brand throughout the Asia-Pacific region.
To gain insight into customer satisfaction, guidance on the
production of new products and global consumer and segmentation
studies, Philips also conducted 14,000 interviews in 17
countries.
The integrated promotional drive comes under the main team of
"human, imagination and seduction", and covers print and
broadcast media, outdoor advertising, the Internet, youth
programs on MTV and e-commerce. The cost of this drive across the
Asia Pacific will come to some $80 million.
This advertising campaign makes Philips the largest advertiser
in Pan-Asian media and places the company among the top three
advertiser in all key markets in the region.
Headquartered in Eindhoven, the Netherlands, Philips Consumer
Electronics is a business unit of Royal Philips Electronics of
the Netherlands, one of the world's largest electronic companies
and Europe's largest such company, with sales totaling more than
$33.9 billion in 1998.
Potential markets
Frans van Houten, Philips managing director for consumer
electronics in the Asia Pacific, Middle East and Africa, told the
press Philips invested millions of dollar in factories and other
programs, including advertising, to grab a bigger market share in
potential markets in the Asia Pacific, such as China and India --
two major Asian countries which are prime targets for Philips.
"China is the fastest growing market in the Asia Pacific, and
will become the single largest market in the world within five
years," Van Houten said.
In China, Philips' market share for consumer electronic
products grew by 1.5 percent in the first quarter of 1999 to 6.4
percent. It has the top market share for personal computer
monitors in the country.
India, with a population of over 800 million, is another
potential market for Philips. The company's market share in India
grew 0.8 percent in the first quarter of 1999 to 10.3 percent.
Singapore, Hong Kong and Taiwan are presently Philips'
strongest markets for DVDs, while Australia, New Zealand,
Thailand and China are seen as growing markets.
Indonesia was formerly among Philips top three potential
markets along with China and India, but its potential was damaged
by the economic crisis which hit the country in July 1997.
In general, the Asia-Pacific region is gaining importance for
Philips in technology, product development, manufacturing and
revenue.
"Philips has emerged from the regional economic turmoil of
1999 stronger and more determined to strengthen its position as a
global consumer electronics player," said van Houten, adding that
Philips Consumer Electronics has done exceptionally well in terms
of sales in the first half of 1999, exceeding the budget forecast
by 27 percent.