Philips stops chasing market share

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Wishing to stop the downward spiral of prices of consumer electronics products and gain the support of its independent retail partners, Philips has just announced a radical change to its market strategy for the sector.

In the face of the unprecedented price erosion of CE products which exceeded 53% over the last three years, Philips decided to switch the focus of its future market strategies. They will no longer be based on market share but on creating value for the company and its trading partners.

The product developments relating to television will focus on improving cinematic viewing experience exemplified by Ambilight and Aurea. Philips wishes to demonstrate its technological leadership by constantly improving what’s most important for the consumer: sharpness, contrast colour and motion.

The manufacturer hopes that this message will be communicated to the consumers by its retail partners who will directly benefit from this strategy by retaining greater margins. In addition to continuing product innovation, Philips plans to support its premier retail partners, with heavy investment in in-store modular panel displays, trade promotions and incentives and by improving the effectiveness of its training. The company also plans to build close relationships with retailers at the store-by-store level.

“This is a fundamental strategic shift from Philips, and there is a genuine commitment throughout the organisation to deliver a very different proposition to the marketplace in 2009. In a next couple of months you’re going to see not only a large amount of new product propositions but also changes which will underline this new strategy,’ said Neil Mesher, managing director, Philips Consumer Lifestyle.

The new direction will also apply to the Philips brand strategy which aims to reinforce manufacturer’s leadership in consumer minds in sectors other than television.

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