Lakme Marketing Mix Strategy

Executive Summary
Our objective in this assignment was to devise a marketing strategy for the mp3
players of Philips India Ltd. In this process we studied the varied elements of
the marketing mix and how they interact in the case of the digital music player
industry.
The methodology given in the course outline has been strictly followed for this
assignment. The Indian mp3 player industry promises tremendous growth in the
future which had opened new opportunities for the companies. The industry
witnessed a growth of 116% in 2007 and promises a compounded growth of
77% till 2010. Using its technical expertise in a technology driven industry,
Philips can capture a good portion of the market. However, the competition is
intense and Apple enjoys a substantial 70 % of the market. Therefore, Philips is
required to continually redefine its offerings, in order to stay relevant in the
market.
In this assignment, we have taken these considerations into account and framed
a strategy for the company with respect to its product, price and promotion.
Widespread growth of internet has made it an important marketing tool and
thus, we have formulated an online marketing plan for the company as well. We
have also devised a budget for the above mentioned plans.
With the help of product innovation, new pricing and distribution strategy,
Philips can attempt to increase its market share and reap benefits of the growing
mp3 players industry.
Marketing Strategy formulation & Implementation
Philips India
About the Company
Mission Statement
We improve the quality of people's lives through the timely introduction of meaningful
technological innovations.
Vision Statement
In a world where technology increasingly touches every aspect of our daily lives, we will be a
leading solutions provider in the areas of healthcare, lifestyle and enabling technology,
aspiring to become the most admired company in our industry as seen by our stakeholders.
Company Strategy
Increase profitability through re-allocation of capital towards opportunities offering

more consistent and higher returns
Leverage the Philips brand and our core competencies in healthcare, lifestyle and
technology to grow in selected categories and geographies
Build partnerships with key customers and suppliers, both in the business-to-business
and business-to-consumer areas
Continue to invest in maintaining world-class innovation and leverage our strong

intellectual property position
Strengthen our leadership competencies
Drive productivity through business transformation and operational excellence

Philips India
Situation Analysis
Globally, the top 10 MP3 brands control 96% of the market.
These brands in descending order, are as follows-
Portable MP3 2004 $396,559,700 Portable MP3 2003 $848,118,469

Player Total Player Total
1 Apple 1 Apple
2 Other 2 RIO
3 Sony 3 iRiver
4 Rio 4 RCA
5 RCA 5 Digitalway
Top Five Brands 70.20% $278,384,909.4 Top Five 86.40% $732,774,357.216
Brands
6 Archos 6 Creative
Tech Labs
7 Creative 7 Samsung
Labs
8 Samsung 8 Nike-
Philips
9 Panasonic 9 Memorex
10 Nike 10 Archos
Tech
Top Ten Brands 68.70% $272,436,513.9 Top Ten 96.00% $814,193,730.24
Brands
Source: TWICEs 2003-2004 Market Share Reports by
Category
The Indian music industry will grow to Rs. 4100 crores in 2009 from Rs 1,450 crore in 2005.
And this growth will be mainly driven by by mobile music, which will account for 88 per
cent of the music industrys revenues. Mobile music will be driven by all formats like
ringtones, ringback tones, full track audio and video downloads. However, online music
sales will remain minimal for the next three years.
Philips India
Digital music sales surpassed physical music in sales in India in 2007.
The sale of digital music has a direct impact on the MP3 player industry. So it is assumed that
follows a similar trend as the sale of digital music.
With prices coming down due to lower cost of storage, the MP3 player market is growing
exponentially. As per IDC estimates, in India the market for MP3 players witnessed a growth
of 116% in 2007, and the demand will continue to surge to 73,34,000 units by 2010, at a
CAGR of 77%.
Philips India
The players in the domestic market include-
Apple
LG
Philips
Sony
Toshiba
Samsung
Creative
iRiver
Archos
The brands like Philips, Apple, Creative, Sony and Samsung have the main market
share.
Porters five forces
Buyers Power: Supplier Power:
(i) No single consumer has any power over The components needed to produce a portable music
the production levels or prices of the various player include:
products offered. Almost all units of MP3
players are sold through: hard drive or flash memory
processing chips
a. Philips Franchisee stores user interface units
b. Philips Exclusive outlets general
c. Multi-brand outlets Assembly, and design ability.
d. Online marketplace
Most of these units are sold directly from Since Apple enjoys an almost 90% market share in
the producer. the hard drive based market, they have considerable
Philips India
buying power over the suppliers.

(ii) In case of IPOD switching cost of Smaller players in the portable music market, such as
changing over to another mp3 player is high Phillips would have difficulty acquiring the deals
as the player only supports proprietary Apple can receive.
music, but this is not the case for other mp3
players.
Degree of competitive rivalry: Barriers to entry
The expected yearly growth of the industry The barriers to entry are:
is around 20%. (i) Technical Knowhow: However, this may be
outsourced as well
Competition in the mp3 market is going to
be fierce (ii) Brand Positioning: Apple relies heavily on
franchising and advertising on television and
Lower prices billboards.
Newer and better features (iii) Component prices: Through its volumes, apple is
Technology will characterise the able to claim the lowest prices.
industry.
(iv) Market share is locked in with higher switching
costs (once consumer has purchased a variety of
proprietary music
Threat of substitutes:
(i) Convergence: cell phone and an audio player in the same device
(ii) Flash based players and hard drive based players are substitutes for one another
(iii) Portable video players having features of an audio player.

Philips India
Philips India
Swot Analysis
Strengths Weakness
Advancement of technology Lower variety as compared to

competitors
Substantial investment in R&D
leading to breakthrough inventions Low awareness of Philips mp3
like CD-RW and DVD players
Long presence in the country (75

yrs)
High Brand awareness
Efficient supply chain and wide

distribution networks
One of the earlier entrants in the

mp3 segment
Opportunities Threats
Growing market - Significant Cell phones with music players

growth for mp3 players in the past
year. Fierce competition of existing players
Rising sales of digital music Entry of new players like Microsoft

Philips India
Zune
Institutional sales - for e.g. Diwali
gifts to the employees. Rapidly changing technology - high
product obsolescence
Philips India
Goals & Objectives
Objectives
To position Philips as a market-driven, people-centric company

Fully reflect the needs of its customer base, while also increasing shareholder value.
Goals
Increase sales by 20%

Double the market share to 8% by 2008-09. i.e. 400000 units
EBITA to exceed 10% through improved margin management, product improvement
and cost savings.
Segmentation
Characteristics Product
They look for portable music players;

inexpensive options to play music on the
Daily Commuter move. Basic Audio Players
Extensive users, brand loyal, Prefer

Dedicated MP3 player over the hybrid
Serious Audiophile type Hard Drive Based Player
They look for portable music players;

that are light and easy to carry with Micro hard drive based
Travel Mate reasonable capacity to carry music player
They look for compact music players;

with shockproof operations, where music
Workout does not skip with jerks; also they look
Companion for the shuffle option Flash-based players
Philips India
They look for relatively inexpensive

music players, with stylish looks, Micro hard drive based
Light Listener interchangeable covers player
Philips India
Product analysis
Product mix width - 2
Product mix Depth - 5 for audio and 8 for audio/video players.
We can see that the audio/video line has a greater variety. The reason being that this is the
latest in this technological warfare and tough competition exists from other competitors in the
same category.
Also this segment is growing at a rapid pace.

Philips India
Philips India offers MP3 players under the product category of Portable Audio and Video
Products. This category broadly includes 4 heads:
i. MP3 Players
ii. Audio/Video Players
iii. Radio/cassette recorders
iv. DVD Players
The product chosen by our group covers the first 2 i.e. MP3 players and Audio/Video Players.
Audio/Video Players have been included because these players not only offer the basic
features of a MP3 player, but also additional features like videos, built in speakers and LCD
display. Philips has a total of 13 products under these 2 heads. The company offers a variety
of features to serve the needs of different customers at affordable prices. The basic features
differentiating the products are:
1. Memory: The memory of the products offered by the company ranges from 1GB
to 8 GB. The basic MP3 players which are also called flash audio players have a
maximum memory of 4 GB. Flash audio/video players have memory ranging from
4 GB to 8 GB.
2. Video playback: The audio video players offer videos and movies playback. The
products are capable of playing back latest video formats such as MPEG 4 and
WMV.
3. Battery Back up The lower end items offer an average battery back up, while
the higher end audio video players offer a 15 hours music or 4 hours video
playback which is in sync with the current scenario in the industry.
4. FM Tuner Philips has products which also offer FM tuner along with MP3
playback in order to compete with other players in the industry.
Philips India
Product Levels
Core benefit Music

Basic product A portable music player
Expected product Good quality sound, Easy to carry and
operate. Good battery life, Durable, clear
display
Augmented product Video, FM, Voice recording, games
Potential product Camera, Bluetooth, GPS
The portable mp3 players are currently in the growth stage of product life cycle.
MP3 players are products which are mainly based on technology. The life cycle of the
technologies used plays an important role in managing the product line.
Philips India
The above technology product life cycle shows that they are 2 types of customers:
Early Adopters: who accept the technology when it is in the growth stage. This is majorly
happening for flash audio players. The audio players have found a lot of adopters. Philips has
a sufficient range in this product line,
Late Adopters: who accept the technology after it has been widely accepted and the prices
have also decreased. This is happening for audio video players. Although, these players have
had a significant acceptance, it is quite low as compared to audio players.
In the future, the strategy will be to focus on these late adopters because the prices are
expected to fall and people are now more willing to accept to new technology. Video players
have been accepted by early adopters and soon they will come to a point when this would
become a basic feature desired by users.
Philips India
Pricing
PROMOTION
P HIGH LOW
R Rapid Skimming Strategy Slow Skimming
I HIGH (RSS) Strategy (SSS)
Rapid Penetration Slow Penetration
C
Strategy (RPS) Strategy (SPS)
E
LOW
Currently, Philips is following a competitive pricing strategy as its prices are marginally
lower than its major competitors. Also its promotion is very low as compared to other major
players. So we can say that Philips is following a slow skimming strategy.
The new product should be launched with a Rapid skimming strategy. The new features
should be used to charge a premium and establish it as a status symbol. Heavy promotion
should be done to generate high awareness.
The prices of other products will match those of the competitors.
MP3 Players Was Now Percentage Reduction
Samsung-YP-T10QB (2GB) Rs. 6,900 Rs. 6,550 5.3%
Samsung-YP-U3 (1 GB) Rs. 3,300 Rs. 3,149 4.8%
Samsung-YP-K5Q (2GB) Rs. 9,000 Rs. 8,699 3.5%
Samsung-YP-T9A (4GB) Rs. 15,000 Rs. 8,149 84.1%
Samsung-YP-K3QB (2GB) Rs. 5,500 Rs. 5,449 0.9%
Sony-NW-E005F/V Rs. 6,990 Rs. 3,990 75.2%
Sony-NWZ-S616F/B Rs. 9,990 Rs. 7,990 25.0%
Sony-NWZ-S615F/S Rs. 7,990 Rs. 5,990 33.4%
Sony-NW-A805/V Rs. 7,990 Rs. 5,990 33.4%
MP3 Players Was Now Percentage Reduction

Philips India
Sony-NW-A806/W Rs. 9,990 Rs. 7,990 25.0%
Sony-NWD-B105F/B Rs. 4,990 Rs. 4,490 11.1%
Sony-NWD-B103F/W Rs. 3,990 Rs. 3,490 14.3%
Sony-NW-E003F/G Rs. 5,990 Rs. 2,990 100.3%
Transcend-T.sonic 840 (2GB) Rs. 5,500 Rs. 3,200 71.9%
Creative-ZEN (4GB) Rs. 9,999 Rs. 6,800 47.0%
Creative-ZEN V PLUS (2GB) Rs. 8,890 Rs. 4,999 77.8%
Creative-Zen Stone Plus (2GB) Rs. 4,990 Rs. 4,399 13.4%
Creative-Zen Stone (1GB) Rs. 2,599 Rs. 2,100 23.8%
Creative-ZEN Vision (30GB) Rs. 18,990 Rs. 11,500 65.1%
Apple-iPod Shuffle (1GB) Rs. 2,700 Rs. 2,699 0.0%
Apple-iPod classic (160GB) Rs. 20,500 Rs. 18,999 7.9%
14.1%
Apple-iPod nano (8GB) Rs. 11,400 Rs. 9,995
Apple-iPod classic (30GB) Rs. 14,600 Rs. 12,995 12.4%
Apple-iPod Touch (16GB) Rs. 23,600 Rs. 21,500 9.8%
Apple-iPod Touch (8GB) Rs. 17,700 Rs. 16,500 7.3%

Philips India
The above table shows the reduction in the prices of MP3 players of major players in the
industry. It is clearly evident that there is a significant reduction in prices, reaching even 100
percent for a couple of products. On the basis of this information, we predict that Philips shall
also reduce its prices in order remain competitive. The following table summarises the
pricing strategy of Philips:
Current Prices in August Prices in January

Prices 2008 2009
SA 1356 2,499 2,250 1,999
SA 2315 2,999 2,749 2,499
SA 4325 4,990 3,499 2,999
SA 3025 4,300 4,000 3,499
SA 3325 5,999 4,499 3,499
SA 3345 6,999 5,999 4,499
SA 6045 8,999 8,000 6,999
SA 6185 15,999 13,499 10,999
It is assumed that some older models would be discontinued on account of continuous

technology advancement in this sector. The introduction of new models during the year is
another reason for lowering the prices. The new models would be introduced at above the
current prices.
Philips India
PLACE
Philips has set up a chain of its company owned stores called Philips Arena. There are
currently over a 100 Philips Arena stores. Apart from these its products are available through
various exclusive Philips outlets and MBOs throughout the country. Its distribution network
covers over 540 districts across India.
With the advent of modern retail in a big way Philips has to make its presence at stores like
Croma, Next, Reliance Digital and Electronics Bazaar. It has to employ a key account
management approach.
Philips has 103 service outlets which provide service support to its consumers.
Channel Design
Philips India Philips India Philips India

Ltd Ltd Ltd
Agency C&F agents
Distributors
Arena/Modern Exclusive
Retailers retail stores/
Exclusive
retail stores/
Consumer Arena Arena

Philips India
Product Development
The current features being offered by Philips are unable to differentiate it significantly from
its customers.
Areas where Philips lags behind its competitors:
o Battery life
Apples video ipods offer a battery life of around 30 hrs whereas a comparable
product from Philips has a battery life of around 15 hrs.
Recharge time is also greater by almost an hour in case of Philips
o Storage Capacity
The maximum capacity offered by Philips is 8GB whereas Apple has touched 160
GB.
Even one of its greatest threats, mobile phones now come with 8GB storage
capacity
o Looks & Design

Philips mp3 players are bigger in dimension as compared to almost any of its
competitors
Heavier - Lack sleekness
Models available only in one colour
Areas where Philips has an upper hand
o Display
First to introduce an LCD display.
One of the largest display screens.
Good clarity
Philips India
o Others
Built in speakers
Introduced Games
Sturdier than its competitors
The New Product
The shortcomings should be kept in mind for developing the new product.
Accordingly, the new product shall have the following features
Change in looks
A much sleek design
Lightweight
Different body colours - for e.g. Apple nano comes in 5 colours.
Approximate dimensions
Weight 120 gm
Width 60 mm
Depth 8 mm
Height 110 mm
Battery life to be at least doubled to match Apples 30 hrs. Charging time to be reduced.
Storage capacity to be at least 40 GB
Differentiating Features
Touch screen to be introduced +3500

Camera - at least 2 megapixels to be included + 2000
Bluetooth + 1000
Philips India
GPS
WiFi +800
E-Mail service
Cost
These differentiating features coupled with improvements in other areas like battery life and
storage capacity will allow us to charge a premium.
A comparable product, excluding the differentiating features mentioned above would cost
around Rs. 20000. These features would cost us an additional Rs. 7300. We would go in for a
much higher price along with heavy promotion i.e. rapid skimming strategy.
Philips India
Promotion
Advertising Agency
Philips hires an external agency to handle its entire advertising effort. The current advertising
agency for the company is Mudra Communications Pvt. Ltd.
The promotion strategy will be based on the five Ms of advertising
Mission
To create brand awareness and knowledge
To establish the product as a status symbol and create a liking, desire and preference.
To create a perception that the company is charging higher price for superior features and
quality.
Money
Very high competition and low awareness.
New features are being introduced
Frequency - Advertise heavily (Rapid Skimming Strategy)
Message generation and Evaluation
The advertisements will position the brands in such a way that it first highlights the brand
Philips and then focuses on the features. Also the heavy advertising for the new product will
have a roll over effect on the other products creating greater acceptance for them.
Media
Philips India
Magazines
Philips will advertise with 2 magazines that include articles regarding latest electronics, at
first, to check which one of them is most effective for advertising into, in the future. It will
place these advertisements @ Rs. 50000/issue/advertisement alternatively in each month (i.e.
6 ads per magazine)
Newspapers
Phillips will utilise 3 major and popular dailies to advertise its products. It will place these
ads every Sunday (ie 52 days) @ 450 cm/sq inch
TV
TV advertisements must be included to increase mass awareness. It will thus advertise once a
week (i.e. on 52 days) in a mix of 3 popular news and sports channels (during popular
programmes and matches) around 2 times a day.
Internet
Internet plan has been enumerated below. For the purpose of promoting the website, the
company will pay a popular search engine such as google money according to the pay-per-
click mechanism. The cost per click is approximately Rs. 5 per click. (It is assumed that the
website generates 100 clicks/day).
Promotions
(i) Free leather case worth Rs. 500 for MP3 players with MRP exceeding Rs. 10,000.
(Cost to the company for the leather case = Rs. 100. Expected Sales= 4,00,000 units. It is
expected that the value of 20% of the units are greater than Rs. 10,000)
(ii) With every MP3 player, Phillips gives its customers 1 MP3 of 100 songs each. (Cost to
the company for the leather case = Rs. 5, songs cost assumed to be negligible, as they will be
culled out from employees songs libraries)
Philips India
Sales Force
The company will require sales force to serve as an interface between the company and the
distributors. It is assumed that they will employ a sales force comprising of 30 executives @
Rs. 15,000 per month.
Publicity
The publicity will be carried out through word of mouth through viral marketing. This will
be done by encouraging forum discussions through social networking websites and will be
carried out through the web research staff. As such this segment has not been taken separately
and the cost is assumed to be nil.
Web Research
The web research staff of 4 executives will be carrying out all the web promotion activities
and monitoring the customers needs and expectations from the website though comments
and suggestions received via participation in the websites consumer research questionnaire.
Additionally they will also be involved in promotion in the social networking websites as
mentioned above.
Promotional Programs- Events
MP3 Mania' programme targeting the youth which is the key target segment for the company.
The MP3 Mania' programme which was launched in Chennai, Mumbai, Bangalore and New
Delhi. The concept was to go to youth hang-outs, schools and colleges, and educate the youth
about the technology behind mp3s. The program helped the company notch up a 45 per cent
share in the MP3 market.
The Philips Mahasangram Integrated Marketing Programme: A key reason behind this
initiative seems to be the growing potential of the rural market. Launched in July, 2002 was
introduced to promote a entirely new set of products to meet the requirements of rural
customers. The aim: To aggressively push the company's sales in the rural/semi-urban
segment with a clear focus on rural towns with a population of less than 5,000 and semi-
urban towns with a population between 5,000 and 50,000.
Philips India
Print Campaigns: The current marketing campaign of the company is Sense and simplicity.
The rationale for the campaign is to portray that technology can be advanced and simple at
the same time. It can be easy to experience. It can be designed around people. [Annexure
No.2]
Other print Campaigns
Let's make things better: This was the longest campaign of Philips and was used as a
promotional programme for the entire gamut of consumer electronics. They wanted to
emphasise that they are the innovators of audio cassette, mp3 players, the compact disc and
the co-inventors of the DVD. They portray themselves, through this campaign to be devoted
towards improving processes. [Annexure No. 2]
Philips India
Website Review
Philips has a website already in place. It is quite an extensive website and has all the
company and product information. If the company adds price information and payment
mechanisms, it will be able to immediately start selling online. It can thus very easily get the
following benefits-
1. Get a new distribution channel and thereby increase market reach. This channel is
accessible round the clock, all days of the week in those areas where physical outlets
have not been established.
2. Visibility- In the ubiquotous market, philips will be able to get a competitive edge. It
can claim greater presence among the current market as well
3. Establishing and maintaining business relationships- Philips can use the website to
create new business relationships with its suppliers and institutional clients.
4. It can promote relationship building with its partners and customers.
5. Reduction in cost
Concerns
1. in order to establish a web presence it is essential for the content to be comprehensive

and easy to understand. This would be able to improve page views and hence, the
sites traffic.
2. It might eventually conflict with the sales from its physical distribution channel
network.
3. It will have to face and try to counter huge amount of competition from the online
sector.
Philips India
Comment on the website appearance
The website has very light tones and colors such as light blues and greys
It is representative of its latest advertising campaign of sense and simplicity as well.
The website seems simple, yet it is modern in features.
The text is very organised.
Links are placed to connect to its global websites to cull out financial and other
company information.
At the same time, finding information within links is a cumbersome process. It does take a
while to find specific information within the website, although the search bar has been
provided for the purpose.
Comparative Website Statistics
Reach for Philipsindia.com:
Percent of global Internet users who visit this site
Yesterday 1 wk. Avg. 3 mos. Avg. 3 mos. Change
N/A* 0.00005%% 0.000175% 35%
Reach for Apple.com:
Percent of global Internet users who visit this site
0.935% 0.94% 0.994% 3%

Philips India
Traffic Rank for Philipsindia.com:
Alexa traffic rank based on a combined measure of page views and users (reach)
N/A* 1,061,544 452,984 142,656
Traffic Rank for Apple.com:
Alexa traffic rank based on a combined measure of page views and users (reach)
103 104 87 3
Page Views per user for Philipsindia.com:
The number of unique pages viewed per user per day for this site
N/A* 2 3.4 No Change
* Daily values are not available for sites ranked outside of the Top 100K.
Page Views per user for Apple.com:
The number of unique pages viewed per user per day for this site
4.2 4.1 4.2 2%
Measures:
Philips India
Phillips must improve the content on its website and start online sales in order to increase its
traffic statistics. It must thereby, include the following-
Product information (mp3 players)
All the products are listed on the website.
Features for the products are listed via listing and downloadable pdf documents
Comparison among products across technical features has been given, which is an
excellent feature.
The pictures for the product are clear, and a 360 degree view of the same is available.
The page is printable, which is a useful tool
Disadvantages-
The main disdvantage is that the prices of all the products is not mentioned on the
website.
List of physical outlets/stores from which the product will be available is mentioned
but requires the customer to feed in a lot of product information before receiving the
information.
Customer Support
Support link is given alongside every product
The link gets directed to FAQs immediately
A provision is given whereby in case of unfulfilled service needs, two telephone lines,
website link, and email helpline is mentioned.
The disadvantage is that the website mentions that the customer needs to have the following
data handy-
- The model number of the product

Philips India
- The date of purchasing
- The serial number of the product.
At most times, this information is not readily available with the customer.
Payment
The company needs to provide a payment mechanism that is both secure and convenient. It
may use any or all of the following for payment purposes-
Credit cards
Electronic Transfers
Electronic wallets, checks etc
Near cash credit card is the best way for the company [Annexure 3]
Philipsindia.com has a traffic rank of: 68452,984
Apple.com has a traffic rank of: 87
The aforementioned fact reveals that in order to reach the level of its nearest competitor,
Phillips would have to realign and redesign its website to attract more visitors and increase
page views.
Delivery
In order to prevent channel conflicts, Phillips must make use of its current delivery network
to send the goods to the customers.
Philips India
Feedback and review
In order to ensure the reliability and relevance of data, the company has already instituted
measures to receive feedback from its customers. This has been done via a questionnaire that
can be voluntarily filled by the customers. [Annexure 4] The information received will be
used by the company to improve its online and general operations.
Website Promotion
1. Besides improving content, Phillips will have to engage in Promotion to increase the
awareness of the online selling facility:
2. Blogs- Articles in other blogs/websites include the companys website link. This will
help to increase website visits and page views.
3. Pop-up Banners
4. Registering with search engines with tools such as keyword search, sponsored links
Online selling strategy
The website of Philips is already in place and which is having a good impact on the visitors.
Certain things can be taken care as talked about above and the site can be improved. For
online selling we should have certain additions like the
1) The payment mode should be mentioned.

2) Online selling option to be added which is clearly visible.
3) Terms and conditions.
4) Method explaining the procedure of online selling, etc
Online selling is an innovative idea and will be becoming a trend in the coming years. So it is
good to start as early as possible. The impact of internet can be judged by the growth rate of
internet users in the table below.
Philips India
YEAR Internet Users Growth

1998 1,400,000 -
1999 2,800,000 100
2000 5,500,000 96
2001 7,000,000 27
2002 16,500,000 136
2003 22,500,000 36
2004 39,200,000 74
2003 37,00,000 -6
2005 42,000,000 14
2006 54,000,000 29
For promoting the online selling strategy by Philips India our target market are the people
who are having the knowledge of internet and are able to operate it. Thus we will be targeting
the internet population of 54 million. This will be done advertising through the medium of
internet marketing as well as other promotional activities.
Internet marketing will include
1) Blog marketing This will help to promote our product to more of a active
population on internet and it will cover th of the internet user population.
Exhibit can be referred. This will be made effective through various
techniques like banners, sponsored links, etc.
2) Banners and pop-ups can be placed on the site most visited and these sites can
be identified through the table below.
Philips India
Rank Online Activities % undertaking % Sites

in 2007 undertaking
in 2006
1 E-mailing 95% 94% Gmail, yahoo, rediff, etc
2 Job search 73% 53% MonsterIndia, Naukri.com, etc
3 Instant messaging 62% 37% Yahoo, gmail, msn
4 Check news 61% 48% Timesofindia.com,hinduonline.com,
etc.
5 Online music 60% 49%
6 Chatting 59% 57%
7 E-greeting 58% 57% Indiatimes.com, etc
8 Check sports 57% 35% Cricinfo.com, etc
9 Online games 54% 34%
10 Dating/Friendship 51% 27% Orkut, hi5, etc
Other uses of the site
Interaction between customers can be encouraged.
Reviews of the customer about the product can be obtained.
Customer grievances can be considered online.
Mode of payment
As given in Annexure 3, the various modes of online payments are analysed and we found
that the payment through credit and debit card, stored value, etc are best.
The option of basket can also be induced where the goods can be put in the basket and then
all the goods can be purchased at one time.
Marketing Budget
Philips India
Annual
Expense Description Cost per unit Total
Research
Web
research 4 Executives Rs. 11,000/Person/Month 528,000.00
TOTAL 528,000.00
Media
Rs.
50,000/Issue/Advertiseme
Magazines 2 Magazines x 6 Issues nt 600,000.00
Newspapers 52 Daysx 3 Newspapers 450/cm sq 70,200.00
52 Daysx 3 Channels x 2 Times 78,000,000.

TV a Day 2,50,000/30 Sec 00
Internet 100 Clicks/Day Rs 5/Click 182,500.00
Promotions 80,000 Units Rs 100/Case 400,000.00
2,000,000.0
4,00,000 Units Rs 5/cd 0
81,252,700
TOTAL .00
Sales Force
5,400,000.0
Expenses 30 Executivesx12 15,000/month 0
5,400,000.
TOTAL 00
Publicity Through Word of Mouth -
TOTAL 0.00
OTHER N.A -
87,180,700
TOTAL .00
Philips India
References
Books
Phillip Kotler- 12th Edition.
Marketing Management- Readings
Websites
www.philips.com
www.apple.com
www.npithub.com
www.alexa.com
www.contentsutra.com
www.indiahousing.com
www.consumercharts.com
www.indiastats.com
Philips India
Philips India

Lakme Marketing Mix Strategy

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Executive Summary

About the Company

Increase profitability through re-allocation of capital towards opportunities offering

Continue to invest in maintaining world-class innovation and leverage our strong

Strengthen our leadership competencies

Drive productivity through business transformation and operational excellence

Globally, the top 10 MP3 brands control 96% of the market.

These brands in descending order, are as follows-

Portable MP3 2004 $396,559,700 Portable MP3 2003 $848,118,469

Digital music sales surpassed physical music in sales in India in 2007.

The players in the domestic market include-

Porters five forces

Buyers Power: Supplier Power:

buying power over the suppliers.

Degree of competitive rivalry: Barriers to entry

(iii) Portable video players having features of an audio player.

Advancement of technology Lower variety as compared to

Long presence in the country (75

High Brand awareness

Efficient supply chain and wide

One of the earlier entrants in the

Growing market - Significant Cell phones with music players

Rising sales of digital music Entry of new players like Microsoft

Goals & Objectives

To position Philips as a market-driven, people-centric company

Increase sales by 20%

They look for portable music players;

Extensive users, brand loyal, Prefer

They look for portable music players;

They look for compact music players;

They look for relatively inexpensive

Product mix width - 2

Product mix Depth - 5 for audio and 8 for audio/video players.

Also this segment is growing at a rapid pace.

ii. Audio/Video Players

iii. Radio/cassette recorders

iv. DVD Players

Core benefit Music

The prices of other products will match those of the competitors.

MP3 Players Was Now Percentage Reduction

Samsung-YP-T10QB (2GB) Rs. 6,900 Rs. 6,550 5.3%

Samsung-YP-U3 (1 GB) Rs. 3,300 Rs. 3,149 4.8%

Samsung-YP-K5Q (2GB) Rs. 9,000 Rs. 8,699 3.5%

Samsung-YP-T9A (4GB) Rs. 15,000 Rs. 8,149 84.1%

Samsung-YP-K3QB (2GB) Rs. 5,500 Rs. 5,449 0.9%

Sony-NW-E005F/V Rs. 6,990 Rs. 3,990 75.2%

Sony-NWZ-S616F/B Rs. 9,990 Rs. 7,990 25.0%

Sony-NWZ-S615F/S Rs. 7,990 Rs. 5,990 33.4%

Sony-NW-A805/V Rs. 7,990 Rs. 5,990 33.4%

MP3 Players Was Now Percentage Reduction

Sony-NW-A806/W Rs. 9,990 Rs. 7,990 25.0%

Sony-NWD-B105F/B Rs. 4,990 Rs. 4,490 11.1%

Sony-NWD-B103F/W Rs. 3,990 Rs. 3,490 14.3%

Sony-NW-E003F/G Rs. 5,990 Rs. 2,990 100.3%

Transcend-T.sonic 840 (2GB) Rs. 5,500 Rs. 3,200 71.9%

Transcend-T.sonic 840 (4GB) Rs. 6,925 Rs. 4,200 64.9%

Transcend-T.sonic 610 (1GB) Rs. 3,200 Rs. 1,750 82.9%

Transcend-T.sonic 820 (2GB) Rs. 2,795 Rs. 2,700 3.5%

Transcend-T.sonic 610 (2GB) Rs. 4,500 Rs. 2,250 100.0%