Philips has developed a stove that runs on wood as well as cow dung. The price for the pilot was Rs 2,500. Rural households may find that expensive, Philips has come out with a smaller stove without the fan for Rs 1,000. The Philips brand is displayed prominently on the body of both the models.
Meanwhile, Philips’ portfolio of lanterns is ready for areas with no electric power. These come in the price range of Rs 1,000 to Rs 3,000. Philips has made two categories of lanterns: One, which can be charged on a solar panel; and two, which can be charged from electricity. The consumer insight here was that people feel secure when there is light around. In most rural households which do not run on electricity, people use kerosene to light their lamps and lanterns. This is unhealthy. To address this demand, Philips has come out with lanterns. These can be used at home or can even be carried to the fields.
Philips may have ceded market share to nimble-footed Korean rivals in consumer electronics, but it is the largest player in lighting and is seeking to build its healthcare business. Both depend critically on modern technology.
These do fit into Philips’ brand promise of sense and simplicity. Philips brand is a household name. It reaches every corner of the country through audio and lighting products. Philips executives add that the popular perception of Philips may not be that hi-tech. Most people, still associate Philips with a radio. In other words, a stove or a lantern may not be a significant climb-down for the brand.
Some years ago, Philips decided to take the health and wellness platform globally. People had started to become more health conscious and Philips quickly caught on to it. At least the stove flows from the same plank. The top-end stove cuts smoke emission by 95 per cent and the stripped-down stove by 75 per cent. Both reduce fuel consumption by 45 per cent. Smoke spawned by traditional stoves in rural households is known to cause respiratory problems. Philips stoves aim to reduce that risk.
That may be fine, but experts on rural markets are quick to point out that smoke also rids rural homes of pests and insects. So, it may not be perceived as such a bad thing. Also, the Philips stove offers only one burner, whereas rural homes run at least two at all times in the traditional fireplace. In order to remove the old fireplace, farmers may have to buy more than one stove. This could push up the final cost of ownership. The availability of liquefied petroleum gas in villages too is improving by the day.
There are problems like these. More could show up during the pilot at Guntur in A.P , India. The pilot will determine how many stoves can be sold at what price points and what communication would be required to the consumers. So, the final strategy will be fine-tuned only when the pilot is over.
Plans are being made to sell it and the lantern in large numbers. Philips plans to be out with the stove in the market in the next festival season which starts in South India in August and the rest of the country around October. These could also be exported to parts of Africa and Asia.
Won’t be a cakewalk for Philips warn rivals. Concept-selling in India is tough. The challenge for Philips will be to get the distribution in place. It will need a large network to sell these products.