Marketing of Innovative products by Phillips for Rural Markets

The list of products that Philips could bring to India in the near future sure looks impressive. There is a “light alarm” that will wake you in the morning by adjusting the lights in the room. No more waking up with a jolt from the shrill ring of the alarm clock. Then there is a “light shower” which will help you get out of jet lag in no time and medical equipment that will remove the disorder of snoring. The products use cutting-edge technology and could well be expensive only for the well-heeled.
That is the line-up for the future. At the moment, Philips is ready with products at the other end of the value spectrum. All set for a commercial launch are Philips lanterns. And some time later it will launch a pilot to try out in the rural markets a wood stove (chullah). The quest for fortune at the bottom of the value pyramid has driven Philips to markets no multinational lifestyle company has seriously served so far.
The stove (if the three-month pilot which will be run in the Guntur district of Andhra Pradesh succeeds) and the lantern could open a whole new market for Philips — poor rural householders and slum dwellers. Rivals in the lifestyle space say this is an audacious move to stay afloat. The company has lost market shares in categories like television and mobile handsets, though it continues to be strong in audio players, a low-tech space vacated by the large players.
Small appliances, Philips’ forte, are Rs 3,000-crore per annum market growing at about 15 per cent per annum. The company has clocked double-digit growth in the last few years. But the market is tough. There are over 600 makers in the country, though there are only about half a dozen well-known brands. Others play the price game, thanks to rampant excise evasion. So, Philips needs to think out of the box to grow.
Stove and lantern could well be the next big thing for it. Having realised that growth in the future will come from BRIC (Brazil, Russia, China and India), it has decided to come out with products that meet consumer needs in these markets. These countries have been given higher empowerment to look at unique demands and new value spaces in their markets.
Product innovation is not something new to Philips. It has done several innovations in its small appliances ever since it entered the market in 1992. Thus, it fitted its juicers with a sieve so that the juice that comes out is of uniform thickness. Research had shown that children drink juice when it is tasty and smooth.
For better grinding, it rotated the jar of its grinder in the reverse direction as the blade. At the same time, noise levels were brought down by 25 per cent so that the housewife can know what’s happening in the rest of the house even when the grinder is on. For this, the company even spoke to aeronautic engineers. Similarly, it has fitted its mixers with a hand-like plastic top on the consumer insight that women often hold the machine from the top when in use.
In mid-2007, it came out with a water purifier for the urban markets. It used ultra-violet filtration, filled whenever the water ran through the taps and indicated through a light whenever the filters had run their life and worked no more.
The new products are something else. The stove took over two years to develop and was worked on jointly by the company and its Dutch parent. It is made of steel and a fan, which runs on battery, is fitted at the bottom. As a result, the flame, claim Philips officials, is as good as that of a gas stove.