NEW PRODUCT DEVELOPMENT STRATEGY:Beauty Market – Hair Streamer for Professionals

Marketing plan 2010

Introduction

Ø Created in 1891 by the Philips brothers In the Netherlands.

Ø Euro-next and NYSE Generated 26 billion Euros of revenue in 2008.

Ø One of the most important electronics companies in the world.- Present in 60 countries - 162,000 employees

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1.1 Company macro environmentPhilips is strongly influenced by several environments:

economical, social and technological.

1.2 Market analysis• Geographically: mainly North America and Europe• Business Sectors: Healthcare, Consumer Lifestyle, Lighting

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Sources: Support Manager Philips headquarters

1.3 Competitive analysis• Direct competitors: other companies that offer electronic

devices such as Samsung, LG, Sony.

• Indirect competitors: all companies that respond to similar needs: Siemens, Braun, automotive industry, Nespresso…

• Future competitors: Babyliss, Calor, Chinese brands…

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1.4 Market Segmentation• So extensive range of products almost everyone can be

Philips potential consumer

• Mostly people that care for reliable products

1.5 Existing Marketing Mix• The two main elements are:

• Indirect distribution channels

• Brand

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1.6 SWOT Annexe 1

Strengths

• reliable brand name• innovative products

Weakness

• Product responding to consumer needs

• very little interaction with consumersOpportunities

• use of internet to provide more services

Threats

• fast changing environment

1.7 Positioning Annexe 26

2.1 Marketing Strategy

• In 2010, we will focus on a product development strategy as we will stay on the same market (beauty) and offer a new product; hair steamers of high quality.

2.2 Desired Marketing SegmentationOur targets :- professional hairdressers

- people who buy powerful products

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2.3 Desired Marketing Mix

2.4 Marketing Objectives as result of the SWOT

PRODUCTPhysical

PLACEindirect distribution

channels

PRICE MarCom

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2.5 Position

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P: Philips (2009)P2: Philips (2010)C: CalorBa: BabylissBr: Braun

• Estimated revenue thanks to our products in 2010

Medium price x Number of products sold daily x Number of open days in a week x Number of weeks per year225.- x 4 x 6 x 52 = 280 800 €

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2.6 Yearly sales forcasts

3.1 Main cooperative bodiesCollaboration with: • Elite Model agency (accessories)• Schwarzkopf professional (hair care and styling products)• Huiles & Sens (aromatherapy, essential oils)

• 3.2 Marketing Current situation in the market• We recommend Philips to continue :

Organizing the Simplicity Event to introduce their new products and concepts.Participating to international exhibitions as an example the DesignBrussels.

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3.3 Developing new products and its pricing

• Hair steamer with integrated essential oil sprays

designed for professionals and accessible for a demanding clientele.

• High-end price: 225 €

• Guaranty for 3 years and possible extension (50 € per year).

• After-sale service 24/7

• Innovating pricing system: free trial during 2 weeks and payment after that if the client is satisfied with the trial.

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3.4 Marketing Activities1) Product

Foresee various colors and modern design.Create a detachable and adjustable base.

Innovate thanks to our partnerships : essential oil sprays.

Set-up an after-sale service 24/7

2) Distribution channels

Direct: Hairstylist salons

Indirect: “Boutique du coiffeur“ and wholesalers

3.5 Enhancing service marketing principlesAgents able to speak several languages, to negotiate and to

know very well the product following company training.13

3.6 GANTT scheme

What Who When Cost Comments

Mailing to 10000 hair styling salons

Sales Manager and 4 assistants

6 – 10 January 2010

1600 €4x 10€x8hx5d

in the main cities in the world

Participation to the MCB Mondial coiffure Beauté

Sales and Marketing Manager And agents

6-8 November 2010

About 12000 €(including fees, stand, agents, transports, equipments…)

In Paris (9 am to 7 pm)

telemarketing 2000 calls

10 Salesmen 3-17 February 10x10Ex8hx14d= 11 200 €

In the main cities

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3.7 Marketing yearly budget

Resources Usages

Self 80% = 89 856 New product development

40%= 44 928

1+1› 2 10% = 11 232 Indirect Marketing 25% = 28 080

Short term loans 10% =11 232 Events 20% = 22 464

Marketing research 5% = 5 616

Unexpected expenses

10% = 11 232

Total ( 40% x 280 800) 112 320 Total 112 320

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Control committee composed by:- Marketing manager- R&D manager - Production manager- Finance manager/ Accountant

4.2 Control toolsBased on “Management by objectives” we recommend to relyon satisfaction surveys and statistical reports.

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4.1 Control Bodies

4.3 Control by MilestonesFor our Marketing plan important days are:

January June December

Hair style week 16 – 21 November

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M.C.B. Paris6-8 November

Well-being fair4-8 February

Fashion week Paris 24-27 June

2010

4.4 Criteria of successTo have a good brand image on the beauty market. To reach a high level of satisfaction from our clients and to retain high loyalty levels.

Annexes

That depends on the company

• Annexe 1 SWOT

BACKBACK18

• Annexe 2 Positioning

BACKBACK19

P : Philips ( 2009)C : CalorBa : BabylissBr : Braun

• Annexe 3 PHILIPS SURVEY(by Support Manager, Philips headquarters , Amsterdam, Netherlands)

1. What are the political (legal), economical, sociological and technological influences over Philips company?

Economical: credit crunch – smaller turnover, smaller profits,Sociological: increasing unemployment: smaller turnover, consumer expect product that maketheir life easier,Technological: fast technological changes force Philips to adapt quickly, Political: Comply with specific rules and standards that are implemented in countries wherePhilips is present.

2. Which are the main markets that Philips is part of?Healthcare, Consumer Lifestyle, Lighting

3. Which are the direct and future competitors of the company?Direct competitors: other companies that offer electronic devices as Samsung , LG, Sony.Future competitors : mainly Chinese brands

4. Who are the people interested in Philips' products (potential customers)?Philips offers such an extensive range of products that everyone can be Philips potentialconsumer. However brand attracts mostly people that care for reliable products. 20

5. What are the two most important elements within your Marketing Mix? Why?All elements of marketing mix are important. Lack of attention to one of the 4P’s may cause

failure on the market. In my Business Unit Consumer Marketing Managers (CMM) develop a product only after they have checked consumer needs. Moreover, CMM needs to remember to create product within a given ‘price-cost range’ to meet consumer expectations. Price that is visible on the market is negotiated between Marketing Manager and Customer Marketing Manger in the relevant country. Promotion – packaging and visuals are developed by CMM but localized locally (there is also possibility to develop some new marketing materials locally). Price-related promotion is agreed between country and Marketing Managers. As you see, none of 4P’s has a dominant position.

6. What are the main Strengths, Weaknesses, Opportunities and Threats of Philips?Strengths – reliable brand name, innovative products, shifting from product to services (from

creating a product to fulfilling consumer needs), know-how.Weaknesses - developing product that do not respond to consumer needs (sometimes there is

no need for the product created by Philips and such a need is also not created), lack or very little communication with consumers. Sometimes consumers do not know that a line of products exist. Finally, there are many procedures that are not flexible enough.

Opportunities - use of internet to provide more services.Threats – fast changing environment (organization is too formal to respond to fast changing

markets).

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7. Can you please rate the position of Philips in connection with the following criteria:

Excellent Good Fair Bad PoorInternational presence □ □ □ □ □Market position (leader, challenger) □ □ □ □ □Value for money: price □ □ □ □ □

Our ConclusionsOur Conclusions

This interview, that reflects the marketing strategy of this year, had an impact on our marketing plan. Information about markets and competitors helped us to focus on consumer lifestyle with the creation of a hair streamer for professionals. Then, we considered some of Philips’weaknesses and threats. We tried to alter those weaknesses into strengths and opportunities for the coming year.

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