Going for markets based on affordable prices that provide high volumes seems to be a buzzing trend. Much like the Tatas making the Nano car, Dutch multinational Philips Indian operation plans to target consumers in smaller towns with low-cost appliances.
The company plans to launch small appliances like mixers, grinders, rice cookers and electric irons at a price lower than current prices by up to 50 per cent. These products are likely to have only critical features without frills and are likely to be introduced only in India for the moment.
That would be Philips’ way of tackling competition from Korean giants like Samsung and LG, much like in the car business, where Hyundai is a key player. Philips plans to have special zones in retail outlets to highlight its products.
Philips’ net sales grew by about 19 per cent in 2007 before the economic slowdown hit the country and the company expects it to be lower for the year ended December 2008 for which data is yet to be released.
“We will roll out small appliances that are cheaper in the range of 30 to 50 per cent for the value conscious consumers in the metros and those in Tier II and Tier III cities across India,” Mahesh Krishnan, vice-president and sales head at Philips India’s consumer lifestyle division.
The special showcase zones will court both traditional retail stores and modern retail chains to highlight Philips’ consumer lifestyle, healthcare and lighting products. In the first phase, the company is testing out these zones across 40 retail outlets in the National Capital Region.
“The plan is to have similar zones across 400 outlets by the end of 2009,” Krishnan said.