Hello, Philips is an interesting example to choose for this particular discussion week. Thank you for sharing the case with the teakettle. I would like to get your perspective on another product segment of Philips, namely TV’s. Hamel & Prahalad (1985) articulate how the Japanese TV makers focused on strong international distribution expansion to gain market share and beat competition on a global level. They continue to outline that such force feeding of the distribution channels by accelerating product life-cycles and expanding to adjacent product segments helped the Japanese companies to pay off their investments as well as create competitive advantage. Consequently, many US or European TV manufacturers were caught short with their slow product development and strategic response and gradually gave in market share in their home turf. Hence, Japanese competitive advantage developed to a world-scale volume and global brand positioning across the consumer electronic products. Given the situation described above, I would conclude that the marketing mix used by the Japanese companies rested on the four Ps which constitute the ‘production-oriented definition of marketing” (Grönroos, 1994) and consequently centered around the goods-dominant logic. I could conclude that Philips missed out to focus on mass markets using traditional marketing mix with the objective to create transactions. Would you agree to this? References: Grönroos, C. (1994) ‘From marketing mix to relationship marketing: towards a paradigm shift in marketing’, Management Decision, 32 (2), pp. 4-20. Hamel, G. & Prahalad, C.K. (1985) ‘Gary ‘Do You Really Have a Global Strategy?’ Harvard Business Review. [online], (Accessed: 5 June 2017). Available at: https://hbr.org/1985/07/do-you-really-have-a-global-strateg

Reply:

Having been established 1891, Philips company has managed to reach out to markets beyond Europe (Kreutzer, 1988). This said, I beg to disagree. Philips like the Japanese manufacturers, targeted mass markets in effort to expand their market share. However, Philips may have missed out on some few marketing strategies. One of the biggest strengths amongst the Japanese manufacturers is that they are constantly improving their products are basically innovative (Sciberras, 1982).

Consequently, Philips due to lack of innovation and inability to cope with the market competition imposed by the Japanese, have found themselves lagging behind. Both Japanese TV manufacturers and European manufacturers had their marketing mix rested on the “four Ps” but, it’s how each of them focused on the traditional marketing mix that made or makes the difference.

Reference:

Kreutzer, R. T. (1988). Marketing-mix standardization: an integrated approach in global

marketing. European Journal of Marketing, 22(10), 19-30.

Sciberras, E. (1982). Technical innovation and international competitiveness in the television

industry. Omega, 10(6), 585-596.

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