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Philips Shavers - Maintaining shaving leadership in the world market

A case study about Philips Shavers

Martin Byström

on 26 May 2011

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Transcript of Philips Shavers - Maintaining shaving leadership in the world market

The shaving story US employee asked for an over the counter product

The first Philips shaver was presented in March 1939

Demonstrations were made to customers all over the US

Market growth took off after world war 2 with a new improved shaver with two heads

Inroduces in 1998 "The cool skin" in cooperation with Nivea Sense and simplicity kina Här kan vi köra bullets Här kan vi köra bulletts Bullets ? Today´s Agenda Historic view of the company and its markets
Key success factors
How Philips can increase their market share
Previous advertising campaigns
Philips´ cooperative relationships
Questions to discuss ff
f Quality, reduce irritation increase convenience
Boundaries between wet and dry shaving diminishing
Female shaving market is different due to physiological factors
Happy customers drive sales Key success factors Industri rivalry Threats of substitutes

Wet shave Bargaining power
of buyers Bargaining power
of suppliers Threats of
new entrants Local players Moderate Low High Low High What are the key success factors in the male market and how are they different from the female shaving market? How can Philips increase the worldwide share of dry shaving? How will you characterise and explain
the crossnational advertising
"rowing boat" campaign? Who are the target
groups for: What is the difference in the cooperative relationship that Philips has With Nivea and that with WilliamsF1? SWOT Questions to
discuss Gift advertising campaign? WilliamsF1 advertising campaign? Continuous product innovation

Ever since the production of the first Philips shaver the concept has been an ongoing strive for improvement
and development

1939 – the first Philshaver was introduced.

1966 – three headed shaver invented

1998 – collaboration with Nivea started.

Continuous innovation of dry shavers might lead to market shares being conquered from the wet shaving market Target young people at an early stage and create long term users e.g. Gillette strategy on the wet shaving market

Take advantage of feasts that occurs in other cultures in different parts of the world. According to Daily Finance, Ramadan has become a major sales opportunity for retailers. The cooperative relationship is called sponsorship
Philips uses celebrity endorsement and WilliamsF1´s strong brand so that customers will associate characteristics such as innovation, masculinity, design and excitement with the Philip shavers’ brand.
Philips is allowed to use WilliamsF1 brand in their advertisements and products by paying an agreed fee. Philips brand is also shown on the car and the drivers outfit to a large number of people during the broadcast of the F1 circuit The cooperative relationship is called strategic partner
Helps enhancing the product
Strengthen Philips shavers brand and at the same time creates competitive advantages as it adds value by differentiating the product against competitors Market Electric shaving(40%) and wet shaving (60%)
Wet shaving preferred by younger customers while electric shaving is more popular amongst older customers.
Electric shaving market estimated at 1,3 Billion Euro in 2004
Total market estimated at 4 Billion Euro in 2004 The Indian male toiletries market grew by 10.5% in 2009 to reach a value of $219.3 million.
In 2014, the Indian male toiletries market is forecasted to have a value of $358.7 million, an increase of 63.6% since 2009 The Chinese male toiletries market grew by 11.8% in 2009 to reach a value of $324.7 million.
In 2014, the Chinese male toiletries market is forecasted to have a value of $544 million, an increase of 67.5% since 2009. Culture will affect how consumers perceive the advertised message in cross-national advertising
- Region , education, family, reference groups and political, economic

The campaign was launched in North America, United Kingdom, Spain and Germany
- Similar cultural characteristics - Hofstede

The three leaves symbolizes Philips three rotary heads
- Symbolize high level of effectiveness and strength

The campaign is targeting men
- Competition and team spirit • Philips' three rotary heads are linked together with the three rings
• Soft tones of these commercials - targeted at women
• Usually seasonally targeted to different parts of the year like Christmas and Father's Day Associate their brand with the innovative technology and design

Targeting young men
- Formula 1 is already associated with masculinity.
- Brand, price and linking with sports is very high priority
- Philips uses celebrity endorsement The wet shaving market is almost twice the size of the dry one, how can Philips further convert users to dry shaving products?

The number of purchasing decisions made or directly influenced by women are not only very high and increasing but generally overlooked by marketers. What initiatives can Philips take to further appeal to women?

We previously mentioned successful co-operations with Nivea and WilliamsF1. Which companies could Philips co-operate with in the future and why? Male toiletry market forecast 2009-2014 Both these co-operations are important in order to strengthen the brand. By both adding value and associating the brand with strong characteristics it creates a more competitive product Key drivers Economic downturn
Emerging markets
Increased VAT
Global unrest (Egypt, Libya)
Natural disasters (Japan)
Growth in male toiletery market
Trends in facial hair
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