Philips maps out new brand strategy
By Liu Baijia (China Daily)
Updated: 2004-09-06 09:42

Philips Electronics needs to transform its advantage as one of the best known brands in China into the most-preferred brand and is well on its way to double its sales in the world's most populous market in four years, said a top company executive.

"Philips is one of the most well-known brands in China, but what we need to do now is to make it the most preferred brand for Chinese customers," said Gerard Kleisterlee, chairman, president and chief executive officer of Royal Philips Electronics.

He said during his fourth trip to China in the past year that his company will launch a new brand positioning strategy focusing on simplicity globally on September 13 in Amsterdam. Philips China will hold a similar ceremony in Shanghai on September 14.

The strategy is believed to be a crucial part of Philips' realization to double its sales in China from US$6 billion to US$12 billion in four years.

Kleisterlee said all business lines of Philips in China saw steady growth this year and the semiconductor business even saw a stronger double-digit growth rate.

Philips just won a contract to provide contactless integrated chips for electronic tickets at the Badaling Great Wall in Beijing.

Kleisterlee believed that the 2008 Olympic Games in Beijing and the 2010 World Expo in Shanghai will create huge demands for smart cards in urban utilities and that will also bring more contracts for his company.

In its consumer electronics business, the company spelled out ambitious plans in the world's most populous market, which may become the most important for the electronics giant.

The company released dozens of new models including 12 models of flat panel TV sets, rewriteable DVD players and household audio and video systems in a launch ceremony in Shanghai on Friday.

Piet Coelewij, senior vice-president and general manager of the consumer electronics business of Philips China, said his company will spend 40 million yuan (US$4.83 million) in the country in the marketing of the new products.

He said Philips aims to expand its sales in China in the next three years to 10 billion euros (US$12 billion), compared with 4.7 billion (US$568 million) last year and estimated 6.4 billion yuan (US$773 million) this year.

The company also plans to grow its market share to 17 per cent in the high-end flat-panel TV market and 5 per cent in the mobile phone market in three years .

Kleisterlee said Philips is also considering gaining a presence in the automotive electronics business in southern China, as the growth of automobile sales is strong.

In the research and development area, the electronics firm will strengthen its efforts in China by building 15 research centres and laboratories.

Its chief technology officer Ad Huijser said Philips will try to contribute to the development of intellectual property rights in China.

China is drafting up an enhanced versatile disk (EVD) standard in order to compete with the DVD format groups including Philips, which has asked for royalties from Chinese DVD makers.

Huijser said that if the EVD standard is accepted by the market, Philips may support the standard, just as it supported the video compact disk (VCD) format developed by the Chinese several years ago.

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