Philips Dies From Self Inflicted Wounds

COMMENT: The exit of Philips from the Australian AV market is not unexpected and in the words of a former Philips Vice Chairman “We are great at inventing products but lousy at marketing them”. Philips Australia has joined the likes of Hitachi and Fujitsu in the Australian consumer electronics graveyard

 The problem with Philips is that the people they hired had to adhere to European marketing practises which evolved more around global brand manuals than innovative marketing. The death of Philips in the consumer electronics market has been coming for 12 months or more and was a bit like watching someone you know die of cancer because they could not give up smoking. In Philips case it was more that they could not break free of their European masters with the introduction of strong brand marketing.

And while the Philips’ products were well engineered they lacked the brand image of a Sony or Samsung.

At a local level the Philips Lifestyle Products Division staggered from one problem to another with many retailers giving the Company the flick not because their products were bad but because they lacked any brand presence in the market.

Earlier this year I wrote in an editorial that Philips, which prides itself on being a leading technology company, seems to have got lost in the digital wilderness, if its latest press event for the new Aurea LCD TV is anything to go by.

Instead of a CD, DVD or even an electronic email with images and text attached Philips chose to hand out printed press releases and no images.

Even its mobile communications seem to be adrift as calls to the local communications manager went unanswered for several hours even though it was the day of a major Philips press briefing. This is not surprising with Philips, which has a global reputation for being able to deliver “great products” but is lousy at marketing activities.

Now it wants to be taken seriously as a premium European consumer electronics company, despite the fact that it has no pedigree as a premium brand. It is not a Bang & Olufsen, Loewe or even a Sony, and apart from the new Aurea TV, which is more gimmick than premium brand, none of its products are a stand out exclusive to Philips alongside products from the likes of Sharp, Toshiba Sony and a host of other brands who are playing in the LCD TV market.

A lot of consumers see Philips as an appliance company or the company that made PC monitors and then pulled out of the market when it found its brand wasn’t strong enough to compete up alongside Sony and Samsung.  

The exit of Philips will bode well for the likes of Toshiba and Audio Products Australia who are set to roll out the European Loewe HD TV range later this year. It will also open up the market for Pioneer to introduce their new Pioneer LCD TV range in 2009.