Chapter 3: Benefits Must Be Perceived by Customers

Except for gifts, people will rarely buy a new product or service unless they feel that it has some specific benefits that are important to them. Many business ventures have succeeded because they provided meaningful benefits that were clearly recognized by their customers. This chapter provides an example of how Philips identified its product s most significant benefit and created something new around that benefit, and then how the company used positioning to communicate this benefit. You should always make a point of finding out what benefits potential customers feel they will get from your product or service. You want to know specifically what these benefits are and why they are important to your customers.

Philips Lighting Company, headquartered in Somerset, New Jersey, is the U.S. lightbulb division of PhilipsElectronics NorthAmericaCorporation. In 1998 themanagement of Philips LightingCompany decided to try tomake a significant impact on the consumer lightbulb market. It began this effort by doing some seriousmarket research to see what was really important to consumers of lightbulbs. The idea was to find out what benefits consumers wanted, then provide those benefits and wrap an entire marketing program around them. The result was an incredibly successful marketing plan.

Philips Decided to Become the Long-Life Lightbulb Company

The results of Philips s market research clearly indicated that long life was the most important feature that consumers would like to have in a lightbulb. Many consumers indicated that they simply did not want to have to climb up a ladder every two months to change a lightbulb. The management at Philips found this believable because of Philips s long history with long-life lightbulbs. A major problem uncovered by this research, however, was that there was a lot of consumer confusion concerning the category. For example, although the expected number of hours was printed on lightbulb packaging, people had no idea how many hours a lightbulb should last.

Philips decided to provide the consumer with long-life lightbulbs and at the same time take away the consumer confusion. It would do this by offering a series of new long-life lightbulbs. This would involve a good, better, best strategy. DuraMax would be the good lightbulbs, with a guaranteed life of one year (twice as long as the average lightbulb). Halogena would be the better lightbulbs, with a guaranteed life of two years . Marathon would be the best lightbulbs, with a guaranteed life of five to seven years.

This long-life strategy took over the entire Philips consumer incandescent-lightbulb product line. As of this writing, Philips has become the only company whose whole consumer line is long life. It has become the longlife company. In fact, long life has become a worldwide strategy for Philips lightbulbs. The current Philips worldwide marketing vision statement is, ˜ ˜Philips is the brand of lightbulbs that helps to enhance the quality of your life. Philips delivers a full line of long- lasting lightbulbs that satisfy your lighting needs and are guaranteed to perform. In the United States, this was brought down to ˜ ˜light bulbs that last.

This long-life strategy has been very successful for Philips. The company is achieving strong consumer sales of all three of its new product lines: Dura-Max, Halogena, and Marathon. It has also been very successful from a retail distribution standpoint. Philips has been able to show retailers its consumer research, which indicated total confusion at the point of purchase. Philips has then been able to explain to the retailer how it has been able to take the confusion out of the lightbulb business with its good, better, best strategy.

This has resulted in broad-scale distribution in Home Depot and many other major retailers of consumer lightbulbs.