Premium Prices Resulted in Substantial Hidden Savings for Consumers

The pricing strategy for DuraMax and Marathon light bulbs was to provide the consumer with a longer-life lightbulb , and to enable the consumer to save money at the same time. The strategy for Halogena was different.

Halogena was to be sold at a premium price because of its longer life and the uniqueness of the lightbulbs. Halogena lightbulbs provided a refreshingly whiter light that was unavailable with traditional incandescent lightbulbs. The Halogena lightbulbs were also useful as decorative bulbs because of their attractive shape and glass.

The price of a sixty-watt incandescent lightbulb from GE varied from store to store, but was often about fifty cents. This lightbulb typically had a useful life of six months. A Philips DuraMax lightbulb with the light output of a sixty-watt bulb would also cost approximately fifty cents , yet it would have a life of one year. A Philips Halogena lightbulb with the light output of a sixty-watt lightbulb would have a two-year life and would cost about four dollars. The Philips Marathon lightbulb with the light output of a sixty-watt bulb would have a life of five years and would sell for approximately nine dollars.

There was a substantial additional hidden savings with Philips Marathon-lightbulbs. Over the five-year life of this lightbulb, the owner would save approximately thirty-five dollars in electricity costs. Naturally this would vary depending on where the consumer lived. The financial comparison with a sixty-watt GE lightbulb is very interesting. Over five years the consumer would have paid approximately five dollars for ten GE lightbulbs with a six-month life each. Over the same five years, the consumer would have paid nine dollars for a single Philips Marathon bulb, or an extra four dollars. However, the consumer would have saved thirty-five dollars in electricity costs, for a net profit of thirty-one dollars.