Philips

Philips used similar tactics to differentiate its Cool Skin electric razor from other electric razors through co-branding with Nivea. The Nivea association allowed Philips to attract people who normally wet shave. In this way they not only gained market share from competitors but also grew the entire market for electric razors.

In Europe, the electric razor market has increased 8% since the launch of Cool Skin and Philips’ market share is up 2%. Furthermore, research showed that Philips’ market share of its other electric shaving products was not eroded, as Cool Skin had a sufficiently differentiated proposition.

Again, Philips invested in developing the insight that there was an unmet market of people who wanted a wet shave from an electric shaver and in creating a product that would meet this need. The association with Nivea was critical to give them the credibility to provide that offering, just as Eddie Bauer gave Ford relevant credibility.

razor – бритва

insight – способность проникновения в суть

unmet (need) – неудовлетворенная потребность

Exercise 61. Read and entitle the text. What was the marketing policy of the company Pizza Patron? What advantages did it get from that policy? Can you estimate this policy from an American psychology point of view?

DENTON (UNT), Texas - Pizza Patrón, a pizza chain based in Dallas, has faced harsh criticism for deciding to accept Mexican pesos as payment. But a University of North Texas marketing professor says the business benefits will outweigh the costs of the criticism.

This represents a good sound business decision. It has probably generated for this firm, on a national basis, 20 or 30 million dollars in free publicity and name recognition for the chain.

Pizza Patrón has 59 stores in Arizona, California, Colorado, Nevada and Texas, and about 60 percent of its customers are Hispanic.

This decision has certainly enabled Pizza Patrón to draw closer to its core customer group, and it has made it far more likely that both existing Hispanic customers and the many new Hispanic customers they will get because of this decision will become more loyal to the chain," he says. "When you calculate the lifetime value of an individual customer, you are talking about thousands of dollars in revenue. Maybe across the chain we are talking about thousands of new loyal customers. You quickly get into million dollar revenues.

The decision also differentiates Pizza Patrón from other fast food chains by making its product easier and more convenient to use, Stratton says.

Pizza Patrón has meaningfully differentiated itself from competing firms in the same industry like Domino’s and Papa John’s, and at the same time, it has differentiated itself from alternative fast food choices such as Subway, McDonald’s or Sonic, he says, ‘People will eat fast food, and given all this publicity and convenience advantage, it will draw people away from a lot of competitors’.

Exercise 62. Read the text, what kind of product differentiation does the company use?