Osram Sylvania

Positioning Innovation Based on Consumer

Insight
08 March 2017
Team 1 recommendations were on point. However, we focus
on a specific target market segment and differ on branding

Our
Key Question Team 1
Recommendation

B2B VS B2C B2C B2C

Hedonic VS Utilitarian Hedonic Hedonic

New Brand VS Brand Sylvania IQ

Lightify by Sylvania
Extension Control

Married men,
Target Market and Target >$70K, college,
Segment
N/A
3.4 family
?
members

Page 2
 Sylvanias positioning strategy should be done through a
holistic rather than independent decision approach

B2B
VS
B2C

Strategic Analysis
Hedonic New Brand
VS VS
Utilitarian Sub Brand

Target Market
&
Target Segment
Consumer Insight

Sylvanias decision has to strike a balance between whats good for the company, and
features customers value
Page 3
Moreover, they should target Asia and Europes Residential
Lighting Control Market
A B2C business model will tap into the Fast growth for the next 18 years will make
Residential Lighting market this market even more attractive
MKT Size MKT Size $ 1597 Mn

Residential Lighting Control Market

$ 43 BUSD $ 60 MUSD
CAGR (2012-30): 20%

Asia
Residential

(MUSD)
40%
74%
Other Europe
26% 38% $ 642 Mn

USA
22%
$ 258 Mn

$ 60 Mn $ 104 Mn
Residential B2C
'12 '15 '20 '25 '30
Office B2B Asia & Europe: Smart Lighting
Architectural B2B ~80% of Residential With 17% market share, Sylvania can earn $270
Shop B2B Lighting MUSD by 2030(1)
Hospitality B2B High growth
Revenues can increase even more by gaining
Outdoor B2B/ B2C US:
market share from GE, which hasnt launched a
Industrial B2B Flat last 5 years
smart lighting solution

Targeting Residential Lighting Control Market in Europe & Asia has huge potential
Page 4

(1) Conservative revenues estimate

Family men with college education, between 25-44 years old
and an income > $70 KUSD are Sylvanias best bet
Gender Yearly Income Education

(49%) (51%) Graduate Degree 21% (19%)

40K 50K
12% (15%)
4-year College
50K 60K 25% (17%) Some College 35% (35%)

60K 70K (16%) No College

26%
33% (33%)
34% 25% 70K 80K 40% (14%)
17% (14%)
Over 80K 35% (39%)

Employment Age Number of Family Members

Number in Family

(88%) (12%) Under 25 86% (4%) (48%) (43%) (10%)

25 - 34 52% (20%)
30% 23% 35 - 44 38% (18%) 25% 32% 41%
45 - 54 16%
(26%)
55 - 64 18%
Employed Unemployed (20%) 1-2 3-4 5+
65+ 8% (12%)

Page 5
People who value more the experiential aspects of our
product, are similar to our defined customer target segment

Cluster 1 Cluster 2
(Energy Savings) (Experiential)
Age 38 37
Age: the younger the
Male 53% 63%
better
Expected Price $164 $181
Less price sensitive
Willing to Pay $177 $198
Household: the
Household Size 2.9 3.4 bigger the better

Reasons to Purchase Cluster 2 Type of Message

Set a better mood at home 97% Hedonic

Improve quality of light 76% Hedonic

Aesthetic appeal of home lighting 57% Hedonic

Make social events more fun 57% Hedonic

Easier to control lighting 54% Utilitarian

Energy cost savings 47% Utilitarian

Improve productivity in work 45% Utilitarian/Hedonic

Based on our research, Hedonic Customers are the best type of customers to target
Page 6
 Sylvania must prioritize the GO signals valued by Hedonic
customers, and inhibit the STOP signals for the Utilitarians

Cluster 1 Agree to
Hedonic Go-Signals

Features to Cluster 2
1 (Energy Pay List
prioritize (Experiential)
Savings) Price
Interested Hedonic
Set a better
Prospects Customers 8% 97% 80%
mood at home
Improve
24% 76% 70%
quality of light

2
Utilitarian Go-Signals

Rogers 5
attributes
Uninterested Utilitarian that
Prospects Customers
influence
adoption

Observability
Stop > Go Stop < Go
Inhibit STOP signals for Utilitarian customers: Price and switching costs to a new system
Page 7
The $200 price point should remain to maximize gains and
develop a Premium Product image

Agree to
Reason to Purchase Utilitarian
KUSD

10.8 Pay List

10.0 IQ Control Vs. Hedonic
$9.5 9.2 Price
8.5 8.1 Improved Quality of Light 70% Hedonic
Aesthetic appeal 71% Hedonic
Make Social Events Fun 93% Hedonic
Energy Cost Savings 66% Utilitarian
Better mood 80% Hedonic
Easier control 69% Utilitarian
2012 2020F 2030F
Improved productivity 69% Utilitarian
Cluster 2 (yellow) will appreciate as traditional 68% of Utilitarian customers are ready to pay
products shift from lowinvolvement to the list price for IQ Control with its respective
lifestyle products features

Pricing Decision
$200
Page 8
Sylvania should go for B2C and innovate to survive, while
developing a new set of core competencies

Drawbacks B2B B2C Insight Implementation Steps to Success

Core Competency B2C marketing competency

Low
New Business Lighting Data Business
Opportunities Opportunity
1 Develop demand creation skills

Brand Image Better brand image with B2C

Market Expansion Not limited to Home
Automation market
2 Develop new channels

Threat from low cost Same

players Develop emotionally resonant
3 brand image
B2B

B2C

Focusing on B2C segment and reshaping their core-competencies to align with the changing market
trends is an important aspect for companies in which are in a highly innovative market

Page 9
The brand should be Sylvania IQ Control, based on our
market research data and the Brand Architecture framework
Brand Equity
80

60

40

20

0
Philips GE Sylvania Sylvania IQ Philips Hue Philips Living IQ Control LivingColors Hue
-20 Control Colors

Sylvania Corporate brand Corporate vs Sub Brand

Highest willingness to buy.
Inconsistent brand positioning.
Marketing economies of scale.
Hedonic Attributes
Par with GE & Philips.
Sub Brand e.g. Samsung Galaxy

Page 10
Our Positioning Statement will focus on the hedonic-
lifestyle features and ease of use

To young professionals with family,

Sylvania IQ Control is a life-style
lighting product that creates the right
ambiance for a better mood

Page 11