Consider another Philips’ innovation, the Lumea IPL (intense pulsed light) method of unwanted hair removal. Philips launched Lumea after six years of clinical studies and trials. It retails for £400, at least ten times the price of other popular methods of depilation. How consistent is this product with Philip’s declared mission? Rehearse the arguments one would use to champion its commercial development. Then rehearse the counter-arguments. Which do you find more persuasive and why?
What will be an ideal response?
The Lumea depilator is different. Potential concerns over health and safety evidently required Philips to
conduct extensive clinical trials before launch. Consumer uncertainty over safety and optimum usage
patterns as well as high price seem likely to restrict its adoption by the wealthy and by professional users
such as models and salons. This exposes Philips to new user segments, which in Clarke’s terms is
actually or potentially disruptive to client relationships, for example by necessitating new distribution
channels to access professional users. However, it draws on existing Philips’ know-how, cementing
existing capabilities. Thus Lumea seems to meet the criteria for being a genuine niche-creating
It seems probable that the main arguments one would use to champion the commercial development of
Ambilight would be its incremental nature, its relatively low incremental cost increase per set and its
high volume sales potential. The main counter argument would be consumer rejection, mitigated by
offering it at a premium price sufficient to avoid losses if sales are low. The arguments for Lumea are
more radical, emphasising its fundamental departure from existing hair-removal methods without any of
their inherent disadvantages. However, high price will presumably prevent it from supplanting other
methods and hence achieving high sales volumes, which is a counter argument. While Ambilight and
Lumea seem consistent with the product positioning implied by Philip’s declared mission, if Lumea is a
low volume product it will not readily recover its R&D investment. Conversely, if it proves successful
and in time becomes widely copied, selling at much lower prices than Philips can achieve, then it will not
support the mission in a sustainable fashion. Time will tell!
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