 "Koos Dekker")
Dutch major Philips, who originally entered into a licensing deal with PE in 2010, extended it first in 2013 for a period of four years. In this interview with Viveat Susan Pinto, Philips' senior global brand licensing director Koos Dekker throws light on its future plans in India and its success rate with licensing so far. Edited Excerpts:
Philips first got into a brand licensing deal with PE Electronics in 2010. You extended it for four years in 2013. Do you intend to continue with PE as your partner after the agreement expires in December 2017?
In all probability, yes. PE has demonstrated its commitment to the business. They have abided by the guidelines that we have set and have attempted to expand the business over the years. This is what we seek in our local partners and I don't see why we would not continue with the arrangement with them even after the current agreement expires.
What has been the success rate like across categories such as TV sets and audio-visual products, segments that you have exited globally? Do you see more global consumer electronics giants going down this road?
Yes. Companies such as Sharp have divested their interest in Europe and entered into a brand licensing agreement with a Turkish company. Sony could also go down this route. So yes, there are examples of this and I suspect this could grow as the consumer electronics market increasingly becomes complex for a large single entity to manage across markets. For corporations that have global brands, this, in my view, is the model for the future. Of course, some companies may have a different view and may not choose to do it. But given the dynamics of the market, this is the way forward.
Who are some of your licensee partners globally?
We have multiple partners in television sets including Japanese company Funai in North America and TPV in markets such as Europe and China. In India, of course, there is PE for TVs. In audio-visuals, we have one global partner, which is Gibson.
Last year, Royal Philips NV had announced that it was divesting its lighting interests into a stand-alone company, keeping medical devices and consumer healthcare products with it. Will you then contemplate a separate brand licensing agreement in this category in markets such as India where lighting is something you are known for and have a strong presence?
It makes sense to consider it, though we have not taken a call on it yet. While we did announce our intention to divest our interest in lighting into a separate company, we are yet to firm up our plans on licensing the Philips brand to local partners in that category. But yes, that is an option we could always consider in markets such as India.
How do you ensure that your partners abide by the principles and guidelines set in the brand licensing agreement. There are numerous instances with other companies where licensor and licensee do not see eye to eye on a number of issues. Your views.
It all boils down to how you execute the agreement. At PE, for instance, there is something called the brand committee, where I represent Philips and Neeraj (Sethi, CEO of PE Electronics) represents the local partner. It is at the brand committee that the architecture, design, marketing of products are decided and it is then the responsibility of the local team to execute it. Of course, we help them with inputs at every stage and make sure that product development, design and marketing are aligned with our global philosophy. We meet four times a year and have monthly review meetings with our partners.
