When a electronics company no longer sees future profits in electronics because of competition from Asia
and decides to focus on the elderly who want to live independently, that's big news. But that's just what Phillips Electronics has done.
Electronics Giant Seeks a Cure in Health Care (WSJ, subscription only)
Philips paid $750 million last year to buy Massachusetts-based Lifeline, an acquisition that represented a turning point for the company.
For decades, its medical-systems division made and sold large, professional equipment like X-ray and CAT-scan machines to hospitals. Now, Philips is attempting to meld its health-care experience with its knowledge of consumer marketing. The goal: carve out a new high-growth business selling health-related products and services.
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One of the hot areas Philips identified was "independent living," or elderly people who wanted to live on their own for as long as possible.
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Philips organized focus groups of elderly people and their adult children in Madrid, Frankfurt, San Francisco and Boston. They made some key findings. For instance, a stigma exists among many seniors who are reluctant to acknowledge their frailty or ill health. Another problem: Elderly patients often aren't comfortable with high-tech products, and prefer a measure of human interaction. Sometimes, arthritic fingers prevent them from navigating tiny buttons.
Philips developed a profile of the elderly customer it wanted to target. Internally, they dubbed it the "Senior Solutions Sweet Spot." People in this group, they determined, valued self-reliance, felt that staying connected to friends and family was important and yet wanted to address "functional decline" like weakening vision or trouble walking.
This is coming just in time for aging boomers since we know there won't be enough geriatricians, It's already too late.