Professional Documents
Culture Documents
Philips
drives change in a
multinational organisation
01_Introduction
10 millionth Senseo presentation Philips was established in 1891 and made lightbulbs – a simple
product. Throughout the years the company increased its portfolio
into technology products that became too complex for most users.
When Philips realised this, it decided to make life easier and so
launched a brand repositioning all about simplicity. The term
positioning refers to where products and brands are placed in a
market. What is more vital is where customers see such
products/brands being placed in the market.
For example, customers might You can see that Philips’ new position in its markets
see products as giving ‘good is based on continuing to provide value-for-money,
Launch of "sense and simplicity" value’ or ‘poor value’ for money. high-tech products. In addition the new position is
They may link a brand with ‘high quality’ or ‘low based on easy-to-understand goods and clear
quality’. It is key to carry out market research to exchanges with its market. Since the launch Philips
spot appropriate positions to take in the market. has made great progress. This has been recorded
An appropriate position is one that suits customers’ by achieving milestones along the route. Good
requirements. The term ‘repositioning’ refers to a examples are the creation of a Simplicity Advisory
conscious strategy to alter the site of Board (SAB) and the launch of a range of thriving
products/brands in the market. The new ‘best’ products such as Senseo®, a coffee machine that is
place should be based on market research. stylish and simple to use. The triumph of these
milestones is outlined in this case study.
“sense and simplicity” is the brand promise that
Philips has identified through its research as the 02_Creating a repositioning
best one to take. The map below shows how the strategy
company has repositioned itself. It illustrates two The stages involved in moving a product are:
key dimensions: 1. carrying out research to find out the weaknesses
www.tt100.biz
Value-for-money,
high-tech products
3. Make plans
1.Research 2.See direction and take actions
for progress
“sense & simplicity”
Edition 11
Philips
The following chart shows four examples of how complex this process has become
Male Shaving Beauty Home Personal Expression
Entertainment
Youth 14-25
Ethnic Male 18-24 Female 15-34 Male 18-34 Adults 15-24
Male 18-25 Female 18-25 Male 25+ Adults 15-35
Male 18-39 Female 18-44 Male 25-49 Male 18-34
Male 18-54 Female 20-34 Male 25-50 ABC Male 19-25
Male 19-50 Female 25-34 Male / Female 25-45 Male 25+
Male 20+ PI>$2000 Female 25-44 Adults 25-54 HH1 100K+ Male 25-54, tech savvy
Male 25-49 Women 18-35 Adults AB 25+
Men 25-50 ABC1 Women under 30 Adults 30-50 ABC1
Male 30-54 All females Plugged Ins 30-39
All 25-39 Plugged Ins 15-24
25-45 families Plugged Ins 25-35
All 25-50
Philips SmartTouch
The table above shows just four product areas The first challenge was to change the Philips image.
and the target audiences for each, which were This was built around “sense and simplicity”. The
being addressed. In addition Philips’ products were message that Philips is getting across now is that
marketed under lots of names, using a range of everything it does is focused on meeting customer
different advertising approaches. It was no wonder needs. This is shown in the following diagram:
that there was great confusion in customers’ minds.
Philips is also looking at all of its existing products Last year, Philips launched its own Simplicity Event.
Philips
to make sure they fit the needs of “sense and This provided Philips with an opportunity to share,
simplicity”. with stakeholders, how far it has come in its
commitment to “sense and simplicity”. Products that
The third key element of “sense and simplicity” is already deliver this promise were exhibited, together
communications. All Philips’ exchanges should be with living prototype demonstrations of how Philips
easy to understand. The message given is directed envisions simplicity in
at the target audience and is simple to follow. the future. Senseo®
is one example of
One of the key simplicity milestones has been the “sense and
launch of the Simplicity Advisory Board (SAB). This simplicity” in action,
is a think tank of independent experts from the fields other living
prototypes include:
of information technology, healthcare, fashion,
• ‘Chameleon’ – a
design and architecture. It has been able to give an
lamp shade that
outside-in view of what simplicity means and how
changes to match
this can be valid across the organisation. The
any colour you
members of the board were chosen for their wide- Chameleon
show it.
ranging knowledge and expertise.
• ‘In Touch’ – a
mirror that
The Simplicity Advisory Board (SAB) – transforms into a
an outside-in approach touch screen
message centre,
IT Specialist providing an
alternative to
leaving messages
Healthcare
Fashion Specialist on answer
phones or stuck
Looking in at on a fridge. In Touch
Philips and giving • ‘Momento’ – a
state-of-the-art advice
about simplicity glass ball, small
enough to fit into
the palm of your
Architecture Design hand, offering a
completely new
way to share
video memories.
04_Illustrating the strategy – Once shaken its
products built in sensors
We can show the new repositioning strategy by will prompt the Momento
an impressive total. The product embodies what In the Ambient Experience suite, a patient can choose
Philips is trying to achieve in everything it does. This a relaxing visual that can be projected onto the ceiling
is to join an exciting state-of-the-art product with and doctors say that this ambience helps relax the
simplicity. The coffee makers are combined with patient and makes the scanning process easier and
Douwe Egberts Senseo® coffee pods to give quicker. Philips is embedding “sense and simplicity”
customers the taste they want. into a wide range of high-tech medical products. 127
21651_Philips 10/3/06 3:01 pm Page 4
Philips
Brand promise: what a brand promises to deliver Positioning: the place that a brand or products
to customers. This may be through advertising, has in the market. The best way of identifying the
GLOSSARY OF TERMS