Philips brand strategy / positioning case study

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Philips Brand Strategy Analysis
Philips
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Category:
Electronics & technology – home appliances, TV sets and home cinemas, healthcare solutions

Owner of the brand:
Koninklijke Philips N.V.

Key competitors:
Sony, Panasonic, Samsung, LG, Siemens, General Electric

Brand essence

Making the world healthier and more sustainable through innovation.

Brand values

Innovation, care, empowerment.

Brand character

Innovative, pioneering, serious, caring, empathetic, supportive.

Dominating archetype
EVIDENCE
Comments
1

Philips’ heritage dates back to 1891 when Frederik Philips and his son, Gerard Philips, started manufacturing light bulbs in Eindhoven, the Netherlands. The company quickly became an international success and was one of the 20th century’s biggest electronic multinationals operating across a vast number of categories ranging from shavers to TV sets. At the beginning of the 21st century, Philips shifted its strategy from being a diversified conglomerate and repositioned itself as a company with a clear focus on health technology.

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The biggest changes in Philips’ business strategy were initiated after the appointment of Frans Van Houten as CEO in 2011 and the subsequent introduction of the Accelerate! programme[1]. Philips went from a centrally managed company with a wide portfolio of products to a much more efficient organization with stronger local teams and a streamlined offering that focuses on products which measurably change people’s lives for the better. In 2013 the company also announced a new brand vision, which is to make “the world healthier and more sustainable through innovation”[2]. Frans van Houten, Philips CEO said: “We believe that the new brand positioning much better reflects Philips’ mission to improve people’s lives through meaningful innovation. As a technology company, our commitment is to deliver innovation that will drive our future growth and matters to people. We will make healthcare more affordable and accessible through innovation.[3]

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Although innovation has always been part of the Philips brand strategy, changes to its business strategy now show that ‘meaningfulness and care’ are core tenets of the company’s brand equity.  Philips highlights its clear focus on ‘meaningful innovation’ as a key factor in what differentiates the company from other innovation-based companies (for which being innovative is an end goal in itself). Philips strives to build an image of an organization investing only in the innovations that matter to consumers and therefore proving that Philips cares about their well-being. To stress this shift in strategy, Philips replaced their old tagline of “Sense and simplicity” with “Innovation and you”.

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Philips also highlights changes in its product roadmap which were made to better reflect the company’s brand mission of moving from TV sets and home cinemas to healthcare and well-being solutions including breastfeeding products, electronic pain relief solutions, respiratory solutions and ultrasound products that reduce infant mortality. Eva Barrett, Global Head of Brand Marketing Communications at Philips, told Marketing Week: “It will take time to fully change people’s perceptions away from the image of Philips being all about, say, TVs[4].

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Philips’ brand equity – despite having some elements of the Sage archetype where there is a focus on research and science – is mainly based on the Hero archetype which solves concrete health and well-being problems, enables people to do things they couldn’t do before, e.g., helping people who have respiratory problems to sing or exercise[5], and measures the efficacy of all their efforts. In fact, Philips aims to improve 3 billion lives by 2030 and has a robust approach to the measurement of these improvements. Philips – proving that the brand cares about its consumers, i.e., the Caregiver archetype – has also made a commitment to build a healthier society and to focus on products that truly change people’s lives rather than just their social status.

Tagline
Most important campaigns

1. “Wherever There Is Life, We’re There, Finding Ways To Make It Better” (2019)

2. “Philips PowerPro Aqua FC6404” (2019)

3. “Baru! Philips Shavers – Star Wars: The Last Jedi Edition” (2017)

4. “Building A Healthy Society” (2016)

5. “Philips Technology” (1987)

Official brand statement:

Royal Philips of the Netherlands is a leading health technology company focused on improving people’s health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. The company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.[6]

Interesting facts:

Philips, together with Sony, launched the Compact Disc.[7]

Founder Gerard Philips’ father Frederik Philips was Karl Marx’s cousin. Frederik Philip’s paternal aunt was Marx’s mother.[8]

Must-reads

1. Interview with Jeroen Tas, Chief Innovation and Strategy Officer at Philips
A. Azis, “The Power Of Purpose: How Jeroen Tas And Philips Are Creating Healthcare With Empathy”, Forbes, Sep 2019,
https://www.forbes.com/sites/afdhelaziz/2019/09/15/the-power-of-purpose-how-jeroen-tas-and-philips-are-creating-healthcare-with-empathy/#48edef73de08

2. Advertising Age on Philips’ audio branding
A-C. Diaz, “Philips Created Its New Identity With The Sound Of Light Bulbs”, Ad Age, Dec 2018,
https://adage.com/creativity/work/philips-philips-instrument/961871

3. Marketing Week on the launch of the “Innovation and you” tagline
R. Parsons, “Philips Introduces ‘Innovation And You’ Strap In Marketing Overhaul”, Marketing Week, Nov 2013,
https://www.marketingweek.com/philips-introduces-innovation-and-you-strap-in-marketing-overhaul/

Sources:
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