Philips: Making Sense of Simplicity

            
 
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Case Details:

Case Code : MKTG163
Case Length : 19 Pages
Period : 2004-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Royal Philips Electronics, Inc.
Industry : Electricals and Electronics
Countries : Worldwide

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

Positioning the Philips Brand

Although Philips was respected for its commitment to quality, the brand was seen as 'traditional'. This was partly because Philips was an old company, having been present in some markets for more than 100 years.

In 1995-96, in an attempt to rejuvenate the brand, the company launched a global campaign called 'Let's make things better', which replaced the 26 different slogans used by Philips in different markets. The objective of the campaign was also to project Philips as a company that used technology to improve people's lives. The campaign tried to convey that Philips technology, while improving people's lives, could also improve the world...

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Philips Launches 'Simple' Products

Even before it began promoting the 'Sense and Simplicity' concept, Philips sold some products that seemed to exemplify the concept. For example, the Senseo, a coffee maker that was a huge hit with coffee lovers, was simple (it only had one button) and yet sophisticated enough to make gourmet coffee. Another product was the HeartStart, a defibrillator that could be used by patients at home. Under the 'Sense and Simplicity' initiative, Philips launched several more products such as the Philishave Cool Skin (an electric razor), the Perfective (an electric iron), the Perfectdraft (a beer pump), and the Intelliclean (a toothbrush system)...

Can Simplicity Change Philips' Fortunes?

According to authors Schiffman and Kanuk, marketers should position their brands so that they were perceived by the customer as occupying a distinctive niche - a niche not occupied by any other brand. With 'Sense and Simplicity', Philips aimed to associate the Philips brand with simplicity. Earlier, with disparate campaigns in different locations, Philips did not have a uniform global image. An employee who joined Philips from HP remarked, "One thing I noticed when I joined Philips was that each of the regions operated with a lot more autonomy in terms of how they positioned the company...

Outlook

Though Philips did not comment on the success or failure of the 'Sense and Simplicity' initiative, it appeared that the campaign was beginning to show results. Philips' total sales from products introduced in 2004 were 49 percent of total revenues in 2005. In 2004, only 25 percent of the sales were from products launched the previous year...

Exhibits

Exhibit I: Philips' Business Areas
Exhibit II: John Maeda's Ten Laws of Simplicity
Exhibit III: Philips 'Sense and Simplicity' Print AD
Exhibit IV: Concepts Showcased at the Simplicity Event
Exhibit V: The Philips Pronto
Exhibit VI: The Lifestyle Home Project
Exhibit VII: Ranking^ of Philips' Consumer Electronics Products in the US
Exhibit VIII: Philips' Financial Highlights


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