How a brand promise drives change in a multinational organisation
A Philips case study

Page 1: Introduction

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...
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Page 2: Creating a repositioning strategy

The stages involved in moving a product are: carrying out research to find out the weaknesses of the starting position researching a right direction to take making plans and taking actions to improve the position. A problem that faced Philips in 2003 was that its media investment was rather unfocused and was spread thinly between too many different product segments. The table shows...
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Page 3: Creating consistency and direction

In order to move forward it was vital to identify the key issues. The problem facing the company was lack of constancy and direction. Resources were being spread too thinly across too many products, with developments in too many countries. Decision making within the wider Philips organisation had become patchy. This was plain to see - there were too many products, too many markets and a lack of...
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Page 4: Illustrating the strategy - products

We can show the new repositioning strategy by taking the example of some of the high-tech products that Philips has just worked on. A good example of this is Senseo®. Senseo® Coffee System has been developed through a partnership between Philips and Sara Lee, a Fast Moving Consumer Goods (FMCG) supplier. The key aspects of Senseo® are: cool design easy-to-use technology amazing...
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Page 5: Communicating

At the heart of business success is good communication. This means sending messages from individuals or organisations to others (receivers). Good contact involves: communicating a brand promise, in this case 'sense and simplicity' in a clear and easy to understand way to the right target audience using the right media. There are a number of ways that Philips does this: As it is a...
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Page 6: Conclusion

'sense and simplicity' is the brand promise for the Philips organisation. The need for change was seen as a result of customer research. Products and processes need to be made with the customer in mind. Modern consumers want to be able to use and benefit from high-tech products. They also want to find that these products are simple and easy to use. Philips has therefore transformed all...
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Related: Philips
Case studies in Business Case Studies

  • Edition 10 Brand repositioning and communications

    As a result of carefully reading the Case Study, students should be able to: explain what is meant by repositioning and why Philips carried out qualitative and quantitative research to identify an appropriate position for the brand, understand why it is important to understand the strengths and weaknesses of an existing brand when deciding how to reposition it, describe how Philips had built a new position for its brand, based on creating products that are ‘designed around you’, ‘easy to experience’, and ‘advanced’.