Feeding consumers a strapline

It is received wisdom in the marketing and advertising world that a campaign strapline should reflect what a brand or company is about. It seems so simple – make the tagline true to the company and consumers will trust the brand and buy the product.

When a strapline works, it becomes a rallying cry that pulls a company together behind one clear goal, but when it doesn’t it can be a costly mistake that haunts a brand long after the strapline is axed.

Royal Philips Electronics, the Dutch consumer electronics company, is hoping that its Sense and Simplicity line will fall into the former category. The company launched it three years ago as part of a global campaign that aimed to position Philips as a lifestyle brand and prove its credentials as a marketing-led company.

The first wave of the Sense and Simplicity campaign came as the company completed five years of restructuring to move it away from its historical position as a “light bulbs and televisions” company towards a focus on lifestyle and healthcare products.

Since the introduction of the strategy in 2004, sales have increased from €25bn (£17bn) to €26.6bn (£19bn) in 2006. In its third-quarter results for 2007, announced earlier this month, sales were up by 7% to €6.5m (£4.5m), which is attributed to sales of consumer electronics and emerging markets.

The Interbrand Best Global Brands Survey 2007 shows that at the same time its brand value has risen. In 2005, it was ranked 53 with a value of $5.9bn (£2.9bn), but this year it has risen to 42, with a value of $7.7bn (£3.7bn). Its rivals Samsung and Sony were ranked 21 and 25 respectively.

The company is now implementing a second phase of Sense and Simplicity that aims to move it from a strapline to its company ethos. It started earlier this year when its senior managers met in Chicago to talk about what the strapline meant to them. They were asked to judge, out of ten, how much they felt they understood what Sense and Simplicity was and how it applied to their role. The average score was 6.6.

The managers signed up to a series of commitments that aim to ensure Sense and Simplicity is implemented across its business. This led to a series of Simplicity Days, which involved 126,000 staff from across the world, held earlier this month.

The days included a series of workshops in which working groups considered what they had done – as individuals or departments – that fitted into the overall strategy by checking it against Philips’ three internal filters – “designed around you”, “easy to experience” and “advanced”.

This, the company says, applies to everything it does, particularly new product development. Over the course of the day, the groups come up with ideas that aim to improve “simplicity” internally at Philips and these are presented at the end of the day. The top ten ideas from all of its offices will be voted on by staff and the winning ideas will be implemented by mid-February.

As well as implementing the strategy on a micro level, it has also completed further restructuring, with the consumer electronics and domestic appliances and personal care (DAP) businesses merging to create one consumer lifestyle division (MW last week). Managing director of the consumer electronics division Jeremy Ling says the move aims to simplify the structure, so its trade partners have one contact at the company, and to make it easier for analysts to follow.

But perhaps the best expression of the strategy for consumers, according to Philips, is its DVD recorder that is so simple it can record in two presses. This is considered the benchmark – against the competition but also internally.
While few industry observers criticise the principle of Philips’ strategy, many question the wisdom of developing an ethos to suit a strapline and not the other way round. Dan Bobby, managing director of brand consultancy Dave, says: “Is it a strapline that becomes an ethos or a strapline that gets forced into an ethos? The difference is whether a brand does it with conviction or whether it is purely confection.”

Tesco is perhaps the brand that has carried off the strapline/ethos strategy with most conviction, says Bobby. Its “every little helps” strategy is widely praised for helping to propel the retailer into its dominant position.
Rooney Carruthers, founding partner at Vallance Carruthers Coleman Priest, describes Tesco as the biggest turnaround of recent times. He adds: “When it launched, the stores didn’t deliver, but over time it has made small changes, such as opening tills, making special offers visible and lining the trolleys up, which made the difference.”

British Gas, on the other hand, made the mistake of using its strapline – “doing the right thing” – as a statement of intent. With confusing price packages and complaints about misleading ads, the strapline jarred with consumer experience. The company continues to use the line.

“It was the cart before the horse,” says Bobby of British Gas. “It reinforces consumer cynicism because they can see it is just marketing, so they don’t think about it or consider it.”

Wolff Olins senior strategist Mark Radda believes that today’s consumers are too savvy for straplines and adds that the company should use lines such as “sense and simplicity” as an internal ethos, but should not feel the need to talk about it externally.

Philips UK chairman Peter Maskell argues that Philips has made “significant steps” since the launch of Sense and Simplicity, but that there is no market yet. He adds: “It was always a long-term strategy.”

He points to recent “discreet” strategies in the US, where Philips bought all the ads around news show 60 Minutes and in Time Magazine. It did not use them to advertise, but rather to give consumers more content. In the UK, it has a microsite on Amazon to promote products under its Gift of Simplicity strategy to take the stress out of Christmas shopping.

Philips believes that this strategy is building a foundation of its ethos for the future, but history has shown that it is a risky move to put your strapline out as a statement of intent, while you are still getting your house in order.

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