Philips moves to more emotional approach

Philips is to increase its investment in local marketing after admitting it “needs to get better” at communicating how its technological innovations are relevant to consumers’ everyday lives.

Philips Liam Gallagher ad
Last year Philips featured Liam Gallagher in a campaign to promote its docking stations. The activity helped shift the brand from number 8 to number 2 in the market, in terms of share.

The company has employed local marketing directors, rather than trying to operate all communications centrally from The Netherlands, and is increasing its investment in CRM, PR and digital as it looks to be recognised by consumers as the leading maker of health and wellbeing products such as shavers and toasters.

Around 7% of Philips’ turnover is also being invested in research and development as the company looks to use local insight to tailor campaigns and products to different territories

UK and Ireland marketing director Joanna Elliott, who joined as Philips’ first in-situ director-level marketer six months ago, says that while the company has created many world-first innovations, including the cassette tape and the CD, she feels the brand is still “the best kept secret” in terms of awareness of these breakthroughs.

She adds: “What we have not done really well is bringing this very rational approach to an emotional level. We are very good at the consumer push, but we haven’t yet focused enough on the consumer pull to really leverage how our products are experienced.”

The UK marketing team has adopted an internal theme of “Choose Philips” to apply to every piece of activity, aiming to increase how many customers will actively choose the brand’s products over its rivals.

Elliott says Philips ambition that it should not operate in any sector unless it is number one or two in the market, which is part of the reason why the company hived off its loss-making TV arm last year.

She adds: “I would like us not to move away from being famous for TV but we want to become even more famous for health and wellbeing. People already recognise us for things like shaving but there’s so much more to us than that.

“We don’t need to reposition, there is a real strength in our products, but we just need to talk more about them – without being carried away by the product specifications – and make sure customers are actively choosing our brand.”

Philips set out a global ambition last year to become the global leader in health and well-being and the “preferred brand” in the majority of its markets by 2015. Financially, it hopes its profit margins (EBITA) will be between 10% and 13% of sales in the period.

The consumer lifestyle division accounts for 26% of the company’s total revenues. Philips reported a €160m net loss in the fourth quarter of 2011, pitched against a €465m profit a year earlier, which it blamed on weak European demand.

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