The company has been gradually evolving its marketing to become “more emotional” since last year, when it employed its first local marketing directors, rather than trying to operate all communications centrally from The Netherlands.
Philips has also been shifting its product lineup over recent years, reducing its portfolio of traditional gadgets – including the agreement to sell its audio and video business for €150m to Japan’s Funai Electric Company in January – and moving more towards the personal health and wellbeing space.
The change in strategy to humanise its marketing and products will culminate in December, when Philips will make its new brand positioning public.
Antonio Hidalgo, Philips Consumer Lifestyle chief innovation, marketing and strategy officer, told Marketing Week at digital marketing trade show Dmexco in Germany that “meaningful innovation” is where the brand can uniquely set itself apart from competitors – although he would not reveal the new strapline.
He added: “‘Sense and Simplicity’ was an expression of our innovation essence, [meaning our products were] advanced, easy to experience and designed around you.
“People are now more technically savvy. Everyone can use a smartphone, the whole market has moved on from where it was 10 years ago, so it was natural for our brand to go through a renewal. We are not changing the essence of the Philips – an innovation brand that cares about people – it’s about how we choose to express it.”
While Philips will invest in a brand marketing campaign to coincide with the repositioning, the majority of the refresh will be communicated by its product lineup, which is increasingly becoming more connected and “smart” to reflect consumer demand. Such products also offer an additional marketing resource for Philips after consumers have made their purchase.
Hidalgo said: “We will build our brand through the propositions, relations and touch points we have in the market so all our money will work to build the brand as opposed to money that sells the product then money you put on top to build out the brand.”
Philips reported a 3 per cent growth in sales year on year to €5.7bn in its second quarter, while profit jumped 30 per cent. The company said gains in its consumer lifestyle division, which reported a 13 per cent increase in sales in the period, demonstrated the strength of its “local-for-local” business creation capabilities such as the Noodle Maker in China and the Click & Style male grooming tool in North America.
The company is currently midway through an initiative to cut €1.1bn in costs by 2014, which will include trimming 6,700 jobs from its roster.
On the marketing front, Hidalgo says Philips’ move away from functional silos to “business market combinations” – such as oral healthcare UK or haircare Indonesia – has helped make its communications more culturally relevant and effective in terms of return on investment.