How A Brand Promise Drives Change In A Multinational Organisation

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. What is more vital is where customers see such products/brands being placed in the market. For example, customers might see products as giving 'good value' or 'poor value' for money. They may link a brand with 'high quality' or 'low quality'. It is key to carry out market research to spot appropriate positions to take in the market.

An appropriate position is one that suits customers' requirements. The term 'repositioning' refers to a conscious strategy to alter the site of products/brands in the market. The new 'best' place should be based on market research.

How Philips repositioned itself'sense and simplicity' is the brand promise that Philips has identified through its research as the best one to take. The map below shows how the company has repositioned itself. It illustrates two key dimensions:

simplicity

value-for-money technology products.

You can see that Philips' new position in its markets is based on continuing to provide value-for-money, high-tech products. In addition the new position is based on easy-to-understand goods and clear exchanges with its market.

Since the launch Philips has made great progress. This has been recorded by achieving milestones along the route. Good examples are the creation of a Simplicity Advisory Board (SAB) and the launch of a range of thriving products such as Senseo®, a coffee machine that is stylish and simple to use. The triumph of these milestones is outlined in this case study.

Page 2: Creating a repositioning strategy

A responsible strategyThe 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.

Four product areas and individual demographics

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 just four product areas and the target audiences for each, which were being addressed. In addition Philips' products were marketed under lots of names, using a range of different advertising approaches. It was no wonder that there was great confusion in customers' minds.

The challenge facing Philips, therefore, was to create a clear vision that would help the company to reposition itself and all of its related brands. A brand promise was then set out that is clear and easy to follow. The brand promise is 'sense and simplicity'.

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