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Quality and Business Excellence

Philips continuously explores new ways to improve in order tooffer innovative products and solutions to its customers. That’s

why we have created a suite of programs and initiatives through

which we will reach increasingly higher quality levels in allproducts and services. These improvement programs affect allour employees and all our processes, in every country, sector ordepartment, encompassing everyone from Board of

anagement to the shop floor.

Our approach

Philips em!races a customer"centric approach, which meansthat the customer is at the heart of every initiative ta#en fromcreation to execution. $ustomer centric thin#ing is the !asis ofall excellence and quality programs in Philips.

The programs and initiatives are firmly anchored in the strategyand execution of every !usiness, through many commoninitiatives li#e the Blac# Belt program, the improvement teamcompetition, % sigma and lean programs. Philips !usinessesdiffer, so each of them also has specific initiatives to improvetheir products and processes.

&peed and Teamwor# lie at the heart of every improvementinitiative. Each and every individual within Philips #nows thatonly !y fully cooperating and wor#ing together will we !e a!le toperfect our !usiness processes. That's why we focus on(

wor#ing more smartly and reducing the cycle"time of processes) wor#ing in teams and learning from the !est practices of others.Philips strongly supports !enchmar#ing as an instrument forlearning and sharing. Building on the approach of *pen+nnovation Philips invites other companies to exchange goodpractices to create mutual advantages.

Measures

Philips !elieves that the ultimate measure is the quality level ofour products and services. This is measured through the etPromoter &core - P& . ext to that Philips has severalmeasures to monitor !usiness improvement li#e processmaturity using process survey tools, improvement contri!utionfrom Blac# Belt pro/ects, engagement increase from the teamcompetition and many other leading process indicators.

Philips strives to give equal attention to all of its sta#eholders,

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such as customers, suppliers, employees, shareholders and thesociety, with the following o!/ectives(

• $ustomers are fully satisfied !y the quality of ourproducts and services

• Employees develop and use their full potential• &hareholders get a premium return on their investment

• &uppliers choose to wor# with us as this generatessuperior value for !oth

• The larger community appreciates our contri!ution to thequality of life

Brand repositioning and communications A Philips case study

Page 1: ResearchMarket and product research lie at the heart of any successful business. Market research involves talking to

customers to find out what they want and then supporting these findings with product research which involves

supplying products with the benefits that customers want.

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Philips is a global company so

the research that it carried out took place on a global scale. Philips involved more than 1650 consumers and 1 0

customer companies around the world to make sure that it repositioned its brand in an appropriate way. Philips

also undertook !"A# $ !rand "%uity Assessment #ool& research involving '6(000 respondents.

)ualitative research involves working with relatively small focus groups which in this case consisted of Philips*

consumers and professionals $trade and opinion leaders( e.g. hospital surgeons who use its scanning

e%uipment&. +sing %ualitative research makes it possible to find out a lot of detailed information e.g. current

perceptions of the company and its products( the types of new products and the image that consumers would like

to see Philips develop.

)uantitative research typically involves %uestionnaires and surveys to bigger samples of consumers enabling

statistical analysis of the results. #he research was designed to,

• enable Philips to have a better understanding of its e-isting position in the market

• identify and test new routes for moving the brand forward

• check the effectiveness of the chosen route.

Philips* market research was designed to help the organisation to define appropriate brand positioning. A

combination of %ualitative and %uantitative research was carried out in,

• +

• /ermany

• rance

• etherlands

• !ra2il

• 3ong ong

• 4hina

• + A.

#he research e-amined Philips* performance versus average performance in the market. #he results showed

that( for e-ample,

• consumers believe that they can *rely on Philips products*

• that Philips* products *make my life better*.

#he characteristics that professionals most valued about Philips was the company*s *development of new and

e-citing products*( that *Philips products are reliable* and that Philips produces *high %uality products services*.

4urrently( 07 of the company*s total sales are made to a core target group aged 85955( which consists of

affluent( well educated decision makers.Philips : !rand repositioning and communications

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Brand repositioning and communications A Philips case study

Page 3: Brand positioning A vision is a clear picture of what you want to achieve. Philips* vision is to produce products that always put the

customer first. #he challenge facing Philips( therefore( is to better understand what people really need.

Philips* new brand positioning is all about promising customers a more comfortable and more straightforward

relationship with technology and with Philips. ?t believes that somewhere along the way the promise of the

#echnology ;evolution to make our lives easier( simpler and better is not being delivered. ?n many respects the

technology industry has made things more comple-. Philips is( therefore( offering a solution.

;esearch showed that people are asking for greater simplicity in their lives and in their dealings with technology.

#hey want technology that gets the @ob done without drawing attention to itself. Most users are put off by the

need to read and understand a complicated manual before they can try out their new purchase.

ith this in mind( Philips is continually bringing new ande-citing products into its portfolio( which at the same time are simple to use. Philips* new position *sense and

simplicity* is based on three essential pillars( that,

• *Products are designed around you*.

• *Products are easy to e-perience*.

• *Products are advanced*.

All its activities must now be driven by insights into how consumers customers seek to e-perience the benefits of

technology . Philips is becoming more market led( driven by the needs of the customer.

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Philips is undergoing a change process to make sure

that products and services are convenient and easy to e-perience( in order to remove the hassles often

associated with technology. At the same time( however( products must continue to deliver the benefits associated

with innovation. #hese principles can be illustrated by considering the widely used onicare electric

toothbrush as shown in the chart.Philips : !rand repositioning and communications

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#he #imes 100 Philips !rand repositioning and communications Communicating the brand positioning

Brand repositioning and communications A Philips case study

Page 4: Communicating the brand positioning4lear communication is essential in business if appropriate messages are to reach the relevant target audience .

Philips needs to communicate its new position to relevant customers consumers and to the market as a whole.

Advertising campaigns designed to

communicate its repositioning e-ercise focused on a core target group( consisting of the '07 of people doing

07 of the buying. #he affluent decision makers in the 85955 age group identified earlier.

#he campaign was designed to be true to the concept of implicity. #o get the message across( Philips sought to

use a different language than the ones we have come to e-pect from a technology company 9 fresher( cleaner(

more human. "very advertisement and insert that is used in the campaign tells part of a story. =ne

advertisement reinforces another( so for e-ample multiple insertions are used in consecutive #B commercial

breaks.

#he advertising campaign is a global one and features e-isting Philips products that fit the new brand positioning.

#he campaign cost around "+; 0m and was run via broadcast( print and online in the etherlands( /ermany(rance( ?taly the +nited ingdom( the + A and 4hina.

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4ommunication has been to a range of audiences in addition to consumers( including Philips* employees( the

media and the marketing community( through integrated P; activities and an advertising campaign. As well as

the television advertising campaign( Philips has used a variety of media including the ?nternet( face9to9face

launches and poster campaigns.Philips : !rand repositioning and communications

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