Philips starts new image strategy
By Wen Dao (China Daily)
Updated: 2004-07-22 10:39

The Royal Philips Electronics is to make itself over from a technology and manufacturing-driven company to a market-driven one with a new positioning of its brand. China has become a trial ground for that strategy, said a top company executive.

"We are trying to create conditions for sustained profit growth," said Andrea Ragnetti, chief marketing officer of the electronics giant, in an interview in Shanghai.

Although the company made profits of 616 million euros (US$758 million) in the second quarter, almost 15 times higher than the same period last year, Ragnetti said the real issue is the company's top-line business was not growing after more than 10 years of restructuring.

In order to tackle that problem, Philips will launch a new brand position strategy under the principle of simplicity, which has three pillars: designed around the customers, easy to experience, and advanced.

The electronics business aims to integrate all its product divisions into "One Philips" through this brand positioning strategy.

With the simplicity principle, technology will not be a priority for the company, which will be replaced by the notion of how to make people's life easier and simpler.

"Most technologies are difficult to experience," said Ragnetti.

His company will release a series of new products in autumn which are based on this principle.

On the other hand, Philips will no longer target the whole population as customers, but only 15 per cent of them, those between 35 to 45 years old and who are highly educated.

China, the fastest growing market for the Dutch giant, will become the testing field for the new strategy.

Philips China formed a China marketing council in November. Heads from Philips China and different product divisions sit on the council and discuss integrated marketing moves.

It will recruit a China marketing officer to carry out overall planning and strategies.

"China has become a champion of our One Philips strategy," said Ragnetti.

It has begun to make its Senso coffee pot in China, based on the new brand positioning and designed for people to use and experience.

Philips China achieved a growth of 38 per cent year-on-year in the second quarter, compared with the 11 per cent worldwide.

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