The Memo Imagine trying to develop one Olympic event that would appeal to audiences the world over. In 1997, Philips Electronics faced such a challenge. The 108-year-old, Netherlands-based company meant different things-even many things-to different people. Worse, to some, especially Americans, Philips meant nothing at all. Though consumers might go through a day touching a Philips product at every turn-from lighting to shaving, coffee makers to car phones, computer monitors to television screens-the brand name didn't register. Philips' products were being sold in the U.S. under brand names acquired in the 1970s and 1980s, such as Magnavox, Westinghouse, and Norelco. In Europe and parts of Latin America, Philips was already as well-known as, say, Coca-Cola. But unlike Coke, its products ran the gamut from light bulbs to flat-screen televisions.
Philips decided to launch a global campaign, says Elissa Moses, Philips' director of global consumer and market intelligence, because "global brands are strongest when they stand for a clear set of values everywhere." Philips also wanted to benefit from the cost efficiencies and consistencies that a singular campaign could offer.
So how do you create a campaign that will reach the aging populations of more than 60 countries that will also appeal to a new generation?
The Discovery In January 1998, Philips launched its Navigator Segmentation Study, using New York City-based Roper Starch Worldwide to interview 14,000 people, ages 13 to 65, in 17 countries. One of the five segments Roper identified, Moses says, is the dreamseekers, for whom the purchase of electronics symbolizes the attainment of a dream.
"At the end of the day, it's benefit that people care about and values that drive them," says Moses. "What are the things that you care most about in terms of benefiting you and your life and your family-independent of what the products are that deliver them."
The research also showed that consumers who knew the Philips brand name trusted it, but even those people were not always familiar with its high-end products. Many voiced their fear of technology, as well. "That anxiousness is something that we need to understand because we at Philips who make these new products and new technologies love the stuff," Moses says. "Sometimes [we] can't understand-why aren't people going to just run right out and buy something that's going to make their lives better?"
Not surprisingly, the population with the least ambivalence toward technology and change is the youth of the world (ages 25 to 32). This generation is looked to, even on a global scale, as the authority on technology because "they take it for granted," Moses says. "It's almost an extension of their arms and legs."
The Tactics In the fall of 1998, Philips tapped New York City-based Messner Vetere Berger McNamee Schmetterer Euro RSCG to create a campaign that would build on its trustworthy image and increase brand awareness. The "Let's Make Things Better" campaign-an evolution of the company's branding effort of the previous three years-was comprised mostly of television and print ads depicting personal scenarios of how Philips' star products fit into and improve individuals' lives. A theme song borrowed from the Beatles and sung by a contemporary British group, Gomez, made the three-year-old tagline sound new again. Moses explains: "It really brought to life what we felt our products were going to do for people in a way that was both comforting-because you've heard the song before-but contemporary, because it's somebody new singing it."
The products and actors featured vary by country, but every ad stars the Philips "tribe"-youthful, forward-thinking men and women. These young authorities are shown putting Philips' newest products to practical use-with a twist on nostalgia.
"We had to put our emphasis on some of the more exciting parts of the brand, and that led to our star-product strategy," says Moses. "If you can make the most state-of-the-art, advanced flat-screen TV, then your regular TV must be pretty good, too."
Last year, Philips spent $250 million on direct consumer advertising in the U.S., 12 percent more than it spent in 1997 and 86 percent more than in 1996, according to Competitive Media Reporting.
In one TV spot, three friends size up their empty, unusually narrow beach house. They leave the house, come back with a narrow couch, leave again, and return with a Philips flat-screen TV to hang on the wall. Then they sit down to watch Flipper. Music up: seven seconds of Gomez singing "Getting Better." Up pop the Philips logo and tagline, "Let's Make Things Better."
In another ad, a guy comes home to a dingy apartment with old furniture and high ceilings. He flips the switch; the light bulb burns out. He proceeds to pile furniture to the ceiling and balance atop it, light bulb in hand. A nosy neighbor sees the commotion from his window and hurries over to save the day with a Philips-brand, two-year halogen bulb. There is light again as "Getting Better," the logo, and tagline play out.
In the third spot, the car and clothes say retro to today's youth, '50s to their parents. A girl steps into her date's convertible and he zips them across the street to his own driveway, where the door opens to reveal a Philips home-entertainment system standing alone. As he reaches into the glove compartment, the girl jerks her knee away, until she realizes that he was just getting the remote control and has flipped on "Austin Powers." She rests her pony-tailed head on his shoulder in approval. Gomez again, Philips logo, then "Let's Make Things Better."
The campaign is evolutionary, with new ads rolling out as new products emerge. The music, casting, format, and tone will remain the same, Moses says, and the next set of ads are due to come out in the U.S. late summer or early fall.
The Payoff Four months after launching its U.S. campaign Philips' brand-recognition rating had increased 17 percentage points-from 39 percent to 56 percent. A tracking study in 11 countries has shown that the campaign has met its global objectives as well, Moses says. It has significantly raised awareness, improved Philips' image, and positively affected sales, though Moses wouldn't reveal actual figures.
Time will tell if the heightened image plays out in the sales figures, but Philips' first quarter earnings show promise. The company reported 8 percent sales growth in North America, for which it credits its consumer products and components. Sales in the consumer products sector for the company globally increased by 7 percent. Philips' 1998 sales totaled $33.9 billion, up 3 percent from 1997.
What the Critics Say Susan Fournier, a business administration professor at Harvard Business School, consulted for Philips on the Navigator Segmentation Study. Philips was "dead on" in its use of individual problem-solving scenarios to show that the company is a partner to improving lifestyle, she says. While she agrees that the overall tone of the campaign is "very approachable, very fun, engaging, interactive," the company should have delved deeper into the data, she notes, and addressed eight specific ambivalences consumers have about technology, in that it offers both freedom and enslavement, chaos and control, competence and incompetence, and efficiency and inefficiency.
And using young actors exclusively "might not necessarily cover the whole spectrum of what needs to be done," Fournier says. Yes, the Philips tribe serves to make the brand hip and contemporary, "but the experience of ambivalence toward technology is less heightened among the youth than it is among the middles and olders."
Philips' star products strategy is "incredibly intelligent," Fournier says. "They've created a brand architecture, and selected certain brands from the thousands that they have and then put support under those so as to leverage and support the umbrella brand in a very complementary way."
Elizabeth DiPilli, founding partner of Project X, a youth marketing company based in New York City, says the commercials are "young, but not trying to be too overtly hip."
The campaign is a particularly appropriate means to convey the high-end technology message to Gen Xers. "It's got a '90s visual style, but a very sweet and almost wholesome undertone," she says. "[Gen Xers] don't need to see cutting-edge graphics, high-speed laser beams, and imagery. They're very, very comfortable with technology. Whether it's going to push direct product sales, I think is really a year to two years down the road. But as far as raising brand awareness, I would say that it's been successful."