After more than a dozen years of losing money in its U.S. operations, $30 billion Philips is considering an estimated $300 million global marketing campaign for the second half of 2004, Mr. Ragnetti said. But don't expect new global agency, Omnicom Group's DDB Worldwide, to come out with a slick branding effort. "I'm not a believer in campaigns focusing on principles," he said.
Instead, he is considering delivering a marketing jolt with ads for products such as a $2,000-plus portable and easy-to-use defibrillator he believes should be in 50% of American homes to help the 250,000 Americans who face death each year from sudden cardiac arrest. "To me, that's the product which illustrates our ability to be in touch with consumers-very sophisticated technology available in very easy, simple way," he said.
raising U.S. profile
Philips also is looking to grow its domestic and personal-care division with products such as Norelco and Sonicare. Another product under consideration for a U.S. launch is the Senseo, an espresso maker that reached 60% penetration in the Netherlands in two-and-a-half years.
Philips' relaunch will try to polish the company's U.S. image, which took a hit starting in the 1970s with the decision to enter the low-end TV segment. It followed up with an ill-timed, $250 million 1997 campaign for flat-screen TV airing when the Philips product was unavailable in stores. "We have a long way to raise our profile in the U.S.," he said, adding DVD players, TVs and other consumer-electronics products, where prices are dropping and competition is fierce, is not a major piece of the equation. "You will not see a campaign focusing on consumer electronics," he said.
Hayes Roth, VP-worldwide marketing and business development for WPP Group's Landor Associates, said Mr. Ragnetti takes over at Philips at a crucial time in the tech sector. Mr. Roth believes strategy is shifting for all major players, many of which recognize the need for strong global branding messages that can be translated into local and regional markets. "The whole landscape is being reworked before our eyes," he said.
At the same time, Mr. Ragnetti faces a challenge within his own organization, Mr. Roth said. "He's an outsider with good credentials" who might be able to "break down the geographic and cultural silos that existed in that organization," he said. Philips trimmed 30 divisions to five: consumer electronics; lighting; semiconductor; medical systems; and domestic appliances and personal-care products.
Mr. Ragnetti spent his first year from his home base in Amsterdam consolidating marketing into one organization and focusing on raising marketing's profile with Philips management. He needed to change the attitude of the company's scientists and engineers to take an interest in developing popular consumer products. He also had to "align the company on the need to stand for something and on the positioning itself."
Mr. Ragnetti, 43, is also familiar with a sweeter side of business. His grandmother was a founder of Italy's Perugina chocolate family. A University of Perugia graduate with political-science degree, Mr. Ragnetti joined Procter & Gamble Co., where he worked on laundry detergents and related products for six years and later continued his package-goods training the company now known as Reckitt Benckiser. With five years at Telecom Italia Mobile as exec VP-marketing, he helped engineer a turnaround.
Rob Westerhof, CEO, Philips Electronics North America, said Mr. Ragnetti is the right man not only for his package goods background or even because he played power forward as a professional basketball player in Italy, but rather because he's got a "good eye" for design, an important marketing proposition in the consumer electronics space where Philips is betting well-crafted, easy-to-use products will win them share.
Name: Andrea Ragnetti
Now: Chief marketing officer, Philips Electronics
Who: The grandson of one of the founders of Perugina chocolate, Mr. Ragnetti is based in Amsterdam. He previously worked for Procter & Gamble Co., Reckitt Benckiser and Telecom Italia Mobile.
Challenge: To come up with a global marketing campaign that focuses on products that underscore Philips' sophisticated technology.