Introduction

A brand is a product, group of products or company name with a unique, consistent and well-recognised character. The uniqueness can come either from a factual product or from its image - uniquely created by the manufacturer through advertising and packaging. The consistency comes mainly from the uniformity of its quality and performance, but it is also reflected in the advertising and packaging.

From time to time organisations need to take a hard and focused look at themselves and ask questions such as:

• Does the public's image of our brand reflect what we want to get across?

• Is the image that we have created for our brand the most appropriate one for the markets in which we operate and what our customers want?

Positioning is the process of defining where a company or product sits in the market place, for example at the quality end of the market. Repositioning involves seeking to alter customers' perceptions of the market position of a product or company (e.g. by moving the product up market). Of course, the new perception of a product or company must match the reality.

Positioning is an important activity because:

1. It gives the customers and consumers of a business a specific reason to choose that business's products or services over competition.

2. It gives the organisation a clear and visible point of reference.

This Case Study examines the way in which Philips has repositioned its brand on the basis of two main characteristics:

'sense and simplicity'

Sense and simplicity characterises everything that Philips does and reflects that it is market oriented - i.e. everything is designed to meet customers' needs and is based on consumer insights.

Royal Philips Electronics is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 161,500 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter.

For over a century, the company has been interacting with people in their daily lives. More than a million Philips' products are purchased every day. It is trusted as one of the world's top brands, with an unparalleled understanding of how people interact with technology.

Philips has always been known as a technology based company and has more than 100,000 patents to its name.

Repositioning the company has involved moving on from its established position which has been successful for many years, characterised by the phrase - 'Let's make things better', to the new position 'sense and simplicity'.

Brand positioning is vital to a company's success. Studies in some sectors have shown that customers who are 'most loyal' to a brand will pay as much as a 20% premium before they will switch to a different company's product.

Today Philips provides products in three main areas:

Healthcare

Philips is the leader in top-of-the-range medical diagnostic equipment, helping surgeons in the battle against heart disease and cancer. Increasingly consumer health and well-being have also become a focus.

Lifestyle

Philips innovates with their Ambilight TV and DVD recorders. The company has established a leadership position in lighting and has introduced exciting new products such as the Senseo coffee concept.

Technology

Philips' semiconductor and lighting products are embedded in the cars we drive, in the offices where people work and in sports stadiums. Philips illuminates monuments such as the Pyramids, the Eiffel Tower and events like the 2004 Olympics in Athens.