Technological Innovation - The Philips Way*



Case Code : CLCB035
Publication date : 2005
Subject : Consumer Behavior
Industry : -
Length : 03 Pages
Price : Rs. 100

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Key words:

Royal Philips Electronics, 'Let's make things better', 'Sense and Simplicity', Simplicity Advisory Board (SAB), Technology led company, Innovation led company, Product Development Processes, Technological Innovation, Brand Positioning and Customer Contact Point


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The caselet, Technological Innovation: The Philips Way, deals with the way Philips marketed its technologically superior products to its consumers who were not comfortable with the complexities of technology. Philips came out with a new campaign, 'Sense and Simplicity', which communicated the technological superiority of the Philips product, while at the same time, taking care not to create apprehensions in the minds of consumers about its complexities. The caselet mentions how Philips introduced Sense and Simplicity in its product development processes.


How a company can communicate its technological superiority without associating itself with the image of being complex
The need to tune promotional campaigns as per the customer feedback
How people outside the company can bring in fresh perspective to the way a company works

Royal Philips Electronics (Philips), a Netherlands-based company with interests in Medical Systems, Consumer Electronics, Lighting, and Semiconductors had sales of 9.1 billion and a net income of 498 million in 2004.

Philips has always been an innovation led company with more than 100,000 patents to its credit, including the patents for the cassette recorder, the compact disc, and the DVD (in association with Sony)...

Questions for Discussion:
1. The results revealed that consumers across various countries seek simple technology, i.e., 'technology without hassles'. In this background, how did Philips utilize its technological strength to connect with the customer?

2. "New products, new services, new solutions, business creation, strategy, research, brand architecture, contact with customers - everything must be driven by the brand positioning." What internal changes did Philips initiate, to link its processes with the theme of 'Sense and Simplicity'?