“Customer orientation as a unit gives you wings” (episode 2)
In an exclusive interview with absatzwirtschaft editor-in-chief Christoph Berdi and editor Thorsten Garber, Philips chief marketer Geert van Kuyck speaks about the change since the change in strategy, about measurable customer loyalty and the new corporate culture. The marketing of the Dutch electronics manufacturer is the subject of the cover story in the current issue 05/2010.
You can find part 1, which appeared on April 23, 2010, here.
Mr. van Kuyck, how many such products do you bring out per year from the dialogue with customers, and how high is the profit from them?
VAN KUYCK: It’s not about the number of innovations. Our question must be: is our innovation portfolio solid enough to generate income for us? Yes that’s it! Some products work great, are great, are wonderful, and go on for another three or four years. In consumer electronics in particular, we tend to develop new things too quickly, which is one of the causes of the problems in this industry, which overlooks the crucial point. Let’s take television in 21: 9 format. It was so obvious, so simple, just a different screen – like in a movie theater. Why has the industry missed this all these years? Because every year she tried to add a new feature, the next and the next series. Stop it! Let’s take a look at what consumers really want! They want to see something, they want to experience something. And that brings innovation. And if they only exist every two or four years.
Competitive pressure also drives innovation.
VAN KUYCK: Above all, there are different types of innovations, and not just for products. There are innovations in service, in sales, even with embassies. How many major innovations have there been in laundry detergents over the past decade?
Estimated a few hundred?
VAN KUYCK: Exactly, but do most of them also represent added value for consumers?
You’d better ask Henkel.
VAN KUYCK: I worked for Procter & Gamble for years. Manufacturers of laundry detergents and other fast-moving consumer products have found a great way to stay competitive with fairly simple innovations. Every organization naturally needs innovations. However, as a company, we want to develop really new and convincing innovations and not just more and more. It’s about differentiation, about trying to make a difference among consumers.
A third of all Philips products are said to be “green” in some form or another. How important is that to a marketing organization?
VAN KUYCK: Sustainability must apply to everyone involved in a company. This applies to environmental protection, but also to the social area or the relationship between employers and employees. All of this is important, there is no excuse for anything else. We believe that we can bring about changes in certain areas of sustainability. Companies have to decide where they can change something and then try to do so. We made such a decision and decided to make a difference in the area of energy. Our goal is to reduce the energy consumption of our product portfolio by 50 percent by 2015. In the health sector, we want to reach 500 million people worldwide with our products because we feel obliged to provide better healthcare. In recycling, we are committed to using energy and raw materials more efficiently. We want to bring about fundamental changes worldwide in these three areas. This is our contribution to sustainability in the world. It is important for marketers to be clear about what you are doing. Marketing has a lot to do with “Do you understand what I promise you?”
One more question about your product innovations: After flagship products like Senseo and Ambilight – what’s next?
VAN KUYCK: That’s a secret, I’m sorry. I promise you, however, that the lighting division will in fact soon see new products for consumers. We are leaders in all types of consumer lighting. The new products are going to be a really big deal. Everyone knows it’s coming. We will play a major role in this. It’s not a secret. It will become a real mass product. The LED.
Is it true that you also offer *** toys?
VAN KUYCK: It’s right and wrong. We actually launched products in a new relationship care category. Offering relationship building products is one way to find out where we can make a positive impact on people’s lives. The positioning as a *** toy is quite nice and beautiful, but as I said, it’s more about looking at people’s lives. And it’s about what we can change as a company, i.e. a strategic decision as to whether we can be active in these business areas. People certainly would not have expected us to be involved in bottle feeding babies. We have been producing baby bottles for many years because we take care of the feeding and care of babies. This is a very nice business area, a very large and very important business area. Baby care is a very important business for us across the entire range.
But does a portfolio expansion introduced at short notice also fit long-term marketing?
VAN KUYCK: Marketing means strategic understanding and implementation, i.e. filling a long-term strategic perspective with life quarter by quarter in a very disciplined manner, so that you stay on track. That’s also the summary of Philips’s marketing. Not complicated at all. It is complicated to do. Invisible, uniform, day after day, so that you can see a significant improvement over time. It can be difficult because we have 120,000 people in our company and we have a wide range of business activities. But good big companies can do it. After all, it is everything that is important to us and that defines us.
If being a marketing company is so important to the Philips management team, why isn’t the CMO on the board just yet?
VAN KUYCK: It doesn’t matter whether you officially put someone on the management board or on this or that committee – even if that would be very good for my career. It is much more important that the marketing organization has a voice with the CEO of the company. I will report directly to Gerard Kleisterlee. He must ensure that the reality of the market enters the discussions objectively, impartially and unfiltered. At the same time, it is important that everyone at the table thinks about our business in the same way. Marketing in the company must not want to own the customer alone. Then it’s all about you. In reality, however, it has to be about the engineers, the sales people, the designers, the service people, the whole company and that includes all those mindsets.
In particular, Gottfried Dutiné, the board member responsible for technologies?
VAN KUYCK: Yes, he’s also responsible for the markets. Incidentally, I don’t think that the marketing of a large company can be determined from above. Philips has never been too obsessed with hierarchy. Everyone – from the very young to the experienced marketing specialist – can address the CEO directly here and will not be thrown out the window just because they show an increased interest in a discussion about our commitment. With us you don’t have to overcome five levels before you can speak to the CEO. I think that is also what makes a good marketing organization.
The interview was conducted by Christoph Berdi and Thorsten Garber.