B2B Case Study: Philips Aligns Marketing and Innovation

In 1954, Peter Drucker, the authority on business management and modern marketing, said that “business has only two functions: marketing and innovation.” Since then, innovation has become one of the most overused words in business-to-business marketing. From technology to manufacturing, many companies claim to have innovative solutions.

If you’re a B2B buyer, how do you know who to believe?

For starters, great innovators almost always follow Drucker’s wise words and support their great innovations with great marketing. Philips is one of those innovators who understands that connecting with today’s self-directed buyer is much different than it was even five short years ago.

“The model of brand building has changed in b-to-b, you need the emotional engagement to tell these complex stories. Understanding what can be achieved through digital media becomes increasingly important, but there’s still an awful lot of learning to be done.”

– Richard Wergan, CMO, Philips

The global lighting and electronics company recently launched Innovation and You, a brilliant campaign (no pun intended) targeted at business decision makers and aligns its innovations with a well-executed and integrated marketing strategy using engaging business stories in various digital formats.

According to AdAge, Philips will post digital stories in two dozen markets over the next six to eight months with the help of its agency Ogilvy & Mather. These “digital documentaries” will showcase how Philips’s innovations are benefiting people and business around the world.

Here’s how Philips is implementing Drucker’s wisdom by aligning marketing and innovation:

1. Stake Your Claim

A company with a long history of innovation can confidently claim they are innovative and back it up. After innovating for over 120 years, Philips has the proof. And just because they have not communicated this value proposition very well in the past, that doesn’t mean they can’t do it today. That’s why the Innovation and You campaign makes so much sense for Philips. They can actually deliver on the promise of innovation because that’s what they have been doing for a very long time.

With a long history of innovation, when Philips says they are innovative, who can argue?
2. Tell Stories

If a picture is worth a thousand words, then a video is worth millions. The Innovation and You digital documentaries are a terrific medium to engage business people from around the world. They are short, to the point, and the production quality is top notch. They are not navel-gazing. The best stories are not crammed with features and benefits or have the latest trendy special effects. Philips and Ogilvy have created stories that are both emotional and memorable. Those are the best stories.


3. Be Human

At the core of every enterprise is people. In the B2B space, we have seen many great marketing ideas go sideways because IT, Engineering, or entrepreneurs themselves just can’t get out of their own way. The companies that are creating real engagement with digital marketing like social media, for example, understand they are communicating with human beings with a pulse. They know to be social is to be human. SAP, Maersk, IBM, GE, and Philips have embraced digital media to enable dialogue, provide better service, and nurture leads.

Customer engagement: about 17,000 fans are actively talking about Philips.
4. Balance Traditional and Digital

Traditional marketing is just as important to your marketing mix as digital is, so don’t throw out the baby with the bath water. It’s not about whether to use one or the other. It’s about strategically knowing what tool in your toolbox to use given the situation you are in. Look at it this way: before the telephone was invented, people went door-to-door. After the telephone was invented, people still went door-to-door, but the phone improved the communication. Digital media is no different. It helps you be more efficient and expand your reach. And just like the phone, at the end of line are people. You still have to talk to them. So yes, along with social media, email, videos, etc, you still need to pick up the phone, go to trade shows, shake hands, and give people brochures. Companies like Philips use traditional and digital technology in unison to improve the customer experience.

Traditional and digital working together: a retweet from SXSW, where Philips presented.
5. Live Your Brand

According to former Apple VP of Worldwide Marketing Communication Allison Johnson, Steve Jobs loathed anyone at Apple who uttered the words “branding” and “marketing”. Ironically, Apple is the most loved brand on the planet today because the people at Apple live their brand religiously. You have to live and breathe what you stand for and be bold and loud enough so that people notice how awesome your stuff is. With Innovation and You, Philips is letting the business world know there are much better things at Philips than just lights and gadgets. Is there any doubt that Philips is living their brand?

Room for Improvement

While Philips is well-known for creating innovative consumer products, the company is less known for its enterprise solutions, which accounts for over 67% of their overall offerings. In other words, most of us only know about one third of the Philips story. The hope is that the new campaign will increase awareness over the coming months.

“Historically we have not communicated these stories as broadly or effectively as we could have. We needed to show the broad innovations we are involved with and appreciate what Philips brings to the market today, not just our history,”

– Richard Wergan, CMO, Philips

The B2B sector has been long plagued with bland, cheap “me-too” marketing. And even though Philips admits “innovation” is often overused, they can use it in their messaging because they live and breath innovation. It is what defines the rich culture and history that is Philips.

Therein lies the difference between a truly innovative company and one that merely says it is: authenticity. When we see proof, we tend to trust it, and when we trust a brand, we tend to become loyal customers.

Oh, and if you haven’t seen the entire quote from Peter Drucker, here it is:

“There is only one valid definition of business purpose: to create a customer. Therefore, any business enterprise has two – and only these two – basic functions: marketing and innovation.”

– Peter Drucker, The Practice of Management, 1954, pp. 39-40
Your Turn

What do you think of Philips’s new Innovation and You campaign? Do you think Philips can live up to their innovation promise or is innovation one of those words that cheapens a business today?