Apple vs. Philips: Branding and Product Management SWOT

Introduction: Consumer-Brand Relationships

In her 1998 article "Consumers and Their Brands: Developing Relationship Theory in Consumer Research," Susan Fournier demonstrates that consumers commit themselves to a particular brand because a purposive consumer-brand relationship exists between them and that brand. This relationship, Fournier argues, is maintained as long as the brand's characteristics align with the customer's lived experiences. She further asserts that a strong, direct relationship exists between emotions and brand loyalty: positive emotions lead consumers to maintain their purchase behavior and even recommend their preferred brand to others, whereas negative emotions produce the opposite effect. This paper uses Fournier's (1998) perspective to evaluate the effectiveness of the product management, positioning, and branding strategies of Apple and Philips.

Branding and Positioning Strategies

The Apple brand has evolved considerably, expanding its range of products over the years to compete in some of today's most competitive markets. It began with desktop computers in the 1970s, before introducing laptops in the 1990s, and then the iPod, iPhone, and iPad in 2001, 2006, and 2010 respectively. In its early decades, the brand operated more as a challenger, focusing primarily on developing products using digital hub technology and conforming to the technological mandates of the industry, and less on providing customers with easy-to-use computers that met their style, individuality, and needs. There has, however, been a gradual paradigm shift: digital hub technology is no longer as central as it once was, and has been replaced by client experience as the organizing principle.

Presently, Apple provides an integrated, harmonized, and synchronized customer experience across all major devices, blending its digital content — including the App Store, iBooks, and iTunes — with iCloud so that customers can access functionality and services on any Apple device (Apple Inc., 2014). In this context, the branding strategy is based on fulfilling the client's desire for instant satisfaction: the desire to get what they want and have their needs and expectations met. It is widely accepted that the Apple brand commands a price premium. Apple Inc. aligns its positioning to target the less price-sensitive customer, structures its activities to meet that target group's needs, and creates a culture geared toward facilitating the same. If Apple were to compete across all customer segments, it would have to lower its prices — a move that would undermine both its organizational culture and its premium brand image.

Philips' vision is to "deliver superior value for customers" through innovation (Philips, 2014). This vision requires the company to understand critically what people's needs actually are. Philips' brand positioning is focused on providing customers with a more straightforward and comfortable relationship with technology. The company recognizes that much of the technology being produced today is only making things more complex for the ordinary customer, and is not necessarily making life better, simpler, or easier — contrary to the promise of the technology revolution. The Philips brand is positioned to offer a solution by developing technology that people can use without the hassle of reading through complicated manuals. Toward this end, Philips continually adds new easy-to-use products to its portfolio.

The brand is positioned on the basis of three fundamental pillars — also referred to as the pillars of sense and simplicity — specifically that each product is: (i) advanced; (ii) easy to experience; and (iii) designed according to customer needs (Business Case Studies, 2014). The table below illustrates the sense-and-simplicity framework as applied to the Sonicare electric toothbrush, one of Philips' more recent innovations.

Sense and Simplicity — The Sonicare Electric Toothbrush

Advanced: Makes use of powerful sound waves, bringing about safer and more effective cleaning.

Easy to experience: Switches off automatically after two minutes — the duration considered appropriate for effective brushing.

Designed around the customer: Eliminates the need to visit a dental hygienist by bringing professional-grade cleaning into the home.

(Business Case Studies, 2014, p. 3)

The Philips branding strategy is grounded in emotions — particularly the feeling of trust — where customers believe that Philips products are reliable and capable of improving their lives in line with the brand's claims.

Brand Personalities

Apple's branding strategy is centered on client emotions — specifically the feeling a customer experiences when using an Apple device. The brand personality is about empowering customers through technology; meeting their hopes, aspirations, and dreams through innovation; granting them the freedom to access functionality from any device; and connecting their actual lifestyles with their imagination. Achieving all of this requires product designs that are simple enough to make life easier for users. One can therefore argue that the Apple brand personality is fundamentally about bringing simplicity to technology, and consequently, developing a sincere connection between the company and its customers to ensure their needs are met.

Philips has at times been criticized for lacking a distinct sense of direction. Over the years, the company has devoted considerable attention to customer satisfaction but has not always had clearly defined goals in that area. More recently, however, Philips rebranded, developing a personality focused on a particular dimension of customer satisfaction: easy-to-use technology that spares users the frustration of navigating complex manuals. This personality is grounded in the recognized consumer need to move away from technological complexity and toward solutions that effectively meet everyday needs. The personality suits the Philips brand well, given its wide product range. While Apple has implemented a similar approach, its impact is somewhat constrained by its more limited product lineup. The Philips brand personality therefore focuses on both the brand itself and the specific needs of its customers.

Conclusion

Apple and Philips have each managed to maintain significant market share despite charging relatively high prices for their products. They have achieved this by targeting strategic customer segments and justifying premium pricing with superior product quality. Consumers who prioritize value have consistently found their offerings attractive, and as a result, both companies have remained competitive leaders within their respective markets.

References

Apple Inc. (2014). Apple info. Apple Inc. Retrieved 2 September 2014 from http://www.apple.com/about/

Business Case Studies. (2014). Brand repositioning and communications: A Philips case study. Business Case Studies. Retrieved 2 September 2014 from

Clark, D. (2011). Reinventing your personal brand. Harvard Business Review, 89(5), 78–81.

Deshpande, R. (2010). Why you aren't buying Venezuelan chocolate. Harvard Business Review, 88(12), 25–27.

Edelman, D. C. (2010). Branding in the digital age. Harvard Business Review, 88(12), 62–69.

Fournier, S. (1998). Consumers and their brands: Developing relationship theory in consumer research. Journal of Consumer Research, 24(4), 343–372.

Philips. (2014). Company profile. Philips Inc. Retrieved 2 September 2014 from http://www.usa.philips.com/about/company/index.page