Philips approach to digital

Building the leading company in health and well-being

An introduction to Philips

Amsterdam, 14th-15th April 2011Marcus Evans Conference

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A well-respected, blue-chipcompany for 120 years

Founded in 1891Headquartered in Amsterdam, the Netherlands

Sales over EUR 25.4 billion in 2010 (USD 33.8 billion)33% of sales generated in emerging markets

Globally recognized brand (world top 50)Our brand value doubled to $8.7bln since 2004

119,000 employeesSales and service outlets in over 100 countries

€1.6 billion investment in R&D, 6% of sales50,000 patent rights – 36,000 registered trademarks – 63,000 design rights

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Philips defined: we are…

“…a global company of leading businesses creating value with meaningful innovations that improve people’s health and well-being.”

Health and well-beingA commitment to healthy, fulfilled lives in our communities and societies our world

Meaningful innovationsImproving people’s lives Going beyond technology Introduced at the right time

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Our focus on Health and Well-beingOur portfolio leverages critical global trends

4Rise of emerging markets

Aging population

Increased consumer empowerment and sustainable lifestyles

Climate change and sustainable development

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Our Health and Well-being offer is powered by 3 businesses

Healthcare

Lighting

Consumer Lifestyle

2010

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Global trends

• Ageing population leading to an increase in chronic conditions• Urbanization and rise of emerging markets leading to lifestyle

changes, fueling cardiovascular illnesses and respiratory and sleeping disorders

Business priorities

• Move towards leadership position in Imaging Systems:• At annual RSNA meeting, Philips unveiled “Imaging 2.0”,

a concept fueled by 8 breakthrough innovations • Construction of healthcare R&D facility for

Cardiovascular X-ray equipment India

• Grow our Home Healthcare business:• Increase awareness and treatment of Obstructive Sleep

Apnea (OSA) focused on emerging markets• Strengthen leadership in Home Healthcare with the

acquisition of medSage Technologies LLC, a leading provider of patient interaction and management applications for home care providers

Healthcare

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Healthcare

€8.6Billion sales in 2010

35,000+People employed worldwide in 100 countries

450+Products & services offered in over 100 countries

1 2010 split

8%of sales invested in R&D in 2010

Philips Healthcare

Businesses1 Sales & services geographies1

Imaging Systems

Home Healthcare Solutions

Patient Care and Clinical Informatics

Customer Services

North America International

45% 35% 20%

Emerging Markets

39% 14% 21% 26%

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Consumer Lifestyle

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Global trends

• Consumers are increasingly focused on their Health and Well-being

• The already substantial middle and upper income segments of Emerging Markets are growing fast

• Back to basics: consumers want simple propositions from trusted brands

Business priorities

• Accelerate growth in four defined value spaces: Healthy Life; Personal Care; Home Living; Interactive Living

• Maximize Health & Wellness opportunity• Invest and prioritize Asia-first innovations for local and

global markets• Improve market shares in BRIC and key markets• Take decisive action to bring TV to profitability

Consumer Lifestyle


17,000+People employed worldwide

€0.3Billion negative NOCfor TV end 2010


1 2010 split 2 Other category (4%) is mainly license income and is omitted from this overview

Philips Consumer Lifestyle

Businesses1 2 Geographies1

Personal Care

Health &Wellness

Domestic Appliances

Television AudioVideo

Multimedia

MatureMarkets

60% 40%

Emerging Markets

13% 7% 17% 36% 13%

Accessories

10%

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Global trends

• Ongoing urbanization and globalization• Increasing need for energy efficient solutions• Fast growing global illumination market, partly driven by

expanding renovation market • Rapid adoption of LED-based lighting solutions worldwide

Business priorities

• Launch new professional solutions with specific emphasis on being a leader in professional outdoor lighting solutions

• Substantially grow home lighting solutions business for consumers

• Develop and market new forms of versatile and energy efficient LED innovations

• Maximize the profitability of our conventional lighting business

Lighting

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Philips Lighting

Customer Segments1

24% 17% 17% 11% 13% 5% 2% 3% 8%

Retail Entertainment Healthcare AutomotiveHomes Offices Outdoor Industry Hospitality

Lighting


53,000+People employed worldwide in 60 countries


80,000+Products & services offered in 2010

1 Indicative split

Saeco (2009)

Discus (2010)

Dynalite (2009)

Selecon (2009)

Ilti Luce (2009)

Genlyte (2008)

Lighting Technologies (2007)

Burton (2010)

Teletrol (2009)

NSW (2010)

Luceplan

(2010)InnerCool Therapies (2009)

Traxtal (2009)

Respironics (2008)

VMI-Sistemas Medico (2007)

Visicu (2008)

Emergin (2007)

Raytel

(2007)

Tecso Informatica (2010)

Somnolyzer (2010)

CDP Medical Ltd. (2010)

Apex (2010)

Wheb Sistemas (2010)

Dixtal Biomedica e Technologia (2008)

Meditronics (2008)Alpha X-Ray (2008)

Medel (2008)

Shenzhen Goldway (2008)

Tomcat (2008)

Interactive Medical Developments (2008)

Lighting Consumer lifestyleHealthcare

Street Controls(2010)

Optimum (2011)

MedSage (2011)

Preethi (2011)

Emerging Markets

Our global reachFocused portfolio through strategic acquisitions*

* Strategic acquisitions since mid-September 2007 until January 2011

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RegionalCardio

vascular

RegionalRadiation

Oncology Systems

GlobalUltrasound

Unique leadership positions in many marketsCurrent NPS leadership positions1

GlobalPatient

Monitoring

RegionalHome

Healthcare

RegionalCardiac

resuscitation

1 (Co)Leadership is defined as outperforming (>5%) or on par with best competitor, globally or regionally

RegionalMale electric

shaving & grooming

RegionalBlenders

GlobalMother and Child

Care

GlobalFemale

depilation

GlobalSteam irons

GlobalHigh Power

LEDs

GlobalJuicers

GlobalLighting

Electronics

RegionalPower

Toothbrushes

GlobalProfessional Luminaires

GlobalLamps

RegionalConsumer Luminaires

Healthcare

RegionalAutomotive

Lighting

ConsumerLifestyle

Lighting

Vision 2015Our ambition

Philips wants to be a global leader inhealth and well-being,

becoming the preferred brandin the majority of our chosen markets.

We believe Philips is uniquely positioned forgrowth through its ability to simply make a

difference to people’s lives with meaningful, sustainable innovations.

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• Building on our legacy: Philips in its 120th year

• Targeting growth with Vision 2015 strategic plan

• Responding to fast-changing market conditions

• Continuing people-focus: • Highly engaged Philips people

• Seamless transition to new management

• Strong relationships with customers

• Continued creation of meaningful innovations

Looking forward

Leveraging Digital Marketingand Social Media

Session:

The Measurement Talk

Amsterdam, 14th-15th April 2011Marcus Evans Conference

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Survey, let’s have a show of hands Key Questions in Social Media?

• Is your company ready for Social Media?

• Is your Consumer Care department ready for Social Media?

• Is your Consumer Care Social Media Operation effective?

http://go2.wordpress.com/?id=725X1342&site=denisewymore.wordpress.com&url=http://denisewymore.files.wordpress.com/2010/09/raised-hands.jpg&sref=http://denisewymore.wordpress.com/2010/09/07/raise-your-hand-if-you-were-a-teller/

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Social Media actively used to create brand preference for Philips

Waking up an arctic town

Promotional material of campaign in The Netherlands

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Radio Print

Special OOH

Online Advertorials

OOH

Online Banners

In Store

Blogs

Websites

Facebook

YouTube

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In the Netherlands, only small increase in consideration, but significant increase in brand preference.

94

66

41

75

1525

15

94

70

45

82

21 2618

Awareness Familiarity Consideration Preference PurchaseIntent

(unpriced)

Ownership Retention

Base: Pre-wave (150); Post-wave (650)Sig Diff @ 95% or above

Pre-wave

Post -wave

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A traditional purchase funnel no longer accurately represents the way consumers interact with brands.

Source: http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/The_consumer_decision_journey_2373

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Consumers are moving outside the purchasing funnel -changing the way they research and buy your products. Change in approach is a necessity.

The consumer decision journey

The consumer considers an initial

set of brands, based on brand perceptions

and exposure to recent touch points.

1Consumers add or subtract brands as they evaluate what

they want.

2Ultimately, the

consumer selects a brand at the moment

of purchase.

3After purchasing a product or service,

the consumer builds expectations based

on experience to inform the next

decision journey

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Ratings &

Reviews

Communities

Registration

Facebook

.com

Syndi-cated

Content

Ratings &

Reviews

WoM

searchMobile

Care

Ongoing CRM

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Consumer Care Online

>50 countries

>30 languages

>30 million web visitors

>150 million page views

>15 million software downloads

>250 thousand surveys

60.000 products supported online worldwide

7 business product groups

>30 product categories

Millions of interactions via repairs & exchanges

Consumer Care is dealing in a complex environment dealing with high volumes of consumer interactions

Global Consumer Care

Consumer Care, March 24, 2011 25

A change to our traditional strategy was needed to adopt to new channelsSocialWeb

SocialOwned

Guidance in CC funnel

Share knowledge

Co

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ap

pro

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ips

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Become organised to support our social media strategy

DEDICATED LOCAL X-FUNCTIONAL TEAMS

WebCare Team

Country Internet Manager

PR agentConsumer Experience Manager

Local Community

Manager

CENTRAL SETUP

Digital Marketing Manager

PR Manager

Consumer Care

Social Media Manager

Flagship Community

Manager

Social Media

Taskforce

In-house resource &Agencies

In-house resource &

vendors

7 BUSINESS PRODUCT GROUPS

MBRMin planning


Social Media objectives as extension on Consumer Care directives

Aim is to have a sense and simple plan on global and local levels to execute on NPS & Cost of non-quality by

• Fast product quality feedback• Web content enhancements (outside-in)• Interaction & escalation management

Social Media

Objectives

Four Foundations:

1. Consumer Care Funnel 2. Making & Keeping Promise

3. Listen, Talk & Support 4. Global Guidance & Local Execution


Guidance to our contact channels– Integration of chat on 3rd party platforms

http://www.prisjakt.nu/produkt.php?p=599262


Clear roles to reinforce the brands with every consumer interaction

TVad

Radioad

Printad

Papermail

Email Website

KioskStore IVR Callcenter

Product

Communicate imageby

Marketing

Deliver valueby

Consumer Care

Social Media Channels

Making promises

Keeping promises

Communication

Guidance

by

PR & Legal


Guidance to our contact channels – Facebook


First Listen, then engage on Talking with and Supporting of our consumers


Driving NPS & GCR by improving web content from consumer feedback

Consumer Data

NPS Feedback & Call logs

Social Media Comments

Analyse data

Topics & Issues

Webcontent

FitGap

Create &

Improve Content

AvailabilitySuccessfulness

NPS GCR

Manually


Converting heavy negative detraction into positive sentiment

OHC - US & UK>600 relevant social comments

and consumer feedback comments

from >1500 websites/domains and from >6000 call logs/NPS

free texts converted into 25 new categorized FAQs

2010-03

2010-04

2010-05

2010-06

2010-07

2010-08

2010-09

2010-10

2010-11

2010-12

2011-01

NPS Oral Health Care (3 months rolling)

0%

Content updates


Assisting our consumers through our support forum by talking and supporting


2 Net TV server outages cause peak visits

Some Facts & Figures:• Language = English;• Net TV & Blu-Ray• Rolled out to WE & RU;• >150.000 visits since July 2010;• > 900 visitors per day;• 3.5 minute per visitor, visiting 4 pages;• > 1200 registered users;• 15% of Net TV connected users in NL have been

on the forum!• NPS Measurement in place

>50% of questions solved by consumers

Objective:Drive peer to peer resolution to

support our contact strategy and enable fast feedback on software and services


... lead by strong brand promoters

Super promoter “Toengel” supported 100+ members


Global guidance and enablement

Local empowerment and execution


Example: QQLQ #1 in best handling consumer complaints - The Netherlands

In the period January to November 2010

Best complaint handling

1. Philips (3,4)2. Tele2 (3,0)3. Wehkamp (2,8)

Fastest (within 24 hrs)1. Tele22. TNT Post3. Wehkamp

Most complaints: 1. Ziggo (1.691)2. TNT Post (1.528)3. UPC (1.245)

Worst complaint handling1. Oxxio (1,5)2. Nederlandse Energie Maatschappij (NEM) (1,6)3. Neckermann Reizen (1,7)


Many other local initiatives, supported through global guidance and global enablers

Using globally deployed tools• Google Alerts• Sysomos• Oxyme• Scup• Tipyo• Siebel• Etc.

and many more


Simple KPIs to measure effectiveness of local Social Media Operations

KPI Explanation of KPI Example Improvement

Digital Sentiment Indicator (DSI)

Monitor the digital sentiment, using the number of positive, neutral and negative comments.

Currently being set up, data not yet sharable

Avg FQF Turnaround Time

Monitor the performance of the Fast Quality Feedback via social media

Global Escalations Improved from weeks to hours

% of Solved Questions by Community

Monitor the power of the community on Social Owned and Social Web Support Forum >50% of questions answered

NPS on interactionsThe successful completion of conversations/interactions with consumers in NPS per transaction


Webcare Sentiment Indicator

The successful completion of conversations/interactions with consumers in sentiment score (per channel)

Brazil>50% of negative sentiments converted into positive sentiment

Web Traffic VolumeMonitor the impact of social media platforms that increase web traffic volume in specific channels (i.e., Support, Online Sales)

Facebook pages

>35x more traffic from Facebook after improved integration

KPI Explanation of KPI Example Improvement

Digital Sentiment Indicator (DSI)

Monitor the digital sentiment, using the number of positive, neutral and negative comments.


Avg FQF Turnaround Time

Monitor the performance of the Fast Quality Feedback via social media

Global Escalations Improved from weeks to hours

% of Solved Questions by Community

Monitor the power of the community on Social Owned and Social Web Support Forum >50% of questions answered

NPS on interactionsThe successful completion of conversations/interactions with consumers in NPS per transaction


Webcare Sentiment Indicator

The successful completion of conversations/interactions with consumers in sentiment score (per channel)

Brazil>70% of negative sentiments converted into neutral or positive sentiment

Web Traffic VolumeMonitor the impact of social media platforms that increase web traffic volume in specific channels (i.e., Support, Online Sales)

Facebook pages

>35x more traffic from Facebook after improved integration


Our answers to the questions

• Is your company ready for Social Media?

• Is your Consumer Care department ready for Social Media?

• Is your Consumer Care Social Media Operation effective?

Consumer Care, March 24, 2011

Special training toolkit for everyone involved with consumer interactions

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Thanks for your attention

Philips approach to digital

Documents

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ok philips

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