How Philips achieved Success with Customer-Driven Innovation

Introduction 

In the fast-moving personal care appliances market, launching new products successfully demands both innovation and deep insights into consumer preferences. Philips, a global leader in electronics, partnered with Chaoly to use a data-driven approach to significantly improve their product launch success in China. By focusing on customer discovery and marketing-mix optimization, Philips developed a product that resonated with Chinese consumers and accelerated their launch timeline.

The Challenge 

Launching a new product in China can be high-risk, with 70% of product launches failing to deliver expected results. Philips adopted a growth-hacking mindset and a lean startup methodology to develop a personal care appliance specifically for the Chinese market. Despite initial assumptions about the broad target audience, Chaoly’s insights revealed a more precise audience focus, shifting the product development process.

The Objective 

The main objective was to drive innovation through deep consumer insights, answering questions such as:

• Who is the target consumer?
• What problems do we solve, and which benefits matter most?
• What product format is credible in the market?
• How should we communicate these benefits?
• What channels should we prioritize?
• What is the size of the business opportunity?

Key stakeholders included Philips’ R&D, innovation, marketing, and sales teams to define the product features and refine messaging.

The Solution Customer Discovery and Marketing-Mix Optimization 

Chaoly delivered a comprehensive strategy combining customer discovery and marketing-mix optimization, ensuring the product fit the needs of the Chinese consumer.

Customer Discovery Phase

1. Surveys and Fieldwork: By running surveys and fieldwork, Chaoly identified the pain points of different audience segments, with a focus on customer needs and behaviors. Initial qualitative insights were validated through larger-scale surveys.
2. Online Experiments: Through online A/B tests targeting various groups, Chaoly identified key pain points such as operation time, product weight, and noise.
3. Target Audience Identification: The data led to a clear segmentation of the audience, identifying urban professionals with specific care needs as the most promising group.

Marketing-Mix Optimization

Chaoly’s approach ensured that Philips’ marketing efforts were fully aligned with customer expectations:

1. MVP (Minimum Viable Product): Using insights from customer discovery, a mock-up MVP was created and tested in the Chinese market to validate consumer reactions.
2. Digital Experiments: Chaoly ran digital experiments through its online store on Alibaba, testing product features, price points, and messaging. Real-life feedback from Chinese consumers provided authentic insights.
3. Iterative Refinement: The feedback led to continuous product and marketing refinements, aligning the final product with consumer expectations.
4. Value Proposition Validation: Multiple value propositions were tested to identify the most compelling solution to customer pain points.

Implementation and Results 

Over a 12-week period, Philips and Chaoly executed a customer-centric product development and marketing strategy:

1. Data-Driven Product Development: Fieldwork and digital experiments resulted in innovative product concepts. Pricing, packaging, and messaging were refined through real-life feedback.
2. Market Positioning: The insights helped Philips discover new ways to position the product in the market, with a unique value proposition and pricing model.
3. Real-Time Feedback: Philips used Chaoly’s store on Alibaba to gather real-life consumer feedback, enhancing the authenticity of the data.
4. Faster Time-to-Market: Philips was able to launch the product in half the time of their main competitors due to streamlined processes and rapid iteration.Quantifiable Success

• New Target Audience: Identified specific consumer groups, enabling precise marketing and product development.
• Innovative Value Proposition: Developed a compelling value proposition that resonated with the target demographic.
• Effective Positioning: Positioned the product effectively in the Chinese market with optimized pricing and packaging.
• Faster Time-to-Market: Philips launched the product twice as fast as their main competitors.

Conclusion 

This case study highlights how Chaoly’s data-driven customer discovery and marketing-mix optimization strategies helped Philips create a product that resonated deeply with Chinese consumers. By combining customer insights with growth-hacking principles, Philips was able to significantly reduce time-to-market and enhance product launch success. Their experience serves as a model for leveraging consumer-centric innovation to achieve sustainable growth in China’s competitive market.

Disclaimer:
This case study is for illustrative purposes only. To protect confidentiality under the Non-Disclosure Agreement (NDA) between Philips and Chaoly, specific product details, target audiences, and methodologies have been fictionalized. The product category and demographic described are examples, and any resemblance to actual products, demographics, or strategies is purely coincidental.