In-depth Analysis of Philips Lighting's Sports Marketing Journey
Sports marketing is one of the best choices for enterprises to expand their influence, increase brand awareness, and tap into emerging markets. After securing market share, sports marketing is also an excellent way for enterprises to enhance their reputation, increase user stickiness, and attract new users. Therefore, as an essential marketing form for large enterprises, sports marketing plays an important role in their daily operations.
Founded in 1891, Philips is a globally renowned Dutch company. Its business mainly covers the production of lighting, home appliances, medical systems, etc. It has production bases in 28 countries worldwide, sales offices in 150 countries, holds 80,000 patents, has more than 110,000 employees globally, generated revenue of up to US$30.9 billion in 2015, and ranked 385th in the Fortune Global 500 published last year.
Becoming a 'century-old enterprise' is the dream of Chinese internet giants. Whether it is Jack Ma, Wang Jianlin, or Liu Chuanzhi, they have all emphasized more than once their determination and desire to build a 'century-old shop'. Philips has undoubtedly realized the dreams of Chinese entrepreneurs, but this century-old electronics company also faces a crisis of transformation.
Once upon a time, Philips was also involved in semiconductors, multimedia audio-visual products, and electronic accessories. However, in today's fast-changing internet environment, these businesses have been divested one after another. Although former Philips CEO Gerard Kleisterlee tried to turn the tide, push through reform, and reinvent the crisis-stricken Philips into a company innovating for the future of life, slow decision-making and inefficient execution remain stubborn problems that urgently need to be addressed.
Royal Philips CEO Frans van Houten
Therefore, after the current CEO FransA.van Houten took office, further reform became the natural course of action. At Philips's 2013 annual meeting, "Royal Philips" replaced "Royal Philips Electronics" as the company's current full name, while health technology and lighting solutions became Philips's clear business lines today.
Under the guidance of this main strategy, "Royal Philips" was divided into two companies: a health technology company and a lighting solutions company. The health technology company merged the group's previous healthcare and quality-of-life divisions, responsible for healthy lifestyles and related businesses such as prevention, diagnosis, treatment, rehabilitation, and home care. The lighting solutions company aims to strengthen its existing market leadership in LED light sources, luminaires, and smart connected lighting systems and services, and to transform the lighting company into an independent legal structure, thereby entering the capital market directly.
Such strategic adjustments mean the reengineering of business processes and the reshaping of corporate values. To achieve such reengineering and reshaping, beyond the innovation and transformation of the group's own business, sports marketing as a market promotion tool is naturally indispensable. In fact, both before and after the transformation, sports marketing has always been an important means for Philips, especially Philips Lighting, to open up and maintain markets.
For Philips Lighting Solutions, making their products known and experienced by a wider audience is a critical issue. Equipping their products in stadiums that gather large crowds has become a premium way for Philips Lighting Solutions to promote their products. Thus, they partnered with Stamford Bridge, the home of English Premier League powerhouse Chelsea, showcasing their Arena Experience sports venue lighting technology to all London fans through the Blues, and in doing so, opened up a broad user base for their product promotion.
As is well known, football matches have extremely high requirements for lighting. During a match, overly strong light can hinder players from performing normally, while too dim light can make it difficult for spectators to see the various details on the field. According to information provided by Philips, the Arena Vision LED floodlighting in their Arena Experience can select appropriate light for the event. Integration with audio-visual systems can further enhance lighting effects. Flicker-free floodlights enable cameras to capture action for slow-motion replays, and touch buttons can change lighting settings, thus creating the right atmosphere for live music and other performances.
For Stamford Bridge, with the help of Arena Experience, the visibility on the field will be clearer, athletes will find it easier to perform at their competitive level, glare-free lighting allows cameras to precisely capture action, giving spectators a better viewing experience. At the same time, architectural lighting can also enhance the atmosphere to attract visitors, setting lighting colors in harmony with the colors preferred by sponsors; façade and architectural lighting can be connected with pitch lighting to achieve better lighting effects; using bright and energy-efficient LED lighting to make spectators feel safe in the parking lot; using low-maintenance lighting fixtures to guide spectators from underground passages into the stadium; using LED façade lighting that transforms the stadium into a landmark building to make spectators feel excited from a distance. Of course, these designs also help generate revenue from products around the venue, and intelligent statistical systems can reduce operating costs.
Through Arena Experience, Stamford Bridge has, to some extent, transformed from a mere football stadium into a world-class integrated entertainment venue. Chelsea Football Club CEO Ron Gourlay said: "I am delighted to be partnering with Philips to create the best lighting environment for our supporters to fully enjoy Chelsea matches. Chelsea Football Club is once again at the forefront of innovation, and we are also looking forward to hosting more unforgettable events at Stamford Bridge stadium, which has adopted this new floodlighting system."
Beyond Stamford Bridge, Philips' lighting system has also been applied at the Ghelamco Stadium of KAA Gent in Belgium. On the exterior of the stadium, half a million LEDs created incredible lighting effects with ripples, alternating fade-ins and fade-outs, sequences, strobes, and explosion effects. In addition, we can also see the wide application of Philips' lighting systems in stadiums including the Emirates Stadium and the Sweden Friends Arena.
Beyond application partnerships, as an important component of sports marketing, Philips also holds the naming rights for Philips Arena, the home venue of the NBA's Atlanta Hawks. At the same time, this venue, completed in 1999 at a cost of $213 million, is also the home of NHL team Atlanta Thrashers and WNBA team Atlanta Dream. Philips had already purchased the naming rights when the venue was first built.
It is worth mentioning that, based on the venue's attendance data, Philips Arena was ranked by Pollstar magazine in 2010 as the second-best concert and event venue in the United States and the fifth-best event venue in the world. Behind this naturally reflects the wisdom of Philips' original decision — as a renowned venue across America, Philips Arena is widely known and familiar to the American people and even the whole world, and the awareness and reputation of the Philips brand have also spread across the world accordingly. The same situation applies to the Philips Stadion, the main stadium of PSV Eindhoven in the Dutch Eredivisie.
Even that wasn't enough. Earlier this year, Philips also signed a two-year contract with Italian Serie A powerhouse Juventus, becoming the "Old Lady's" official lighting partner for the next two years. In the contract, in addition to obtaining commercial rights for Juventus in terms of public relations, media platforms, and image rights, Philips will also serve as the lighting equipment provider, redesign the lighting system at Juventus Stadium, and provide lighting services for Juventus at other public relations events. In the new season, the lighting system at Juventus Stadium has been updated, with extensive use of ambient lighting, bringing a better visual experience to the stadium. At the same time, the energy efficiency of stadium lighting has been improved, and maintenance has also become easier.
During the National Day holiday, Philips Lighting also became the lighting sponsor of La Liga powerhouse Atletico Madrid's new stadium. The two sides will sign a four-year contract, and the lighting of Atletico's new stadium will be fully provided by Philips Lighting. Atletico's new stadium will be built into a world-class LED-lit stadium. Atletico president Cerezo said: "Our new stadium will have a lighting effect that is unbelievable to you. The new stadium will be completed next year, and we are striving to move into the new stadium next season."
It is not hard to see that, whether in the pre-Van Houten era or the Van Houten era, sports marketing has been Philips' primary marketing choice in the lighting business, and in the future, they will inevitably reach more and deeper cooperation with more world-renowned venues and clubs. A century-old company still values sports marketing so highly, so what reason do emerging companies, as market followers, have to overlook the important role that sports marketing plays in the market?