Mark Hartevelt, Hugo RaaijmakersPhilips Design16 September 2010

Service Design at PhilipsTowards providing experiences

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Introduction Philips

Rise of emerging markets

Aging population

Increased consumer empowerment

Climate change, need for sustainable development

Philips focuses at four key priorities

Philips' focus on Health and Well-being

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Introduction Philips Design

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Create valueProduct, interaction

Communicate valueOnline, packaging, print, point of sale

Integrate valueService Design

Service design sociologists

anthropologists

visual communication designersproduct designers

psychologists

human factors specialists

brand consultantsonline designers

project managersinteraction designers

innovation consultantsvisual trend analysts

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Partners in innovation

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What’s Happening?

Product manufacturing industries start including services

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Initial business

TomTomService Design business opportunities

HD traffic

Fuel prices

Speed cameras

Hotel bookings

Points of interest

VoicesRoutes

Audio books

iPhone…

Link to Hotel brands

Link to Apple

Link to Petroleum brands

Map sharing

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Nike +Initial business New business opportunities

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FiatInitial business New business opportunities

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Initial business

Apps…

AppleNew business opportunities

Customers expect their products to be . . . connected (products,content,communities) upgradable payable through usage

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Where's Philips with services?

Incubators

DirectLife,

LightingLumileds, Lighting controls, Street sensors

Philips' product services today

Consumer LifestyleNet TV, GoGear, Photoframe Streamium,

HealthcareMaintenance, Raytel, Lifeline,

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Still less than

15%of Philips revenues

comes from services,of which the majority care services.

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Service Design at Philips

Human centered approachFocus on the overall customer experience

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Consumer centricPart of core propositionBased on product dataRevenue generatingConnected

Our focus..

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Mapping and visualizing the Customer Journey

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Defining the Eco-system

Mapping and visualizing the Business Model

Designing product & service combinations

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And how can Service Design help Philips…

By building propositions that are really customer centric

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By introducing new innovative business models

By introducing rapid prototyping with customers

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Key Learning's sofar

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Intrapreneurial attitudeInnovate in standing organizationTop management sponsorshipInvolve the right competenciesEarly business involvementService implementation

Key Learning’s

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Situation at Philips• Philips is product manufacturer• 120 years of experience with product development• 95% of all Philips output is products• Services is a fairly new area for Philips• No services culture yet within Philips• Little to none service competencies available• Rapid change of customer expectations in the market• Rapid creation of large and powerful digital eco-systems• Product centric mindset, technology push

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How should Service Design help?

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Solution:• Change management program

– Creating awareness of the potential of Service Design & Services– Building internal partnerships with marketing, IT and RD&I– Running cross sector pilots– Attracting new talent: multidisciplinary T-Shaped staff– Training of current staff– Developing new competences

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• Customer trends, mega trends

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New competitors are entering our Business domains with Product Service propositions

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Eco systems provide value for customer and business

Customer value• Personalized value• Unique experience• Convenience• Enhanced product functionality• Seamless user experience• Pay per value

Business Value• Barrier to competition• Two-way communication• High retention ratio• Recurring revenue’s• Higher Brand Engagement• Real-time insight generation• Unique differentiation• Open innovation with partners

product service combination

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Aging population• The number of people aged over 60 will double from 500 million

today to 1 billion by 2015

Emerging markets• 99% of future population growth will be in emerging markets;

Emerging economies are expected to account for 2/3rd of global GDP by 2016

Empowered consumers• Consumers are increasingly focused on their Health and Well-

being and look for products that fit their lifestyle

Climate change and sustainable development• 19% of global electricity consumption is used for lighting;

Energy efficient lighting can save 40%...or 600 power stations worth of energy