Focus on ‘Specialists’ Brands Key to Growth Objectives – Sales up 18 Percent through Third QuarterPALATINE, Ill., (Nov. 12, 2004) -- Schneider Electric, the world’s power and control specialist, is focusing on a brand strategy to more clearly define and reinforce the unique strengths of its Merlin Gerin, Square D and Telemecanique worldwide specialty brands of electrical distribution, industrial control and automation products, systems and services. The renewed focus comes as Schneider Electric aims to aggressively build on its growing strength in electrical distribution and industrial control and automation technologies for residential and commercial building, industrial, energy and infrastructures markets. According to David Petratis, president and CEO of the North American Operating Division, this revitalized brand positioning and focus has accelerated growth in all geographic areas. Through the third quarter, Schneider Electric has generated global sales of $9.4 billion (U.S.), up 18.3 percent from the year-earlier period. Growth remained strongest in the Asia Pacific and Rest of World Divisions where sales expanded 19.7 and 22.9 percent, respectively. In North America, sales through the third quarter totaled $1.9 billion for an increase of 6.5 percent from the year earlier period.“More than ever, electricity is the energy of the future,” said Petratis. “According to the U.S. Department of Energy, the projected growth in commercial and industrial electricity demand through 2025 will require significant additions of generating capacity, which is good news if you’re in the business of getting electricity where it has to go. This means different things to different markets but with our specialist brands, we’re uniquely capable and well positioned to meet each of their needs.” Schneider Electric is now the world’s largest company focused exclusively on electrical power and control. Such an industry leadership position seemed remote a decade ago when the awareness of Schneider Electric in the global power and control industry was not as strong as it is today. At the time, building awareness for the Schneider Electric corporate brand was important after a series of acquisitions, and prospects for a single Schneider Electric brand strategy seemed likely. Times have changed. Corporate Brand Gains Awareness, Builds FoundationOver the past 10 years, the company has built awareness for Schneider Electric, primarily through association with its leading worldwide product brands. Corporate and worldwide product brands have been combined through new graphic standards and external messaging. A global corporate campaign launched by Groupe Schneider in 1996 proclaimed “No One in the World Does More with Electricity,” reinforcing the company’s focus and industry standing. In 1999, the company changed its name from Groupe Schneider to Schneider Electric, which was introduced with a worldwide campaign built around the theme: “Get More From the World’s Power and Control Specialist.” These and other efforts have tripled market awareness for the Schneider Electric corporate brand over the past seven years, according to regular brand awareness studies in more than 40 countries that account for 90 percent of sales. However, studies revealed that as awareness for the corporate brand increased, productbrand awareness began to decline, except for the 101-year-old Square D brand in the United States. Acquired by Groupe Schneider in 1991, the Square D brand is in first or second position in almost all markets it serves. It accounted for approximately 80 percent of the North American Operating Division’s $2.5 billion in sales in 2003.The Multi-Specialist Approach – Global and LocalIn 2002, encouraged by growing recognition for Schneider Electric, the company altered its focus on promoting the Schneider Electric brand in favor of maintaining and revitalizing its leading worldwide brands: Merlin Gerin, the electrical distribution brand for International Electrical Code (IEC) type products; Square D, the electrical distribution and industrial control brand for National Electrical Manufacturers Association (NEMA) type products; and Telemecanique, the control and automation brand. In support of this “multi-specialist strategy,” these brands will be used as full-fledged marketing platforms, according to Jean-Pascale Tricoire, president and chief operating officer of Schneider Electric. The strategy offers other benefits as well. Focusing on the worldwide brands complements the company’s strategy to be more global and local at the same time. This is key to serving targeted industrial market segments, such as automotive where Schneider Electric adds value by offering global manufacturing customers the same level of seamless service, technical support and continuity whether it’s in Detroit or Mexico City.“A multi-brand approach provides considerable flexibility in terms of positioning and market access,” said Tricoire. “We’ll continue fortifying Schneider Electric as a corporate brand particularly among major direct customers who look more for a key partner than for a specific range of products. At the same time, our growth strategy is based on product differentiation emphasizing flexible and open architectures and meeting the most demanding standards for performance and reliability. “Our access to markets is another fundamental strength,” continued Tricoire, who was appointed to his current post in fall of 2003 after serving as the executive vice president of the Schneider Electric International Division. “Our access has been forged through a network of distributors and specifying partners in 130 countries where we not only sell but manufacture and conduct R&D. Our brand positioning will help us reinforce these and other strengths, including a growing services and consulting capability and our commitment to operational excellence.”The Schneider Electric branding strategy will be reflected in all advertising and communications, and to some extent product and packaging for the three worldwide brands.Positioning Updates Historical StrengthsNew positioning statements for each of the brands sum up fundamental attributes and value propositions. For Merlin Gerin, it’s “The Guiding System,” emphasizing the total solutions offering. For Square D, the new positioning is centered on the theme “Turn It On.” The “Simply Smart” positioning for Telemecanique accentuates the brand’s reputation for sophisticated simplicity. The accompanying advertising signature, “A brand of Schneider Electric,” reinforces the relationship of each of these brands to the company, which last year introduced its own positioning statement: “Building a New Electric World.”Merlin Gerin – ‘The Guiding System’The Merlin Gerin Company was founded in 1921 when it introduced the world's first range of high voltage, oil circuit breakers. Over the next 70 years, the strength of the Merlin Gerin brand grew as the company expanded its operations worldwide and set its sights beyond circuit breakers as reflected in its 1980s tagline “Mastering Electrical Power.” Schneider Electric made its first investment in Merlin Gerin in 1975, acquiring 60 percent. It acquired the balance of the company in 1992. Today, Merlin Gerin is a leading international brand of products meeting the International Electrical Code (IEC) requirements, including electrical circuit protection products, panel components, low and medium voltage enclosure systems, metering, control and monitoring devices and transformers. Schneider Electric intends to expand the Merlin Gerin offering to include installation systems, switches and sockets and Voice Data Imaging (VDI), by relying on the strengths of its relationships with electricians and distributors.“Merlin Gerin competitors are perceived as product suppliers or package contractors who partially compete with their own customers, and we believe this opens a wide door for differentiating the Merlin Gerin brand,” said Tricoire.“Today, the market is organized two ways,” he continued. “On one hand, there’s a product approach, especially on small size jobsites served by small and medium sized contractors and many manufacturers. Then there’s the complete solution approach that only a few large players, including large contractors and a few manufacturers selling direct, are able to serve. We’re a supplier of products organized into systems, and we partner with intermediaries without competing with them.” Merlin Gerin’s brand positioning is built upon visual elements associated with “The Guiding System” tagline. A “highway” icon was chosen for its universal recognition and because it easily conveys clear direction. It will be featured in generic brand advertising. Additional executions will be created to capture other Merlin Gerin value propositions, including simplicity, flexibility, reassurance and productivity. Square D – Turn It OnAll three brands enjoy a long and rich history, especially the North American flagship Square D brand. Last year, in honor of the 100th anniversary of the Square D brand, Schneider Electric donated to the Smithsonian’s National Museum of American History an original and still-working 1922 model of the Square D electrical safety switch that helped save lives in American factories in the early 20th century. Today, Square D NEMA type electrical distribution and industrial control products are found in all types of residential, commercial and industrial construction, in a wide range of manufacturing and processing facilities, and in or on the products of other manufacturers. Growth opportunities include providing critical and uninterruptible power solutions for such markets as data centers and telecommunications. QO Breaker Plays Star RoleTo visually illustrate the “Turn It On” promise, a QO circuit breaker with a label icon will be used. The QO circuit breaker reflects the enduring historical legacy of the Square D brand and illustrates the idea of “turning on” - in this case literally – of electricity. The associated label includes the promise “Turn It On.” It can also include any one of the five Square D brand values – innovation, ingenuity, reliability, quality, and safety.“The research confirmed that it’s the people behind the Square D brand who make the difference for customers,” said Petratis. “And that’s a good thing, because research also showed that our legacy of high quality products is not enough to demand premium pricing as competing products get better, downward price pressure prevails and business becomes more complex. What that means is we need to ‘turn it on’ for customers everyday. It’s not just a slogan. We know what our customers are looking for and they’re going to get it.”Telemecanique – ‘Simply Smart’Acquired by Schneider Electric in 1988, Telemecanique invented the first electrical contactor in 1924 and quickly expanded its business to become a leading specialist in industrial control and automation. Founded in France, the company built a large network of subsidiaries worldwide between 1950 and 1988. It is becoming increasingly well known in the industrial control and automation markets and is supported by many of the 1,500 Square D distributors throughout North America. Telemecanique is now being positioned as the family brand for automation components worldwide, including IEC type motor and machine control products, such as drives, starters, contactors and push buttons. Designed to handle the command, control and protection functions for machines and equipment, Telemecanique brand name products work together to ensure optimal productivity, flexibility, safety and traceability in all the processes in the industrial and infrastructure sectors. The brand is crucial to the company’s strategy to seize new opportunities created by the convergence of electricity, automation and communications technologies. It has helped forge an entire new category dedicated to helping manufacturers monitor the use and quality of electrical power from anywhere in the world through new Web-enabled technologies.Leadership in Web-enabled Power ManagementIn fact, Schneider Electric pioneered Web-enabled power and control equipment in 1997, when it introduced the world’s first programmable logic controller (PLC) with a built-in Internet communications capability. To further simplify information sharing and improve control over manufacturing and other processes, Schneider Electric is extending its offering of Internet-enabled products to include a broad range of power distribution and control equipment.Launched last year under the umbrella name Transparent Ready™, the new line covers the company’s entire range of assembled power distribution equipment, including switchgear, motor control centers and switchboards. Also included are control products such as electrical contractors, drives, etc. The expansion is timely as the industrial and commercial worlds are moving rapidly toward open Internet standards as the primary network approach for sharing information within all parts of an enterprise.In positioning Telemecanique, Schneider Electric is leveraging brand values such as compactness, simplicity, intelligence, flexibility and openness. Telemecanique ads produced for leading industry publications will support the “Simply Smart” brand positioning as well as each of the brand values and individual products. Schneider Electric launched the new Telemecanique brand positioning late last year at a customer event in Brussels where 2,000 of its European customers, wholesalers and distributors celebrated the 80th anniversary of the Telemecanique brand. The company also introduced a new line of automation products, the result of R&D investments over the past five years totalling more than $300 million.Headquartered in Palatine, Ill., the North American Operating Division of Schneider Electric had sales of $2.5 billion in 2003. The North American Operating Division is one of four geographic divisions of Schneider Electric, headquartered in Paris, France, and markets the Square D, Telemecanique and Merlin Gerin brand products to customers in the United States, Canada and Mexico. In the United States, Schneider Electric is best known by its flagship Square D brand, with Telemecanique becoming increasingly known in the industrial control and automation markets and supported by many Square D distributors. For 100 years, Square D has been a market-leading brand of electrical distribution and industrial control products, systems and services. Schneider Electric is a global electrical industry leader with 2003 sales of approximately $9.9 billion. Visit Schneider Electric at www.us.SquareD.com, www.us.telemecanique.com, www.us.schneider-electric.com or Merlin Gerin Products www.us.merlingerin.com
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