Lenovo: Building a Global Brand

Lenovo: Building a Global BrandManaging Brands over Geographic Boundaries and Market Segments

Presented by:Prasanth BoharaDinesh SharmaMudith HimwanShalini MishraHet Mavani

REGIONAL MARKET SEGMENTS

Regionalization is an important recent trend that, perhaps on the surface, seems to run counter to globalization.

Reasons for regional marketing◦Need for more focused targeting ◦The shift from national advertising to sales

promotionsDrawbacks

◦Production headaches◦Marketing efficiency may suffer and costs may

rise

OTHER DEMOGRAPHIC AND CULTURAL SEGMENTSFor example, the importance for

marketers to consider age segments and how younger consumers can be brought into the consumer franchise

As another example, the 2000 census revealed that Asians and Hispanics accounted for 79 million of 281 million people in the United States and an estimated $1 trillion in annual purchasing power.

RATIONALE FOR GOING INTERNATIONALPerception of slow growth and increased

competition in domestic marketsBelief in enhanced overseas growth and

profit opportunitiesDesire to reduce costs from economies

of scaleNeed to diversify riskRecognition of global mobility of

customers

Advantages of Global Marketing ProgramsEconomies of scale in production and

distributionLower marketing costsPower and scopeConsistency in brand imageAbility to leverage good ideas quickly

and efficientlyUniformity of marketing practices

DISADVANTAGES OF GLOBAL MARKETING PROGRAMSDifferences in consumer needs, wants, and

usage patterns for productsDifferences in brand and product

development and the competitive environment

Differences in the legal environmentDifferences in marketing institutionsDifferences in administrative procedures

STANDARDIZATION Vs. CUSTOMIZATION

Indian consumer American consumer

As brand consultant Robert khan said. “ global branding does not mean having the same brand everywhere”

Standardization: same product-same communication across the border or globally

- Followed by electronic instrument

customization: to change or adopt product-communication according to the market

- As coke’s marketing mantra “think global act local”

Standardization-customization process- product

communication

No change change

No change

change

Straight extension

Product adaptation

Communication adaptation

Dual adaptation

Why customization:

Meaning is different

reading habits

country 1 right left

right left

country 2

Detergent Ad

taste, need , demand is different from one country to other

Culture difference: individual Vs. collectivism , masculine Vs. famine.

Delivery adaptation by domino pizza in different

Countries because of culture because in Britain anybody knocking on the door is

rude

Domino pizza home delivery

to get positing difference or country

Of origin effect

“ Tokyo beer”

Global brand strategy: we need to get attention over few basic issues while making product brand in global market

- Identify differences in consumer behaviour. How he purchase and use product.

- Adjust the branding program accordingly through the choice of these customers

- Then have a leverage secondary association programme according to the market.

- After the application of these factors over the brand we need to focus on the implication, control and measurement of these factors

Making the brand by the use of CBBE model :

Salience- awareness about the product useful for product recall and recognition

Performance-its basically related to the

product features and its performance.

Tailor product according to the

globally market

Increase brand awareness

Favourable brand

association

Positive reaction

Increase brand

locality

Imagery: imagery means what is your product having mental map in the mind of costumer. Should be carefully because each word symbol and picture represent different meaning. So it hurt sentiment of people

Source of imagery-

Core brand association

Identifying points of parity and point of difference

By origin effect

Judgement and feeling: brand judgement can be negative or positive like good quality , credible and worthy. At this point judgement provide feeling to the consumer like excitement, happy etc. making product brand by the use of LSA in global market-

LEVERAGE SECONDARY ASSOCIATION

BRAND

Other brand

placespeople

things

alliance

ingredient

extension

company

employees

endorsers

eventsThird party

Channels

Country of origin

Celebrity endorser: all good character related to celebrity gets transfer to product and influence to the decision of the consumer.

trustworthy

intelligence

Likeability

Familiarity

attractivenessattractiven

esstrustwort

hy

Familiarity

Likeability

Resonance: it is a final stage in making any product globally brand here costumer is having locality towards your product

Resonance is depend on the success of other parameters in the CBBE model.

And you can have your product as a brand now.

Ten Commandments of Global Branding1. Understand similarities and differences in the

global branding landscape2. Don’t take shortcuts in brand building3. Establish marketing infrastructure4. Embrace integrated marketing

communications5. Cultivate brand partnerships6. Balance standardization and customization7. Balance global and local control8. Define operable guidelines9. Implement a global brand equity

measurement system10. Leverage brand elements

LENOVO:BUILDING A GLOBAL BRAND• In the year 2004 IBM’s personal

computer acquired by Lenovo.• By the year of 2004, 90% of

revenue comes from china market.

• Lenovo sponsor “Turin Winter Olympics” in order to gain strong market share in china and Asia.

The Global PC Industry1970s- IBM introduced its first PC

after microcomputer and home computer.

IBM relied on three key technical contributor-1. Intel for 8080 processor2. Microsoft for DOS operating system3. Software for VisiCalc Art

1990s Internet BoomedLaunching the set of basic

standard for PCs by Microsoft and Intel.

Increase in the number of outsourcing and off shoring.

Early 21st century major consolidation had taken place between HP-Compaq and Gateway-e machines.

Contd……….By 2004 half of the PCs sold

around the world came from Dell , HP and Lenovo including IBM’s market share.

RISE OF LEGEND:1984- china academics of science

invest $25000 to form the New Technology Developer.

1987- Introduced its original product Legend card.

Contd……..1990- Company launched their

own PC.1996- Launched their first laptop

and marketed its PCs carrying Intel Pentium chip.

DEAL:IBM was an opportunity to shed

“Unprofitable operation”.Lenovo gained the right to use

IBM think pad laptop and think centre desktop..

Think Pad LegacyThe research showed that in

customer mind IBM and Think pad are hard to separate.

OPPORTUNITY:The way IBM and Lenovo sold PCs

was very complementary.CHALLENGES:Lenovo focus on the SMEs while IBM

focus on corporate and enterprise customer.

Organizational ChangesSeptember 2005 –

Management restructuring that integrated the original Lenovo and former IBM◦New international composition and

scope◦Company’s working language

changed to English◦Working via conference calls posed

challenges◦12-hour time difference between

Beijing and U.S. east coast also caused some strain

Branding OpportunitiesOpportunity and Challenge to

build an international brand using IBM legacy.

Turin Olympics Sponsorship – a platform to showcase its capabilities to the world

Right to use IBM logo for five years

Best from East and WestFrom Lenovo

◦ Understanding of emerging markets

◦ Excellent efficiency

◦ Focus on long-term strategy

From IBM◦ Deep insights into

worldwide markets

◦ Best practices from western companies

Main concerns with customersInnovation would slow downQuality would sufferService and support would be

outsourced overseas

Branding Alternatives

1. Master Brand Strategy2. House of Brands Strategy3. Synergy Approach4. Lexus/Toyota Strategy

“One-Two Punch” StrategyTwo main elements:

1. Build up Lenovo as a strong master brand

2. Continue to strengthen the ThinkPad product brand, which was a special franchise that could be leveraged to support the Lenovo master brand.

Differentiation: Innovation and Efficiency

Advertising Plan“Maintain ThinkPad brand and use

that brand’s strength to build the Lenovo brand”

Three phase advertising plan:1. Worldwide Advertising campaign –

“ThinkPad” instead of Lenovo (maintain ThinkPad sales momentum)

2. “ThinkPad Unleashed” campaign – Lenovo making ThinkPad even better

3. Third campaign stress innovation for Lenovo master brand