Lenovo was a leading PC maker in China, and China was also a target market of the brand. Lenovo was founded in 1984 in Beijing with $25,000 of capital from Chinese Academy Science. Other than that, positioning of the brand was providing affordable PCs with functionality that average Chinese consumers could use, and 80% of their client base were small business and consumers. They launched their own-brand PC in early 1990, and the brand was also a pioneer of home computer concept in China. In 2004, Lenovo announced the acquisition of IBM's personal computer division for $1.75 billion, and IBM allowed Lenovo to use their name and logo on their products for up to 5 years with two main product brands that were ThinkPad laptop and ThinkCentre desktop. This deal could be seen as profitability and challenge, because the popular ThinkPad brand was hard to be separated from IBM in consumers' minds. The Company also prepared for international expansion and they needed a new global marketing and brand strategy to operate the business in different countries.
Lenovo's point of differentiation could be innovation and efficiency. The brand considered themselves with efficiency in Chinese market, and 90% of their revenue came from China. Their PC design focused on Chinese market and easy-to-use. For example, their Chinese voice-recognition software and graphics pad for hand-writing Chinese Characters. These features made them become best-selling PC in China. From their mission statement, “we put more innovation in the hands of more people so they can do more amazing things.” Their innovation could be seen in the new design of ThinkPad laptop. They designed new wide screen for ThinkPad Z60 with Titanium cover. This was kind of revolutionary design for ThinkPad, because the brand used to have black cover design. This titanium cover brought protection to consumers' laptop with beautiful design, and they even made the keyboard better to benefit their consumers. This decision was risky and bold, the company showed that they could maintain ThinkPad brand essence and made the improvements upon it. The company actually made the ThinkPad better with innovation. In “ThinkPad unleashed” campaign, it gave credit to Lenovo for their bold move, because it did something that IBM had never done before.
Since Lenovo had low brand awareness in the rest of the world except China. Therefore, Lenovo could take advantage of ThinkPad to build Lenovo brand. In order to build the Lenovo a master brand, the company came up with the strategy of “one-two punch” with two elements, which were building Lenovo as strong master brand and strengthening ThinkPad brand at same time as a special franchise to support the Lenovo master brand. This strategy was brilliant, since the company gained the right to operate ThinkPad brand, it would be a great opportunity to develop Lenovo base the ThinkPad's popularity and reputation. Moreover, the company would need to identify their brand essence and combine both efficiency and innovation; they also needed to use unconventional way to position Lenovo brand. Their three-phrase advertising plan for the new product launch would be a best practice to implement the strategy. First, the company started global advertising campaign for ThinkPad instead of Lenovo in order to strengthen ThinkPad brand and sales momentum. Second phase is “ThinkPad Unleashed” campaign, which was run on NBC during Turin Olympics Opening Ceremony. The objective of this campaign was to deliver the message that Lenovo could make ThinkPad better than IBM. They established the reputation of the brand by innovating ThinkPad laptop, and received many compliments from the public about their business and brand. Third phase is about telling public that Lenovo master brand represented innovation. They maintain and leverage ThinkPad brand to develop Lenovo brand. Their unconventional way to position Lenovo could be seen in their cooperation with Opportunity International by providing nonprofit PCs to automate loan processing system. Lenovo also provided computers to good student with limited financial income. These practices helped Lenovo to establish a positive public image.
In addition, Lenovo gained the right to use IBM on its products for up to 5 years, this was kind of endorsement for Lenovo since IBM had higher reputation of Think-family products in the world and PC industry. However, IBM's logo could also be used on Think-family products, not on individual ad. IBM was a trusted brand around the world, having the IBM stamp on the notebook could be a good advantage for Lenovo to endorse its brand and products.
In 2006, Lenovo planned to launched their own-brand PC series 3000 around the world. The price of this series would be set at slightly premium, which was equal to ThinkPad and ThinkCentre products. Other than that, the company wanted to prevent detracting the Lenovo brand and have differentiation, so they decided to name their new product series the “3000 Family”. It was a right approach to let people more focus on the brand “Lenovo”, and number did not conflict with the brand name. The number name even became part of the brand. If they gave a name for the new product, people probably would more focus on subbrand name.
I think Lenovo can position themselves as an international brand with innovative and unique design of the product. Since they focused on expanding their business around the world, and designed their product to better serve small and medium enterprise, their marketing and brand strategy should also focus on global market. The sponsorship of Turin Olympic Winter Game would be a great example of their global marketing strategy, because Lenovo could benefit from using Olympic logo and had chance to be seen by the world. From this strategy, we can see the company was moving to an international firm, not just a new type of Chinese company.
There are some key takeaway from the case, innovation is really important for the brand to maintain their status in the marketplace and be able to overtake other brands. Innovation is risky because it contain many uncertainties, and it has possibility to fail at the end. Nevertheless, it can help the business and industry to grow if the innovation is successful. Launching new product is difficult, because you will need to analyze and understand the market to provide product to consumers that can satisfy their needs and expectations. For the PC industry, quality, reliability, and durability are the keys. You will need to provide something that can assure your product is the best, and people do not need to worry about that when they are using it. Strategy for raising brand awareness is also critical for an organization. The company should analyze different markets with their consideration, conversion rate, and aided and unaided awareness to deploy their marketing strategy. Situation analysis, competitive analysis, and market segmentation can also help the company to better position their brand and products.
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