Eamon McGrane looks at the latest efforts by the PC company to raise its profile with celebrity help and by hitching its wagon to major events
What do you do when you buy the PC division of the world's most famous computer company and no one really knows who you are? Simple, you engage the world's most famous footballer to be the public face of your company, plaster his image across your advertising and use him to boost your profile.
Lenovo was largely an unknown entity when it bought IBM's PC division. Just over 18 months later it could be argued that the company is still struggling to establish its identity and become a worldwide name that can step into the rather oversized shoes that IBM left behind.
As part of its push to get the visibility, it will require going up against the likes of worldwide brands such as Toshiba, HP and Dell, Lenovo recently acquired the services of the Brazil and Barcelona footballer Ronaldihno.
Arguably the world's most well known face in soccer (sorry Becks), Lenovo is hoping that some of his profile will transfer to the company through a sort of branding osmosis. While this is somewhat of a facetious point, the company is trying to acquire its own cachet.
In its efforts to boost its image it has hitched its wagon to some of the biggest shows in town including the recent Winter Olympics in Turin, Italy and the forthcoming 2008 Olympic Games in Beijing. It also has a sponsorship deal with the National Basketball Association (NBA) in the USA.
What value this very aggressive commercial push is having on the business community where Lenovo hopes to harvest market share and revenue is difficult to ascertain. Milko Van Djuil, Lenovo's president of EMEA said the company was finding it tricky to raise its profile.
"Yes it has been and will continue to be a struggle. Why? Because when you have zero brand awareness it takes a great effort and we need to start from scratch."
Van Djuil said Lenovo was the biggest IT company in China with phenomenal brand recognition. After Coke and Nokia, it is in the top three Chinese brands. This is primarily due to the amount of advertising and demand generation it conducts in that market.
Lenovo also casts a huge shadow in the commercial space in China with some 20,000 dedicated shops in China's largest cities.
"Outside China, very few have heard of Lenovo," said Van Djuil. "So very gently and steadily we need to make progress in terms of unaided brand awareness. That is not easy and it is also very expensive. So you can't do it all in one go. I would love to be on TV everywhere in the world on the biggest stations, but I don't need to because we're not in the consumer market over here yet and we don't want to overreach ourselves by suddenly launching products everywhere. I think we need to stabilise and make some steps forward but not all at the same time."
The real challenge for Lenovo and part of its future strategy is getting a bigger cut of the SME market. This problem is something of a hangover from IBM which had somewhat ignored this sector as it focused on corporate business with its Thinkpad range. To this end Lenovo is looking at two business models - one will see it keep the corporate executives in thrall with its Thinkpad product series, while the other will generate market demand for its Lenovo 3000 range among the SME crowd.
Lenovo is employing a dual strategy, using what it calls a transactional model and a relationship model. Simply put, the relationship model will cater for the upper end of its business in the Thinkpad product set sphere with more emphasis on direct selling. The transactional model will push its 3000 series while using the indirect channel and retail.
Lenovo is often trumpeted as the number one PC manufacturer in the Asian Tiger countries. Strip away the Chinese statistics, and the picture looks a lot less impressive. Europe, the US, South America and Russia are the new theatres of battle for the company as it seeks to gain worldwide market share muscle and lose dependency on China.
While Van Djuil agrees that the market outside China is vitally important as it represents two-thirds of the PC space, its strength in China is growing since the IBM acquisition.
"IBM had about 7 per cent of the market in China and Lenovo had 28 per cent and in the latest IDC check our market share has risen to about 37 per cent. Outside of China, the market is more under pressure. You look at Europe and at the high end and it's very tough. Indeed there are some countries with negative growth. You look at the small to medium sector and it's still growing hence our efforts to learn from the Chinese and what they've done."
Sixteen Lenovo 3000 notebooks signed by Ronaldinho will go for auction from December 1st on ebay. All of the proceeds will be donated to charity. The auction will last for 10 days.
