Lenovo: Building a Global Brand


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This presentation is based on the HBS case - "Lenevo: Building a Global Brand" for the Brand Management Course.

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Lenovo: Building a Global Brand

  1. 1. Lenovo: Building a Global Brand Managing Brands over Geographic Boundaries and Market Segments Presented by: Prasanth Bohara Dinesh Sharma Mudith Himwan Shalini Mishra Het Mavani
  2. 2. 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 promotions  Drawbacks ◦ Production headaches ◦ Marketing efficiency may suffer and costs may rise
  3. 3. OTHER DEMOGRAPHIC AND CULTURAL SEGMENTS  For 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.
  4. 4. RATIONALE FOR GOING INTERNATIONAL  Perception of slow growth and increased competition in domestic markets  Belief in enhanced overseas growth and profit opportunities  Desire to reduce costs from economies of scale  Need to diversify risk  Recognition of global mobility of customers
  5. 5. Advantages of Global Marketing Programs  Economies of scale in production and distribution  Lower marketing costs  Power and scope  Consistency in brand image  Ability to leverage good ideas quickly and efficiently  Uniformity of marketing practices
  6. 6. DISADVANTAGES OF GLOBAL MARKETING PROGRAMS  Differences in consumer needs, wants, and usage patterns for products  Differences in brand and product development and the competitive environment  Differences in the legal environment  Differences in marketing institutions  Differences in administrative procedures
  7. 7. STANDARDIZATION Vs. CUSTOMIZATION Indian consumer American consumer
  8. 8. 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”
  9. 9.  Standardization-customization process- product communication No change change No change change Straight extension Product adaptation Communication adaptation Dual adaptation
  10. 10.  Why customization: Meaning is different reading habits country 1 right left right left country 2 Detergent Ad
  11. 11.  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”
  12. 12.  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
  13. 13.  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
  14. 14. 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-
  15. 15.  LEVERAGE SECONDARY ASSOCIATION BRAND Other brand placespeople things alliance ingredient extension company employees endorsers events Third party Channels Country of origin
  16. 16.  Celebrity endorser: all good character related to celebrity gets transfer to product and influence to the decision of the consumer. trustworthy intelligenc e Likeabilit y Familiarit y attractiveness attractivenes s trustworthy Familiarit y Likeabilit y
  17. 17.  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.
  18. 18. Ten Commandments of Global Branding 1. Understand similarities and differences in the global branding landscape 2. Don’t take shortcuts in brand building 3. Establish marketing infrastructure 4. Embrace integrated marketing communications 5. Cultivate brand partnerships 6. Balance standardization and customization 7. Balance global and local control 8. Define operable guidelines 9. Implement a global brand equity measurement system 10. Leverage brand elements
  19. 19. 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.
  20. 20. The Global PC Industry  1970s- IBM introduced its first PC after microcomputer and home computer.  IBM relied on three key technical contributor- 1. Intel for 8080 processor 2. Microsoft for DOS operating system 3. Software for VisiCalc Art
  21. 21. 1990s  Internet Boomed  Launching 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.
  22. 22. 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.
  23. 23. 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
  24. 24. Think Pad Legacy  The 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.
  25. 25. Organizational Changes  September 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
  26. 26. Branding Opportunities  Opportunity 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
  27. 27. Best from East and West  From Lenovo ◦ Understanding of emerging markets ◦ Excellent efficiency ◦ Focus on long-term strategy  From IBM ◦ Deep insights into worldwide markets ◦ Best practices from western companies
  28. 28. Main concerns with customers  Innovation would slow down  Quality would suffer  Service and support would be outsourced overseas
  29. 29. Branding Alternatives 1. Master Brand Strategy 2. House of Brands Strategy 3. Synergy Approach 4. Lexus/Toyota Strategy
  30. 30. “One-Two Punch” Strategy  Two 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
  31. 31. 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