Lenovo Brand Strategy

Lenovo Brand Strategy snarfPurpose This get wind aims to apply the reviewed literature of grease identicalness, daub dodging, and intersection point positioning to conk out the lessons and improvements on how Lenovo, a No.1 PC manufacturer in chinaware, implements tarnish integration as part of its globose discoloration out caudex to extend label awareness and realisation.Approach This subject area introduces multiple methods to analyze the pros and cons of fire daub integration, and home run ingathering positioning such as crop segmentation and perceptual map as well as the confederations r razeue enhancement comparison.Findings Lenovos co- disgraceing strategy in its first 2 microscope stages of orbicular mug strategy realize its revenue outgrowth dramatic on the wholey but in circumscribed level to its own smirch awareness. And the orbicular sales loss happened later Lenovo deep-sixne co- branding with IBM brand on its ThinkPad/ ThinkCentre brand lines in its third phase of global branding strategy. More all over, the unsatisfying sales performance forced the comp any to trade-off the premium set of ThinkPad in effort to cater to much consumers, gaining mart share and revenue growth, but only result in the inverse situation due to the unclear repositioning of ThinkPad.Research limitations/implications The inaccessibility of the boilers suit statistics on the sales of ThinkPad by Lenovo in overseas trade over the past five years impacts the accuracy of the analysis result. Besides, the depth of the study is hindered due to the lack of Lenovos investment in branding and selling promotions, as well as sales volume of its major competitors such as US, Europe, etc.Practical implications Leveraging a well-k directlyn ThinkPad brand squeeze out expedite Lenovos access to the cutting-edged technology and distribution channel setup, however, it exit takes a long do work to build and increase a strong brand of Len ovo globally. Apart from centering on woodland and technology entry, Lenovo should emphasize its economic value-added brand positioning, i.e. nurturing the brand in the dimensions of relationship, personality and close. The separation of Lenovo and ThinkPad should be the best answer for the sake of maximizing each brand legality.Originality/Value This study is an attempt to discuss gulf of distinctive brands like Lenovo and its sub-brands mindpad/ideacentre from ThinkPad / ThinkCentre to maximize each brand faithfulness.Literature ReviewAccording to Arnold (1992), brand strategy is the process whereby the state is positioned in the guests mind to produce a perception of advantage. And strategy implies the effectuation of the organizations vision, mission, and objectives. In an opposite word, the essence of the brand needs to be reflected in everything the company does, especially those that impact the consumer. When making branding strategies, a company should first ma ke believe an insight into their brand and brand equity.Brand equity is the distinctial effect that knowing the brand name has on customer response to the fruit or its marketing (Kotler, 2009). A successful brand has extravagantly brand equity and its image (B) tramp be conception of as the combination of three elements a good intersection point (P), a distinctive individualism (D), and added values (AV), i.e. B=P*D*AV. especially the brand preference depends on added values that give customers confidence that this produce has qualities, status or associations not possessed by alternative choices (Doyle, 2008). It helps customers travel the choice process by reducing risks and saving cadence of valuation (Doyle, 2008). Brand concern centres on creating perceived added value for the companys offer among customers, which washbasin be achieved by shaping the brands individualism. Brand Identity is everything the company wants is brand to be perceived by customer (Temporal , 2002). It has six dimensions, which is also called now as brand personal identity prism (Kapferer, 2007), namely, physical, reflection, relationship, personality, culture and relevance (Kapferer, 1997). The identity of strong brands reminds us that identity is not just a enumerate of functional attributes (Kapferer, 2007). With time, brand associations typically move up from tangible to intangible values -No brand should be without a strong intangible dowery became the top priority of 10 key principles of strategic brand management (Kapferer, 2007). Due to the change magnitude fierce competition and rapid imitation, the focus of retention customers in marketing high put downs the building lasting relationships on brand management, namely, classifying the contrastive types of relationships consumers take a shit with brands (Fournier, 1998), or the different types of interactions companies engage in with their clients (Rapp and Collins, 1994 Peppers and Rogers, 1993).Kapferer (2007) claims the establishment and lore of brand identity is one of the key stages in the process of brand globalization. That is, the brand mustiness have an identity that will serve as a specialty for its globalisation, specifically for its brand positioning and brand strategy. Clearly, for quick brands, positioning derives from identity. But it exploits a specific, coherent and salient aspect of identity at a given point in time in a given market and against a precise set of competitors. At the level of global brands, the brand positioning emphasizing a unified identity should occupy a distinct place in the indicate markets mind (Kotler, 2000), ensure the distinctive position of the products of a company from its competitors offerings, go on or increase market share by satisfying menses or potential customers, and finally achieve higher revenue (Hassanien and Baum, 2002). Bingham and Raffield (1995) set six positioning alternatives for firms price, technology, product quality, distribution, image and service. Although repositioning is increasingly needful as the changing marketing environments that influence organisations (Trout and Rivkin, 1995 Kotler, 1997), any decisions companies need to rack up about repositioning will demand careful consideration of all of the brands attributes (Park et al., 2002).When brand managers decide brand strategy, the added-value lever on which a product is based should be taken into consideration as an important line in choosing different brand architectures. A single (corporate) brand comprehensive or master brand strategy is often recommended when the added value in a particular market is linked to reputation and scale (Kapferer, 2007). However, the much segmented the market, with top-quality, personalised products, the more one has to favour either an endorsing brand strategy or a newborn portfolio of product brands.Besides, cost factors have to be considered. Doyle (2008) gave insightful explanation and said that the objective of adopting brand strategies is to increase long-run economic profits, which leads to an orientation to sharing brand names For companies in its initial phase of going global with limited resources, the simplified brand lines can reinforce each brands selling power and reduce marketing cost, provided that the company has complementary products.Another factor that can not be neglected in formulating brand strategy is the country background of a brand. COO (Country of Origin) refers to the impact that generalisations and perceptions about a country have on a persons evaluation of the countrys products and brands (Nebenzahl, Jaffe, and Lampert 1997 Lampert and Jaffe 1998 Dinnie 2004). COO helps or hampers the development of brand equity in the new market. Yet to some extent, acquired brands can produce a short-cut to overcome the negative effect of COO in brand globalization (Ying, 2008) and co-branding provides a buzz around the brand among opinion leaders to reach an image (Kapferer, 2007) facilitating brand into global arena, but it is not a veer or alternative for brand building in the long term. Co-branding can generate greater sales from the existing target market as well as open additional opportunities with new consumers and channels as it can increase cash flow through increased figure of speech of touch points between brands (Srivastava et al., 1998). In addition, co-branding can reduce the cost of product introduction and help stage a brand into a new market by leveraging the existing brand with global awareness. This is reflected in the increasing number of cases of mergers and acquisition of such kind worldwide. Undeniably, it can climb the cable of a company but does not necessarily conceive the success of integrating brands (Swystun, 2001). It is difficult to change an formal brand identity and a good fit between brands is essential to the successful marriage. For a company going global, a distinctive and reproducibl e brand identity should be nurtured and matters most in distinguishing itself from other competitors despite of manufacturing the same high quality products.Clayton M. Christensen (2004) noted that most organizations can acquire resources, but it is the exercise of the process (how to solve problems) and values (past investments) that distinguish a company. And branding strategy is the process of such kind as one of the key factors which will ultimately determine a companys future success.About Lenovo and its internationalization and global brand strategyFounded in Beijing, China, Lenovo is No.1 PC manufacturer in China and the worlds fourth largest PC maker with its revenue in 2007-2008 reaching 16.4 one thousand million US dollars and its market share in China stabilize at 29%-30%. In 2004, its acquisition of IBM PC business (Thinkpad brand) for 1.25 billion US dollars made the company the worlds No. 3 PC company later Dell and HP and signified the beginning of its steps into i nternational market. Since then, Lenovo has established more than 200 branches in 66 countries (Lenovo positive website http//appserver.lenovo.com.cn/About/aboutus_overview.html, accessed Nov 23, 2009). Lenovos sports marketing, the surpassing marketing, and co-brand marketing strategy enhance the brand image and capture the market share. Its global branding strategy incorporates three phases. In the first phase focused on the continuity of the brand in overseas countries to sanction the relationship between the Lenovo and Thinkpad In the second phase to consolidate the high-end business Thinkpad image. And in the third phase to accelerate Lenovo brand building (Gu, 2006). methodology and descriptive analysisWe can compare Lenovos branding strategy with its revenue over the past five years. Investment in the brand must come first to ensure revenue enhancement. (Jeff Swystun, 2001) From the comparison, the dramatic revenue growth in 2004-2006 seems to verify that the branding st rategy of leveraging IBM brand and reinforcing ThinkPad benefit the corporate performance. Meanwhile, however, Lenovos global brand awareness got increased during the process? Since Lenovo had the castigate to use the IBM brand only for five years until 2010, the company intractable to drop it two years ahead of schedule, such was its confidence in its own brand (http//www.economist.com, 2008). Despite of the right move, the result is the decrease in the corporate revenue Lenovos sales volume was down by 5 percent in the third quarter 2008, sales revenue dropped by 20 percent, and market share declined from 7.5 percent to 7.3 percent (Ming, 2009), especially, the sales in America and Europe fell by 17% in the tertiary quarter compared with the same period last year due to the gloomy demand in those markets and notably, its domestic sale grew and accounted for 48% of its total sales(http//www.economist.com, 2009). Actually, the unsatisfactory result can be attributed in a sniff out to the precipitant brand shift from IBM ThinkPad to Lenovo ThinkPad. Whereas, the point is that it is not the inappropriate timing to forgo co-branding with IBM brand, but it is during the initial phase of implementing global branding strategies when Lenovo did not shroud well the relations between leveraging IBM brand and, more importantly, enhancement of Lenovo brands identity and differentiated advantage in its new market extraneous Asia where the brand name was little known, especially in US and Europe, the focus of Lenovo business outside China.To gain an insight on the brands strategy, we can scene at Lenovo brand architecture transition below for the major product lines and brand integration in the early 2008. After the brand integration, under the corporate umbrella brand of Lenovo, the streamlined product brands resulting in global marketing cost-effectiveness can be categorized into ideaPad and ideacentre sub-brands for consumers and ThinkPad sub-brand for consume rs and commercial segment and ThinkCentre sub-brand for companies. Notably, at that place is a change in customer positioning for ThinkPad by dowry companies only switching to companies primarily and consumers secondly served with individual models of ThinkPad products. This is to meet the increasing needs for consumer PC. Besides, ThinkPad is expanding its position from high-end only to both middle and high-end in light of Lenovos determine system. And a question comes to arise Is Lenovo ThinkPad is as good quality as IBM ThinkPad? Lenovos reaction to the sceptical voices is the price cut of ThinkPad is to cater to those customers whole step pinch in the current situation. But the transition risk should be foreseen that the customers who know ThinkPad very well whitethorn not have that sense of advantage that the received brand identity confers, and eventually the transformation may harm the brand equity.Lets look at the brand positioning of Lenovo and its competitors. everyp lace time, PCs has become ubiquitous and play a growing post in more important aspects of daily life. Consumers are therefore looking for more debut (Quelch and Knoop, 2006) with appropriate pricing. Capping the product features of each company in footing of understructure and pricing, we can see that HP, Dell and Acer-the strong competitors of Lenovo in US and European market -are all positioned as economy brand whereas Lenovo as bargain brand positioned as overall high level of innovation and IBM as premium brand. Highly recognized by its customers, ThinkPad brand, with high innovation and high price of a differentiate advantage, best represent the culture of IBM brand. The branding strategy should first take into consideration the environment and customers (Doyle, 2008). Although Thinkpad brand has nothing to do with IBM after the acquisition, the customers perception of high level of innovation and pricing of Thinkpad brand is deep-rooted, thus, it is not necessary and even harmful to its original image in its customers mind for any attempt to swallow its pricing arrange. As for Lenovo brand, on one hand, competitive pricing is the core value that the company embraces to contest its key competitors internationally, and on the other hand, like many other Chinese company going global, it still take time for Lenovo to get away from Made in China image see as manufacturing cheap products. Thus, the implementation of its bargaining pricing system in its another brand line ideapad and ideacentre can embody its differentiating advantages lower price but good quality and higher level of innovation and lower the entry barrier to the consumers in the new market(Doyle, 2008). Of course, this is what Lenovo is doing, promoting its idea brand line in US, Europe and other major overseas market (Lenovo official website http//appserver.lenovo.com.cn/About/aboutus_overview.html, accessed Nov 23, 2009). It can be concluded that there is distinctively different bran d identity between ThinkPad/ ThinkCentre and Lenovo and its sub-brands ideapad/ideacentre.Discussion on improvementIn developing a global brand, Chinese companies could choose between a traditional and modern sexual climax (Ewing, Napoli, and Pitt, 2001). And Lenovo has adopted the modern (although more risky) approach that accelerates internationalization via joint ventures and acquisition of foreign brands, enabling them to leapfrog to the go stage in the process. Product differentiation and brands management separation Lenovo should resume the high-end brand identity of ThinkPad targeting companies and high-end consumers to gain premium price and high margins. And this branding strategy can not waver surrendering to the current economic conditions. And for the medium and lower-end market, idea brand line can play its flexible role catering to different subdivision market. In addition, the ideapad/ideacentre identity should be enriched to increase its value-added specifically i n its relationship and personality prospective to differentiate with other competitors brands. Apart from product promotion, creating customers product experience should be the remedy to have them gain better knowledge of the new entry brands and enhance the recognition of Lenovo.Most important, ThinkPad/ThinkCentre brand should be separated from Lenovo and its sub-brands. The case of the separation of product brand Lexus and company brand Toyota means the success of the both brands even though few know Lexus brand is under Toyota.(Jean-Pierre and David, 2002) .ConclusionThis study emphasizes on the analysis and discussion on the brand integration of Lenovo, idea brand line, and IBMs ThinkPad brand, which features an indispensible process of implementation of global brand strategy by Lenovo. The strategy of co-branding of Lenovo and IBM in ThinkPad products in the initial phase impelled the process of Lenovo brand into international arena. At the same time, however, Lenovo should ha ve engaged in its own brand identity and equity, which will alleviate the loss arising from the disconnection of IBM and Lenovo. An effective positioning/repositioning brand strategy should highlight the consistent process of enhancing brand awareness. At this point, Lenovo took a either slower or inappropriate action which entail improvement and transformation. As for the established ThinkPad brand, the dimensions of its brand identity should be taken into full consideration otherwise any branding initiatives will damage its brand value through confuse or depriving the sense of status and pride from its customers. To avoid the collision of two distinctive brand identities ThinkPad and Lenovo with its sub-brands ideapad/ideacentre, disconnection is the best solution to maximize brand equity.