Marketing Plan and Strategy
Business Mission and Executive Summary
With the acquisition of IBM’s PC business Lenovo has the opportunity to compete with Dell and HP in a better way in China and the rest of the international market. Lenovo had planned a master strategy for promoting their Lenovo as the master brand and use ThinkPad as the product brand to penetrate the different segments of the market. Lenovo would conduct new product launches as a proof of their improved quality and increase their advertising spend. The business mission of the Lenovo is to take advantage of the opportunities that have through the deal and ensure future growth of the master brand and products.
Analysis of Current Situation
In 2004, Lenovo acquired the PC business of IBM for $1.75 billion and expanding their market presence beyond their Chinese stronghold. Through the acquisition, Lenovo also acquired the very popular ThinkPad series of PC created by IBM. Along with the acquisition, Lenovo faced several opportunities and challenges. Opportunities came in terms of expanding the Lenovo brand and its expansion to new business markets and large and mid-market enterprise business. The challenge was overlapping the different cultures of Lenovo and IBM. The new combined force needed to compete with market leaders Dell and HP. Therefore, a new marketing strategy and plan is needed for the company to penetrate the market and increase the market share.
Key Issues & SWOT
Lenovo had decided to use the master strategy which will use Lenovo has the master brand and the highly popular ThinkPad will become the product brand. The master brand would compete with industry leaders such as Dell, Acer and HP who are spending millions of dollars in advertising their brand. The premium brand was chosen to compete with players such as Apple to sell company innovations at premium rates. Implementation of the strategy requires product launch and advertising plan with three phases. The three phases were to be used to reinforce the ThinkPad sales, communicating that Think Pad will be made better under Lenovo and finally promoting the master brand through several media channels. Lenovo’s strength is their cost efficiency, well-developed distribution, alliances with companies such as IBM, R&D investment. Lenovo is more or less China based PC and a comparatively lower quality to ThinkPad. The acquisition of HP provides Lenovo with the opportunity to enter high-end and medium PC segment and enter new geographical markets. The threat comes to market leadership and fast growing Dell and HP and innovations from Apple.
Objectives
The objectives of Lenovo included successful new product launches of the Lenovo PC 300 series, which was used for convincing customers to buy the Lenovo branded products over the competition. In addition, the new improved series of ThinkPad called Z60 was to be launched keeping mind the possible improvements expected by ThinkPad users and new ultraportable X41 Tablet was also introduced to penetrate the upcoming tablet market. The 3000 series from Lenovo was priced at affordable rates to provide competition to the Dell and HP PCs that dominated the market. The ThinkCentre and ThinkPad were priced at premium rates for targeting the mid-market segments and large enterprises. Overall, the objective is to ensure Lenovo is able to enjoy the synergy from the deal and prove to customers that Lenovo would be able to deliver superior quality and provide competitive services to different market segments.
4Ps
Product
The product strategy for Lenovo included new product launches of the Lenovo PC 300 series, which was used for convincing customers to buy the Lenovo branded products over the competition. In addition, the new improved series of ThinkPad called Z60 was launched keeping mind the possible improvements expected by ThinkPad users and new ultraportable X41 Tablet was also introduced to penetrate the upcoming tablet market. All products were launched through extensive product launches in different geographical markets to meet the need of different customer segments.
Price
The pricing strategy of the new products to be launched was based on the different products markets it was targeting. The 3000 series from Lenovo was priced at affordable rates to provide competition to the Dell and HP PCs that dominated the market. The ThinkCentre and ThinkPad were priced at premium rates for targeting the mid-market segments and large enterprises. The diversified pricing strategy is based on the different types of products to be launched by Lenovo.
Place
The acquisition will increase the market presence of the new company by leveraging the reputation of Lenovo in China and IBM in international market. The acquisition allows Lenovo to combine the distribution channel of Lenovo and the well-established channel of IBM. The distribution will be performed through the 300,000 strong distribution team of IBM. The ongoing support from the partner is going to be an important part of the place strategy.
Promotion
Lenovo already had worked out a deal as the sponsor for Turin Olympics and it was one of the main sources of endorsing the business. In addition, the deal also provided considerable brand awareness and public visibility to the company and brought it to the knowledge of many customers in the western world where they were not very popular. Lenovo also got the opportunity to keep using the IBM logo for 5 years and leverage their brand name. The new product launches were also an important source of making the brand more popular in the global market.
