So far, so good. The Chinese company dominates consumer PC sales in its domestic stronghold, and has also performed creditably since launching consumer products in India in 2006.
But global CMO Deepak Advani’s decision to review the company’s media buying and planning may hint at some of the uncertainties that surround Lenovo’s voyage into markets that are, as yet, unchartered. While Lenovo’s Thinkpad range remains in sterling shape, the decision to launch consumer products into selected global markets may require optimisation of an overall marketing budget that is believed to reach just US$70 million. Within that, global media spend is believed to tap out at $35 million, which may not be the war chest that will have key competitors HP and Dell quaking in their boots.
Advani, however, dismisses these figures as pure “speculation”. Unable to provide accurate budgets for “competitive reasons”, Advani instead points out that the “game has changed” when it comes to media effectiveness. “There are more options available today, but there’s also media inflation. It’s just that the mix is different now. But I will say that there is money being wasted and the focus on ROI now is stronger than in past.”
Regardless of spend, it seems clear that Lenovo will have its work cut out building brand awareness in countries where its bigger rivals are household names among consumers.
“Dell and HP have bigger budgets and more focused ones,” says a source. “If you do reduce spend, it’s OK in the short-term providing brand awareness is high. They want higher ratios of working to non-working dollars, but what often happens is you end up reducing a lot of the hard work that went on in the background to build the brand.”
Advani is again unswayed, pointing out - rather understandably - that comparing Lenovo’s budgets with much bigger companies such as HP and Dell is pointless. “If you look at the last six quarters, we’ve delivered results,” he says. “We’re ahead of most of our brand metrics, because of an amalgamation of so many things we do.”
One of those things is sponsorship, with the brand shelling out to link with Formula One and the NBA. While the outlay on these events is impressive, supporting spend to activate these sponsorships has been less apparent.
Advani denies this, saying “our sponsorships have little to do with media optimisation”. He adds that the company has not scaled back its marketing budget, but has simply become smarter. “We have shifted more money into web marketing, direct marketing and channel co-marketing.”
“They are learning to prioritise effort,” says a source involved in overseeing Lenovo’s Bangalore hub. “If you have got restricted budgets its important to be really tough on yourself.”
How tough Lenovo can be, in a fiercely-competitive consumer environment, remains to be seen.
Live Issue... Lenovo looks to smarten spend for consumer launches
Earlier this year, Lenovo announced its long-awaited push into the world's consumer markets with the launch of its IdeaPad range.
