Three years ago, Chinese PC manufacturer Lenovo embarked on an experiment. The company, which has two personal computer brands — Think (for the business segment) and Idea (for consumers) — decided to centralize all of its marketing communications and services from across the globe into one location. In June 2007, it set up its global marketing hub in Bangalore.
Lenovo’s move evoked a lot of interest. In 2008, in their book The New Age of Innovation, management gurus C.K. Prahalad and M.S. Krishnan wrote: “This experiment challenges the traditional belief that branding and advertising activities are best addressed at each local market and location. These activities were always considered country and culture specific. The Lenovo experiment shows that branding and advertising activities can be disaggregated and all elements need not be culture specific.”
Today, this strategy is no longer an experiment. Steve Starkey, Lenovo’s vice president for global marketing, calls it the “established Lenovo way of doing marketing.” According to Starkey, who is based in Raleigh, N.C., “This model has helped Lenovo to centralize a large quantum of its global marketing communication, both from a strategizing point of view as well as from an execution point of view. This has helped in getting much higher levels of precision in our communication without losing the local connect.”
Starkey explains why Lenovo — the fourth-largest PC vendor in the world, with US$14.9 billion in revenues last year –decided to take this route. In 2005, the company purchased the personal computing business division of the U.S.-based IBM. Prior to this acquisition, Lenovo had mainly focused on China and was the eighth largest PC maker in the world. Through the deal, Lenovo acquired IBM’s “Think” brand, which was strong in the enterprise segment (business users) across the globe.
In one stroke Lenovo zoomed up to the third slot (behind Hewlett Packard and Dell). It also moved beyond consumers to the enterprise segment and beyond China to rest of the world. “The primary reason to centralize our marketing services was to ensure that we build one identity of the new brand ‘Lenovo’ all over the world and maintain the same quality of execution in all countries. We were a new organization and did not want Lenovo to have a different personality, essence and value proposition in different countries,” says Starkey.
Lenovo zeroed in on India for its global marketing hub for many reasons: India is among Lenovo’s fastest growing markets, offers a cost advantage and has a large pool of marketing talent. India was the first market outside of China where Lenovo introduced its consumer products in March 2006. (Lenovo entered the global consumer space later in 2008.) “Our existing marketing team in India had a proven record in delivering compelling and creative advertising for Lenovo,” says Rahul Agarwal, who until recently was heading the hub. (Agarwal, who has been heading the hub since inception, moved to a new role as executive director, key account business at Lenovo India in early May. Ajay Kaul, who was earlier director, business intelligences, American Group, and worldwide direct marketing, is now the new head of the hub.)
It was not just its own marketing communications and services teams that Lenovo grouped in one location. At that time, Lenovo worked with advertising agency Ogilvy & Mather in 25 different locations across the world. In a parallel move, Lenovo convinced Ogilvy to centralize all its operations for Lenovo and locate its own hub in Bangalore. Pooran Malani, president of Ogilvy & Mather, Bangalore, believes the co-location is critical. “One can’t run a new model based on old paradigms,” he says. Malani says the 80-member Ogilvy team in Bangalore is not just a production house. “We take the brief, we strategize and we execute.”
Both Lenovo’s global marketing hub and the Ogilvy team in Bangalore have executives dedicated to the various geographies in which Lenovo operates. These executives work closely with each other and with the Lenovo teams to fulfill their specific requirements, taking into account geographical and local cultural sensibilities. Brand consultant Harish Bijoor, chief executive officer of Harish Bijoor Consults and visiting faculty at the Indian School of Business at Hyderabad, points out, “Lenovo is probably the only company which has centralized both its marketing strategy and execution to this extent.”
Engineering a ‘Creative Production Factory’
The hub, which currently has around 40 members, began with baby steps. The translation and production work that were happening in different regions of the world moved to Bangalore as did some aspects of creative development. Agarwal describes the early days of the hub as a “creative production factory.” It later added other functions like market research and alliance relationships (both of which shifted from the U.S.). The hub also added the new function of analytics, which helps measure campaign performance through ROI dashboards, performs segmentation studies, and handles online and e-commerce research like shopping cart studies, traffic-spend analysis and so on.
In June 2008, the New York-based function of worldwide integrated marketing communications, which was responsible for developing global campaigns for Lenovo, moved to the hub. Since then, the Bangalore team has planned and launched campaigns for Lenovo worldwide.
In the past three years, the hub — along with the Ogilvy team — has developed and executed more than 9,500 assets (print ads, brochures, catalogues, posters and so on) in 30 categories for 60 countries across three time zones. Some of the creative work, particularly for the Idea brand and in the emerging markets, still gets done by a few local agencies. “This is a model that we will continue to follow, but from now onwards it will be a more planned co-existence and will be anchored firmly on the Master Communication Platforms [MCPs] developed by the hub,” notes Anjana Srinivasan, head, global campaigns (Idea).
The MCPs — one each for Think and Idea — were introduced in April this year and are in fact the most significant activity to roll out of the Bangalore hub up to now. Each of the MCPs is a communication framework that establishes brand positioning, creates a consistent and unique identity for the brand and harmonizes the short-term demand generation activities with the long-term brand objectives of Lenovo.
The brand positionings for Think (“the ultimate business tool”) and for Idea (“make life more fun”) have been developed by Lenovo’s Raleigh-based brand management team, and the MCPs have been conceptualized and created by the team in Bangalore. “The MCPs are creative platforms that from now on will be the skin and the face of all our marketing communications across the world. We expect these MCPs to have a life of least two to three years,” says Kiran Ramamurthy, who heads the global campaigns for Think. The two MCPs are the first of their kind for Lenovo.
Building a Brand’s ‘Personality’
Prior to the MCPs, Lenovo produced campaigns with new themes every quarter, but that approach resulted in inconsistent brand messaging. “We now believe that in the long term a consistent approach is important. Getting the same look and feel across 50 countries is a huge challenge,” says Agarwal.
Earlier, Lenovo had a mother brand strategy under which Lenovo was the master brand and Think and Idea were the sub brands. However there was a growing realization within Lenovo that the brand equity of Think was not being leveraged adequately. Around six months ago, Lenovo decided to adopt a dual brand strategy, with Think as the prominent brand for the business segment and Idea, led by the Lenovo brand, for the consumer segment. Both brands now have distinct personalities and messaging, and the MCPs are the culmination of the dual brand strategy.
Lenovo’s experiment with centralized marketing has had its share of challenges. One has been an internal resistance to long distance creative development. Unlike in manufacturing, where quality can be checked by random sampling, in the creative world relationships and face-to-face interactions are important. Getting cultural nuances right in various markets is also important. “The competitive edge is built on understanding and communicating the nuances correctly, and the nuances are best understood through relationships,” says Ogilvy’s Malani. “These are challenges that we continue to face,” adds Agarwal. “We are working on them, and we believe that they can be managed with a strong collaborative approach.”
How does Lenovo plan to take this model ahead? With the launch of the MCPs, will more responsibilities now be handed to the hub in Bangalore? “The success and the contributions from this centralized model are reflected not by how much it handles but by how well it handles what it manages,” says Starkey. “We are focused on improving the effectiveness of this model further, build on ‘glocalization’ and create a ‘wow’ factor in every piece of our execution. Our goal is to make the remote model transparent to the local country teams, and to provide them the support that a local model could provide.”
Bijoor, meanwhile, believes that Lenovo’s next step could well be to move the brand positioning and brand management function to India. “The entire technology business has been exocentric. While we do not consume enough technology and technology services in India itself, we [do] a substantial amount of technology services from here. I don’t see why technology branding, too, can’t happen out of India. In fact, if Lenovo gets it right it could well become a trailblazer.” Ogilvy’s Malani agrees. “It’s a proven model and we can expect more high value functions to move to the India hub.”
Can this model work for categories also? Bijoor believes it can work best for categories like technology and retail but may not be very effective in the fast moving consumer goods space. “Even though in global markets consumers show a reasonable sense of similarities, there are dissimilarities which need to be respected,” he says. Malani, however, has fewer reservations. “I can’t think of a single category where this model can’t work to some extent, except perhaps local politics.”