In 2007 when Lenovo chose India for its global marketing hub, a lot of people thought that the world’s number two PC maker was making a big mistake. But Lenovo went ahead and six years later, it is happy with its decision. It has succeeded in having a unified global voice for the brand. Ogilvy India has been its agency on record and the company added Saatchi & Saatchi New York to its roster two years back after it won a global pitch and came up with the ?Those who do? campaign. The company has recently roped in Ranbir Kapoor as its brand ambassador for the Indian market.
FE’s Payal Khandelwal caught up with Ajay Kaul, executive director ? global brand communications at Lenovo during his recent visit to Mumbai and asked him how the hub has evolved, and concerns about a shrinking market for PCs in India with a major chunk of the youth moving to mobiles. Kaul also talked about the challenges in the SME market and of the relationship between Ogilvy India and Saatchi & Saatchi New York. Edited excerpts:
How has Lenovo?s global marketing hub evolved over the last few years?
It has been an interesting journey. It started off as a set-up of 5-6 people. Over a period of time, it has grown into becoming a critical function for the CMO (chief marketing officer). For us, it is a part of our global marketing function and of us being close to being number one globally. So it has withstood the test of time. When it was set up, people were sceptical, they told us never to do centralised marketing. And at that time, it was driven by the fact that we wanted to centralise. This is a unique model and is now actually an integral part of how we do marketing, how do we do our campaigns, and strategic planning for our marketing functions globally. It is also integral to how we extend the brand into new markets.
Has setting up the marketing hub in India worked to your advantage?
When we set up the hub, the aim was to centralise marketing. The question was where do we centralise. At that time, most of our marketing was happening out of New York where our agency was based. However, we had to see where the growth was actually happening and we wanted to set up the hub close to where there was maximum growth. And that was happening in the emerging markets, in places like India and China. India presented the opportunity since there is talent here and the team which launched Lenovo in India did a great job in getting us from nowhere to becoming number three or four very quickly. They are good strategic thinkers.
It was an experiment, but then it worked. There were challenges, some disappointments, but we stayed with it and it has worked for us.
How does having a centralised marketing unit help in achieving creative effectiveness?
Creative effectiveness is actually one of the strongest benefits that you get out of centralising the global marketing function. Prior to setting up the hub, each country was on its own and there were inefficiencies in the process. People were reinventing the wheel and were creating the same ads over and over again. We thought that we can actually put in a lot more money and produce one good powerful communication message instead of people doing small efforts everywhere. The hub enabled us to do that. Thus, instead of cutting costs, we decided to pool our resources into a unified marketing effort.
We talk to our global teams on a daily basis to make sure that we understand their marketing plans and their creative needs. Sometimes, we have to create something new for them. But if there is already something they can use, that’s great. A unified brand tone and voice has become really important in the market where a digital video can go viral worldwide. It is a challenge for every company today to have a unified global voice. For a company like ours, the hub is doing this function very well.
In emerging markets such as India where mobile is growing at a phenomenal pace, is selling PCs getting more and more difficult?
For us, there are a lot of competitors ? new entrants, tablets, Google, etc., but at the same time the competition has dramatically expanded the market. Earlier each house used to have just one PC, but now people have a flat screen TV, tablet, one main PC for your work, and the mobile, which is a device on the go. And thus we have now adopted a four-screen strategy. That has actually increased the market for us. We are profitable in the PCs business. In the mobile category, we displaced Nokia in China last week to become number two. We have launched smart TV. Thus, we are constantly working on our four-screen strategy. But it is not easy. There are credible competitors in the market such as Apple, etc.
What are the challenges faced in marketing to SMEs?
SMEs is a fragmented market. Its needs are very different. One could be a shopkeeper, another could be a company with a small manufacturing unit. The key to target them is to focus on some universal common values that they love. Reliability, ruggedness, technology are some of the values which we tend to focus on for this segment.
Another aspect is reach. In some markets, SMEs have started going to the retail and thus for us, retail becomes important. But in a majority of the other markets, they tend to rely on word-of-mouth. Thus, opinion leaders in local communities have to be nurtured to win that confidence. If you look at our market in India, we have partner recruitment strategy, etc., to target SMEs.