Think local, Lenovo style
October 21, 2015
Despite a shrinking market, the Chinese multinational has increased its share; sewing up alliances with state governments and pushing its brand in small towns
Lenovo, the third largest personal computers (PC) maker in the country (after HP and Dell) increased its market share by 4 per cent during the April-June quarter in 2015; from 14 per cent in the same quarter the previous year, to 18 per cent. Its mantra for success: think and do local. (Dell's share has gone by 2.7 per cent over the same period) Over the past year, it has stepped away from the metros, launched aggressive advertisement and promotional campaigns in semi-urban and rural areas in vernacular languages and tied up with state governments to cater to bolster institutional sales.
"Within a short span of time, the campaign has not only helped Lenovo increase its market share, it has also helped the entire PC market grow at a faster pace in some of these states. We are now scaling the program to more states across the country," said Bhaskar Choudhuri, marketing director with Lenovo India.
The company's first step towards widening its reach came in November last year when it ran a pilot test of the new initiatives in Andhra Pradesh, Telangana and Gujarat. Buoyed by the success of these interventions, the company has, in the last month-and-a-half, tied up with several states including Tamil Nadu, Karnataka, Punjab, Uttar Pradesh and West Bengal.
A state-led marketing strategy along with a thrust on semi urban markets meant huge challenges for a brand that was barely beginning to understand the country. For one, it meant understanding local needs and purchase drivers. It also meant communicating in regional languages and customising promotional initiatives so that it fit the needs of the target customers.
"The market has evolved from desktop to laptop to smart phones. The spending (advertising budget) is more towards tablets and smartphones these days," said Jagdip Kapoor, chairman of Samsika Marketing Consultant. Besides, as Lenovo learnt from experience, traditional advertising does not help sell computers in small towns. And thus it decided to dive into the markets it wanted to be a part of. Soon it began advertising in regional languages and; in conjunction with the state governments, launched awareness and promotional campaigns. "Today, the key bottlenecks affecting PC penetration are lack of awareness, availability and affordability of PCs. A majority of the country's population has never used a PC and Lenovo is addressing the problem at its root," Choudhuri said.
Currently at 10 per cent, India's PC penetration ranks the lowest among developing countries like South Africa (18 per cent), Turkey (49 per cent) and Malaysia (64 percent). To tap the potential demand for PC sales, Lenovo came up with the 'Start up with Lenovo' campaign which spoke to the customer in a familiar language, built awareness about the product and the brand and gave out free USB sticks in alliance with Tata Photon that are used for Internet connections with a laptop.
By tying up with the states, the company also tackled the problem of falling demand from government offices and educational institutions. Lenovo is also roping in buyers as brand ambassadors.
While the 'Start up' campaign was meant for towns and semi urban areas, for urban consumers the company relied on traditional TV commercials and digital campaigns. "This new generation of 2-in-1 devices (tablet-cum-laptop) are more capable and more mobile. You can use them (the Yoga range) as a PC when you need to and like a table when you want to," said Choudhuri. The company is also pushing its brand on several channels but making sure they do not rely on celebrity branding for PCs.
In the retail space, however, Lenovo still lags behind. It expanded its presence in the tier 3-5 cities by opening up 186 stores last year, against Dell, which doubled its stores to 400 last year.