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Intel has already dominated the market for chips. Notebooks are replacing larger laptops except where a large screen is crucial, and replacing desktops even more swiftly, as noted in Table 1, below. Lenovo’s new Thinkpad’s X1 Carbon has cool texture, durable cutting edge materials, and comfortable corner design, as well as fine performance. It is very pricey, however, in an industry headed for a kind of maturity, where computing power is evolving towards becoming a commodity, and this presents a challenge and an oppo1rtunity in marketing it. (Hazarika)
Marketing Plan Objectives
The marketing plan objectives for this product are difficult to quantify because market data is not fully available to the public. The data that is available often mixes different product lines, as is visible in Table 2, below. Lenovo has, according to Bloomberg, garnered 19.4% of the 2014 personal computer market, representing just under a 1% increase from the prior year. However, data on ThinkPads, specifically, is harder to acquire (Lococo). Mr. Yuanqing Yang, the Lenovo CEO, was quoted as saying that 100 million units of the ThinkPad were shipped in 2014 (Robinson), without specifying models.
However, the Gartner firm reported that PC sales grew 1% in 2014 (Gartner), supporting a 1% growth goal for any individual Lenovo product line. Another way to look at sales goals for this pricey and luxurious product is that it will appeal to what has been termed the “one percent”1. This marketing plan thus seeks a one percent annual growth in sales. This would translate into 1% of the ThinkPads that Lenovo sells, or at least.01 x 100 million, which equals one million units.
Table 1: Sales of Different Types of Personal Computing Equipment.
|(In Millions) |
|Total PC Sales||304.9||347.1||363.9||367.2||391.1||418.6||450.1||483.1|
|Notebook & Netbook Sales||168.7||201.2||209.1||214.2||235.4||259.9||289.2||321.1|
Table 2: Worldwide Device Shipments by Segment (Thousands of Units).
|Traditional PCs (Desk-Based and Notebook)||296,131||276,221||261,657|
|PC Market Total||317,648||308,472||316,689|
|Other Ultramobiles (Hybrid and Clamshell)||2,981||5,381||7,645|
|Source: Gartner (June 2014)|
To achieve this objective, even taking a skim approach rather than a big bang penetration approach, will require substantial investment. Marketing investments of anywhere up to 15% of the sales value of the one million units could be appropriate (Mckee). The value of this level of sales, at approximately 1000$/unit, would be one billion dollars and equate to a marketing budget of 150,000,000 dollars. This would be spent on product placement, enhanced tech support, and specialized salesforce training, as noted below.
The ideal target market is the business customer, whether corporate or small business owner. Other targets are people with substantial resources and the need for the ultimate in mobility. This underserved need for mobility may arise because of travel, or being ‘in the field.’ Competitors are as strong/stronger in battery life, although Lenovo is innovating in materials. While this is a new product, ultrathins are a known product, so the stage of the lifecycle is perhaps more like a mature product.
This product meets key under-served needs of intensive users on the road, in the field, or in the air, requiring extreme portability, including lightweight, thin profile, comfortable corner design, decent battery life, quick charging, and built-in Wi-Fi access (Hazarika). A variety of brands are trying to compete intensely on all these same characteristics. These customers demand/expect more in reliability and service. To differentiate this product from competitors, who are shaving their costs brutally on most models, Lenovo must provide superlatively swift and responsive support. Phone support staff with superior language skills and intense customer orientation and on-site “nerd squad” office visits for a modest fee would fit with Intel’s previous pattern of some vertical integration. The package could also include a backup battery to ensure continued operation under extreme circumstances.
Computing power is, in general, becoming practically a commodity, and increasingly affordable, with other brands competing intensely on price. The original price of over 1000 USD placed it well beyond the reach of most students, and casual users, but within reach of employer-funded purchasers (Hazarika). At this price, attractively priced owners’ insurance should be offered with a purchase package to enhance perceived product value.
Despite its distinctive appearance, the Lenovo X1 Carbon Thinkpad faces a plethora of similar close items competing intensely on looks and performance. Promotion by other brands is also intense. The X1’s promotion must distinguish it, and justify its high price. It also must reach high-end customers who can afford it.
The ideal promotion is product placement in entertainment vehicles featuring corporate, creative, or political successes2. Additionally, sample units could be distributed to highly visible, successful people (doctors, celebrities), with a follow-up taping of their (hopefully positive) impressions for website posting.3. The company can also link the product to success by providing sample units to salespeople for upscale products like luxury cars, jewelry, and yachts, and high-end real estate.
The best distribution channels for high-end items are places attracting high-end customers. Additionally, this computer’s selling points – weight, hand feel, and speed – must be experienced personally, implying real rather than virtual distribution channels. Specialty outlets like MicroCenter are ideal, but Staples is widespread, and their store and inside sales staff can be prepped with information before roll-out.
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Lenovo has a product priced for high-end customers. Their marketing strategy must differentiate the model and position it as a premium item worth the extra cost for what has almost become a commodity. Premium support is one stratagem, as is insurance and extra batteries. They must market it to the people who need the premium features and can afford to pay for them. They can do this by making the model visible as an accessory of the successful or those who service the highly successful
Gartner. “Gartner Says Worldwide PC Shipments Grew 1 Percent in Fourth Quarter of 2014.” Gartner. Web.
Hazarika, Pallab Jyotee. “Pallab Jyotee Hazarika.” 2012. Notebook. Web.
Lococo, Edmond. “Lenovo Surges After Profit Beats Estimates on Smartphones.” 2015. Bloomberg Business News. Web.
Lundgren, Ingrid. “Gartner: Device Shipments Break 2.4B Units In 2014, Tablets To Overtake PC Sales In 2015.” 2014. TechCrunch. Web.
Mckee, Steve. “What Should You Spend on Advertising?” 2009. BusinessWeek.com. Web.
Robinson, Daniel. “CES 2015: Lenovo unveils ThinkPad X1 Carbon with Intel 5th-generation Core chips.” 2015. V3.co.uk. Web.
Trefis Team. “What’s Impacting Intel’s Notebook Processor Market Share?” 2013. Forbes. Web.
- This is a reference, used by social justice activists over the last several years, to describe the more financially successful among the population.
- The dream placement would be as James Bond’s personal computer – not the villain – but the hero.
- Any video of beloved celebrities migrates to YouTube immediately, constituting free advertising.