Tuesday, August 12, 2008

Acer : Life is busy,Acer makes it easy

Brand : Acer
Company : Acer India
Agency : Dentsu Marcom


Brand Analysis Count : 343

Acer is an aggressive brand in the Indian computer industry . The aggressive brand promotion and smart pricing allowed this Taiwanese giant to be among the top five leading computer brands in India.

The Indian personal computer market is lucrative enough to make all the global giants have a presence here. In 2007 around 6.5 mn units of desktops and laptops were sold in India in the Personal Computer segment.

HP is leading the pack with 21 % share followed by HCL with 13 % and Lenovo with 10% ( Economic Times 2007) .

An interesting trend seen in the Indian computer market is the shift of consumer preference to laptops. The aggressive pricing and the snob value of laptops has changed the consumer preference to this product category. In 2007 around 1.27 mn laptops were sold in India.

In the laptop segment, HP is leading with around 37 % market share and Lenovo with 16% share and Acer with 10% share.

Acer brand was born in Taiwan in 1976. From a humble beginning, this brand has become the third largest computer vendor in the world. Acer India was incorporated in 1999 as a wholly owned subsidiary of Acer.

Acer has always been a price warrior in India. In 2000 it stunned the Indian computer market by offering PC at unbelievable prices. From Rs 40,000-50,000 to a price range below Rs 25000.
It was also the first company to bring down the price of servers to Rs 60,000.

The ever value conscious customers were quick to lap up this brand of economical computers.

In the last two years, Indian consumers are witnessing an unusual flurry of high profile brand building in the PC segment especially in the notebook category.

The brand to take the center stage was the market leader HP. The brand roped in Shah Rukh Khan to endorse a range of brand from Compaq to printers. The endorsement along with the " Computer is personal again " campaign boosted the brand equity of HP to new heights.

Lenovo was quick to follow by roping in Saif Ali Khan as the brand ambassador.
According to reports, both HP and Lenovo benefitted greatly by this FMCG model brand building.
Not to be left behind Acer roped in Hrithik Roshan as the brand ambassador and started a high profile campaign for the range of Laptops for both individuals and business owners.

Although Acer was following the herd in roping in Hrithik Roshan, there was another logic behind this 'expensive' promotion.

I personally believe that Acer face the issue of a negative brand perception especially among the urban youth/professionals. The brand is perceived to be a low priced low quality brand and hence usually the brand appeals to those customers who are very price conscious .

Its advantageous to have the ability to sell at a lower price but being perceived as a low price warrior is not good for the brand. I am a strong believer of the principle that price should not be the reason for customers to buy your brand.

Since consumers have the habit of relating Quality and Price together, the brand equity suffers the most. When I searched the web about this brand, I was surprised to find that Acer is considered a pioneer in bringing in latest technology to the consumers. In most of the cases, it is the first brand to launch the latest range of chips and platforms.

When I bought my laptop, Acer was never in my choice set because I thought Compaq is a better brand ( perception). These perceptions can be dangerous especially in the emerging laptop segment where younger consumers also are conscious about the image of the brand.

Acer was the first brand to launch designer range of laptops. It has a Ferrari Laptop range and Gemstone range which was designed by BMW designers. But I came to know of this only when I studied deeply about this brand.

Surprisingly Lenovo which is a Chinese brand was able to position itself as a premium brand despite its secondary association with the country of origin.

It was with objective to enhance the brand equity that Acer launched an extensive brand promotion using Hrithik.

Watch the commercials here : Acer Campaigns

But alas, the money has been terribly wasted ( my personal opinion).
Acer and Parle's Hide & Seek are classic examples of messing up the potential of a celebrity like Hrithik.

Acer's set of campaigns featuring Hrithik reinforces the existing perception of Acer as a so-so brand. I did not like anything about the ad. No positioning, nothing.
The brand has the slogan " Life is busy, Acer makes it easy ". Again nothing to harp on.

For example, in the plane ad, Hrithik makes the noise " any problem, no Acer ekey ?".
Frankly I understood nothing about this stuff ekey. On searching, I found that e-key is a patented technology which enables the customer to have customized settings in the computer.

And again I don't understand why there has to be a song and a dance when ever you have Hrithik ?

Most of the ads are higly melodramatic filmy kind of stuff which is not insynch with a rational product like computers. I think that the agency was really confused about matching the persona of Hrithik with the product.

Having said that , I see some logic in the ads. If the ad is targeted towards a highly price conscious customer ( not the sophisticated ones ) these ads make sense. These group may say WoW at the ads and enjoy watching Hrithik singing about memory and data recovery.

But I feel that Acer has lost the opportunity to build some premiumness around the brand.Lesson has to be learned from brands like Vaio and Dell which has a high level of aspirational value attached to it.
At present, the current campaign may further reinforce the brand Acer among the TG. But its not going to help the brand to reposition as a tech-leader. By not repositioning , Acer is undermining its core strengths .
I see a situation where most of the features of computers getting commodized. In such a scenario, customers may be willing to pay a premium for the brand rather than the features. In such a scenario, Acer may have to struggle hard to extract a premium from the customer.