On Advertising: Lenovo Tries to Win the West

LONDON China is usually seen as a low-cost producer of consumer goods, often of Western brands that simply slap their own logos on products made in Chinese plants. Only a few Chinese brands - Tsingtao beer, perhaps, or Haier home appliances - have gained any sort of consumer recognition, even if Western luxury labels are all the rage in Shanghai.

But that may be about to change if Lenovo, a Chinese personal computer and electronics company that recently bought IBM's PC business, has anything to say about it. Lenovo last week started running the first advertisements in a $100 million marketing campaign aimed at explaining its global ambitions.

"So many Chinese companies we're talking to are paying careful attention to this," said Shelly Lazarus, chief executive of Ogilvy & Mather, the advertising agency charged with getting Lenovo's message out. "They're all talking about taking brands global, but nobody's really done it."

Though Lenovo retained the right to use the IBM name for up to five years when it acquired the business for $1.25 billion, the Beijing-based company seems determined to develop its own brand, along with those of specific IBM product lines like ThinkPad laptops. Though the computers will still carry an IBM logo, ads for them will be "signed" more prominently with the Lenovo name.

The initial newspaper advertisement that Lenovo ran last week shows a man sitting in the shovel of a backhoe, working on a laptop computer. "How do you build new technology?" it says. "Start by building a new technology company." The text-heavy spot goes on to explain the fusion of IBM's PC division into Lenovo.

Lazarus said the campaign would include a range of strategies, including online ads, event sponsorships and perhaps television in addition to print. Lenovo is a sponsor of the Winter Olympics in Turin next year, for instance, as well as the Summer Games in Beijing in 2008.

Before starting the new ads, Ogilvy, a unit of the WPP Group that has also been IBM's longtime ad agency, mounted an internal communications campaign aimed at employees of Lenovo and the PC division, as well as some customers. An eight-page marketing brochure attempted to answer the question, "Does the world really need another PC company?"

Mark Ritson, an associate professor of marketing at Melbourne Business School in Australia, is skeptical about whether the answer to that question is yes, particularly if the company is based in China.

"There will be great Chinese brands at some point," Ritson said. "But some of them are going to fail spectacularly at first."

Ritson added: "The Apples and Nikes of China in the 21st century will not be the ones spending $100 million but somebody sitting in one of the provinces somewhere coming up with something we don't even know about yet."

He said it might take years for the Chinese to learn the ropes of international branding. Rather than assuming they can develop their own expertise, he said, Chinese companies might be better off sending executives to work for Western consumer marketers, then hiring them back in a few years, he said.

Lenovo dismissed such views as outdated. "People tend to stereotype," said Deepak Advani, chief marketing officer at Lenovo. "Lenovo is a company that will shatter all stereotypes."

In a bit of rebranding gone awry, the British government's Department of Trade and Industry has officially reverted to its old name only one week after Prime Minister Tony Blair announced that it was to be changed to the Department for Productivity, Energy and Industry.

Havas, the parent of the Euro RSCG advertising agency, reported last week that its revenue fell 1.7 percent in the first quarter, to €330 million, or $416 million, although without currency fluctuations or the effects of acquisitions and disposals, revenue rose 1.4 percent.