Last year Lenovo completed its $2.91 billion acquisition of Motorola's handset business, Motorola Mobility. The acquisition of Motorola makes sense on several levels.
Lenovo is one of the world’s top 5 smartphone makers, but its market share in the U.S., one of the world's largest smartphone markets, is zero while Motorola has an 85-year history in the U.S. The company's biggest business is still PCs, and it's the world’s No.1 PC maker. But PC sales aren’t growing. If Lenovo is going to be a technology leader by the end of the decade, it needs to be a mobile leader.
Lenovo has experience integrating and running U.S.-based technology companies. It bought the ThinkPad business from IBM and led it to success, and it now has domestic manufacturing.
Getting into the U.S. market is all about relationships with U.S. carriers. Motorola's relationships are good: it has the ongoing Droid deal with Verizon Wireless, and it’s placed the Moto X on three out of our four national carriers.
Lenovo doesn't just want to be a consumer smartphone maker. It has very strong enterprise relationships with its ThinkPad and ThinkCenter products, and it just bought IBM’s low-end server business. By also offering phones, it can deliver full technology packages to its U.S. business clients.
I recently spoke to David Roman, CMO of Lenovo, about the challenges of branding a multi-layered product line. Roman, a former VP at Apple, Nvidia and HP, has been with Lenovo for the last seven years.
Avi Dan: Why did you ditch the moniker “Lenovo” and changed the name of your smartphone to Moto?
David Roman: Motorola, despite some legacy issues, retains many strengths as a brand in the Moto sub-brand. People remember “Hello Moto” and perceive it as cool. This branding is frankly something Lenovo so sorely lacks in its smartphone offering. We certainly want the name of the company to be on the products, but we didn’t want to lose the strength of Motorola, particularly Moto.
Dan: You brought back the iconic “Hello Moto” ads which Motorola retired. Do they have appeal to mostly Baby Boomers and Gen-X who remember the original advertising?
Roman: I don’t have a definitive answer to that since we are researching this question now, but anecdotally it appears that it has an appeal to all. Millennials like it for the same reason that older generations like it, because it’s cool and visually striking. We contemporized it of course but the appeal cuts across different groups.
Dan: Lenovo is both a market leader with some products, and a challenger brand in other categories. Are there differences in terms of how you manage your franchise?
Roman: I don’t think that you can behave as a leader anymore, certainly not in the technology sector since the status quo can change overnight. It used to be that you would build your position over many years and could maintain market leadership. But now markets change so fast that you must act as a challenger brand no matter what’s your market position.
Dan: Does that mean that as a marketer you look at the consumer differently?
Roman: Certainly. We used to sort of “own” the brand, but now the consumer, through social media, is very much part of it. Which means that we had to sacrifice some of the complete control that we had over our brands. On the other hand, what we get in return is a co-marketer who can propagate our brands and add real value.
Dan: Has Big Data changed your job as a marketer?
Roman: As marketers, we always had a lot of data and made decisions based on that data. What’s different now is the amount of data, which has made things more complex. Yet, everybody has the same data so that’s not where smart organizations see an advantage. Interpretation and speed of implementation are key, and we are restructuring our company along these lines.
Dan: How has the role of the CMO changed in recent years?
Roman: In some ways, it is shifting from focusing inside-out, and doing the ads and marketing, to outside-in, bringing the customer into the center of the company. I know from talking to colleagues that CMOs spend more time on integrating different departments and enhancing transparency, while at the same time continue to develop strategy and increase competitiveness.
