BEIJING, April 24 /Xinhua-PRNewswire/ -- The media has recently reported that HP plans to introduce a new PC brand mainly for the middle- and high-end consumers. This will form a hierarchy with Voodoo, the new brand, HP, and Compaq being the different levels in HP’s product brand system. CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong, comments that HP is now gradually forming a new PC brand system, thus striking a first blow in a brand war.
With the penetration of the Internet, PCs (PCs and notebooks) have gradually become a consumer product similar to mobile phones and automobiles in people’s lives. Predictable consumption patterns are gradually becoming clearer. One such example is that consumers with different purchasing powers have started to show different demands. This is not merely a product's functionality or performance; there is still a growing need for the product to highlight other features of consumer preferences, such as a user’s status and taste. Based on this trend, some PC makers have started to use the brand differentiation strategy, previously used for automobiles and other consumer products, as a reference point for a new strategy of brand values with PC products. They have classified low-, middle- and high-end products and brands with different positioning and set up a framework of “one product but multiple brands” to meet consumers’ differentiated brand pursuits. The new brand that HP has introduced precisely fills the middle- and high-end consumption demand left between Voodoo and HP.
The brand differentiation strategy implemented by PC makers will also bring about certain changes to the pattern of competition in the PC market. From the HP phenomenon, CCID Consulting analyst Zhao Gang has reached the following conclusions: As PC consumption features become more apparent, market leaders should consider, on the basis of their unified enterprise brand, differentiating their product brands and adopting a strategy of one product but multiple brands. HP currently adopts this model precisely. In the low-, middle- and high-end market, HP now respectively focuses on promoting Compaq, HP and Voodoo. The newly planned brand is between Voodoo and HP. People can see that HP’s PC brand operations are increasingly segmented and specialized. For market followers such as TCL, Haier, Great Wall and Hasee, it is perhaps possible to form their own differentiated positioning in the market through their implementation of brand values. They may only focus on product brands of low-, middle- or high-end values, and through it, form competitive advantages in those particular market segments.
Unified product brands have mostly been adopted for PCs, such as Acer and Dell. To continue to expand their market shares and fully cover the low-, middle- and high-end, these market leaders often make differentiated product positioning through a primary and secondary brand strategy or unified brand product series. These include Lenovo-Yangtian, Lenovo-Qitian, Lenovo-Kaitian, and Dell’s XPS and Optiplex series. However, unified primary product brands are still used for the secondary brands and serialization. Vendors who adopt unified product brands often face problems such as conflicting goals in their brand pursuits, generalizations in their communications and promotions, and even mutual constraints.
For HP, implementing a brand framework and implementing a differentiated brand strategy will avoid price wars resulting from growing homogenization of PC technology and products, and form a reasonable profit margin for PCs. HP, which brings new tactics to the brand wars, will likely have better market performance in the future.
About CCID Consulting
CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
Based on four major competitive areas of the powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.
CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://www.ccidconsulting.com/default_e.asp .
