‘We offer a value-driven experience’  ( June '18,2007, FE)

In one line, what is the brand Lenovo about? A brand dedicated to building the world’s most innovative and best engineered personal computers.

And what does the report card say after one year’s launch in India?

To be specific, we began operations in India on May 2, 2005, after acquiring IBM’s PC division. We don’t share our sales or turnover data, but over the last two years we have grown significantly. In fact, between April 2006 and March 2007 we more than doubled our Lenovo Exclusive Stores (LES) to 100 and more than tripled our multi-brand outlets (MBO) to 579 across the country. We have aggressive plans to make inroads in upcountry locations through our retail stores. Our dealer network comprises 2,076 partners in some 366 cities.

From your positioning, it is apparent that you are targeting the price-conscious customer. Do you also offer EMI-deals as HCL does?

That’s a wrong perception. We are not just focused on the low end of the price spectrum. Rather, we would like to offer a value-driven PC experience to our consumers. We realise that while the Indian customer is price-conscious, he or she is also very tech-savvy and does not want to compromise on that front. So our value proposition is—new technology at the right price. Take for instance, the facial recognition feature on Lenovo 3000 Y series notebooks that lessens the hassle of remembering passwords every time a consumer logs into a system.

And yes, we have tied up with Bajaj Finance and Citi Finance for finance options on the Lenovo 3000 series.

How fast is the laptop market growing vis-a-vis desktop? And how does it compare with other Asia Pacific and Latin American markets?

Notebooks are driving strong growth in the PC market. We see this as an opportunity to extend product lines, which is why we introduced the widescreen ThinkPad T61 and R61. The home desktop market meanwhile is evolving into a more entertainment-centric model with multimedia applications and designs driving the high-end desktop segment. We have observed another very interesting trend in India in class D and E cities: they are skipping the desktop curve totally and jumping straight to desktop replacement mobiles (notebooks) on that price band.

Hasn’t the name Lenovo been a blessing in disguise? It sounds more European than Chinese and that must have helped because Chinese products are not perceived very high on the quality parameter.

Lenovo began as Legend in 1984. Eleven computer scientists started Legend in a one-story bungalow in Beijing. Ten years later, by 1994, Legend was trading on the Hong Kong Stock Exchange. In 2003, Legend changed its brand name to Lenovo, taking the “Le” from Legend, a nod to its heritage, and adding “novo,” the Latin word for “new,” to reflect the spirit of innovation that still lies at the core of the company. A year later, the company’s name was changed from Legend to Lenovo. So the name Lenovo, just like the brand, represents a synergy between the East and the West.

It’s this synergy that we like to highlight more than the “European” connotation that you point out. Lenovo presents a new model of globalisation. We are a global company, operating in international markets, led by a diversified, international management and board. While our Chinese roots are a strong part of our heritage, we are actually more global with roots going into all parts of the globe.

Although Kaun Banega Crorepati Edition 2 is nowhere as successful as Edition 1, you claim that the brand recall of Lenovo has risen from 38% in February ’06 to 74 % in September ’06. Was it Shah Rukh Khan’s charm?

You see, we wanted to explore an avenue whereby we could reach out to the mass audience and KBC is precisely such a format. Falling in the popular genre KBC did well for our brand and gave us great visibility due to the creative product placement in the programme.

This year you opened your first innovation centre in India—the third in the world, after China and the US. What’s your R&D spend?

Innovation is in our DNA. As a company, we have received more than 1,000 patents with a team of 1,700 engineers and scientists drawn from around the world. Our R&D expense is 2 % of our revenue, that is, approximately 50% higher than the industry average.

You have been sponsoring major sporting events globally. Isn’t that a little risky, considering that players’ performance is always difficult to predict?

We select our sports sponsorships very carefully. Lenovo computers, as you’d know, runs the computing infrastructure of one of the most complicated sporting event in the world—the Olympic Games. For National Basketball Association (NBA) we not just run the operations but also track vital sports statistics. As a way to demonstrate the power of this teamwork, Lenovo and the NBA unveiled the ‘Lenovo Stat’ to tip off the 2006-07 NBA season. The Lenovo Stat is a plus/minus statistic that looks at the point differential when a player, or combination of players, is in the game to see what effect they have on the team as a whole. The statistic identifies the best individual through five player combinations for each game, and over the course of an entire season.

At AT&T Williams, our technology supports design and manufacturing, handle data telemetry from cars and manages various business operations. The AT&T Williams F1 team will use Lenovo PC technology in every functional area of its business, right from ignition to inventory management. A Lenovo notebook PC will form an integral part of the Williams-Toyota FW29 before each race, practice and test session. Lenovo PCs will support engineers in car research, test, development and manufacturing; the drivers in race operations and analysis; and every area of AT&T Williams F1 team management.

You have also done some in-film placements (Corporate, Metro). Is this trend India-specific? When an endorsement is loud, it sticks out like a sore thumb, and if it’s too closely weaved into the plot, the message simply gets lost. Where do you draw the line?

You are right, this trend may have a slight bias in India with more companies opting for it; however, it is nothing new and companies in the West have been using this avenue for over a decade now.

Our first in-film branding was in 2006 —the year when we brought Lenovo to India—with Corporate. This movie provided the perfect platform as the PCs formed an integral part of its storyline. In my opinion, in-film branding needs to be subtle enough to leave an impression yet not detract from the entertainment value of the movie. If I remember correctly, we received over 14,000 SMS responses during our tie-up with Corporate, and 20% of that accounted in conversions. Encouraged by this response, we replicated the effort in Metro where too we have been quite successful in raising recall and lead generation with our target audience.