Analysis: Brand building key as tech market gets more crowded

As Christmas nears, companies introducing consumer electronics will focus on developing trust for their brands and the experience they provide.

As Christmas nears, companies introducing consumer electronics will focus on developing trust for their brands and the experience they provide.

Santa will need a bigger bag. This holiday season, and beyond, consumers face a daunting number of choices when it comes to consumer electronics. With PC makers such as Apple, Hewlett-Packard, Gateway, and Dell introducing everything from mp3 players to flat-screen TVs, and companies such as Virgin starting its own line of consumer electronics called Virgin Pulse, the market for hi-tech gadgets is more crowded and competitive than it has been in years. And companies face not only keeping consumers focused on their own brands, but also on entire market segments, with robotic vacuum cleaners and DVD recorders vying for consumers' attention, along with mp3 players and cell phone-digital camera combos. "There is more competition now, but there have been stages where there was a lot of competition, but then many of those companies were washed out," says Rick Clancy, SVP of corporate communications at Sony Electronics. He points out that PC companies aren't the only ones increasing competition. Companies such as Samsung and LG have stepped up their branding efforts in recent years, and there are low-cost producers in Asia that are targeting the US market for the first time. "What this has done is made us redouble our efforts, and focus on those traits that make Sony like no other company in the industry. We are unique in terms of our focus on product differentiation, quality, features, and design. We are a premium brand. And our PR strategies and tactics play a part in that brand equity." Sony isn't the only company focusing on brand. When Dell jumped into the consumer-electronics market in October, the company hoped its strong brand equity in the PC market would make its entry a smooth one. "One area we've always focused on is product reviews, and generating word of mouth," said Dwayne Cox, director of communications for Dell's US consumer division, in October. "And I think a lot of people who might have been hesitant to buy these products, who trust and know the Dell brand, will go ahead and buy them because it's a Dell. That trust and brand equity we have also transfers to LCD TVs and mp3 players." HP also hopes its strong brand will serve it well. The company unveiled 158 new consumer products in August, the biggest consumer launch in the company's history. "PR is playing an enormous role in educating the public about HP's presence in the consumer market," said Mike Moeller, director of strategic media operations, at the time of the launch. "Not a lot of people knew we're the largest digital-technology provider. Our job as PR guys is to drive awareness around that." But for the newcomers who don't have strong brands, visibility is key. Kim Uberti, a VP with The Bohle Company, works with Asian companies entering the US market for the first time. Since companies such as Niro and Amoisonic don't have direct relationships with dealers and retailers, much of Bohle's focus is on aggressive media and analyst relations. Companies must focus on anything that differentiates them from the competition if there's any hope for them being seen or heard in such a crowded market, says Uberti. But it's not going to be easy, and even Sony's Clancy admits that it's going to be tough to get heard, with so many companies and gadgets vying for attention. An altered landscape Jake Drake, president of GCI California, foresees many different battlegrounds shaping up not just this holiday season, but far beyond. PC companies' entry into this market alters the landscape, as does the mobile companies' desire to have everything untethered, says Drake. Customers care about cost, but companies must convey how easy devices are to use, and how to use them. "Advertising often focuses on price and differentiation," says Drake. "PR teaches the benefit and value, and how consumers can use these products in their lives. Consumers don't care if Dell is going against HP and who will own the market." But the companies care deeply about those kinds of things, and whoever can do the better job teaching and educating will enhance their share of mind and heart - and hopefully market - among consumers. PR has always been about influencing behavior, asserts Porter Novelli EVP Sandy Skees, and getting consumers to adopt new technology is about developing new behavior. Mp3 players are about a different way to listen to music, and that requires a change in behavior. "It's not like you're promoting a new toothbrush," says Skees. "You can't sell an mp3 player the same way you sell candy. The companies that survive not only influence behavior, but also provide a way for people to get the technology in their hands and try it, and who can articulate the relevance of the technology to people's lifestyles. These products must have relevance. And you have to meet people where they live." For Siemens' mobile division, cutting through the clutter is a time-tested challenge that is never going to go away, says senior PR manager Jacob Rice. And as cell phones sell just as much for their sex appeal than anything else, Siemens met its consumers where they live by sponsoring Fashion Week in both New York and Los Angeles, which not only got Siemens' phones into the hands of celebrities and models, but also gave the company the leeway to "pitch a litany of fashion magazines. Design is killer. It's definitely what sells. We don't stop just with design. It's about new technology and innovation, which includes design." But for companies to stand above the fray, PR as usual won't work, warns Bob Angus, president and managing partner at A&R Partners. Consumers are adopting digital entertainment, smart phones, handheld devices, and other products more willingly than ever, and such technology is ubiquitous, in every corner of consumers' homes, cars, stores, and lives. But neither traditional tech PR nor traditional consumer PR are up to the challenge of delivering the right messages to mainstream audiences in a way that gets above the noise, asserts Angus. "So the rules are changing," says Angus. "PR programs are becoming much more creative and specifically tailored. Small companies can't afford traditional mainstream marketing, and large companies can't win attention with it anyway. For consumer tech clients small and large, it's all about leveraging precious budgets with highly creative, alternative methods. Working with production houses to weave products into the plots of movies and TV shows, rather than paying traditional licensing fees. Partnering with radio stations to give away prizes, rather than paying for airtime. Customizing products on an individual basis for particular interest publications like the shelter books, or family magazines, or music or parenting." Reaching influencers For Hitachi America, media relations is key. The company stays very close with journalists who cover consumer electronics, whether they're from consumer magazines, websites, or trade publications. One of the most efficient and effective ways to reach consumers is to make sure "you go after the people who are influential," says Gerard Corbett, VP of branding and corporate communications at Hitachi. "Our strategy has been to stay top of mind with consumer-electronics reporters." He brings the discussion back to brand, arguing that it is what matters in the end. He says no one can predict what the landscape will look like five years from now. But what there will be is a handful of very strong brands with strong customer relationships. And that's why branding is important, he argues, as people are buying more than just a plasma-screen TV. They're buying an experience. "It's not about gadgets and product features, or even coverage," argues Luca Penati, EVP and GM of Edelman's Silicon Valley office. "It's the value the product brings you, and how it comes from a company you trust, which is why you ultimately buy it from one company and not another. It's about understanding that the decision behind the buying is not clear-cut. People feel the need to connect at a deeper and wider level. A brand delivers an experience rather than a product. Only then will a product become a promise. A promise you buy because you believe it will be kept."

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.