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 user 2007-08-29 at 12:46:00 pm Views: 33
  • #18659

    HP’s Bold New Printer Marketing
    company’s new ad campaign features Gwen Stefani and stresses
    self-expression. But will it boost sales?Can giving away designs and
    photos from a blonde bombshell get people to print more?

    is betting big on it. In HP’s latest attempt to spur printer sales
    growth, the company on Aug. 28 is unveiling its largest-ever
    advertising campaign, anchored in part by singer and artist Gwen
    Stefani. Unlike past marketing strategies that have emphasized prices
    and hardware, the new effort plays up notions of “self-expression” and
    “communication” through printing. It features free online material
    developed by Stefani and other creative professionals.The advertising
    effort is part of a broader strategy within HP to keep the printer
    unit’s revenue increasing at a rate of 4% to 6% a year amid rising
    competition from digital technologies and a slowdown in overall demand
    for printers in some markets. HP’s printer division generated $26.7
    billion in sales in the fiscal year that ended October, 2006. Within
    HP, the focus is not merely on “printer units sold” but on “share of
    pages printed,” executives say. That mentality, says Vyomesh Joshi,
    executive vice-president of the printer business, helps managers think
    broadly about the many kinds of materials that customers print, from
    photos and party invitations to business stationery to marketing and
    advertising materials. “It’s billions of pages,” he says. “We want to
    go after everything.”

    Stefani as Saleswoman
    that shift in mentality actually helps HP ultimately boost sales
    volumes and profits is uncertain, but its new advertising clearly
    emphasizes the act of printing over the printers themselves. Using the
    tagline, “What do you have to say?,” TV and billboard ads play up the
    idea of creative expression and direct viewers to HP’s Web site, where,
    HP says, the heart of the campaign lies. On pages devoted to Stefani
    (hired by HP’s camera business as a celebrity endorser in 2005),
    customers can view and download photos that she has provided
    exclusively to HP. Consumers can use those free photos, some of which
    show Stefani performing, to create scrapbooks—say, of a particular
    concert they attended. The site also offers some of Stefani’s designs
    for birth announcements, greeting cards, CD covers, and paper dolls. At
    another page on the HP site aimed at small businesses, customers
    wanting to design stationery or business cards can download free fonts
    and templates provided by New York graphic designer Paula Scher.

    which expects the printer campaign to last at least several years, is
    spending $300 million on the effort in the first year. The company as a
    whole spent about $472.1 million on advertising time and space in 2006,
    down 7% from the prior year, according to tracking firm TNS. The
    printer effort follows the company’s successful “The computer is
    personal again” campaign for PCs, which emphasizes how celebrities and
    other high-profile businesspeople, including wedding-gown designer Vera
    Wang, use HP equipment. That campaign began in mid-2006.Some analysts
    say playing up the HP brand and the experience of printing is a smart
    move. For a printer company, “it’s a tough proposition to be different,
    since all printers look the same,” says Allen Adamson, managing
    director of branding firm Landor Associates, a unit of WPP Group

    A Crowded Field
    based in Palo Alto, Calif., is the world’s top supplier of printers and
    printing supplies. But it is facing rising competition. An increasing
    number of upstarts are offering online photo printing and
    photo-bookmaking services. Then there are the digital photo frames that
    let individuals download photos directly to a frame, bypassing the
    printer altogether, says Michael Megalli, partner at New York marketing
    consultancy Group 1066. Some analysts point to competition from Eastman
    Kodak (EK), which earlier this year introduced printers that use
    lower-priced replacement ink (see BusinessWeek.com, 2/6/07, “Kodak
    Launches a Printer Offensive”). Joshi, however, insists that HP hasn’t
    felt any impact from Kodak’s moves. In laser printers, HP holds a 55%
    worldwide market share as of the first quarter of 2007, according to
    research firm Interactive Data (IDC), far surpassing the 10% share of
    second-ranked Samsung. In inkjet machines, too, HP’s share is 45%,
    compared with second-place Canon (CAJ), which holds a 26% share.Those
    top rankings suggest that HP’s old product-focused advertising wasn’t
    ineffective. But HP is convinced it can cast printers in a different
    light. Says Steve Simpson, creative director at San Francisco ad agency
    Goodby Silverstein & Partners, which created the new campaign, “Our
    job is to change behavior and give customers more ideas on what they
    can print. It’s a very broad idea of printing.”