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Compaq led the Indonesian PC market before Hewlett-Packard (HP) acquired the company in 2002. Then, HP massive marketing campaign somehow had killed the brand. But today, HP Indonesia will have to resurrect the reshaped Compaq.

Before the merger in 2001, total PC (laptops, desktops and X86 servers) sales in Indonesia reached 445.000 units, according to Gartner. Compaq was leading the market for quarters. While strong in printer market, HP only managed to secure fourth place behind Acer and IBM (now Lenovo), but still ahead of local brands Zyrex, Mugen and Wearnes.

Market confusion HP-Compaq merger in Indonesia completed in 2002. HP inherited Compaq’s market leadership in a PC market that grew 11% and reached 495.000 units. Although HP led the market, its post-merger market share experienced a six points drop in second quarter of 2002 compare to previous quarter.

This six points drop opened the door for archrival Dell to build up strong ground in Indonesia PC market. In second quarter 2002, HP’s market share was 12%, followed by IBM (8%), Acer (7%), and Dell (5%). Gartner analyst pointed out confusion amongst consumer between the two brands. With no new combined HP-Compaq product in the market, Compaq brand -with its black-silver case and red logo on laptops- were still popular among consumers.

But after HP released their first post-merger products, these Compaq unique attributes vanished. HP merged Compaq brand to its new product line, namely HP Compaq and Compaq Presario, while maintaining its own Pavilion brand. Each of the new product line serves different segments.

HP’s own brand Pavilion is an entertainment notebook, featuring Quick Play to play DVD without booting up the OS. HP Compaq (also known as Compaq Business Notebook) is a customizable notebook for corporate customers while HP Compaq Presario bridges business and entertainment notebook.

Leading the market Then things began to change. The once printer maker company had successfully sustained their market leadership. For quarters, HP’s PC sales beat up the Taiwan based Acer -their main competitor in Indonesia. Gartner’s preliminary first quarter 2007 report showed HP PC sales grew of 83%, way up against their competitors Acer (32%), Dell (41%) and Lenovo (32%).

HP booked 17% market share followed by Acer (11%), Dell (6%) and Lenovo (4%). Total PC sales in Q1-07 reported 360.550 units. Laptops drove the market after remarkably grew 60% and accounted 26% of total sales.

Brand differentiation: lifestyle and fashion From a marketing perspective, HP had successfully differentiated itself by building their brands to become a lifestyle and fashion icon. Their ads, product launches, press conferences and below-the-line activities are packed in a way that promotes digital lifestyle. So we can put Pavilion and Compaq Presario in the same shelf as Apple’s MacBook. Just look at the white, minimalist style, manufactured only for Asian consumer: Compaq Presario B2800.

This digital lifestyle and fashion marketing campaign are a huge success, but in turn have made Compaq brand as a simple and affordable PC detoriate even faster. Compaq brand has evolved. There is nothing wrong with it; HP sales performance speaks for itself.

Reviving Compaq Until HP announced plan to detach Compaq as a new product line, complete with a new logo, different product attributes and target market. The 1982 Compaq logo will be re-branded as ‘CQ’ and positioned as the low-end and medium range laptop, while other HP brands are for a bit higher range.

Though this decision came at the right time, while HP Indonesia had not announced any details, it would be difficult to execute. Now HP Indonesia has two different brands to manage, each which their own distinctive style of marketing. HP should carefully craft their marketing message to prevent consumer confusion that happened post HP-Compaq merger.

It’s going to be a tough job for the local marketing team who does not need any more interference that might loosen their focus. Watch out…

HP & Compaq Logo from Wikipedia HP Compaq Presario B2800 from notebookreview.com

Topik: Hardware, News