While the Swedish wireless giant's consumer business represents only about 20% of its total revenue (the rest comes from network gear and services), it remains a key entry point for boosting global brand awareness.
The year 2000 was a turbulent one for Ericsson. Its consumer business weathered a gut-wrenching reorganization and a split from WPP Group's Y&R Advertising, New York and London, after a five-year run; Ericsson in January awarded the account to Bcom3 Group's Bartle Bogle Hegarty, London and New York. The company also outsourced the manufacturing of its wireless handsets to Singapore-based Flextronics International in an effort to stem spiraling losses. Ericsson still markets those handsets under its brand.
"We are at a pivotal point," conceded Bo Albertson, marketing director, communications for Ericsson's consumer business during a telephone interview from Stockholm. "Right now, we can see that there is an opportunity to do things that are slightly different."
REBUILDING A BRAND
Indeed, Mr. Albertson said Ericsson has charged Bartle Bogle with rebuilding its brand. Bartle Bogle will receive additional assistance from Bcom3 Group's Leo Burnett Co., Chicago, which owns a 49% stake in Bartle Bogle (AA, Jan. 29). Media buying and planning for the business' $100 million global consumer account remains with WPP's The Media Edge, New York and London.
Ericsson needs "a more dynamic, more passionate communication," Mr. Albertson said.
That need sparked the review- and some internal soul-searching. "We would like Ericsson to be described as being an inspiring brand [and innovative]. ... A lot of brands are claiming that, but innovation is worth nothing unless it's inspired," Mr. Albertson said. "Life's about entertainment, fun, enjoying friendships and relationships. It's about understanding that there is an element of seriousness and levity," he added.
Mr. Albertson suggests that while rivals Nokia and Motorola are ranked No. 1 and No. 2, respectively, in the global market for wireless handsets, no one brand stands out. "When it comes to communications, you could put any brand under any one ad," he said. "This is the time for BBH to make us stand out and be different, to help us revitalize the brand and to be brave enough to do that."
In 1998, Ericsson tied in with MGM's James Bond flick "Tomorrow Never Dies." It's working the entertainment connection again with the June 15 release of Paramount Pictures' "Tomb Raider," a film based on the adventures of videogame heroine Lara Croft. The film will feature a wireless headset, Web-screen device and rugged R310 wireless phones, all of which are expected to get product placements and advertising support.
In the coming consumer push, Ericsson will target at least two of the five global lifestyle segments it has defined-the Pioneer, driven to buy the latest technology no matter what the cost; and the Materialist, a brand-driven, price-sensitive consumer. "We have a great challenge in North America-we are not as known as a brand there," Mr. Albertson said.
Last week, Ericsson issued a first-quarter profit warning, saying sales would be flat. Its stock dropped more than 25% on the news to $5.84, closing in on its 52-week low of $5.25.