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May 31, 2001

By Tobi Elkin

NEW YORK ( -- The PC price wars have started, and it's not even back-to-school season yet.

The opening salvo comes from Gateway,

which today launches a print and TV campaign touting its new Gateway Guarantee. The guarantee promises consumers that, for a limited time, the company will beat the price of a comparable PC if they present the competitor's ad.

In recent months Dell Computer Corp. has taken a low price, high volume approach to boost its market share, and Compaq Computer Corp. has also waged aggressive price warfare.

In-house campaign
Created in-house, the Gateway campaign includes a 30-second spot breaking on cable and broadcast networks tonight and print ads starting today in USA Today and nearly 50 local newspapers in markets with Gateway Country Stores.

The TV spot for the offer will run in place of Gateway Country Store ads that have been airing for the last couple of months. Brad Williams, a company spokesman, declined to specify the media expenditure, but he said the offer is open-ended and could run through the fall.

Gateway tested the offer in Dallas and Phoenix for a couple of weeks and found it drove sales, although incrementally. Mr. Williams declined to specify the estimated cost of the offer to Gateway, but he said the test resulted in Gateway awarding some discounts "to meet competitive offers but not to the degree we suspected we'd need to before we tested."

The campaign's tagline is "PC Price War...? Cool." The initial TV ad features Gateway Chairman Ted Waitt announcing the Gateway Guarantee to a meeting of Gateway Country store leaders.

Copyright May 2001, Crain Communications Inc.

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