HP is now in a race to provide the high-octane Internet marketplace with its e-services solutions based on core strengths in computing and imaging. In its bid to join the fast-pace networked world, HP has reorganized its famously decentralized operations, begun acquiring smaller Internet players and forged new marketing alliances. Last year, the company spun off its test and measurement business, now called Agilent Technologies.
And the pace is quickening with new President-CEO Carly Fiorina at the helm. In seeking to reconnect with HP's legacy of invention, Ms. Fiorina is challenging legions of employees to rally around the brand and think about product innovation and service delivery in a new way.
Sixty years after Bill Hewlett and Dave Packard launched HP, the spirit of invention that began in a one-car garage is the cornerstone of the company's new image. And the company is sending a clear message that it is poised to play in the Internet economy.
TV spots by Goodby, Silverstein & Partners, San Francisco, HP's lead creative agency, announce: "The original start-up will act like one again. Watch."
Advertising Age's Tobi Elkin recently discussed HP's brand initiative at the company's Palo Alto, Calif., headquarters with its principal stewards: Antonio Perez, president-consumer business and digital media solutions and corporate VP; Bojana Fazarinc, director of global marketing services; and Amy Kelm, worldwide consumer brand manager, consumer business.
Advertising Age: What have the challenges been for HP in the marketing arena?
Mr. Perez: This company doesn't get a lot of credit . . . but it has incredible talent in branding and marketing. Because we've been very decentralized, maybe we didn't take advantage of it. We've been a product-centric company. At the center of the organization was what we used to call the product lines. They were divisions, which were responsible for understanding the market and developing products associated with it. And they had profit and loss responsibility. For 60 years, it was phenomenally successful. So, we can't be too quick to disregard what has been a very successful organization.
AA: But some would argue that HP is a slow mover.
Mr. Perez: About five years ago, we realized that the world was becoming a network world and that product-centric organizations were going to suffer. We were perfectly aware of it, and we thought we could keep the independence of the businesses . . . [but] that didn't work too well. We kept making money, but the growth was not the growth we wanted. It was just single-digit growth, and we are a growth company. We did not behave sufficiently well in this network world.
AA: What is HP's brand persona?
Mr. Perez: We are perceived, by and large, as a solid company that has great products. Reliability is almost embedded within the name of the company. What we don't get a lot of credit for is the leadership that we have had year after year, month after month, day after day in redefining this industry. But, I think, we missed that because we were [in a way] slow in accepting the reality of the Internet world.
AA: How would you characterize the monumental task of reshaping HP?
Mr. Perez: Moving this organization [toward becoming] a solutions kind of company is a journey with ups and downs. But we know where we're going and it's always fun.
AA: How do you think HP will change?
Mr. Perez: We're going to be the company that we always were. . . . We invent things. Sometimes we got the credit, sometimes we didn't. Now, we are going to get the credit.
AA: How challenging is it to reshape a decentralized culture? This is a big change for some people.
Mr. Perez: It was hard for some of us to accept, but we supported it because it was the right decision for many reasons. First of all, we were trying to present the image of a new company, the new company that we wanted it to be. So [Carly] came and we [the four HP presidents] spent about two months with her and her staff evaluating the options we have. We decided we wanted to become a customer-focused solutions company. And we're going to do that while we preserve and leverage the strength that we have as a company.
AA: There is a mandate from the top that the brand be baked into every single piece of communication and into product design. Will it be difficult for some at HP to accept the mandate?
Mr. Perez: We're not going to change the culture, we're just going back to the way it was. So it's a lot easier for people to accept that.
Ms. Fazarinc: One characteristic of HP people that's been embedded in our culture is that when there's a rallying cry, there's an incredible movement to get behind a direction and make it happen. So, emotionally people already bought in. Now, it's just a matter of getting the processes and the tactical implementation.
Mr. Perez: This is a company where at any meeting that you attend, the notion that wins is not the one that comes from the boss, but the [person] with the best idea.
AA: So it's a collaborative culture.
Mr. Perez: In the sense that it is participatory. This company is not at all hierarchical, but it is very disciplined.
AA: Carly made you the point person on corporate marketing, and you also lead the brand executive committee. Are you interested in looking for a chief marketing officer?
Mr. Perez: I don't think we need a chief marketing officer. What we need is a very strong branding team, and we have that today.
AA: What did you learn from your experience heading up the "Expanding Possibilities" initiative [HP's consumer brand effort two years ago]?
Mr. Perez: I learned the power of the brand. It was an enormous success, it linked a lot of people and a lot of activities. Now when you go into stores, you see the incredible presence HP has. Ten percent of [high-tech] retail space worldwide is HP. I learned, as well, the difficulties of uniting the emotions of different people in different parts of the company and what it takes to integrate the souls.
AA: What do you mean by "integrate the souls"?
Mr. Perez: You have to convince the brain and the soul, you can't just make an intellectual argument for the brand. That [process] requires homework and involvement and basically a good theme.
AA: How will the "Invent" positioning come to life?
Ms. Kelm: The concept of invention will be extended into everything we do; [it's] a new mantra for the company. We're going to look and feel very different than we have in the past. You already see it in the advertising. . . . That same type of approach will be extended through the retail environment.
AA: Does that mean things like kiosks, setting up HP printer stations in stores or even store-wthin-a-store concepts?
Ms. Kelm: It means all those things. It means taking a hard look at product designs, at how we traditionally have created products and what they look like -- the functionality -- and how we get those to customers. The concept of invention is one that we're excited about because it's not only HP celebrating inventiveness but it's also celebrating the inventiveness of our consumers through all kinds of ways that they might use text and images and graphics. We have come a long way over the last couple of years in becoming much more consumer-friendly, and this initiative has taken us even a step further.
AA: Didn't HP make a lot of those moves a couple of years ago with the "Expanding possibilities" initiative?
Ms. Fazarinc: It's going beyond the consumer in many ways. Now we really have to extend this across the entire company. We need to look at inventive ways of reflecting our new position in the consumer area [as well]. . . . We're looking at inventing new business models. In fact, e-services is a strong demonstration of that . . . and helping customers be inventive in how they approach their enterprise and commercial business challenges with a lot more consulting services and other kinds of more comprehensive solutions.
AA: How much more of a commitment will HP make to sponsorships such as World Cup Soccer?
Ms. Fazarinc: We have an executive committee that will be developing criteria for what kinds of sponsorships would be ideally suited to support our brand position. I think HP-wide [in the past], we probably did not have as much of a coherent and strategic umbrella for those activities. They were a little bit more opportunistic, I would say. In the future, we're really going to look at sponsorship activities that directly support our brand position and brand promise. . . . We have a number of sponsorships right now that we have contractual obligations to continue.
AA: What's your concept of brand architecture?
Ms. Kelm: At a high level, I think it is a broad understanding of how we go to market as a company and understanding how we align our products and services with the marketplace. Technology in general has been driven very much by product and services, and branding is a new thing. It's really managing those customer relationships in a very holistic way. Understanding what customer relationships and experiences we ought to have, and then managing to deliver on them in as tight and as strong a manner as we can as a company.
AA: What are some of the challenges that you've had in establishing a brand architecture?
Ms. Kelm: What you've seen since Carly has come on board is [a realignment of the company] at the highest level from a technology-facing group into customer-facing groups. And the brand architecture is really the next layer down from that. It's saying, "OK, now that we understand the customer experience, the customer markets that we want, what are those experiences that we want to manage?"
AA: On the ad front, many observers predicted HP would consolidate agencies, particularly given your new CEO. Why didn't that happen?
Ms. Fazarinc: I don't think it was ever a goal to go strictly to one agency. I think that there was a desire to consolidate some of the many agencies HP was working with. We had a very decentralized structure, and that spawned a lot of different agency relationships. And there was a sense that fewer agencies would actually be better in terms of getting a more unified set of messages. Having two large agencies -- agencies that have been doing the bulk of HP's business already -- sharing in this major campaign is pretty consistent with what we were trying to achieve. We did sort of split the account according to some of the strengths we felt the agencies had. Goodby is doing the creative right now, but we were just talking with [ Saatchi & Saatchi, San Francisco, which oversees media buying and localizing creative for international markets] about transnational localization of the ads. There's actually quite a bit of creative value-added taking place there as well.
AA: Do you see HP paring down to one agency this year?
Ms. Fazarinc: No.
AA: How closely does your identity agency, Landor Associates, San Francisco, work with your advertising agencies?
Ms. Kelm: Actually, very closely with the Goodby team in particular. In the past, we've tended to look at advertising separate from identity, and we have never pulled them together as strongly as we all would have liked. So, I think as we reintroduce people to HP and as we align around a kind of common strategy, it becomes even more important that all of our partners are working together. And the Goodby and Landor relationship has been very tight throughout this entire process. We want people to be able to look at the advertising, the in-store environment and the Web experience and feel like they're coming from the exact same company. So, it's really important that those creative teams get together behind the scenes.
AA: What's involved in creating a new identity system?
Ms. Kelm: We have developed at a system level what the new identity program is going to look like. And over the next few months we'll be finalizing that so we truly translate it into specific package designs. We'll develop the applications, and very specific guidelines . . . and we'll define how we're going to take this creative vision and extend it into those different application areas.
AA: You're creating the identity system for the consumer and business segments?
Ms. Kelm: Across the whole company. And you'll see that, at least in the in-store environment, probably this summer. We expect, over the next two months, to finalize the approach and then you're going to see it folded in. We're a very large company and we create a lot of communications, so the goal is to roll as quickly as we can.
AA: What's the road map for the campaign going forward?
Ms. Fazarinc: On the advertising side, we really wanted to set the stage and re-introduce HP's heritage of inventiveness and the symbol of the garage to the world with the first three TV spots and some of the print executions. Having done that, we are now getting ready to start moving to the Level 2 messages, which will revolve around our e-services strategy and digital imaging. E-services will probably lead over the next several months, and we'll start seeing some of that in late February. Digital imaging will kick in several months after that. The brand ads, frankly, will continue to be interspersed throughout the year, but there will be [executions] added. . . . And then what you'll see is a ramp-up on the e-services messages and digital imaging through the rest of the year with some of the overall brand sprinkled [in] just to maintain some thread of that message as well.
AA: So there are different campaign phases?
Ms. Fazarinc: There are three levels to it. Level 1 is the corporate brand positioning; Level 2 represents the major business strategies e-services and digital imaging. But then there is a whole set of product-specific advertising that is continuing to be developed, and Saatchi is doing part of that. Saatchi has been doing it in Europe for the printer business, Goodby's been doing it in the U.S. for the printer business. Saatchi, of course, continues to do Level 3 activities on a global basis for the computing business, and the PCs are still using Publicis SA, Paris, and Publicis & Hal Riney, San Francisco.
AA: What role will e-services play this year?
Ms. Fazarinc: I think e-services is certainly a strategy that touches on all the different market segments we are targeting. And there are overlaps between some digital imaging and e-services activities. But there are some digital imaging things that really are not strictly service-oriented.
AA: Will Saatchi continue to spearhead the e-services push that began last year?
Ms. Fazarinc: I think Goodby will be the primary creative agency right now for the brand campaign and the e-services portion [of the brand campaign]. On the product specific activities, I can't comment. It's very possible Goodby will be involved in that as well.
AA: E-services will appear in TV and print?
Ms. Fazarinc: Yes, actually it'll be part of this whole brand campaign. It's really considered part of the brand campaign.
AA: Are there any new uses of media that HP will experiment with? Out-of-home, etc.?
Ms. Fazarinc: We're looking at different parts of the world and trying to see which medium probably is the most impactful. We may have some things in outdoor in certain international markets. I'm not sure what exactly is being planned in the U.S. at this point. . . . We have some on-line [media] as well.
AA: HP received a rap for being "e-too" given the fact that IBM was the first to articulate the e-business concept. It's difficult to differentiate between all the "e" claims out there.
Ms. Fazarinc: It's a really crowded place. Everybody's talking over everyone else, and there needs to be more messaging around what this means to people, our customers and consumers. The difference from some of our competitors is that we are a unique interface between infrastructure, appliances and services. There aren't many [companies] that play in all those areas, and that's what we see as our strength.