HEWLETT-PACKARD TAKES THE CONSUMER PC PLUNGE

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Hewlett-Packard Co. is readying an ambitious move into retail stores with personal computers that could make the king of printers a contender in consumer PCs.

But rather than simply handing the assignment to HP's global agency, Saatchi & Saatchi Advertising, the technology marketer is believed working with Foote, Cone & Belding, also San Francisco.

Initially, HP is expected to focus efforts on in-store promotion, co-op ads and possibly infomercials. That's in contrast to media blitzes that backed two other consumer PC launches, Compaq Computer Corp.'s Presario in 1993 and IBM Personal Computer Co.'s Aptiva last fall.

Presario is a hit, but IBM stumbled badly by hyping Aptiva but not being able to meet demand.

In contrast, HP is planning a lower key, methodical introduction in the U.S. to make sure it can provide customer support, and it will move into international markets later this year.

FCB appears to be assembling an integrated team including its general agency, its sales promotion and direct marketing arms as well as FCB Technology. FCB's New York office already works for AT&T's computer unit, which is expanding its retail sales; FCB Technology, San Francisco, handles Epson America, a key competitor in printers. Epson already is in review.

HP in the past sold mainly to businesses through distributors and specialty resellers. Last year, it commanded just 2.7% of the world PC market, according to International Data Corp., Framingham, Mass. But HP is among the fastest growing PC marketers, and its expansion into computer and electronic stores should vault it into the top PC sales tier. HP already is the world's top seller of laser and inkjet printers.

"We obviously feel like we can make a strong contribution on the PC side," an HP spokesman said.

"The reputation HP has in brand quality and customer service is second to none," said David Goldstein, president of Channel Marketing Corp., a market research company in Dallas. Another advantage is its ability to package PCs and printers into simple bundles guaranteed to work.

HP's home PC effort is being managed by the same division that's developing interactive TV technology. HP appears to be hedging its bets on whether "the box" will be a desktop PC, a TV settop or some combination, to which a printer could be attached.

"They are trying to strike a good balance between being an engineering based company and a company which creates a good product the customer wants, needs and desires," said an executive familiar with the home PC launch.

HP has been in stores for years with printers and calculators. Some consumers already think HP is there with PCs. In focus groups, the spokesman said, consumers often confuse HP with Packard Bell, the top-selling mass-market PC.

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