April 23, 2001
By Tobi Elkin
NEW YORK (AdAge.com) -- Hewlett-Packard Co. and Thomson Multimedia have entered into a global marketing agreement to co-brand a line of computer accessories including home networking kits, surge protectors, cables and connectors.
The deal, the terms of which were not disclosed, pairs HP's Pavilion, the No. 1 personal computer brand at retail, with Thomson's venerable RCA, the No. 1 marketer of remote controls and a leading provider of digital satellite and other home entertainment accessories.
New venture for RCA
The foray into computer accessories is a new one for RCA, but executives say the move is logical given the brand's experience in audio/video accessories. The company, known for its mascots Nipper and Chipper, estimates the audio/video accessories business at $1.2 billion in the U.S. Thomson expects its deal with HP to potentially triple the business. The duo plans to market optical and wireless accessory lines within the next year or two.
While PC sales have slackened in recent months, HP and Thomson say accessories offer retailers decent margins. For example, the average markup on the forthcoming $249 System Link home networking system is 30%.
In June, the pair will launch 18 different items at computer retail chains CompUSA and Fry's Electronics; HP and Thomson expect to announce additional retailers in coming months. The co-branded products won't be made available to online retailers, except for Thomson's own RCA.com. The accessories will be available in Canada and Latin America in the fall; Europe and the Asia-Pacific region by early 2002.
Following HP's guidelines
Co-branded product packaging follows HP's rigorous guidelines with consulting on design by WPP Group's Landor Associates, San Francisco. Packaging features the HP logo with the company's "invent" brand mantra and the RCA logo with "from RCA universal products."
For HP, the deal aligns with the company's beyond-the-box strategy for creating additional revenue streams and complete product packages, said Craig Artherhold, aftermarket product manager, HP Home Products Division. HP expects retailers will create product bundles in time for the back-to-school selling season, pairing Pavilion PCs with one or more accessory items.
Thomson and HP will handle retail merchandising and bundling opportunities jointly, but Thomson will lead co-op advertising negotiating arrangements with individual retailers. HP's agency is Omnicom Group's Goodby Silverstein & Partners, San Francisco. Thomson's agency is Interpublic Group of Cos.' Lowe Lintas & Partners, New York. It has not yet been decided which agency, if any, will handle the joint products.
Copyright April 2001, Crain Communications Inc.