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LUCENT'S GOAL IS CLEAR: MAKE A NAME FOR ITSELF: AT&T'S SPINOFF LOOKS GLOBALLY TO PROFIT FROM DEREGULATION, NEW MARKETS

By Published on .

How do you create a worldwide identity for a $2 billion start-up that is 125 years old? Answer: Very diligently.

For proof, ask Dave Shaver, VP-advertising and brand manager at Lucent Technologies in Murray Hill, N.J. After AT&T Corp. spun off its telecommunications equipment business in September 1995, Mr. Shaver spent a frantic three months working with corporate identity consultants Landor Associates in San Francisco and ad agency McCann-Erickson Worldwide in New York to christen the new unit and give it personality.

SINGULAR SUCCESS

"We had one shot at getting it right," said Mr. Shaver, a 25-year AT&T veteran who led AT&T's public relations office during the 1984 divestiture of the regional Baby Bell companies. "We wanted to transfer our equity from the past into a new company that in many respects has had an amazing 125 years, and give it new attributes as simply and credibly as possible without bragging," he said, referring to global ads running now.

The strategy is working. Since Lucent went public in early April 1996 at a share price of $27, the stock has climbed 77.8% to $48 as of late October. Meanwhile, Lucent profit has risen to $255 million compared with $13 million in the same period a year earlier. And Lucent revenue in the third quarter 1996 was $5.92 billion, up by 24.7% from the same quarter last year, led by strong international increases ranging from 28% for network systems to 46% for business communications systems.

Communicating the right international marketing message is key to Lucent's future prosperity. Lucent leads the U.S. telecommunications equipment market with a 60% share, according to market researcher Northern Business Information, with AT&T representing 10% of Lucent's overall revenue. Just 25% of Lucent's business comes from outside the U.S., far less than for its major international rivals.

ANSWERING THE CALL

Yet increased international business is the promise as governments deregulate telephone systems and developing markets begin to order phone systems.

"[Lucent] realizes that it needs to catch up internationally," said Michael Arellano, an analyst at Probe Research in Cedar Knolls, N.J. He notes that Lucent ties with France's Alcatel for an approximate 9% market share worldwide, followed by Sweden's Ericsson at 6%, and 5% each for Northern Telecom in Canada and Siemens in Germany.

To reach corporations and telephone providers that comprise 80% of its total revenue, Lucent broke a $65 million TV and print ad campaign that's consistent in 90 overseas markets. The straightforward print ads feature a Lucent business card with copy highlighting the company's new identity.

IN THE CARDS

"We wanted to have a consistent look across our business units and across countries because we don't have as many dollars as other corporations do," said Austin Patrick, corporate advertising manager at Lucent.

The business card approach is particularly suitable in Asia, where executives routinely exchange and scrutinize calling cards. But some messages were still modified to reflect cultural differences. In Japan, for instance, McCann decided to downplay AT&T's 125-year history because 125 years is a comparatively short time for a Japanese keiretsu, or conglomerate, said Scott Lackey, senior VP-group director at McCann. In the U.S., supplemental TV spots targeted to both business-to-business and consumer groups detail Lucent's history of innovations-the dial tone, laser cellular phone mail, fiber optic cables-in an understated manner that ends with the tagline, "We make the things that make communications work."

NAME RECOGNITION

While ads have helped boost awareness to 90% in many markets, reaction to the Lucent name hasn't been universally positive. The word Lucent, which means "glowing with light" or "clear" in English, has been a shocker to an industry more familiar with descriptive names that start or end with "tech," "tele" or "net."

Bo Hedfors, chief of North American operations for Ericsson, has been quoted as saying that the name Lucent is a joke and that he wonders what the heck it means.

Landor first tested the viability of associating the new company with predecessor Bell Labs. After customers scored Bell Labs high on quality and smartness, but low on state-of-the art innovation, Landor substituted a new brand name but underscored it with the tagline, Bell Labs Innovations.

He considered several unnamed runners-up before research in eight key markets showed "Lucent" was a winner.

"There were no negatives associated with the name Lucent," said Patrice Kavanaugh, executive director, Landor Associates. She added that Lucent, the Latin root for light, worked extremely well in the Romance languages of French, Italian and Spanish. Only in China did Landor opt to translate Lucent. The literal translation in Mandarin is "the bright message company,"-certainly an appropriate slogan in any language.

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