Packard Bell NEC has awarded its ad account to Suissa Miller, Los Angeles, as the fallen PC leader struggles for a turnaround.
In a strategy switch, the company is asking the agency to develop a campaign only for the NEC line, reverting solely to co-op advertising to drive sales of the Packard Bell brand.
This marks the first time Packard Bell NEC will stage a campaign for its NEC retail line since NEC Corp. and Packard Bell merged PC operations in 1996.
Spending is likely to be at least $10 million. Mal Ransom, senior VP-marketing for the consumer division, and David Suissa, the agency's chairman, declined to discuss spending, saying that budget and media plans aren't set.
The campaign is expected to break in the second half, to launch a revamped NEC line.
NO CONFLICT WITH GLOBAL PC
Mr. Ransom and Gordon Chapple, exec VP, picked Suissa Miller following a monthlong review of California agencies. Mr. Suissa said Packard Bell NEC doesn't conflict with Global PC, a start-up that hired the agency late last year. Global PC is working on a PC device that connects to a TV.
Since the merger, Packard Bell NEC's U.S. retail market share has plunged from the No. 1 spot in the consumer market, a position held for years by home PC pioneer Packard Bell. In February, however, the company's retail share was 7.5%, putting it in fifth place behind Compaq Computer Corp., Hewlett-Packard Co., IBM Corp. and start-up eMachines, a hot seller of cheap PCs, according to researcher PC Data.
Since '96, there have been two TV campaigns for Packard Bell through M&C Saatchi, New York. But that relationship has been dormant for the past year.
Mr. Ransom said the new campaign will follow a move implemented over the past year--part of a turnaround plan by President-CEO Alain Couder, who took the helm last summer--to position Packard Bell as a value line, in the below-$1,000 market, and NEC as a performance line, in the higher-margin market for PCs above $1,000.
Suissa Miller faces big challenges with NEC. The boom in the below-$1,000 segment--holding 62% of retail unit sales in February, according to PC Data--leaves that brand fighting to increase share in a sluggish premium market.
MORE PRESSURE ON RETAIL
PC buyers are increasingly turning to direct sellers such as Gateway and Dell Computer Corp. for premium machines, putting more pressure on retail.
Adding to the challenge, Packard Bell NEC didn't help NEC's image with retailers in 1997 when the business computer division made an aggressive, ill-fated and since-abandoned move into PC direct marketing.
"This is where an agency earns its money," Mr. Suissa said. "Where there is a challenge, where a client needs a turnaround, that's where strong advertising can make a difference."
Copyright March 1999, Crain Communications Inc.