Computer giant Lenovo takes its PCs on the road

Tour of 1,000 small cities hypes Olympics theme, boosts sales over 50

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nmadden@crain.com

[beijing] Chinese computer giant Lenovo Group is bringing new meaning to the word roadshow with a massive 1,000-city tour of China's smaller towns, ranging from the capitals of outlying provinces, such as Lhasa, Tibet, to small cities such as Sanya, in Hainan province.

Lenovo is best-known for buying IBM Corp.'s personal-computing division for $1.74 billion in 2005 and striving to make Lenovo a global brand. But in China, Lenovo sees opportunity in the small-by Chinese standards-cities marketers often ignore. Marketers tend to focus heavily on the four mammoth cities-Shanghai, Beijing, Guangzhou and Shenzhen-and eight second-tier cities, most of them capitals of prosperous provinces.

"Lenovo is one of the few to actually take Beijing to the people with this initiative. It's more designed to help close the digital divide than be a sales promotion," said Greg Paull, principal of R3, Beijing, a marketing consultancy tracking brand performance connected to the 2008 Olympic Games in Beijing, where Lenovo will be a global sponsor. "[Lenovo] views itself as a crucial symbol of national pride, a truly global Chinese company. But when I first heard about their 1,000-city tour, I thought it was a mistranslation-it's so many cities."

The average population of the cities visited is 250,000, and "none [is] larger than 1 million," said Alice Li, Lenovo's VP-Olympic marketing, who orchestrated the roadshow. "We've provided many young Chinese with their first experience using a PC and their first close-up view of China's sponsorship of the Olympics."

Since computers are rare in China's smaller cities, Lenovo's technology probably would be enough to draw many rural residents. But the roadshow's highlight is its Olympic theme. The full-day events feature Olympic sports, traditions such as the torch relay and prizes for answering Olympic trivia questions. With help from the Beijing Organizing Committee for the Olympic Games, Lenovo recruited former Olympic athletes who are local celebrities to speak and pose for photos at each event.

sales surge

By January, with three months to go in the yearlong roadshow, about 70% of the cities had been covered. Sales in those cities have grown more than 50%. And 80% of participants said the roadshow improved their image of the company.

Lenovo's PC sales in China grew 25% in the third quarter of 2006, according to the company, but they fell 9% in the U.S., where the company has lost market share. And worldwide share is flat at 7.3%, according to IDC.

The small cities on the Lenovo tour account for much of its growth in China, despite relatively low incomes and price wars with rivals such as Founder Technology Group Corp. and Tsinghua Tongfang Co.

Local values help. Chinese spend a disproportionate amount of their disposable income on education, and computers are seen as a valuable resource. The roadshow promotes the inexpensive Jiayue desktop PC, designed for kids to use at home.

The events are promoted with newspaper ads, online marketing and storefront posters, and most attract about 4,000 people. None of Lenovo's three multinational agencies in China- Ogilvy & Mather, Dentsu and JWT-is directly involved.

Despite the scope of the one-year program, the budget is just $2.6 million, Ms. Li said.
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