Conference 7.286::digital

4192.0. "Article in Oct. 16, 1995 WSJ on Marketing/PCs/branding" by GEMGRP::GLOSSOP (Low volume == Endangered species) Mon Oct 16 1995 23:44

This seems relevant to a number of recent discussions here...

Marketing Plays a Bigger Role in Distinguishing PCs,   WSJ Oct. 16, 1995
H-P Gets More Out of Its Marque, Survey Finds, While Apple Loses Cachet

    The power of the branch name isn't what it used to be
for Apple Computer Inc., and some of its struggling bretheren
in the personal-computer industry, but it's packing more clout
for industry stars such as Hewlett-Packard Co.

    According to a new survey, business customers are far
less willing to pay as much of a premium for the computers
from Apple, AST Research, Inc. and Digital Equipment Corp.
than they were only two years ago, while they are ready to pay
more for PCs from big rivals, including Compaq Computer Corp.,
H-P and Dell Computer Corp.  In the survey by IntelliQuest Inc.,
a market research firm in Austin, Texas, the customers said
they would be willing to pay $260 more for an H-P computer
than a no-name clone, compared with $145 in the same poll
in 1993.  But for AST, they said they would be willing to pay
only $17 more, compared with $176 two years ago.

	The Power of the Brand

	Premiums that customers would pay for desktop PC brands
	(based on surveys of business customers; numbers reflect
	premiums above prices of smaller clone vendors.)

		    1993	1995
	IBM	    $364	$339
	Compaq	     301	 318
	Apple	     264	 182
	Digital	     193	  10
	AST	     176	  17
	Dell	     161	 230
	H-P	     145	 260

	    Source: IntelliQuest


'A Marketing Game'

    The standings of Apple and AST have slipped amid longstanding
internal problems, analysts say, while Digital's decline appears
to stem more from customer concern over all the publicity of
the company's problems in larger computers.  The Maynard, Mass.,
firm's PC sales actually have been doing well.  ...
...
    "This has changed from a technology game to a marketing game,"
said Larry Fortmuller, marketing vice president for AST, based
in Irvine, Calif.  Adds Eric Lewis, analyst at International Data
Corp., a market research firm in Framingham, Mass.: "The companies
that have been gaining market share are the ones that have
established a strong brand image, and the companies that are
in trouble are the ones that have failed to establish a strong
brand image."

Name Recognition Isn't Good Enough

{bits on Apple, AST}

Component Makers Step in

{bits about Microsoft, Intel}

    I am not sure the parameters of the survey that has been stated, but
    let's assume it is valid (i.e. reasonably large cross-section of
    customers, generic-enough questions, and so forth.)  If accurate, where
    does that leave Digital's oft-recognized attitudes reflecting those of
    a premium, cachet-like vendor?  Something has to be changed here. 
    Personally I would like everyone, but especially management, to begin
    to do everything to shore up Digital's image, to allow us to once again
    gain the prominence in customers' minds that we once enjoyed.  It
    includes the attitudes we all espouse, and of course it includes our
    marketing and product quality.
    
    It should also be noted that companies that have well-recognized
    financial successes are oftentimes the recipients of this type of
    customer largesse.  Look at Digital back in its heyday - we enjoyed the
    same position that H-P is in now.  If we continue to have successful
    quarters of performance, and pare down some of the excessive levels of
    overhead we have that inhibit all our actions and drain the company
    finances, maybe we can deservedly attain our once-vaulted position in
    the industry.
    
    Chuck