Why HP Plans to Market ‘Ecosystems,’ Not PCs

Cloud computing has given way to what might be called “cloud branding,” that is an attempt by tech companies to “own” not just the gadgets consumers use, but the experience around it as well. Such is the vision of Richard Gerstein, svp-worldwide strategy and marketing for Hewlett-Packard’s Personal Systems Group. Gerstein, who joined HP in 2007 after holding marketing posts at Sears, Alberto-Culver and Procter & Gamble, plans to launch a “new vision” for HP’s consumer products in the U.S. in 2011. The mission: Changing the way consumers think, feel and connect. It’s a tall order for HP, which is best known for reliable hardware, but not for innovation on the consumer side. (This is a company that once resold Apple’s iPod with an HP logo on the back.) Gerstein discussed that plan, HP’s Palm acquisition and how marketing computers compares to marketing detergent.


Brandweek: So you think there’s only room for two to four players in consumer tech right now?
Richard Gerstein:
I think there’s only a space for two to four [companies] that provide a seamless, multi-device, software-enabled ecosystem, which is what consumers are ultimately looking for.

BW: So, it’s HP and who else?
RG:
Clearly, Apple today has done the job; they’ve created that. I think when you go past Apple and HP, it becomes questionable who’s next.

BW: When most people think of HP, what do they associate it with?
RG:
Within my business, most people think of it as an extremely reliable, well-built computer and I think that’s what we’re going to focus on, going from an outstanding device with great customer service behind it into a connected ecosystem that transforms your life in terms of the way you think, feel and connect.

BW: Is that something you’re going to do via advertising?
RG:
I think you’ll see in the advertising, I think you’ll see it in the in-store experience, I think you’ll see it in the design of our products. I think all those things become relevant. We developed this new vision and from that we developed a marketing mission for a marketing organization…I want people saying “I’ve gotta have an HP” as opposed to “I chose an HP and it was fine.” I want people desiring an HP because the reality is that technology has become a fashion statement, a badge.

BW: Speaking of which, are you going to keep the Palm name?
RG:
Clearly, what we’ve announced is that it will be branded HP. It will HP computers and phones. We are still working through the role of the the Palm name after that.

BW: What about the HP Slate? Why is that not a consumer device?
RG:
Microsoft will tell you that Windows Mobile was not designed for a Slate-type product. It’s for a mobile device. They’re working on a new operating system for a consumer-type device.


BW: Do you see the Slate as a consumer device?
RG:
Next year we will have a Web OS-based Slate device for the consumer side. 

BW: What’s your ad agency situation right now?
RG:
Goodby [Silverstein & Partners] is sort of our global strategy agency and then we have McCann[-Erickson] runs the Americas and Publicis runs Asia and Europe. Actually, as we worked on the next phase of the campaign, we engaged all three agencies. My simple view is that you’re all working on my businesses, so….we had kind of a unique situation where all three agencies were working on one brief and all three agencies sat in on all three pitches to see if we could get to the right place where we wanted to go. It was very collaborative, we’re all in this together. My simple view is if I’m paying you as my agency and you’re working on my business, I expect you to set aside agency [rivalries] and you’re going to all work together and make HP successful.  We all have to live with whatever we decide to do. Why wouldn’t we all want to be part of the process? Some people were a little nervous at first, but in the end, they were really appreciative.

BW: You’ve been in a few different industries. How is marketing computers uniquely challenging?
RG:
I think a lot of the fundamentals still apply. The positive and the negative is it’s extremely fast-paced. You also still have the ability for unbelievably disruptive technologies to come through. It’s tough to really “disrupt” laundry detergent. I mean, you can do some cool things, but it’s not disruptive. It’s not like a smart phone coming in. So with that positive, that’s really exciting. You can change market share positions, you can do lots of different things. You can talk to consumers about innovation. On the opposite side, as a marketer, you have to keep up with it all.

BW: Business PCs and consumer PCs have sort of morphed together. How has that changed the business? Does it mean you sell fewer PCs?
RG:
Actually, people are buying a second machine or a third machine. At work, now they’re bringing a pad-type product in. I think units are growing very healthy, but the opportunity is how can you design a machine that fits both those needs. My best analogy is there were minivans there were cars. So you were either a family or you weren’t a family, but then you take a look at these crossovers and it’s like “Just because I have a family, doesn’t mean I don’t enjoy a night out.”