With Competitor On Heels, Segway Says, 'Get Moving'

Although scooters with souped-up lawnmower engines have been keeping neighborhoods awake at night for years, Segway threatened to revolutionize the category with the 2001 launch of its "Human Transporter." The electric, two-wheeled, self-balancing device received a lukewarm welcome from consumers, and only about 10,000 have been sold so far. News photos of President Bush falling off his Segway didn't help, either.Now the scooter maker is revving up its efforts with a new marketing director and a repositioning campaign that breaks today. The goal is not only to charge up the category but also to blunt the encroachment of its first direct competitor.Segway's positioning has been staid: Its Web site shows a man in his early 30s, wearing khaki pants and a casual-Fridays shirt, using the device. Promotional materials touted the product's intelligent design and business utility, conveying that they are serious devices for adults.Klee Kleber, appointed Segway's vp of marketing last month, is leading the company's first traditional marketing campaign. Kleber, who spent 10 years at Dell, is communicating the repositioning internally around the concept of "fun, smart transportation." A point-of-purchase campaign created by VSA Partners in New York and Chicago uses the tagline, "Get moving."In March, Segway said it was expanding its dealer base—there are just 20 outlets, Kleber said—a move that eventually may be supported by spot TV.Segway was held back by a recall of 6,000 models and by limiting its distribution to Amazon.com, where people cannot try them out before buying.Not so its new rival. In January, scooter maker Rad2Go launched a more inexpensive rival, the Q. The device retails for about $1,000 (versus Segway's $4,500) and is similar in appearance to its rival, but it dispenses with Segway's gyroscopes and on-board computers—hence the price cut—in favor of two smaller wheels in the back.Rad2Go, meanwhile, got good early press out of the curiosity value of its cheap-and-cheerful entry. The Q is also positioned differently, as it is touted more as a toy, and the company claims distribution in Pep Boys, Winn-Dixie and Sports Authority.Rad2Go president John Wong claims he has already received orders for 6,000-8,000 Qs—almost as many as Segway has sold in three years. But Wong hit a hurdle when, according to Wong, his chief engineer in China stole one of only 10 prototype Qs upon its arrival in Shanghai and sold it to a pirate manufacturer.Wong lodged a complaint with Chinese authorities and the California U.S. attorney's office, but copycat machines already have started turning up on eBay and other Internet sites, he said, potentially undercutting his sales.Until now, both brands have relied on media appearances, product placement and word-of-mouth for marketing. Neither has a significant ad budget. And with the battle lines for summer and Christmas now drawn, both have gotten off to limping starts this year.The market as a whole has been hogtied by a wave of municipal ordinances banning powered scooters on city streets. Most of those bans do not include the Segway or the Q, but the media rarely has made that distinction clear.Skepticism remains about whether the gap between walking, cycling and motorcycles is large enough to sustain its own market."I will be stunned if I ever look down the street and see 30 two-wheeled utility devices coming at me," said Sam Hill, president of Helios Consulting in New York. "But I could be wrong."

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With Competitor On Heels, Segway Says, 'Get Moving'

Jim Edwards

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Jim Edwards