Lenovo Ramps Up ThinkPad Channel Program

By Jacqueline Emigh  |  Posted 2005-09-16 Email Print this article Print
 
 
 
 
 
 
 

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Despite a stronger SMB thrust, the initiative for ThinkPad notebooks exploits the IBM PC Division's relationship with IBM Global Services as well as partnerships with VARs.

Lenovo International, the new owner of IBM's former PCD (PC Division), is ramping up a program for resellers and other channel partners that makes use of IBM's long-time channel structure while also placing a bigger emphasis on SMBs.

The blended company, which brings together staffers from China-based Lenovo and the old PCD, will focus on expanding the market for ThinkPad notebooks and other products beyond IBM's traditional enterprise stronghold, Lenovo executives said at a press briefing in New York on Tuesday.

Lenovo is working on a strategy that will "leverage core competencies" into less trodden market areas, starting with SMBs but eventually including consumers, too, said Lenovo Chairman Yanqing Yang.

In China, he said, Lenovo has divided its market into two types of customers: "relational" and "transactional." This sort of categorization has proved more useful than traditional market segmentation models such as "consumer vs. commercial," according to the company chairman.

"Relationship customers are more frequent purchasers," Yang said. "They pay more attention to stability, security, and customizability."

But on the whole, Lenovo wants to increase the level of its transactional-driven sales to about 50 percent of revenues worldwide, reaching SMBs mainly through VARs and consumers through retail stores, according to officials.

Even before the acquisition, Lenovo and the PCD each combined direct and indirect methods in their respective sales efforts, said Robert J. Galush, vice president of product marketing, during an interview at the press event.

Now, Lenovo is taking advantage of the PCD's established partnership with IGS (IBM Global Services) as well as with the IBM division's earlier alliances with resellers and systems integrators, he said.

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Like PCD before it, Lenovo is also accompanying IGS on enterprise sales calls, according to Galush, who was previously PCD's vice president of product marketing.

"But that's not all. Resellers have always been very important to us. They'll become even more important to us now as we [grow] what we're doing with SMBs," he said.

Lenovo will also look to recruit new VAR partners in the SMB space, Galush said.

The cultural values of PCD and the old Lenovo have "mapped very well," according to another speaker at the event, Deepak Advani, chief marketing officer and head of strategy.

On the product side, the new Lenovo will lead with the ThinkPad notebook while also developing other offerings. "We have a very special brand in ThinkPad. We will strengthen it," he told reporters.

The company will put innovation to work in the interests of customer satisfaction, according to Advani. "At the end of the day, [customer satisfaction] is the most important strategic [pillar]," Advani said.

"Innovation is not just a cool new widget that you have on a device," concurred Peter Hortensius, senior vice president for worldwide market development.

For example, Lenovo's just-announced Z60 ThinkPad series will use a "roll cage" internal frame for ruggedization and feature optional clip-on covers made of real titanium.

"This is not just painted plastic," Hortensius said, raising a demo unit into the air for the journalists to view.

"The Z60 Series [is] oriented to small business," Hortensius said.

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Beyond IBM's long-time bastions in the U.S. and many other developed nations, and Lenovo's home in China, the blended company will target emerging markets in Russia, India and Brazil, according to Advani.

Lenovo is already running a "network of sales offices around the world," including an office recently opened in India, said Yang.

The company also operates a customer innovation center in Raleigh, N.C., together with Intel Corp., Microsoft Corp. and Symantec Corp., Advani said.

The new Lenovo's sales efforts will vary somewhat according to country, Hortensius said, during another follow-up interview. For instance, in emerging markets, businesses are still more accustomed to going to stores or customer centers to see new products, as opposed to getting sales visits.

But the new company will adopt the old Lenovo's "relational vs. transactional" customer segmentation across all its geographic markets, according to Hortensius.

"The strategy has worked quite well for Lenovo in China. Chairman Yang is very much in favor of it," he said.

As Hortensius sees it, relational customers are businesses that have ongoing direct sales relationships with a vendor, and that are keenly interested in customization.

Transactional customers, on the other hand, tend to purchase off-the-shelf products.

The blended company plans to gravitate away from the use of "IBM" in ThinkPad branding. Over the next 18 months, the name "IBM" will probably gradually disappear from the ThinkPad logo, for example, according to the Lenovo executive.

Hortensius also said that, despite IBM's long-time involvement with the Olympic Games, IBM had nothing to do with Lenovo's designation as technology sponsor of the 2006 Olympics Winter Games in Torino, Italy and the 2008 Summer Games in Beijing, China.

"IBM hasn't had [much] to do with the Olympics for years," he said. "We did this all by ourselves."

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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