IBM computers have been one of the products that have flourished well in the market. This is credited to the staunch advertisement principle that the management has lay on the table. Advertisement is a paid, mass-mediated effort to influence customers to buy. It can be done for a product, service, idea or a company. Advertisement message is interpreted differently by different members (Forshaw, 141). Advertising is an important part of marketing and enhancing product promotion. In today’s competitive world, only the product that is advertised can be sold competitively in the market. IBM’s launched its personal computers (IBM 5150) in 1981 (Mercer, 231). Before the year 1981, IBM had launched different small computers for individual users.
IBM personal computer is today at its twentieth year. In its advertising, IBM portrays itself as a company that specializes in providing service and business solutions (Birn, 45). Their earlier image was that of a computer hardware company but, as the years went by they were forced to move away from this image when, more company for example Dell and Hp were launched (Forshaw, 76). In the market, IBM positions themselves as having better, slightly more costly and quality product compared to their competitors. Before the year 1993, IBM’s advertisement on its products was mostly handled by a number of different agencies. In the late 80’s, advertising wasn’t big problem because, IBM was top in the market. However, this turned to a problem when other companies entered the market and, IBM began to lose its identity.
Trends in advertisement
Throughout the 1990s IBM applied two forms of advertising in making its products known to the customers. This advertisement was done in form of print and commercials. Print advertising usually runs on print. Most of IBM print comprises of full color graphics hence, they ran in magazines and in poster placed in location like subways and on buses (Hobson, 47). Different IBM print adverts, appeared in many countries for example, England, Portugal, France, Denmark, Argentina, Norway, Puerto Rico, Australia, Israel, Brazil and Japan. Each of the advertisement employed different aesthetic sensibilities and market points that are different in each country (Koharik, 54). In December of 1911, IBM Chairman Thomas J. Watson, managed the sales and advertising departments, in a sales meeting. He is reported to have said in his speech: “The trouble with us is that we don’t think enough. Thought has been the father of every advance since time began”.
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IBM Company has had tremendous growth in both revenue and profits. The company often was referred to as Big Blue, a nickname from its massive blue mainframe computers. IBM loss of about of $15 billion in 1993 and, fall in the price of its stock made the management to think otherwise (Forshaw, 23). The fast growth of personal computer networks throughout the world threatened IBM’s lucrative mainframe and minicomputer. The company had a great struggle trying to turn the situation around (Goldman, 89). IBM had fallen behind in technology compared to his competitors like Dell, Hp, Microsoft and oracle. Its top management had stubbornly clung to the idea that their mainframe which had been the company strength for long time would maintain their lucrative position in the market. IBM had become ineffective in that, it had lost touch with the customer need (Forshaw, 141). The situation was so worse that some board members had an idea of breaking IBM into several companies that could compete effectively against their competitor.
Lou Gerstner became the new Chief Executive Officer in 1993 and, was given the task of reviving the company (Mercer, 141). He was a former McKinsey consultant and had made a reputation through senior when he was working for American Express and RJR Nabisco. Though he didn’t have technological knowledge he commenced by talking to customer throughout the globe on how they viewed IBM. He concluded that, IBM was not worth splitting. In his ideas he combined software provision, hardware and consulting services that leverage strengths to solve definite problems that would advance their customer’s.
Changes in advertisement
IBM made a radical move in consolidating all its advertising creative work worldwide with one agency known as Oglivy & Mather. Before this, IBM’s advertising was handled by about 40 different agencies throughout the world (Mercer, 145). IBM management had a feeling that, the company had too many images having its advertising spread among very many agencies. By consolidating all this agencies, IBM could present a single brand that could be identified throughout the world (Hobson, 42). Creative head of the IBM account by the name Chris Wall noted that this would be an enormous job having a very complex brand in question and, a very complex category. The main challenge was existing was to bring a product that was known from the past to the present. This provided complexity in that the product evolved but there was no new product to show. Ogilvy as the advertising company that had mandate to handle all IBM advertising had a challenge of keeping the IBM brand fresh, interesting and topical to maintain customer trust.
The consolidation process was reorganization in IBM’s business and, various strategies in communication that were initiated by Gerstner. Before reorganizing its advertising strategies, IBM had 13 semi-autonomous business units. Each of this unit could develop its own independent business strategy with associated communication strategy (Mercer, 119). Gerstner oversaw the 13 units being reintegrated into a more consistent whole. The first project that was undertaken was launching of a new advertising campaign throughout the world to create a universal identity on its brand. The main aim of this campaign was to pass the message to customers and, the potential customers that IBM provides simple solution and powerful to manage information anywhere, at anytime, and to everyone (Koharick, 87). The tagline that was associated with this campaign was “Solutions for a Small Planet. This slogan was used worldwide for their campaign but varied for each country by use of subtitles in the local languages. This campaign targeted “C-level” executives, such as CEOs, CIOs, and CFOs. This was different from the previous campaign that targeted audience of procurement and information technology executives.
The goal of their advertising was to convey the message that IBM was capable of solving business problems. The problem involved hardware and software issues. Thus, by this campaign IBM was recognized as seller and solution provider (Birn, 79). An important message was also communicated that IBM has remained vigorous, innovative, and a supplier of technology and solutions throughout the globe. This showed that IBM latent strengths of global scope, leadership, and reliability were beyond doubt (Mercer, 211). Print advertisement from the “Solutions for a Small Planet” campaign and some photos that are shown in T v commercial were also in use.
Though this campaign had proved effective IBM felt that they needed creativity in showing the customer the company was capable of providing new technology. They also felt the need to show the customer that they understood their needs and had solution that would give them a difference. In year 1997 it was published in 3000 words in the wall street journal and the New York Times that IBM understood customers businesses, spoke their language and had the relevant expertise that would help them in solving their various problems (Mercer, 105). The “Subtitles” campaign that was undertaken by IBM was the most successful of all the image-oriented advertising campaign ever done by IBM. In the late ‘90s, there was a tremendous growth in Internet and many companies were using it to conduct business (Forshaw, 93). IBM was worked with these companies and, helped them in improving their electronic business processes for example advertising, merchandising, inventory administration, making orders and customer service.
Sales and marketing practices
IBM has positioned itself as the real provider of solution to electronic business. This led to launch of electronic business campaign with saw sub- campaigns that was used to support IBM’s products. The main campaign comprised all IBM communications in relation to the business that was done online and this helped the company owning the electronic business model. Visual was used and was framed in IBM’s blue logo color that evoked the brand’s longtime equity (Mercer, 132). This also portrayed IBM in a fresh and in a new way. Their commercials were witty and had a sense of humor that was not previously used in their advertisement. Female voice was used to provide an attractive appeal. Print adverts were done in black and white with some red appealing color (Goldman, 24). Large pool of print adverts that illustrated the various electronic business customers were put in magazines, wild posting, outdoor billboards and in airports.
This campaign was used to communicate the message that IBM worked with companies of all sizes and over a variety of industries. Their broad expertise made them the most knowledgeable and many businesses relied on them for advice. Many companies started approaching IBM needing to be included in the electronic business campaign. This showed that their public image had enhanced tremendously. Ogilvy & Mather in 1998 created a thirty two page color insert on heavy stock paper containing electronic business print executions (Goldman, 108). In this advertisement new content was sprinkled throughout, there was explanation of what electronic business was all about. There was an invitation to all these people who wanted to find out for themselves more about IBM products and solution they had for e-business.
ON Demand campaign was launched after the e-business campaign. It was the first campaign carried under Samuel Palmisano, IBM’s new Chief Executive. His focus moved from component value (PCs and machines) to business value. This involved providing end-to-end integrated solutions to all IBM’s customers (Hobson, 97). The vision of this campaign was based on the idea of how the world can work together if businesses were fully connected. If all systems were integrated, consumers ha multiple choice, transaction happened faster, better services were provided by different companies and if businesses were more responsive to customer requirements then many problems experienced today would be reduced at greater height (Koharick, 83). There was a difference between On Demand and e- commerce in that e-business was all about e -commerce and the internet while On Demand was my diverse in that it was about technology and movements such as supply chain optimization. IBM has been able to market its product through series of advertisement campaigns.
In April of year 2005 they launched a campaign with a tagline “The Other IBM”. It was designed so that the company may be viewed as provider of business consulting services and also tells the public the areas of expertise not associated with IBM. An eight-page manifesto in The Wall Street Journal was used to define IBM Company in the context of business consulting services. Help Desk campaign was developed and to show how IBM’s on demand computing solves real problems and touches real people. They portray how IBM helps the world and the second phase relate to industrial and customer related solutions. IBM’s present itself to have ability to deliver value-added services to a customer. Its Help Desk is of great help in the areas of Business Consulting Services and it has given credibility to IBM among business executives.
In conclusion, IBM is taking a new direction with its advertisement. It has launched “Innovation That Matters” campaign that is intended to position IBM as a means for company’s change how they carry out business. With the knowledge of what people really need and knowing their different tastes advertisers can position their product to get maximum benefit. With the right techniques, a good advertiser can sell approximately anything to consumer. Thus advertising is a key tool in helping different companies to sell their products and without it, things would be very different for both the business world and for consumers.