Veiling Its Roots, Olympic Sponsor Pushes Its Global Appeal

By Stephanie Clifford

With a line of computers once made by IBM and a chief executive who hails from Dell and NCR, the Lenovo Group is not an obviously Chinese company.

And that is just fine with Lenovo, which happens to be the only Chinese company to have a worldwide sponsorship for the 2008 Beijing Olympics.

Lenovo, which bought IBM’s personal computer business in 2005, plans to use its Olympics campaign to catapult the brand, which had once played understudy to the IBM name, onto the world stage.

But it will not exactly be highlighting its home-field advantage.

Although Lenovo’s largest shareholder is the Chinese government and its biggest operations are in Beijing, Americans who watch advertisements during the Olympics this August will see only a company that wants to show off its technology.

“In China, the advertising will be very much leveraging the heritage of a Chinese company,” said Glen Gilbert, Lenovo’s vice president for brand management. But, he added, “in the U.S., we won’t be making direct mention of that.”

Lenovo is not trying to hide its Chinese roots, Gilbert said.

It instead wants to position Lenovo as a global brand and highlight the quality of its computers. “In terms of priorities, we have so much more that we will be conveying,” he said.

Whatever the intention, the strategy makes sense in light of the political outcry over Beijing as an Olympics host. The Olympic torch has served as a lightning rod for public anger over China’s policies in Tibet, Sudan and elsewhere, and Lenovo was the company that designed it. The torch was to arrive in Tibet on Saturday, though its stay there has been reduced to one day from three.

U.S. sponsors of the Summer Games – like Coca-Cola, General Electric, McDonald’s, Johnson & Johnson and Visa – have been seeming to distance themselves from the host government, playing up the message that the Olympics are about athletic achievement, period.

At least one protest group, Dream for Darfur, led by the American actress Mia Farrow, continues to hold some feet to the fire: On Friday, her organization was to stage protests against four Olympic sponsors that it said had not passed certain thresholds for corporate responsibility. Lenovo is not among them.

For Lenovo, there are many reasons to be at arm’s length about China.

“The typical American still associates Chinese products with cheap – precisely what Lenovo doesn’t want,” Lou Hoffman, chief executive of the Hoffman Agency, a global public relations firm with offices in Beijing and Shanghai, said in an e-mail message. “They want to be viewed a global company, not a Chinese company, in the West or they’ll never be able to beat the cheap rap.”

Even before the Olympics, Lenovo had been backing away from China.

It had moved its headquarters to Morrisville, North Carolina, which had been the area of IBM’s operations, from Beijing after the acquisition; last year, it abolished official headquarters altogether. It now refers to itself on its Web site as a “global company with executive offices” in Beijing, Singapore and North Carolina.

In 2003, the company dropped its previous English name, the Legend Group, which it had been called since soon after its inception in 1984. It chose Lenovo as a distinctly non-Chinese name, appending the first syllable of “legend” to the Latin word “novo,” meaning new or innovative.

The name change set the stage for a global marketing push that began in 2004, when Lenovo paid $65 million to become an Olympic sponsor for the 2006 Winter Games in Turin, Italy, and the 2008 Games in Beijing.

The explicit goal was to elevate the brand from a Chinese one to a worldwide one. An Olympic sponsorship “puts you in the league of some premium brands,” said Deepak Advani, chief marketing officer at Lenovo.

Also in 2004, the company agreed to buy IBM’s personal computer business, a deal that put Lenovo’s name on the U.S. radar screen – and under heavy scrutiny. Because of Lenovo’s affiliation with the Chinese government, U.S. officials raised the question of whether the Chinese government would be taking over the critical U.S. government contracts that IBM had handled, and the U.S. business community deplored the deal as sad evidence of China’s growing economic supremacy. The transaction closed in 2005 without formal opposition.

The next step for Lenovo was to confront its image in the marketplace. The company went to more than 4,000 business customers and asked how they felt about Chinese ownership of the IBM PC business, which was dominated by the ThinkPad brand.

Advani, who worked for IBM before the acquisition, worried it would be as though a “company from Sri Lanka was buying iPod from Apple – the cachet, the next day, would disappear. We wanted to make sure we maintained the ThinkPad strength.”

To clear the hurdle of public acceptance, Lenovo decided to play down its Chinese heritage and focus on telling business customers that “not much has changed – same people, same processes, same products,” Advani said. “If we were to lose those customers, then it would be a very deep hole we would have to dig ourselves out of.”

To that end, Lenovo kept using the IBM logo on the ThinkPad.

Though Lenovo had the rights to the IBM name for five years, Advani drew up a plan to phase it out, using the Turin and Beijing Olympics as turning points. It was a decision analysts applauded.

“Building their brand from Day 1 was going to be one of those big challenges,” said Bryan Ma, an analyst in the Asia-Pacific region at IDC, a technology consulting firm. “Outside of China, of course, nobody really knows that Lenovo brand name.”

In Turin, Lenovo started advertising its own name alongside ThinkPad’s in its first global campaign for the product. The ads used computer-generated images to show off various ThinkPad features, and ended by mentioning that Lenovo was now making the computers – one signed off: “New Thinking. New ThinkPad.”

“That reassured ThinkPad loyalists that their favorite product was in very good hands,” Gilbert, of Lenovo, said.

In Beijing this summer, Lenovo will take the next step, this time playing up Lenovo’s brand rather than the ThinkPad’s.

Television spots on the NBC network will try to show that Lenovo makes good computers: One will highlight how the company is running the information technology for the Olympics; others will promote the engineering of the ThinkPad line and the design aspects of a consumer line introduced in January, the IdeaPad.

All of the spots emphasize the parent company and are meant to show how Lenovo “inspires ideas, helps you to share them, store them,” Gilbert said. “I’d like to think of it as, this will put Lenovo on the map and will show Lenovo to the uninitiated.”

Lenovo is also doing heavy online marketing. It plans to sponsor an Internet lounge inside the Olympic Village at the Beijing Games, and, together with Google, has built a blog platform for the athletes.

Today, 34 percent of Lenovo’s sales come from China, while most of its growth comes from elsewhere. Lenovo ranks fourth in global market share for personal computers, behind Hewlett-Packard, Dell and Acer, according to IDC. Although the majority of Lenovo employees do work in Beijing, its chief executive, William Amelio, works from Singapore, and its chairman, Yang Yuanqing, works from North Carolina.

Last summer, Lenovo decided to globalize its marketing, handing responsibility for all the work outside China to a single office in Bangalore, India.

Together they are assembling a library of country-specific marketing materials. In a recent photo shoot, for example, the team assembled six versions of the same ad, using Indian models and backdrops in one shot, Caucasian models and Americanized backdrops in another, and so on.

This year may be Lenovo’s last big presence at the Olympics. The company did not renew its sponsorship and will be replaced by its Taiwanese rival Acer, which is in a position similar to Lenovo’s four years ago: It just acquired the U.S. brand Gateway and is trying to build up a global presence.

Advani said that the Olympics had given Lenovo’s marketing a “big initial boost” but that the next phase would be to sponsor events at the local and national level. “We do have a pretty massive task in front of us, to build our brand globally,” he said.

Originally published by The New York Times Media Group.

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