Thursday, January 8, 2009

Hmmm, this could be a problem.


A post this morning on GigaOm points up the potential reverse food chain/cannibalization that could occur if notebook makers are not careful with their brand architecture when chasing after hot netbook share. As with any product category, brand extensions too tightly bound could easily confuse consumers, leading to some unintended cannibalization. A few key paragraphs:

Such cannibalization is easier when computer manufacturers link their netbook branding with the names of their more powerful notebooks. C’mon, even Toyota keeps its luxury Lexus brand far away from its everyday Toyota Camry and Corolla brands. In its “Netbooks are the Third PC Form Factor” report, Forrester Research warned:

Consumer products strategists at key vendors have mistakenly named their netbooks as extensions of their laptop lines: The Dell inspiron mini is closely linked in nomenclature to the inspiron notebook line. Similarly, lenovo’s S10 is an ideaPad, while Acer’s one is an Aspire. Even HP’s mini-Note suggests a “miniature notebook.” This branding strategy is dangerous — it cultivates consumers’ confusion about whether netbooks are, in fact, laptops or something else. Craft a completely new sub-brand to market these devices appropriately.
Of course, Stacey made the very same point about consumer confusion months ago. The recent introduction of 12-inch models is only going to accelerate the cannibalization of the notebook market. For someone like Intel, that is a prospect scarier than the 20 percent decline in quarterly revenues.

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