Lenovo Brand Observation Portfolio Essay Example

Lenovo: Brand Observation Portfolio Essay Under the guidance of Prof. Ravi Shanker Submitted by: Ayush Goyal (17) Gaurav Singh(20) Karthik Raja(24) Nitesh Warke(33) Table of contents Introduction3 Understanding the market and competition4 STP Analysis5 Segmentation5 Demographic5 Psychographic5 Targeting5 Targeting Rationale5 Positioning5 Product Strategy7 Advertising11 Promotion13 Brands in the Lenovo space13 Promotion Strategy13 Impact of Promotion and Future Outlook13 Channel Strategy15 Channels of Distribution15 Physical Distribution16 Lenovo Customer Support17 Distribution Strategy18 Pricing Strategy19 Alternate Pricing Strategy20 Product Life Cycle and New Product Development Strategy21 References22 Shop Visits23 Introduction Lenovo is an ace Chinese computer technology corporation that develops, manufactures and markets desktops and notebook personal computers, workstations, servers, storage drives, IT management software, and related services has been a big player in the laptop and notebook market after acquiring the concerned business from IBM. Primary activities: Inbound Logistics; Operation; Outbound Logistics; Marketing and Sales; Service. Lenovo does all the operations from the cargo to the assembly production, from the product-sells to the post-sale service. This has helped company realize the large scale production and cost efficiency. In sales aspect, the company provides many kinds of purchases and the marketing channels. The customer can directly get the product through the on-line purchase and the store purchase way. Support activities: Procurement; Technology Development; Human Resource Management; Firm Infrastructure. Lenovo has formidable technical strength, especially in product research and development, and highly trained technical personnel. We will write a custom essay sample on Lenovo: Brand Observation Portfolio specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Lenovo: Brand Observation Portfolio specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Lenovo: Brand Observation Portfolio specifically for you FOR ONLY $16.38 $13.9/page Hire Writer This superiority has guaranteed the company’s leading status in the market. Lenovos global research and development centers in China, Japan and the US have produced some of the worlds most important advances in PC technology. The company is rich in talent, with teams who have won hundreds of technology and design awards – including more than 2,000 patents – and introduced many industry firsts. And many more are on the way. Core competency After conformity with the PC department of IBM, the brand, the scale, the efficiency have become the new Lenovo the core competitive ability. In brand aspect, Lenovo continues to maintain IBM and the Lenovo brand inherent. High premium brand localization has helped the new Lenovo achieve higher profit levels. In scale aspect, Lenovo, the largest player in China and IBM have complementary strength. With the presence of IBM in various markets, the new Lenovo seeks to expand its foothold outside China in the other Asian markets and developed world. In efficiency aspect, The Lenovo at present has in the global first ten big PC merchant. Lenovo has the lowest core business running cost rate 6. 9%. Going into the future it will fully display the highly effective operation platform superiority which it has already established in China, in the purchase, supply chain, research and development and service. With the support area being strengthened with the coming of IBM, there are going to be further efficiencies resulting from economies of scale. Understanding the market and competition In China, Lenovo has a 30% market share and is the biggest player there. In India, its market share was 6. 7% last year and currently is at 7. 2% ending March this year. It is ranked 5th in the Indian market after Hewlett-Packard, Dell, Acer and HCL Infosystems, according to research firm IDC In the laptop market there is a huge competition as Dell now has overtaken HP as the ace seller of laptop in India. The annual sales of PCs are expected to be in the range of 10 million by 2015, of which the laptop market is expected to occupy nearly 50% of the pie by 2012 alone. Lenovo, going forward sure wants a double digit market share in one of the largest market in Asia. The market itself is growing at a greater than 50% rate for the past couple of years. STP Analysis Segmentation: The segmentation for laptop market can be done on the following three parameters: * Geographic: North America, Europe, Asia. * Demographic: Size of the customer, region of the customer. * Psychographic: Preference of the User, basic or advanced usage. Demographic * Size of the customer: It can be divided as being further classified into the large users, the small and the medium businesses (SMBs) and individual users. * Region: The major region for a laptop comes from the big cities and educational and employment hubs. Apart from there, the upcountry markets are a major growth area. Psychographic * Preference of the User: The users can be further segmented on the basis of the high end models which are style and configuration conscious and users which are mid end users and use the laptops according to their needs. * Usage: This pertains to users who use laptops for advanced application development, network users and software professionals. The other user segment has a usage for fun purposes, net browsing, office applications and social networking purposes. Targeting Lenovo targets users based on the demographic segmentation. It targets in China and India users who belong to two segments * Relation: These are the large institutional users. * Transaction: Combining SMBs and individuals. Targeting Rationale The market in India is comparatively the same as that of China. Lenovo identifies India as China ten years ago. The strong relational business, accounting 60% in India is on the same lines as of China. The after sales spread that Lenovo enjoyed in China bodes similar prospects for the company in India. It currently is concentrating on consolidating the distribution network in India to take on the market. Positioning Tagline:†New World. New thinking. † The focus of the company in positioning its laptop can be gauged by their mission statement: â€Å"We are now one company with one goal: To build the best, most innovative products in the world. To use world-class economics to put new and better technology in the hands of more people, by innovating on cost the same way we innovate on technology. To focus our energy and our commitment on the success and trust of our customers. † The company positions itself as a manufacturer of computer laptops that innovate to suit the requirements of its users. This is further bolstered by the launch of its new range of laptop: The Ideapad, alongside its range of Thinkpad –positioned as business laptops and Essential Notebooks- positioned as laptops engineered for value. The main contention, says Amar Babu, is to provide power to consumers in terms of value, not cheap computers. Product Strategy Lenovo has a diverse range of computing products on offer. As our focus is on only Lenovo laptops, we are only considering the category â€Å"Notebooks Netbooks†. This category has three product types; ThinkPads, Ideapads and Essentials. Each of these product types has several product lines popularly known as series, each line trying to target a particular segment of consumers. Some business analysts consider Lenovo product lines to be improperly defined. To Quote Mac McCarthy of AllBusiness. com, â€Å"Lenovo prices are competitive, and the Web site is clean, but of course there are a confusing number of confusingly positioned and confusingly priced business product lines like the ThinkCentre A, M, E, and S lines. † This probably follows from each line having a very high variance in prices thereby confusing the target segment. The ThinkPad which IBM has targeted towards business users looking for high quality and reliability has now some product lines targeted towards small business users as well and low quality machines with low cost. This has diluted the ThinkPad identity as a high quality business machine. Below is a brief analysis of the Product types and the associated lines. Lenovo * Desktops * Notebooks Netbooks * Thinkpads Originally an IBM Brand of Business notebooks, Lenovo overtook it in 2005. This was brand addition for Lenovo. Entire range of notebooks was retained and the name as well. Gradually new products were introduced under the same brand name. Laptops designed for businesses, schools and power users everywhere. ThinkPad notebooks are exceptionally engineered to boost productivity, enhance mobility and reduce the total cost of ownership. * SL Series Small Business Tool. (~ 32k) [All figures from Lenovo India portal as on 2010-08-08 in INR] * R Series Cost Effective Enterprise productivity. (~ 53K) * L Series Cost Effective Enterprise productivity. (~ 63K) * Edge Series Simple and low priced. (~ 28k) * T Series Portable business powerhouse. ~ 59k) * X Series Extreme mobility, lightweight. (~ 60k) * W Series Ultimate Mobile Workstation (~ 107k) * IdeaPads This brand of laptops was basically a rebranding of the existing product line of the parent Lenovo company created to integrate all the multimedia and entertainment based notebooks into one category. It also helped Lenovo to align the existing products with ThinkPad without overlap in targeted segments. These are designed for home/home office, with distinctive designs and features for entertainment and multimedia. * S Series Tiny, Supercompact. * U Series Ultraportable Y Series Multimedia * V Series Small business Home Office * Z Series Ergonomic comfort * Essentials This was the original key focus notebooks from Lenovo targeting the low price segment of users looking value for money. This was aligned into three product lines each in different price range. These are the Laptops that have been customized to suit any budget category. The Lenovo Essential offers well-equipped, smartly designed notebooks for business, home or home office. * G Series Reliable Effordable. No frills. * E Series Thoughtfully designed with human engineering * B Series Small business Budget friendly * Workstations Servers * Peripherals * Printers * Televisions * Scanners * Storage Advertising Lenovo’s Beijing Olympics 2008 Campaign: Lenovo Groups purchase of IBMs PC division gave the Chinese company global scale overnight, yet it didn’t have a strong global brand. So the company used its sponsorship of the Beijing 2008 Olympics to elevate its reputation worldwide, and design played a crucial role in its efforts. Lenovo won the design competition for the Olympic torch, and used some of the same design elements on a limited-edition notebook computer. Deepak Advani, senior vice president and chief marketing officer for Lenovo India had quoted, â€Å"Our Olympic tag line Powering the Worlds Biggest Idea reflects Lenovos belief that the Olympic Games are one of mankinds great inspirations and that Lenovo is proud to be a driving force behind them. Every element of our marketing programme underscores Lenovos integral role at the Games and reinforces the fact that Olympic values are Lenovo values global goodwill, the pursuit of excellence and world-class performance. Visual elements featured in the Lenovo Olympic marketing programs include PC product images that convey the companys core mission, a stylised light bulb that embodied the then current advertising campaign, and the cloud motif used in the Lenovo-designed Olympic Torch, appearing in the five colours of the Olympic rings. Lenovo advertised through pervasive billboards, buses, bus stations and other out-of-home venues across Beijing. Advertising leading with the IdeaPad P C line highlighted the ability of Lenovo PCs o support and originate ideas everywhere and included a yellow light bulb recognised by cultures worldwide as a symbol for ideas. Lenovo’Saif Face Recognition Campaign:- The TVC features Saif in a Tom Hanks Castaway setting being rescued by a chopper. On reaching home, his wife fails to recognise him, his appearance is that of a bedraggled and unshaven man and the wife is just on the point of dialling the cops for reporting an intruder, when Saif rushes to his Lenovo notebook and the camera on the computer does a face match and accepts him as an user. This was the first campaign run by Lenovo in India and sought to convey the launch of Lenovos new series of laptops targeted at the consumer market. It also sought to create awareness in the Indian market about Lenovo as a youthful brand and drill home its innovation. This ad is meant to harp on the face recognition feature that comes bundled with the 3000Y series units that have an inbuilt camera. It is an example of Attribute positioning. Banking on the success of his roles in popular movies like Dil Chahta Hai ,the choice of Saif Ali Khan is meant to portray an image which the brand wants to associate itself with young, innovative, experimental and exciting. Promotion Brands in the Lenovo space The retail store in Delhi we visited has been stocking high selling brands of Lenovo, i. e. Thinkpad and the Ideapad G450 and G550 series. Promotion Strategy Traditionally, since its coming to India in the middle of this decade, Lenovo concentrated only on the push strategy. It has a sales training program with Intel and Microsoft called iLAMP across six cities for 600 partners. In Delhi, the retailers for Lenovo admitted the offering on extra margin per computer based on the sales figure and plans for dealers and retailers’ foreign trips based on the yearly sales(mostly or franchised stores). Recently there has been a shift from the push strategy to the pull strategy for Lenovo. With its launch of Y300 and Y500 notebooks in the last fiscal year, Lenovo launched a promotional offer called Face to Face wherein lucky buyers of the 3000 product line would get an invite for dinner with Lenovo Brand Ambassador, Saif Ali Khan . Promoting its product in the youth, from 15 May 2010 to 15 June 2010, Lenovo’s ‘Fun on Campus offer’ gave goody pack including a Sling Bag, Lenovo Optical Mouse, a Multimedia Headset and One-year Protection of McAfee Anti-Virus. Lenovo G Series and Lenovo IdeaPad S Series customers could avail of a goody pack worth Rs 2,660 at a discounted price of just Rs 499 plus taxes. Similarly, Lenovo IdeaPad Y Series customers could avail of a goody pack worth Rs 4,459 at a discounted price of just Rs 749 plus taxes. Running on an equal ground was the Lenovo’s ‘Fun Online Offer’ which coupled the needs of laptop and net surfing. The collaboration with Tata Tele in providing cheap Tata Photon connections ran from May 1, 2010 to July 31, 2010. Impact of Promotion and Future Outlook The market share of Lenovo ending March has jumped from 4. 75% to 7. 2% in the Indian market. With its new promotion schemes in the first quarter of FY11, the company eyes a double digit market share ending this fiscal year. The growth in the volumes was estimated at 33% ending March 2010. The schemes which the company has offered target basically the range of Ideapad computers and targeting the youth. The low range affordability, style and the usage targeted schemes are selected carefully by the company. The company which has a market share of 17% in the enterprises segment has about only 10% share in the consumer. The volume sales are skewed in the ratio of 60:40 to the commercial segment. The company enjoys a large presence in commercial segment, thanks to the legacy of IBM; so a conscious move to engage in promoting the consumer categories is directly in line with the company growth strategy. The company has schemes in pipeline for the four verticals it has. Although the exact nature of the promotion schemes was not disclosed, the schemes would increasingly be targeting youth and revamping its online sales. The company has coupons available online with future expiration aimed at providing discounts online to the users. This again is a conscious strategy at the youth segment which has a registration in the online buying space. Channel Strategy Channels of Distribution With the deal with IBM, Lenovo got access to its 160-country-strong distribution and sales network, skilled staff, advanced technology. The primary target was enterprise customers. Post acquisition Lenovo moved into the highly competitive consumer business. Internally, it has been categorized into four verticals: Lenovo exclusive stores, multi- branded showroom, regional distribution model and large format retailers (LFRs). Regional Distribution model: A large chunk of consumer business comes from metros and A-class cities. To penetrate into tier-II, III and tier IV cities it has adopted regional distribution model. The company has instituted a three-tier model consisting of four national distributors at the top who serve the seven regions India is split into. To address conflict of interest among distributors, as a rule not more than three Tier 1 distributors are allotted to a specified region. It has appointed Redington, Ingram Micro, Iris Computers and Neoteric Infomatique as its four national distributors; Lenovo is now finalizing the names of regional distributors in metros and in upcountry market across the country. that each of the regional distributors will have to select a respective national distributor of their own choice and that partner will be logged in with the same national distributors for at least a year. This implies that a regional distributor has to do business with that particular national distributor only. In North India the company had already announced Kopal Computers, San Infotech and Park Computers as its regional distributors. Lenovo has also signed up with Modern Computers and Royal Vision in Punjab; Aakriti Enterprises in Ghaziabad; KI Solutions in Gorakhpur, Libra Technocorp in Allahabad; Computer Shoppe in Varanasi; Chandra Infosystems in Lucknow; Strutech Computers in Panchkula, Haryana; and Balaji Lifestyle in Rajasthan. So far, the company has not appointed any regional distributor in Jammu and Kashmir and Chandigarh. In East, Lenovo has appointed Bit Infomedia for West Bengal and Siliguri; Eastern Logica and Computex for Kolkata and South Bengal; Xeoni Infotech for South Bengal; Trade Technology, Nextech and Universal Computers for Guwahati; Peripheral Engineers for Patna, Bihar and Computers India for Jharkhand. They are yet to sign up anyone for Orissa. In West, the vendor has appointed Megahertz, Impetus and Galaxy Infotech for Mumbai, Care Office Equipments, Aegis Infotech in Ahmedabad and Paras Trade Link in Rajkot for Gujarat, Data Care Corporation, Venus Infotech and Monarch Technology in Pune. Data Care has also been appointed for Nasik and Nagpur region. In Madhya Pradesh, AP Distributors has been appointed in Indore; Latest Technology in Bhopal and Geeshal Sales Corporation for Jabalpur. Siddharth Marketing and Hi-Tech Solution have been appointed for Chattisgarh. Lenovo is yet to close the deal with a regional distributor in Goa. Down South, the company is still in the process of negotiating with the channel partners. Margins Based on our findings from retailers at Delhi’s Nehru place, the business is volume driven. The margins in this business are very low and fluctuating. A typical retailers earns anywhere between Rs. 200 to 1000 per laptop. On achieving a pre determined target offers like foreign trips etc are available. In special cases when the company needs to clear inventories, an additional margin of Rs200-300 is offered Retails Partners (franchises),Multi Brand retail: Lenovo drives its products in the retail sector through Lenovo Exclusive and multi-branded stores. It has a different take on retail partners Partners who enrol for the retail segment will sell the products only through retail stream and would not be authorized to do business through channel network. Physical Distribution In House Manufacturing Suppliers Component Lenovo PC Assembly Dealers,VAR,Retailers Distribution Large Business Customers(Think pad),Small business and consumers(Idea Pad) Final Sale,Service,Support A facility at Pondicherry became part of Lenovo after its acquisition of IBMs (IBM) PC business in 2005. It has a capacity of 1 million units. Lenovo announced factory in Baddi,Himacahal Pradesh in 2007 it said it would eventually have a production capacity of 2 million units. It was designed to save on freight costs and shipment time to customers in north India. The facilities support regional customer requirements including product assembly, distribution services, and reverse logistics. They also offer additional value added services such as product configuration including custom imaging, and bundled and over packed orders Lenovo may have over-estimated demand for its products in India, when it created new manufacturing capacity . Lenovos market in the north of India was not large enough to require a large factory there . In the quarter ended Dec. 31 last year, Lenovo shipped about 155,100 laptops and desktops in the country . Lenovo is in the process of completing the required regulatory formalities for closure. From April last year, all production for Lenovo has been undertaken at its second plant in Pondicherry in south India, which has sufficient capacity to meet customer demand. Bulk of the transportation in the entire process takes place through land transport. Company owned/leased trucks transport requisitioned stock on a weekly basis to the 5 major nation wide distributors. Regional distributors in turn use a combination trucks and mini vans to transfer stock to the regional centers. Local retailers mostly collect the stock as and when the order is made. Bulk of the transactions made the mid levels do not involve cash and payment is made as and when the final purchase is made Lenovo Customer Support Lenovo offers a comprehensive suite of customer service and support is everywhere you need it: on the system, on the Web, on the phone and on the way. * On-the-system: Expertise at your fingertips The Lenovo Care portal is a preloaded set of tools on Lenovo desktop computers which can resolve most common system problems and help save time. * On the Web: Online support thats always there Lenovo drivers, downloads, maintenance manuals and technical support documents for your Lenovo personal computing products. Web-based eSupport is available 24/7 On-the-phone: International support Lenovo works with IBM to provide the worlds most comprehensive service and support. IBM customer contact center technicians help provide quick diagnosis and repair support for warranty-related matters. * On-the-way: Bringing powerful support to any size business Exceptional local service and support relationships with 3000+ Lenovo-authorised service, providers and a comprehensive, worldwide service. Lenovo I ndia has introduced drop off-pickup centers and a Rapid Replacement Service scheme for customers. Drop off-pickup centers have been established with a facility for customers to drop off their notebooks that need servicing and pick them up from the same locations. Customers can call the Lenovo SmartCentre at 1 600 44 6666 and will be directed to one of these centers if a hardware fix is required. Distribution Strategy Post its acquisition Lenovo is moving towards a direct model of distribution. Cross-functional collaboration between supply chain executives and sales is the centrepiece of a two-year effort by Lenovo to overhaul internal processes to make its supply chain more demand-driven. Like other manufacturers in high-tech markets, the maker of desktop and notebook computers needs to make frequent additions and enhancements to its product lines in order to keep up with rapidly advancing technology. To do that, Lenovo needs a highly flexible supply network to keep pace. In addition, because many of its products feature cutting-edge components, supply shortages are common, creating added incentive to manage demand to avoid delivery delays and maintain customer satisfaction as well as maximise profitability. In an effort to leverage their understanding of sales and perations planning, Lenovo has set up marketing teams responsible for demand management and maintaining margins across its product lines. The teams monitor the supply chain and meet daily with members of the company’s fulfillment department to ensure availability of components and products, and to recalibrate pricing and promotions as necessary. In addition, the company has installed a range of new s oftware tools to help analyse and correlate data from various sales channels and the supply chain, creating instant visibility for teams in sales and marketing, advanced planning, fulfilment and procurement. The systems allow the company to make real-time decisions on pricing and order fulfilment—all the way back to parts procurement—by integrating all the relevant information. In addition to the traditional benefits of demand-driven supply chain management—better inventory management, more accurate order fulfilment and better cash utilisation—Lenovo’s improvements have delivered a boost to the bottom line, improved customer satisfaction, and accelerated the development and delivery of new products and services.. A key goal of Lenovo’s supply chain organisation is to fulfil all orders within eight business days (four days for building and four for shipment). A little more than two years ago, before it launched its demand-driven initiative, the percentage of Lenovo’s laptop shipments, for example, was only hitting the eight-day target somewhere between 34% and 37%,. Today, more than 70% of Lenovo orders are filled within eight days. The initiative has also paid off on the cost side of the supply chain equation, which is particularly critical for technology companies such as Lenovo that switch frequently to newer, more advanced components. Pricing Strategy Lenovo has been very aggressive in their pricing strategy and they constantly offer substantial discounts e. g. via their web site and in addition there are loads of coupons/codes around, which add to the total discount- often making you able to get a ThinkPad for about 20-35% under MSRP. In India there, are different series laptop with each having an entry level model, a mid-range model and a high end model. Pricing of some of the models are as follows: * Lenovo Y Series Laptop are priced from Rs. 32000 to Rs. 54000. Lenovo G Series Laptop are priced from Rs. 24500 to Rs. 34500. * Lenovo N Series Laptop are priced between Rs. 30000 and Rs. 40000. At a certain press event, Lenovo’s CEO Yang Yuanqing detailed his firms strategy to break into rising economies with low-price products before moving its focus to mature markets. In the short term we are pursuing higher market share rather than profits, Yang said. Lenovo’s head for Europe, the Middle East and Africa, Duijl said,† We will enter the low-end price cells and we will add our netbooks and lower-end price-cell models†. Lenovo may perform well in emerging markets, but the entry-level products it sells will bring low profit margins, said an analyst at UOB Kay Hian, a brokerage. In Indian context, following have been the steps to identifying and setting the Lenovo products. 1. Pricing Objective- Capturing Market Share: As is the objective of the company, the company wants to capture a substantial market share going forward. The pricing strategy of the company hence has been to attract more and more consumers to buy its products. 2. Determining Demand-High Price Sensitivity: Indian consumers are very price sensitive. The sales of Dell have shot up in the recent years ahead of HP because of the low pricing model. High end brands like Sony have to skim their prices to nearly half in the last five years to match the consumer expectations. Due to a presence of a thriving grey market and the options available, the consumer in India has a tendency to get the maximum quality for the price paid. 3. Knowing Competitors’ Pricing: The pricing strategy of Dell has been to offer the lowest possible pricing based on the configuration chosen. The consumer has the flexibility of choosing the laptop configuration and assembled components, and gets a desired configuration at the competitive prices. HP follows a perceived value pricing for its Pavilion range of laptops, and a low cost pricing strategy for its Compaq Presario range of Laptops. Sony basically follows a price skimming strategy in all its models. The following table compiles the current market rates in Delhi for the various players in the market. | Lenovo| Dell| HP Pavilion| Compaq| Sony| Dual Core, 320 Gb, 3 GB Ram| 27000| 31200| 40300| 29900| 35000| Core 2 duo 2. 2 GHz, 320 GB, 3 GB Ram| 30500| 34500| 43500| 32500| 37500| Core 2 duo 2. 2 GHz, 320 GB, 4 GB Ram| 32500| 36500| 45500| 34500| 39500| Core i3, 500GB, 3 GB Ram| 35800| 38500| 44900| 32000| 41000| Core i5, 500GB, 3 GB Ram| 39000| 41000| 48000| 35000| 45000| 4. Pricing Strategy: Based on the competitors’ price vis-a-vis market position, the company had two options of going for pricing. * Value Pricing: Offering the customers high quality offering at a lower price. Going Rate Pricing: Following the pricing strategy of the competitor and pricing the laptops at a rate just lower than that of the market leader. 5. Selecting the final Pricing Strategy: Lenovo in India has gone for value based pricing. It has not gone directly into the price wars with its nearest competitors. It instead has offered high quality products with a substantially lower price in the Indian market. The rationale has been gathering fi rst the market share and then substantially go for alternative pricing strategies. Alternate Pricing Strategy The largest market for Lenovo laptops has been China which is also its birthplace. But since 2001, Dell has been steadily eating away its market share owing to its low pricing strategies. Dell priced its laptops below Lenovo’s and offering similar features. This resulted in a drop of Lenovo’s market share and subsequent increase in that of Dell. In order that Lenovo maintain its market share and remain competitive in the Chinese as well as global market, it is imperative that the company adopt different pricing strategies for the different segments of the market. Some of the following strategies can be useful: * For the developing markets of Asia, the company can adopt a going rate pricing strategy after it has established itself in the Indian market and achieved sufficient economies of scale. Since in most of the countries, including India, Lenovo is a market follower after Dell and HP, this simple strategy can ensure that the product makes an impact on the market as most consumers will not go upon the value of the product only but the price of the product too. For the developed markets of Europe, the company can adopt a perceived value based pricing. As Value-based pricing is dependent upon an understanding of how customers measure value, there is good chance that customers from the developed European economies will have a good understanding of the product value. * For the Chinese market, the company can adopt a competition-based pricing. As the Chinese market is flooded with number of competitors, it is essential that the prices of Lenovo Laptops are in the comparable range of the competitor’s. Product Life Cycle and New Product Development Strategy The Laptops and netbooks developed by lenovo mainly concentrate on the home users and small or medium businesses. Lenovo lacks a product, specifically a laptop, which attracts gaming enthusiasts. Similar products are currently being offered by rival companies like HP and Dell. Hence it becomes imperative for Lenovo to come up with a new product which can perform under extreme conditions and give the ultimate gaming experience. The new laptop which can be developed will be powered by the new intel Core-I3/i5/i7 processors. It will also have a dedicated graphics memory for the high-end gaming graphics. The user will be given the option to increase the memory accroding to his or her requirements. The laptop will be shipped with a minimum hard drive space of 500 GB. As stated above, the laptop will target the niche segment of gamers and casual gamers. The laptop laptop will also be targeted at businesses and industries concerning graphical development applications or any kind of animation industries whose graphics requirement are quite high than what the existing line of laptops can offer. The laptops will be distributed using the existing References 1. Lenovo India portal: http://www. lenovo. com/in/en/ 2. http://www. livemint. com/2010/04/13001711/Acer-p