While the brand segmentation between Packard Bell and the rest of the Acer umbrella is a pan- European-strategy, are there any nuances within the UK market that makes your approach here different?
The UK is a very unique market. It has a lot of entry-level products and somebody who is looking for something nice has, until now, had to pay the price for it.
For us, the real beauty is because we don’t just have the one brand, we don’t have to compromise any of the segments of the market. It means that Packard Bell can really focus on the lifestyle segment, and it means that we can really concentrate on people looking for a PC that has a nice look and feel. We’re targeting people who are willing to pay a little bit more. I think it’s an entirely new space that we’re opening.
I know the brand is not really that well known in the UK. That is partly because we were positioned as an entry-level brand by the Dixons Group. But across the rest of Europe, Packard Bell has been known to be a strong marketing player, with an emphasis on quality and good product marketing.
You say that Packard Bell isn’t really that well known in the UK. Can you elaborate on what you mean by that?
There was a study done by a consulting firm that found that people had heard of the brand and could even associate it with computers. But they didn’t know what type of computers it sold or what market it targeted.
In a strange way, it’s very good for us because it means that we start with an established brand, but without it being pigeon-holed into a particular market segment. It’s essentially a fresh start, which is great for us. It’s one of these times that we can help Packard Bell to achieve a second life.
You said that Packard Bell is targeting those consumers who care about how something looks, which inevitably draws comparisons with Apple and Sony. Do you feel that your price point is a key weapon for competing with them?
If we examine those brands you mentioned, at our price point, there isn’t really any competition.
Sony has its own approach – it doesn’t just do PCs, it has a whole range of consumer electronics, which helps it to leverage its brand equity. But in turn, you have to pay the price for the brand name.
Apple is a very different animal, especially in the PC environment. It doesn’t have the same operating system for one, and its product are expensive.
I’m just thinking about all these people – they’re the bulk in essence – who may not be able to afford such brands, especially in the current economic environment. Until now, they have had to go where 80 per cent of the volume in terms of sales is, and until now have not be able to buy a computer with a nice design.
Do you feel that computers have gotten to the point where most are more than capable of doing what an average person wants, and so it isn’t so important to focus on the specs?
It’s always going to be the same; some people will continue to consider specs. I know people who will want to have the best PC they can buy for security. They feel by having the maximum computer specification they will get the value back out of it. However, there are also some people who say, ‘no, I’m just looking for a PC based on the tasks that I’m going to use it for.’
You have the same segmentation in the car industry, for instance. It’s the same reason why some people will buy a Ferrari, with a super powerful engine, while others will be quite happy with a new Fiat – they’re both part of the same group, but they cater for different ends of the market.
I really do feel that we’re moving towards this with the PC industry. There is definitely a market for the various segmentations of the Acer Group, as there is for the Fiat Group.
Could you give us some more details on your retail and distribution partners?
We are going to have a two-phase approach. We’re going to announce about five to six retailers, with products hitting shelves in the third quarter. In terms of distribution, we have one confirmed distributor, which is Micro-P – it’s not going to be a secret as they are very consumer orientated.
We’re also going to have a second, just to make sure we cover all resellers. The second set of discussions are a lot more advanced, while with Micro-P, because of its consumer focus, I would say it was a natural choice.
So I feel that by the end of Q4, we’ll have everybody on board. The main reason for that, and this isn’t a secret either, is that we have to ramp up – it’s not just like pushing products out, we have a very marketing-orientated approach, so we have to make sure that we get the right message to the right people, and take care of them. This is very central to our business model and that is why it will be in two phases.
What we want to get across is that while we are certainly going to be in some major retailers, we are keen to invest in smaller retailers and resellers. It’s one of our top priorities to take care of all our partners.