Growing Market Share - Branding In The Computer Industry

The computer market is as crowded and competitive as any consumer brand market in the world and, with the exception of operating system platforms, is undifferentiated. Today computer marketing seems to be chasing DELL when, in reality, the DELL brand is simply synonymous with value and PC. The entire category defines itself in the same way and counts on sleek new design to create brand preference. The problem with these brands is that they have not created brand loyalty and are in the unenviable position of having to constantly recreate brand equity.

Apple has the most powerful brand in the category but still enjoys less than a 4 share. Despite recent campaigns to get customers to switch brands, Apple has been preaching to the choir for 20 years. Apple users care but PC users do not. Why? Because the computer hardware today is cheaper than many software applications and no amount of bells and whistles is going to get an avid PC user to switch to the Macintosh brand platform and scrap all of their existing software. Even the hugely successful iPod did not take off until Apple made it PC compatible and released a PC version of iTunes. click image to enlarge The reason this chart does not include placement of brand names is because they all occupy the same space. For the most part, brands sell models and not brands. On the Windows side of the axis sits all of the PC brands. HP, IBM, and SONY and the like represent the “brand names” of computer models and DELL, Gateway, and others represent the “value” quadrant. On the Macintosh side of the axis, there is only one competitor.

Computer manufacturers continue to complain about shrinking margins and yet they have given the customer no other reason (once they choose a platform) to choose other than price and features. click image to enlarge Apple has the greatest opportunity to steal market share but only if the brand begins to understand that it needs to allow customers to compare apples to apples. The Macintosh brand has always commanded a premium price point because its brand represents ease of use, simplicity, elegance, and reliability. Until Apple realizes that its brand currently sits on the same axis as its competitors (proprietary system), it will continue to languish until it wastes away.

Today’s consumer demands compatibility, and the first brand to allow customers to use both systems (natively) will win. The Mac system is better, and, when all things are equal (read: I can still use my old software), the customer will purchase new software that runs on the Macintosh system. The first brand that offers upgrades at a reasonable cost will win as well. For the Windows market, the only way out of the value conundrum is to represent flexibility in the upgrade positioning.

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