Gateway Computers are failing to captivate buyers

San Diego Tribune Mast Hed

 

 

FROM THE SAN DIEGO TRIBUNE

 

How now Gateway cow? Poway computer maker abandons folksy prairie image for a hip, urban appeal… Gateway was born.

Bruce V. Bigelow STAFF WRITER

What about Gateway Computers?

Gateway was born in a barn and reared on the prairie. But something has changed this year, as the Poway computer maker rolls out its offerings for the holiday season.

Gateway Computers fight for preference
What makes them different or better?

The talking dairy cow is gone, along with cameo appearances by Ted Waitt, the company’s ponytailed founding chairman and chief executive. Gateway’s trademark cow-spotted shipping boxes have also been put out to pasture. The make-over, exemplified by TV ads that began weeks ago, constitutes what Waitt has called the “de-prairiefication” of Gateway.

In texture and tone, the company has shucked the quirky and folksy aspects of its image for a look that’s more hip. In short, no more country shtick. Gateway is moving its brand downtown. Gateway’s new ad campaign, for example, features computer users in a series of vignettes with an urban look and feel. In one, an attractive woman riffs about Gateway’s new tagline, “a better way” while the neo-soul duo Floetry plays a syncopated tune in the background. Information about Gateway and its digital products is simultaneously displayed in colored boxes that border the video like a picture frame. The new campaign is intended to solve a basic problem: Gateway’s down-on-the-farm image ran counter to the identity it wanted as a high-technology computer company offering the latest advanced components.

The decision to alter Gateway’s longtime rural identity was not made lightly, officials said. While Waitt wanted to take the country out of the corporate image, he also wanted to retain Gateway’s identity with consumers as approachable and customer friendly. “I actually pushed the team to the outer limits of seeing how far we could evolve the brand without abandoning the core elements that made it great,” Waitt said. “I even had them explore package designs that didn’t include the cow spots. “In the end, I think we settled in a place that really works,” Waitt said. “It’s still Gateway, but with a fresher, more modern attitude.” Whether it’s all enough to create a stronger affinity for the Gateway brand remains to be seen, though the Christmas shopping season offers the first test. For example, Gateway’s old logo, which featured a cow-spotted shipping box, has been replaced with a symmetrically triangular form that still suggests a cow spot, or what some marketing professionals call a “heritage echo.”

Gateway computers are not doing well
What could Gateway say or claim?

The New Logo

The new logo also carries a computer power button laid on its side to form a stylized “G.” Gateway intends eventually to use the new logo as a stand-alone graphic, like Nike’s distinctive swoosh. The decision to change Gateway’s identity actually began in late 2000, with Waitt’s return as chief executive after a yearlong hiatus, said Brad Shaw, Gateway’s senior vice president for marketing and communications. “He said the very first thing that needs to change is our product line,” Shaw said. Of course, product design was only part of a much-bigger overhaul that included withdrawing from overseas markets and refocusing Gateway’s business on the United States, especially in mass-market retail.

Much of Gateway’s new strategy became evident this year in new merchandising efforts, as the company expanded its lineup of digital products. By April 2002, the industrial redesign Waitt commissioned had replaced Gateway’s beige-colored desktop PCs with silver and black models — or, as Gateway prefers, “platinum and graphite.” All of this has happened with the technology industry in recession and the personal computer industry under pressure on several fronts. If anything, the challenge at Gateway is trying to accomplish everything at once.

“While advertising helps, advertising is not the key in turning a company around,” said Dominique Hanssens, a professor of marketing at The Anderson School at the University of California Los Angeles. Customer tracking research done after Waitt’s return also showed “some deterioration in terms of technology leadership and reliability,” Shaw said. While consumers considered Gateway’s advertising “entertaining,” “friendly” and “Midwestern,” Shaw said market research showed “We were not playing well in the business space with the cow motif.”

During the 2002 Winter Olympics in Salt Lake City, Gateway was running frequent TV spots with Waitt and the talking dairy cow — a campaign created by a Los Angeles ad agency, Siltanen & Keehn. “I think the cow idea was cute,” said UCLA’s Hanssens. “It has probably given them some brownie points in terms of consumer awareness, but it really doesn’t do much to build the brand.” Though Gateway’s talking cow ads continued to run through June, the company had already commissioned a new branding campaign from the Arnell Group, the New York ad agency run by Peter Arnell. “We tried to make a simpler, easier, more understandable communication program to let you get more easily to the product and what it is,” Arnell said. Arnell’s firm also selected a palette that helps consumers “put the product into a lifestyle setting,” like paint chips around the border.

A key benefit to the New York agency, Shaw noted, was Arnell’s partnership with Steve Stoute, an executive producer at Interscope Records. As a result, Gateway’s TV ads feature Interscope artists, such as Floetry and Robin Thicke, son of TV entertainer Alan Thicke. “I believe the sense of discovery that comes with music is one of the most powerful elements you can have in your marketing mix,” Shaw said. “And Ted is as avid a music fan as I am.” These artists have yet to make their commercial breakthrough, Shaw acknowledged. But they’re less expensive than more popular alternative artists, such as Ryan Adams, Wilco and Beth Orton, who appeal to the market segment Gateway has targeted. Even so, linking Gateway’s products with up-and-coming artists is essential to conveying how innovative the company is. “It’s got to be very cool and believable, that’s the key,” Arnell said. “It’s got to be very hip.

Tom Dougherty brand strategist on Gateway Computers
Tom Dougherty

It’s got to drive in your mind a certain believability and reality. ” Tom Dougherty of Stealing Share, a Greensborough, N.C., brand development and naming company, says consumer loyalty regarding PCs has been based on the lowest price rather than brand recognition. Dougherty doesn’t think any of the major PC makers have done a good job of creating brand loyalty.

The object of a brand campaign, Dougherty said, is not that a company is selling the latest and greatest stuff. CD burners and other bells and whistles are not what differentiates a brand these days, Dougherty said. “The brand is not the product, and it’s not the business,” Dougherty said. “It’s the customers and who they want to be.” The real measure of success, Dougherty says, is if consumers watch a Gateway ad and say, “I want to be that.”

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