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Brand Tracker Phase I Brand Image Measurement A report submitted to Prof. Govindrajan In partial fulfillment of the requirement of the course Product and Brand Manage ment On 14 August 2011 th By Rakesh Gakare (B10021) Sharath Ghosh (B10024) Shishir Ramkumar (B10025) Siddh arth Goutam (B10030) 2

Executive Summary Hewlett Packard is a California based company established in the year 1939 as a partnership between William Hewlett and David Packard. It is best known for its manufacture and sale of personal computers and computer accessories. It sells mo re than 48 million computers annually and 1 million printers weekly. It was rank ed No. 9 in the list of Fortune 500 companies in the year 2009, with revenue of US$ 126.033 billion. HP enjoys global market leadership in the PC and computer p eripherals segments. HP started as a manufacturer of instruments for analysis an d measurement, it diversified itself into producing computer monitors, Digital c ameras, digital press, PCs, mobile phones, networking, laptops, PDAs, printers, sc anners, servers and storage devices. One of the main reasons for HPs success has been its innovativeness and its ability to acquire companies. In the first phase of the Brand Tracker project we have attempted to determine the current status of the brand and the brand identity in the minds of the consumers. A variant of th e famous Brand Asset Valuator (BAV) was used to identify the current status of t he brand while the Zaltman Metaphor Elicitation Technique (ZMET) was used to det ermine the brand identity. The BAV model measures the value of the brand along 4 dimensions namely Differentiation, Relevance, Esteem and Knowledge. Differentia tion and Relevance together comprise the brand strength while Esteem and Knowled ge build up the Brand Stature. For BAV, a random sample of 50 was surveyed using a questionnaire. HP has the highest percentile score (100) along 3 pillars name ly differentiation, relevance and knowledge while it has 80 percentile in Esteem second only to Apple. On the BAV power grid HP lies on the leadership category which shows that it has a high earnings and high growth potential. The only caus e for concern, if any is the comparatively low esteem score which shows that the re is a problem in HPs brand personality The ZMET technique was used as the quali tative research tool to gauge the brand identity of HP. A sample of 9 respondent s was chosen to execute this process. The technique is based on the fact that mo st human communication is nonverbal, much of which is visual. The ZMET interview employs several steps to surface and further define consumers key thoughts and feelings. Each step in ZMET provides a different opportunity for identifying and understanding metaphors, thereby gaining a deeper understanding about the consu mers. The ZMET technique identified HP as a global giant which is highly trusted , innovative & professional and delivers superior performance. 3

Table of Contents

Executive Summary... 3 Brief history of the brand 4

A Brief History of Hewlett-Packard: The Founders: William Redington Hewlett (Bill Hewlett) was born 20 May 1913 in Ann Arbor, Mich igan, where his father, a respected physician, served on the faculty of the univ ersitys medical school. Occasioned by his fathers acceptance of a faculty posi tion at Stanford University; introduced young Bill to the cultural, scientific, and literary world of a dynamic and growing San Francisco Bay Area. David Packar d (September 7, 1912 March 26, 1996) was born in Pueblo, Colorado. He attended C entennial High School, where early on he showed an interest in science, engineer ing, sports, and leadership. He earned his B.A. from Stanford University in 1934 . Stanford is where he met two people who were important to his life: Lucile Sal ter and William R. "Bill" Hewlett. In 1938, he returned to Stanford from New Yor k, where he earned a masters degree in Electrical Engineering in 1938. Dave Packard Bill Hewlett HP: US$ 538 to US$ 126.033 billion Hewlett-Packard had its beginnings with Stanford University graduates, William H ewlett and David Packard, who were encouraged by Professor Frederick Terman to s tart their own business. With only $538 and workspace in a garage behind Packard s rented house in Palo Alto, California, the two men began working on a resista nce-capacity audio oscillator, a machine used for testing sound equipment. After assembling several models--baking paint for the instrument panel in Packards o ven-they won their first big order, for eight oscillators, from Walt Disney Stud ios, which used them to develop and test a new sound system for the animated fil m Fantasia. Now the same Hewlett-Packard is a global market leader in with reven ue worth US$ 126.033 billion. How to make a BRAND (name): On January 1, 1939, Hewlett and Packard formalized their venture as a partnershi p, but they were unable to decide the company name. So they agreed on a coin tos s, which will decide the order of their name. Hewlett won and the legendary Hewl ett-Packard was born. A Snapshot of HP: The California-based Company Hewlett Packard is best known for its manufacture a nd sale of personal computers and computer accessories. With a distribution of m ore than 48 million computers annually and 1 million printers weekly, this Fortu ne 500 Company ranked No. 9 in 2009. However, this was not always the case. Hewl ett Packard started many years before the Internet and personal computers became household items. At the time, this risky venture started by two guys working ou t of garage had only one customer, Walt Disney, and then the rest is history. 6

Statistics: Type: Public company Traded as: NYSE: HPQ Industry: Computer hardware, Computer software, IT consulting, IT services Headquarters: Palo Alto, California, US Rev enue: US$ 126.033 billion (2010) Products: Computer Monitors, Digital Cameras, E nterprise Software, Indigo Digital Press, Mobile Phones, Networking, Personal Co mputers and Laptops, Personal Digital Assistants, Calculators, Printer, Scanners , Servers, Storage, Televisions, Telecommunications hardware and software. Emplo yees: 324,600 (2010) Important Phases: HP Began as Maker of Test and Measurement Products: In Palo Alto, California, Bi ll Hewlett and Dave Packard men began working on a resistancecapacity audio osci llator, a machine used for testing sound equipment. After several attempts, they got their first big order, for eight oscillators, from Walt Disney Studios, whi ch used them to develop and test a new sound system for the animated film Fantas ia. HP Moves into Calculators and Computers in the Late 1960s and 1970s: Althoug h primarily a manufacturer of instruments for analysis and measurement, HewlettPackard developed a computer in 1966, specifically for its own production contro l, the HP-2116A, and had no plans to enter the computer market. Two years later, however, HP introduced the HP-9100A, the first desktop calculator capable of pe rforming scientific functions. Signaling a change in company strategy, in 1972, Hewlett-Packard made its first decisive move into business computing, a field do minated by IBM and Digital Equipment Corporation, with the HP3000 minicomputer. HP Introduces Personal Computers and Printers in the 1980s: HewlettPackard intro duced its first personal computer, the HP-85, in 1980, to a cool reception. Its move into information processing, however, proved successful and the company qui ckly established itself as a leading computer vendor. It also introduced a numbe r of other products, including the HP9000 technical workstation (1982), the HP15 0 touchscreen PC, the HP ThinkJet inkjet printer (1984), and the HP LaserJet pri nter--a phenomenally successful product that came to dominate the printer market soon after its 1984 debut. HP in the Late 1980s: New Products and Markets: In 1 986, HP introduced its new family of Spectrum computer systems, developed at a c ost of $250 million. While market projections for Spectrum were good, and the sy stem itself was state of the art, HP initially failed to capitalize on its techn ology because of the companys strategy of focusing on markets rather than produ ct lines. In April 1989, Hewlett-Packard paid $500 million for Apollo Computer, a pioneer in the design, manufacture, and sale of engineering workstations. Inte grating the two companies and eliminating unnecessary engineers and salespeople proved more time-consuming than anticipated, and as sales dropped, Hewlett-Packa rd slipped back to second position in late 1989. 7

Early 1990s Difficulties Led and Restructuring of HP: In spite of the new focus on workstation technology and cooperative trade agreements, HP began 1990 with sagging profits and a lackluster consumer response to its new product line. In 1 990, earnings fell 11 percent to $739 million, down from $829 million in 1989. D avid Packard, the retired co-founder of the company, returned to his office to t ake a more active role in running the business. HPs 95LX palmtop personal compu ter, which was introduced in 1991, established an important new market in inform ation devices. The resurgence of the company was not achieved without a price. H P cut 3,000 positions in 1990 and a further 2,000 positions in 1991. While execu tives agreed that downsizing was a necessary evil, the staff reductions, togethe r with a more aggressive advertising stance, changed the companys image. HP Agg ressively Expands in PCs in the Mid-1990s: HPs pursuit of personal computer pro minence was problematic given that sectors relatively low margins, but Platt (C EO at the time) felt the company had to be a major player in PCs in order to rem ain one of the top computer companies in the world. With the Internet and electr onic commerce burgeoning, HP in mid-1997 paid nearly $1.2 billion to acquire Ver iFone, Inc., a maker of in-store terminals used to verify credit card transactio ns. Also in 1997, HP was added to the companies that comprise the prestigious Do w Jones Industrial Average. 1999 HP Plans to Spin off Non-computing Lines: In la te 1998, HP launched a comprehensive review of its operations and announced in e arly 1999 its intention to spin off into a separate firm, Agilent Technologies, its non-computing segments: test and measurement products and service, medical e lectronic products and service, electronic components, and chemical analysis and service. These segments generated about $7.6 billion in revenues during 1998, o r 16 percent of the total. HewlettPackard hoped this major divestment--which inc luded the companys original lines of business--would sharpen the firms competi tive instincts, energize its workforce, and enable it to become a more aggressiv e player in the increasingly important sphere of the Internet. Acquisitions and a Merger of Worldwide Importance: In September 2001, HP acquired StorageApps, ma nufacturer of storage virtualization appliances, and Indigo, a leading commercia l and industrial printing systems company. Perhaps the biggest news to the indus try occurred on September 3, 2001, when HP and Compaq Computer Corporation annou nced a definitive agreement to merge; creating a new $87 billion global technolo gy leader. On May 3, 2002, Hewlett-Packard officially closed its $19 billion acq uisition of Compaq Computer Corporation. Compaq investors received 0.6325 shares of Hewlett-Packard for every Compaq share they owned, and Compaq stock ceased b eing traded. HPQ became the new stock ticker for the combined company. The Time Line: 1939: William Hewlett and David Packard enter into a partnership; Hewlett-Packar d (HP) is born. 1940: HP operations begin in Palo Alto, California. 1947: HP is incorporated. 1951: HP introduces the HP524A high-speed counter. 1957: HP shares are offered to the public. 1958: HP acquires F.L. Moseley Company, manufacturer of graphic recorders. 1961: HP purchases the Sanborn Company; a medical instrum ents manufacturer and is listed on the New York Stock Exchange. 1966: HP develop s its first computer. 8

1972: HP introduces a handheld scientific calculator, the HP-35; HP introduces t he HP3000 microcomputer. 1980: HP introduces its first personal computer, the HP -85. 1984: HPs LaserJet printer makes its debut; 1988: HPs stock begins tradin g on the Tokyo stock exchange. 1989: HP purchases Apollo Computer; 1991: HP intr oduces the 95LX palmtop personal computer 1992: Lewis E. Platt replaces Young as head of HP; 1993: Packard retires and Platt is named chairman, president and CE O of HP; 1994: Compaq surpasses IBM as the number one seller of PCs worldwide; 1 995: HP launches the Pavilion line of home computers. 1996: HP co-founder, David Packard dies on March 26, 1996 1997: HP acquires Verifone, Inc., maker of in-st ore terminals for verifying credit card transactions; 1999: HP president Platt r etires and Lucent-executive Carly Fiorina is appointed president and CEO. 2001: HP co-founder Bill Hewlett dies on January 12, 2001 HP acquires application serv er specialist Bluestone Software Hewlett-Packard and Compaq announce their plann ed merger. 2002: HP and Compaq merge on May 3, 2002; HPQ is unveiled as new stoc k ticker for combined company. 2004: HP announces plans to renovate and rehabili tate the garage, house and shed at 367 Addison Ave. 2005, December 6: With prese rvation efforts complete, the HP garage is re-dedicated as a state historic land mark and the Birthplace of Silicon Valley. 9

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The Brand Asset Valuator (BAV) is the worlds largest database of consumer percept ion of brands created and managed by Brand Asset Consulting, a division of the a dvertising agency Young and Rubicam(Y & R). The BAV is based on research data of almost 500000 consumers from 44 countries. It is used as an empirical model for managing brands worldwide. BAV also serves as a diagnostic tool for understandi ng how brands grow and decline over a period of time. Brands use BAV as a perspe ctive tool for developing brand strategies and tactics. BAV measures the value o f a brand across four key pillars: Differentiation, Relevance, Esteem and Knowle dge. Differentiation measures the degree to which a brand is seen as different f rom others Relevance measures the breadth of the brands appeal Esteem measures ho w well the brand is regarded and respected Knowledge measures how familiar and i ntimate the consumers are with the brand Differentiation and Relevance together lead us to brand strength or brand vitality while Esteem and Knowledge calculate the brand stature. Brand strength is an indicator of the brands future value whi le brand stature is a report card on the past performance of the brand. Keeping in sync with the times another pillar has been added to the BAV model known as e nergy which measures the momentum of the brands sense of momentum. In the power g rid it forms a part of brand strength. 11

Research Methodology The BAV model was used to measure the current status of the brand vis--vis its co mpetitors. As the BAV is a proprietary tool an independent questionnaire was des igned to gauge the consumers perception across the 4 pillars on which BAV is base d. Each pillar was assigned 100% weightage and this was split amongst the questi ons pertaining to them. Weights were assigned on the basis of how direct and how comprehensive was the information that could be derived from the question. The survey was done through the internet for a sample size of 50 and the sampling me thodology followed was random sampling. The calculation was done by totaling the number of responses and adding them after the weightage of the question was all ocated to a particular attribute or a brand. This was done for every question to arrive at a score for each brand. All the scores from the questions pertaining to a specific pillar for a particular brand was added to get the final score for that pillar for that brand. Once this was done percentile was assigned on the b asis of the final score received by each brand. In Q.9 a Z-test was done to find out whether the sample was representative of the entire population or not. Afte r that ANOVA was executed to figure out which brand was the leader across all at tributes being tested. In case of brand stature, there were few open ended quest ions which resulted in the category others. For the purpose of plotting the bran ds on the BAV power grid, this other category was ignored. Questionnaire: 1. Wha t is the first brand that comes to your mind when you hear the words Technologica l Corporation? (Brand Knowledge-30%) 2. Identify the following taglines with thei r brands: (Brand Knowledge-50%) a. b. c. d. e. Solutions for a small planet The power to do more Think Different Invent-Everything is possible Your potential our passion 3. When it comes to computer hardware which amongst these brands would YOU recommen d: (Brand Esteem- 30%) a. IBM b. Dell c. Apple d. HP e. Microsoft 4. Which brand (s) would you associate with the following devices: (Brand Differentiation-25%) a. Laptops b. Printers c. Desktops d. Servers e. Storage devices 12

5. Which technological brand would you associate with the following: (Brand Rele vance-50%) a. Stylish b. Prestigious c. Intelligent d. Professional e. Innovativ e 6. When buying a computer devices or(&) peripheral devices which of the follow ing is the critical to you: (Brand Relevance-50%) a. Price b. Quality c. Recomme ndation d. Variety e. After sales service 7. For each of the following brands is there any brand that is similar in its offerings: (Brand differentiation50%) Br and Yes/No If yes, please name the brand IBM Apple HP Dell Microsoft 8. Match th e following usage with a technological brand of your choice: (Brand Differentiat ion-25%) a. Home usage b. Commercial usage c. Education d. Entertainment e. Data storage 9. Rate the following brands on a scale of 1-5 for the following attrib utes (1 being the least rating and 5 being the highest): (Brand Esteem-70%) Trus t Performance Customer care User friendly HP Dell Apple IBM Microsoft 10. Identi fy the following logos: (Brand Knowledge-20%) 11. Which brand of computer hardware do you use?( to be cross tabulated with Q.6 ) 13

Results and Analysis of BAV: (the details of the analysis and the calculations are in the excel sheet attache d)

Individual brands: The percentile score of all the individual brands across differentiation, releva nce, esteem and knowledge was calculated and then converted into graphs. Then th e graphs were compared with the graphs given in the prescribed text- Marketing M anagement,13th edition to find out in which category( new, unrealized potential/ niche, leadership, declining, eroded and unfocused) do these brands lie. The bra nds that were analyzed were IBM,Dell,Apple & Microsoft as they are competitors t o HP. IBM 100 90 80 70 60 50 40 30 20 10 0 D R E K 40 IBM 60 60 60 From the graph we can see that IBM is low on relevance while it is about average in differentiation, esteem and knowledge. By plotting it in the BAV power grid it comes that IBM is a Declining Brand. 14

Dell 100 80 60 40 20 0 D R E K 80 60 40 40 Dell In case of Dell the respondents perceive to be a highly differentiated brand. It has an average score in terms of relevance while score below average in esteem and knowledge. In the power grid Dell comes in the Unrealized Potential category . Apple 100 100 80 60 40 20 0 D R E K 40 Apple 80 80 Apple scores high on brand stature but scores comparatively lower on brand stren gth, ergo a Declining Brand 15

Microsoft 100 80 60 40 20 0 D R E K 20 20 20 20 Microsoft Microsoft scores low across the 4 dimensions as such it is an Unfocused Brand HP 100 100 80 60 40 20 0 D R E K HP 100 80 100 From the data collated we find that HP scores high across the 4 dimensions of BA V, ergo Hail to the chief. HP is considered a high earnings and high potential b rand i.e. it falls in the Leadership category 16

Brand Asset Valuator Power Grid Hewlett Packard on BAV HP as per the BAV is a market leader what does that mean? In order to decipher this mystery we need to analyze the 4 pillars of BAV indiv idually with the percentile scores that have been awarded. Differentiation: HP h as a percentile score of 100, this means HP has managed to differentiate itself properly from the other need satisfiers Relevance: HP has a 100 percentile in re levance. This leads us to realisation that the need identification process of HP is excellent which leads to conclusion that the most important building block f or a brand is in place HP. Esteem: HP is only a 80 percentiler in case of esteem coming second only to Apple which has a 100 percentile in esteem. This shows th at the brand HP is well respected and regarded by the consumer.

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Knowledge: HP again scores a 100 percentile, the highest score one can receive i n Knowledege. This leads us to the conclude that the past brand building efforts of HP coupled with its age have made it one of the most well known brand around the globe. High Knowledge & Low Esteem: From the quantitative research we found that HP scores the highest in knowledge but has a comparatively low score when it comes to esteem. This leads to the conclusion that there is a slight problem with the brand personality of the Hewlet-Packard.

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Analysis Tool Used: ZMET ZMET stands for the Zaltman Metaphor Elicitation Technique and was developed by Harvard Business School Professor Gerald Zaltman, the Joseph C. Wilson Professor of Business Administration and Codirector of the Mind of the Market Laboratory. To develop creative strategic solutions to marketing problems managers need: De tailed knowledge of the consumer and the marketplace Clarity of thought guided b y effective models and theories Creativity and imagination Reasoned judgment and experience Where these needs exist, it is appropriate to consider using ZMET. Z MET research provides fundamental understandings of consumers, by identifying a broad set of meanings, at several levels of experience. It helps understand how unconscious and conscious processes interact to: Create needs Influence the crit eria for satisfying them Shape the experience of satisfying needs Spawn judgment s about those experiences. These understandings are necessary foundations for bu ilding effective marketing strategies. ZMET uses visual and non-visual "images" gathered and/or generated by consumers to elicit and probe the metaphors that re present consumers thoughts and feelings about a topic. Images are important units of analysis for marketing managers. When augmented by consumers explanations du ring careful probing by an interviewer, the images provide a clear idea of what consumers really think and feel. Almost invariably, these insights are far deepe r and clearer than the insights to be gained from verbal discussions alone. Alth ough images can be visual, many images can take other forms as well such Touch, smell and sound. Whatever the form it might be, an image represents a feeling mu ch more distinctly than words. For this reason, usage of images is referred to a s a Metaphor. During a ZMET interview, we collect verbal descriptions of the tho ughts and feelings represented by these images to help us understand their meani ng. Strong evidence exists that these verbal descriptions are far more complete and far more useful to managers because they were stimulated initially by these images or metaphors. By having, people select their own images, the ZMET process gives participants control of the research stimuli and a greater sense of invol vement with the interview topic. Thus, participants are able to represent their thoughts and feelings more completely and accurately than when responding to sti muli presented by the Researcher. The pictures participants bring to the intervi ew are metaphors that serve as entry points into their thinking process. Explori ng the meaning of these metaphors allows us to elicit many important ideas 20

Origin of ZMET: Zaltman began thinking about the power of using imagery in research while on vac ation in Nepal in 1990. Zaltman initially planned to bring his camera but at the last minute opted to chronicle the trip by giving local residents disposable ca meras and asking them to take pictures that would explain what life was like in their villages. After developing the pictures, Zaltman returned to the village t o ask residents to explain, through an interpreter, the meaning of the photograp hs. The imagery tended to reveal ideas that would have been difficult or unaccep table to put into words. For example, the photographers often cut off peoples fee t in the photographs. This was intentional. In Nepal, bare feet are a sign of po verty. Zaltman believed that because of the stigma associated with poverty, the topic likely would not have surfaced had the villages been asked to describe lif e in their villages using just words. Steps followed in the Quantitative research Step 1: Story telling about the pictures The respondents were asked to select 10 pictures, which they felt best described, their feelings towards the brand HP. They were then asked to describe the pictures and how they associated them with the brand in the form of a 5 to 6 line story. This is done as much of our experi ence and feelings take the form of stories and are an important source of insigh t of the respondents. A bit of laddering was done to get a bit more insight into the respondents mind Step 2: Missing Picture The respondents where then asked if they wanted to include any other picture in the 10 selected. If they answered y es then they were asked to explain why. This is done to explore the kind of imag e that might represent the thoughts and feelings. Step 3: The Triad Task This ta sk tries to identify the concepts and thoughts at a higher level. The respondent s are asked to represent 3 pictures selected at random by the interviewer and ho w 2 of them are similar, but different from the 3rd picture. The reasons are pro bed using laddering technique. Step 4: Metaphor Probe The participants are then asked to elaborate their thoughts and feeling in a deeper and more complete way. This uncovers hidden meaning and gives validation to ideas, which have surfaced in the previous steps. For this the respondents are asked to widen the frame of one or more picture by asking what should be added or deleted from the picture that might reinforce the original idea. This step is repeated for 2 or 3 picture s. 21

Step 5: Digital Imaging The respondents are then asked to create a collage of th e pictures they have selected. They were asked to give one word for the pictures they had selected. This brought out what they thought and their ideas. This is the summary of the entire exercise. While the summary brings out most of the ide as expressed by the respondents earlier, some new ideas do surface during this s tep as the participants modify the pictures in size and colour to fully convey t heir feelings. When the picture is finished, the respondents are asked to give a verbal description, which serves as an interpretive tour of the entire exercise . 22

Similarities among the respondents 3 2 4 5 7

Global Giant Invention Ideas Rich Value for money King

Future Innovation Trust Bonding Poor customer service

Leader Ahead Out performers No.1 Global reach Selfevaluation Quality State of ar t Innovative

Faith Basket of goods Team player User friendly Bright Ideas Standing out Profes sional

Professional Trendy Host of services Well Known 24X7 Helpful Basket of goods 23

Keeping in mind the Zaltman story telling approach, the brand identity of HP as per respondent feedback can be interpreted as the following: is a global giant having a wide spread network. It is a highly trusted brand whi ch promises value for money along with superior quality. This coupled with its i nnovations and professional attitude makes HP stand out among its competitors. 24

References: Prof. Srinivas Govindrajans PPTs Marketing Management, tex ://fmcg-marketing.blogspot.com http://wikipedia.org http://www.people.hbs.edu/kr andel/mml/negotiation/zmetint.html http://www.acrwebsite.org/volumes/display.asp ?id=7644 http://www.brandassetconsulting.com/ http://www.hp.com/ http://hpalumni .org http://www.webhostingreport.com 25 http://www.fundinguniverse.com