IBM: Brand Equity Restoration and Advertising Evolution
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IBM
Brand Equity Restoration and Advertising Evolution
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______________________________________________________________________________ This case was written by Professor Michele Greenwald, Visiting Professor of Marketing at HEC Paris, for use with Advertising and Promotion: An Integrated Marketing Communications Perspective – 7th edition by George E. Belch and Michael A. Belch. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources and interviews with executives at IBM and Ogilvy & Mather.
Introduction
During the 1970s and ‘80s, IBM was one of the most successful companies in the world. The company had experienced strong growth in both revenue and profits and had a virtual stranglehold on the market for mainframe computers. In fact the company was often referred to as “Big Blue,” a nickname derived from its massive blue mainframe computers. For four consecutive years in the 1980s, IBM held the top spot in Fortune magazine’s annual list of the most admired companies in the United States. However, by 1993 the quintessential “Blue Chip” company had reached its nadir. Over the three previous years, IBM had lost a total of $15 billion and its stock price was at an 18-year low. The brand had fallen below number 250 in Interbrand’s annual survey of the most valued brands with a brand value, estimated at a negative $50 million dollars. The explosive growth of personal computer networks threatened IBM’s lucrative mainframe and minicomputer business and the company was struggling to turn the situation around. In the late 1980’s and early 90’s, the drivers of innovation and change in information technology were smaller, nimble companies like Microsoft, Compaq, Dell, Oracle and others who offered less
IBM
Brand Equity Restoration and Advertising Evolution
[pic]
______________________________________________________________________________ This case was written by Professor Michele Greenwald, Visiting Professor of Marketing at HEC Paris, for use with Advertising and Promotion: An Integrated Marketing Communications Perspective – 7th edition by George E. Belch and Michael A. Belch. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources and interviews with executives at IBM and Ogilvy & Mather.
Introduction
During the 1970s and ‘80s, IBM was one of the most successful companies in the world. The company had experienced strong growth in both revenue and profits and had a virtual stranglehold on the market for mainframe computers. In fact the company was often referred to as “Big Blue,” a nickname derived from its massive blue mainframe computers. For four consecutive years in the 1980s, IBM held the top spot in Fortune magazine’s annual list of the most admired companies in the United States. However, by 1993 the quintessential “Blue Chip” company had reached its nadir. Over the three previous years, IBM had lost a total of $15 billion and its stock price was at an 18-year low. The brand had fallen below number 250 in Interbrand’s annual survey of the most valued brands with a brand value, estimated at a negative $50 million dollars. The explosive growth of personal computer networks threatened IBM’s lucrative mainframe and minicomputer business and the company was struggling to turn the situation around. In the late 1980’s and early 90’s, the drivers of innovation and change in information technology were smaller, nimble companies like Microsoft, Compaq, Dell, Oracle and others who offered less