Acer hopes multi-brand strategy will lead to global domination

TAIWANESE COMPANY ACER is doing its best to pretend it isn't Taiwanese at all.

For decades, Taiwan has been pumping out computer hardware like there's no tomorrow. This was fine and dandy as far as it went. But it took a while for the tech leaders on the island to realise that to make real money and bigger margins, it's the brand on the box that matters.

Founder of Acer and giant of the Taiwanese tech industry Stan Shih cottoned on to this fact earlier than most and took the radical step of outsourcing all of the company's top management to Italy.

The Europeans, Shih decided, know a bit about marketing and branding and by shifting the focus at Acer, Shih figured he could turn Acer into the world's Number One PC maker. As it happens the Taiwanese are obsessed with the idea of being Number One in anything and everything.

The next step for Acer was to dump its factories. Shih had a look around at companies like Nvidia: Sharp, image conscious, focused on branding, makes nothing itself but uses smart marketing to squeeze greater margins out of what is after all a niche product. Blimey, thought Shih - or whatever the Mandarin equivalent is - we should be doing that.

Acer, having pumped out pretty cheap laptops for years, still has something of an image problem in some areas. It's got pretty poor penetration in the US, for example. So to address this, the company bought up Gateway - a once-mighty direct-selling rival of Dell which fell upon hard times. While it was at it, it picked up Packard Bell which has a half-decent name in Europe. It also uses the Emachines branding as a lowish-cost retail brand, mostly in the US.

Here today, Acer president and CEO Gianfranco Lanci led the charge to explain how Acer has been looking at the global market for PCs and is attempting carve it up between its brands.

The split is largely geographical, pushing Gateway in the US and Far East, Packard Bell in mainland Europe and Acer whereever it can.

Within these georaphical areas the firm has identified six different sorts of consumer at which it is targeting its products. These start with 'tech leaders', whom it seems are likely to be INQ readers. They understand and use technology extensively and have money to spend on their kit. The next two groups are less techie and more price conscious.

The people Acer calls 'practical' are very price conscious, the over 40s are technophobic (cough!) and want simple devices to do simple things, while the kids are fickle, social networked up to the eyeballs and extremely brand conscious.

Acer gathered research from some 10,000 consumers to come up with its categories of punter. It is now designing products for all of its branded companies to offer products aimed at these consumers in their different areas.

The firm remains tightly focused on the laptop, which it thinks will be all-conquering and expects to the the Number One laptop maker by 2011. Lanci claimed that by becoming the world's top laptop poducer, Acer could also become the world's top PC producer overall, as the laptop market continues to expand while desktops shrink.

Lanci is convinced that the most significant emerging market is China, where he thinks a massive market for PCs will develop. "The world is becoming more global," he said, helpfully.

He said that being number five was OK, but five isn't the number it likes to see. But he is optimistic Acer can make inroads into the Chinese market as it has everywhere else.

We just wonder whether the Europeans will still be running the company by then, or whether marketing China may require the sort of local understanding the Taiwanese may have at home. µ