February 12, 2012 3:28 pm

Acer seeks makeover in Europe

Acer is doubling its marketing budget in Europe in an attempt to revitalise its cheap-and-cheerful image and increase sales in a region that has been a trouble spot for the world’s fourth-largest personal computer vendor.

The Taiwanese company is understood to have hired Mother, the London-based advertising agency known for breakthrough campaigns for Coca-Cola, Boots and Ikea, to help change perceptions of the Acer brand.

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“Our past communications have been old-fashioned. Our new campaign will be more modern, we want to do something different and something with a twinkle in the eye,” said Oliver Ahrens, who took over as president of Acer’s Europe, Middle East and Africa operations last October.

Acer’s more traditional PC products are being squeezed by more popular tablet devices such as Apple’s iPhone and Samsung’s Galaxy Tab. Although it has launched its own range of Iconia tablet computers, these have so far seen slow take-up in sales.

The company last year fell from number two in terms of global volumes of PC shipments to number four, behind Hewlett-Packard, Lenovo and Dell, according to technology research group Gartner. Sales in Europe, which account for more than a third of the company’s revenues, fell more than 46 per cent year on year in the fourth quarter of 2011.

Walter Deppeler, Acer’s global head of marketing, said the company was doubling marketing spend in key countries such as Germany, France and the UK, as it tries to win back market share.

Mr Ahrens is also committed to returning the European business to profitability this year. The company made losses in the second and third quarters of last year, mainly due to the poor performance in Europe.

Acer has made substantial changes to its business in Europe in the past year, including cutting 300 jobs after sales slumped and writing off $150m worth of excess inventory, particularly in Spain.

Gianfranco Lanci, Acer’s former chief executive and global president, resigned last March following a profits warning. Mr Lanci subsequently moved to Lenovo to head up the Chinese group’s European business.

“We had non-strop growth from 2002 to 2009 and we had the perfect business model for that environment. But Acer reacted a bit late to the change in the market,” Mr Ahrens said. “Our strategy is now adjusted to the new circumstances. We have changed the way we trace market growth and keep track of our inventory.”

Acer is also introducing more high-priced items, such as the S5 ultrabook, which it claims is the world’s thinnest notebook computer, at just 15mm. The ultrabook is expected to retail at more than $1,000, and Mr Ahrens believes such high-end products will make the brand seem more aspirational.

“It is like the strategy for Volkswagen or Audi. We have to have everything from the A1 to the R8,” he said, referring to Audi’s luxury sports car. “People will come in to admire the $1,000 ultrabooks. Ultimately they may buy a cheaper notebook, but the following year they might upgrade,” he said.

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