HP's Dual Brand Strategy Takes Shape

NEW YORK — Hewlett-Packard and Compaq's newly combined desktop and notebook development teams gave an overview at PC Expo of how HP will strive to deliver two separate, viable Pavilion and Presario lines at retail.

With HP's merger with Compaq barely 60 days old, the integration plans are still in the early stages of development, but with the company's first post-merger product introduction taking place in June at PC Expo the direction the brands will take is becoming clearer.

Will Townsend, senior manager worldwide retail desktop marketing for HP's Compaq Presario brand, said that at this point the problem has only been attacked at a high level, but several paths for the two brands have been marked out.

"The decisions made so far have the Presario products having the latest and greatest specs and focusing on digital video and music, while the Pavilion will be digital and printing focused with specially developed software to enhance these applications," said Townsend.

In order to ensure that consumers are not forced to choose between the brands based on price or feature set, Townsend said that the pricing is interlaced with Pavilion and Presario brands holding places from the entry-level $529 starting price to the high-end $1,799 model.

"Brands will not overlap on price and there are no identical configurations being offered," he said.

To help consumers distinguish between the brands each will continue to have an entirely different industrial design, even though they will be developed by the same design team, and the retail floor models will be heavily labeled with the product's specifications.

Outside the product development arena HP is planning to increase its emphasis on the Pavilion and Presario configure-to-order (CTO) programs. Townsend said more money will be dedicated to promoting the in-store CTO kiosks. The brand's unassisted Web sales have been good and are expected to continue doing well, while kiosk sales have been basically flat.

The newly merged notebook brands are taking an even more direct approach to separating the brands at retail, with the Pavilions targeted at general consumers and the Presarios at the prosumer segment.

The Pavilion models are adorned with a consumer-friendly industrial design with many "cool looking" lights on the keyboard and a chassis and a feature set that emphasizes consumer applications like CD burning and viewing DVDs.

To give the Presario a business-like appearance it has a stainless steel and black color scheme, and is bundled with productivity software. Although a final decision has not been reached, HP is considering using the Presario line as the launching pad for new mobile technology as it is introduced, said HP's Jonathon Kaye, product marketing manager, personal systems group.

As with the desktop lines, the fine details of the company's retail approach for the notebooks has not been finalized.