New York — One year ago this month, Steve Moss began his job as the chief marketing officer of Imation, a company in the midst of a radical transformation.
At the time, the company had just acquired the TDK brand for blank media and was closing in on the purchase of Memcorp, which brought access to the iconic Memorex brand for products outside of the media category. Imation had completed similar deals in the months and years prior for use of the Hewlett-Packard, IBM, Memorex and Sun brands for media and storage products.
It was a seismic transformation for an established technology company, as Imation went from marketing one consumer brand to juggling six, and focusing primarily on the consumer market when its bread and butter had been B-to-B sales of magnetic and optical storage media.
On the one-year anniversary of Moss’ first day at Imation, he sat down with TWICE to give a progress report on the company’s ongoing transformation:
It’s been a year since we spoke of Imation’s plans to become less R&D driven and more brand focused. How’s it going?
Steve Moss. Imation:
The first goal was is to optimize the magnetic tape portion of the business. That’s an important piece of business for us. It generates a large amount of cash. But we recognized that due to market conditions, there was less opportunity for growth, and that’s why we decided that it made sense to branch out and try a consumer-based strategy to grow our brands and our business.
The second goal was to grow our other pillars of storage — flash, hard drive and optical. The third was to extend our brands into other categories, be that CE or accessories in particular. We have made progress on all fronts.
It’s going well. We’ve been concentrating on getting the strategy right. The strategy we laid out was threefold.
Besides the strategy issues, what has been the biggest challenge?
We also had to deal with the challenges of bringing new people into the business.
We call that process "reskilling." Taking a look at the needs we have in the organization, in some instances, we had some cuts in our groups. Our R&D group is smaller than it was a year ago as we focus on magnetic tape and research. What we were doing in optical storage has become less important going forward because of the acquisition of TDK.
In this reskilling, we had to assess who has the talents and understanding of an end-user based business [and] who has an understanding of brands and brand management. Where we didn’t have that expertise, we went out and hired people who had that expertise.
I’d say building the organization and creating a culture that can deal with the changes we’re looking at. We had a company that was essentially technology- and R&D-driven and we’re going to a consumer-brand-focused business — an enormous amount of change. We have to make sure that all the people we have who saw Imation one way for so many years understand how our needs have changed.
Was there a lot of turnover?
Then it then comes down to execution. Once we have the strategy in place and the right people in the right roles, we have to look at the road ahead and put our foot on the gas.
Of 10 people who are reporting to me, six came completely from the outside. We hired someone from Lexmark, someone from Gallup, someone from Land O’ Lakes — a very good mix of high-caliber people from the consumer brand world. People who understand how to take consumer insights and turn them into actionable strategies that lead to profits.
Are you there yet?
For example, our marketing used to be a sales-support function, but now it’s leading a lot of the strategic development.
The transformation is something that will probably be going on for three or four years. It’s so complex. If you look back to 2004, we had a company in Imation whose business was about 70 percent B to B, worked with one brand and had a relatively shallow product portfolio. Fast forward to 2008 and we’re at 50 percent B to C, and we have a portfolio that includes Memorex, TDK and Imation media brands and HP in optical. In magnetic we’re distributing IBM and Sun Storage Tech. We have a license agreement with Nickelodeon for their NPower line of youth electronics, so the model has become far more complex.
What efforts are you making to differentiate your brands?
The first are the digitally driven. These are people who are used to dealing with technology at work, bringing it home, doing a lot of backing up. Much of their social standing and their peer interaction involves knowledge of technology. We identified that the Imation brand and TDK appeal to this group, especially in overseas markets like Korea, where Imation is well established as a top brand, and Australia, where TDK has the same status.
Then there are the memory keepers. They have kids at home, are often female, and use technology primarily to document their family lives and connect with other people. Their technologies of choice are cellphones and digital cameras. The Memorex brand appeals to them as well as TDK.
Then you have the technology challenged — generally older, intimidated by technology but are forced to use it in some capacity. They most often shop for technology in mass market.
The fourth group is the casual mass-market shopper. All they really look at is price.
We map each of our brands with these groups in mind. By doing so, we’re able to tailor a message that’s far sharper than before and still cover a broad range of consumers better than single-brand companies.
One of the first things we did was conduct studies and gather as much information as we could on media usage by consumers. We identified four main types of consumers.
So it’s all about the marketing.
We still see growth opportunities in our legacy products. Our DVDs will be around for a long time. But we can still grow the business by utilizing our brand strategies and forging relationships with the consumer segments we are targeting. That’s a new way of thinking for our company. There had been a mindset that the only way you grow is by coming out with new things and that’s typical of a technology company.