Thursday, July 16, 2009

An expansively Compaq branding

In a previous post, I noted that many of us still recognize the "Compaq" brand name today. This is despite the fact that Compaq Computer Corporation ceased to be a separate entity in 2002.

Now normally when Company A buys Company B, there is a transition period until Company B's name is retired to the dustbin of history. I live in southern California, and when Wells Fargo Bank acquired Crocker National Bank in 1986, I recall that Wells Fargo suddenly began airing a number of commercials that trumpeted both Henry Wells and Charles Crocker. But after a brief period, those commercials stopped, and the name of Charles Crocker was never publicly uttered by Wells Fargo again.

Again, I live in southern California, so I'm familiar with Kragen Auto Parts. In other areas, the brand that is used is Checker Auto Parts. But one morning while driving to work, I heard a commercial for "Kragen O'Reilly Auto Parts." Sure enough, there's been an acquisition:

July 11, 2008 marked a historic day in the automotive aftermarket industry, as O’Reilly Auto Parts, based in Springfield, Missouri, successfully completed the highly anticipated acquisition of Phoenix-based CSK Auto. The combination of O’Reilly’s midwestern and southeastern foothold, along with CSK’s dominance in the western United States, will create a stronger, more competitive company that benefits not only the do-it-yourself customer, but also the professional installer.

Notice that a year has passed between the acquisition and the time that a consumer such as me heard about the rebranding. This is an interesting case, since it's a combination of two separate auto companies in two separate regions. Presumably some cost savings will be achieved in central office issues, but the merger itself shouldn't result in Crocker-like closures of outlets. But I wouldn't be surprised if the name "Kragen" (and related names such as "Checker") completely disappeared from the market within a couple of years, while O'Reilly the name becomes dominant.

But a similar thing didn't happen with the Compaq computer name. As it turns out, Compaq was a pretty good acquirer of companies before Compaq got acquired itself. At one point I worked for a company that was the Compaq poster child, since we used UNIX computers from the old Digital Computer Corporation, plus Tandem computers from another Compaq acquisition, as well as the personal computers for which Compaq had originally become famous.

Hewlett-Packard subsequently acquired Compaq, which led to an interesting situation since both companies manufactured Wintel-like personal computers. Did this mean that the "Compaq" brand would immediately disappear into the dustbin of history? In this case, it didn't. Here's what was said in 2002:

Hewlett-Packard hosted a conference call for journalists and analysts Friday morning, shedding light on what businesses and consumers can expect as the company merges with Compaq. The call was hosted by Duane E. Zitzner, president of HP's Personal Systems Group, who frequently referred to the merging companies as "HP Newco."

Nice little distinction, which communicated to everyone that Compaq wasn't just going to be a subsidiary of HP, but was going to be combined with HP to create a newer, greater entity. But then Zitzner got into branding:

Questions about how HP will handle business and consumer branding in the wake of the merger have been swirling around, recently. The answers aren't simple. Both the Hewlett-Packard brand and the Compaq brand will be carried forward, in a two-tiered strategy. "There is a value proposition for both the HP and Compaq brands," said HP spokesperson Jim McDonald. The two-tiered branding strategy was compared by HP executives to the Toyota/Lexus branding approach, but in response to a question about whether Compaq would be positioned as a low-end brand and HP a high-end brand, HP executives said "not necessarily."...

Compaq will be the brand for business desktops and notebooks. Thus HP's long-standing Omnibook line of notebooks will become Compaq-branded. But in workstations, where HP has had a strong presence for many years, the HP brand will go forward. IA32 workstations as well as upcoming Itanium workstations and workstations based on Intel's McKinley chip will carry the HP brand.

In the consumer and retail arenas, both the HP and Compaq brands will stay in place for certain product lines because of "varying brand equity throughout the world," according to Zitzner. Thus the Compaq Presario line will stay as it is, and HP's Pavilion line will also remain. In the handheld computing space, though, HP's Jornada devices and Compaq's iPaq PDAs will morph into HP iPaq devices. Wireless product lines will carry the HP brand. Got all that?

Uh, yeah. But if you want to know how the brand strategy works today, pay a visit to This does NOT take you to the black and white website, but to a separate, red-tinged site with the Compaq brand name.

Now if you click on any of the links you'll end up at, but obviously Hewlett Packard has concluded, even seven years later, that there's still life in the Compaq brand.
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