Nortel wanted to expand as an organisation but found its core telecoms business was shrinking. Determined to achieve growth it decided to instead focus its efforts on the entertainment networking sector, dominated by Cisco Systems.
With a 74% market share - in comparison to Nortel’s 4% - and an ad spend several times larger than any of its competitors, Cisco could out-manoeuvre and out-muscle the competition. Cisco’s key strategy was to ‘rip and replace’ companies’ existing systems, thereby providing an easy all-in-one solution for the busy decision-makers responsible for the purchase. Nortel discovered, however, that Cisco’s all-in-one solution was ‘energy expensive’, costing considerably more to run than its own offering, and creating a larger carbon footprint.
Its launch took place in the form of side-by-side comparisons at tradeshow Interop, where energy consumption meters were used on both Nortel and Cisco switches. Nortel’s product advantage was accentuated by the strategic placement of Nortel’s booth right next to Cisco’s. Print and TV ads asked provocative questions such as: “How much is your network costing you?” But rather than drive people to a website, consumers were encouraged to enter ‘Cisco Energy Tax’ into search engines. Optimised results would bring up a raft of blogs, IT Papers and Videos discussing the issue. An online energy efficiency calculator allowed IT staff everywhere to determine the potential cost savings of Nortel over Cisco.
The results of the campaign were emphatic. A $2 million order for Cisco was pulled and instead invested with Nortel – and this became the trend rather than an anomaly. The campaign resulted in a 46% in sales, over three times the stated goal of 15%, taking Nortel’s baseline from $722,000,000 to $1,055,000,000.
Nortel "Piles" Commercial
Nortel "Holes" Commercial
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