A major new marketing battle is taking shape in the telecommunications world, as two once-separate areas – voice and data – converge, putting traditional voice network vendors face-to-face with the relatively new data players.

While the eventual winner in the converging datacom marketplace may be decided on the basis of product, players are putting their bets on branding and customer focus in what represents a significant cultural shift for companies once focused solely on product specs.

On the data side, the Big Three players – Cisco Systems, San Jose, Calif.; Bay Networks, Toronto; and 3Com Corp., Santa Clara, Calif. – are striving to position themselves as innovative data pioneers that also happen to be unfailingly dependable. This is a critical point in the highly sensitive telecom area, which prides itself on its 24×7 – 24 hours a day, seven days a week – dependability.

On the traditional voice network equipment side, vendors such as Murray Hill, N.J.-based Lucent Technologies and Toronto-based Northern Telecom are fighting for a piece of the wildly growing data action by pushing their established track records.

Between the data and voice worlds, the product that may determine who will win this battle is the router switch, or the switched router. It’s a piece of equipment that has the intelligence of a data router and the speed of a voice switch, and the ability to put voice, video and data traffic on one network.

Marketing differs greatly

So far, however, the players have been focusing their resources on the marketing front, taking markedly different approaches. Some are pouring money into advertising where they’re again divided between trying a more consumer-oriented focus and sticking with traditional business-to-business outlets. Still other competitors are focusing on one-to-one marketing and the Internet as a sales channel.

csCisco is the leader in Internet data network equipment, with an estimated 70% to 90% of Internet traffic running on Cisco routers.

However, the company spends little money on advertising and instead pours its marketing dollars into customer education programs, face-to-face marketing and its Web site (http://www.cisco.com), where it sold more than 52% of its products last year.

In that one-to-one marketing environment, Cisco executives say, they can control their message and positioning, and keep customer relations personalized.

“We don’t do a lot of advertising and haven’t to date. Our go-to-market [strategy] has been focused on facts and education,” said Keith Fox, Cisco’s VP-worldwide corporate marketing. “Most of our marketing communication is centered around our Web site.

“It’s a new-age model of communications. I would say we work hard to let people get access to information that we know.”

Basic Cisco plan remains

The one area where Cisco does some print advertising is in support of its partners in the Cisco Powered Networks program. More than 70 service providers use mostly Cisco equipment and in return can use the Cisco brand as a stamp of quality.

Launched last year, the Cisco Powered Networks program is classic ingredient branding, similar to “Intel Inside” or Nutrasweet campaigns.

While Cisco may begin to advertise more, Mr. Fox said, the basic Cisco plan will remain.

“Are we going to get into an advertising war with anyone? No. We’ll continue to keep our current marketing plan about the customer experience,” he said.

On the other end of the spectrum is Bay Networks, which early this year launched an aggressive advertising campaign that includes network TV.

Jeffrey Brooks, Bay’s VP-brand management, comes from brand management in the consumer marketing division of Sony Corp. and wants to push this market where it hasn’t gone before.

“New demands are being placed on this business,” Mr. Brooks said. “I felt there was little definition being made by computer and networking industry to establish their role.”

In search of value

Bay’s strategy is to target what it calls CXOs or C-level executives – CEOs, chief financial officers, chief operating officers and chief information officers – along with the traditional data networking targets, the technology community and business partners.

“As the convergence transpires, a few things will happen,” Mr. Brooks said. “No. 1 is people will migrate to brands they are familiar with, and No. 2, they’ll move to the brand with the highest value proposition. Our strategy is to get there and have the value.”

3Com is also beginning to move down the consumer path with an estimated $20 million brand effort that’s part of a $100 million worldwide campaign. Its first corporate brand advertising on television is set for this fall.

“Most high-tech firms historically and by definition are very technology and product focused,” said Jerry Johnston, 3Com’s VP-corporate marketing. “And a product organization is very sales driven, much different than a customer-centric organization. 3Com is becoming more customer focused and promoting ourselves in terms of solutions and applications, rather than products and technology.

“It’s a pretty big shift and a huge cultural change in this industry,” Mr. Johnston said.

Meanwhile, voice players are also lining up new marketing efforts.

Lucent, the former AT&T network equipment unit, is a traditional voice powerhouse and wants to lead the way once again with converged equipment.

“As voice and data converge, this is actually our turf and someplace where we feel very comfortable,” said Kathy Fitzgerald, Lucent’s senior VP-public relations and advertising. “We position ourselves as the best, especially to understand that companies need data networks to be as reliable as voice networks.”

This month, Lucent breaks a new campaign, including a Business Week supplement and network TV spots during “60 Minutes” and “Meet the Press.”

Battle lines drawn

Still, while Lucent may be a software giant, it has a lot of old-world voice equipment going out the door. Smaller data companies will be using brand building and marketing to gain their own share of the new market.

“The battle lines are drawn,” 3Com’s Mr. Johnston said. “Who’s going to win? Is it datacom companies that know the intricacies of the data world? Or is it the voice guys who have good reliability but higher-cost models? It’ll come down to who do service providers go to, Lucent or 3Com? It’s one thing to talk about it, but in the end, you’re only as good as the network you build.”