Gateway Offers Discounts to AAA Members

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Computer maker Gateway Inc. has allied with AAA to gain business from the membership of North America's largest motoring and leisure travel organization.


The marketing relationship exposes Gateway personal computers, notebooks, digital cameras, consumer electronics products and training programs to 46 million AAA members, who are eligible for discounts of 3 percent to 25 percent on most Gateway products.


"Typically we look for organizations that have a strong influence over their members, and then obviously our job is to provide a very good value-added proposition," said Mark Bauer, Cincinnati-based national accounts manager at Gateway.


The deal resembles relationships Gateway has with the Hispanic Association of Colleges and Universities, the National Association for Equal Opportunity and Costco.


Gateway is the first maker of personal computers and consumer electronics to ally with AAA on a national level.


AAA members who are part of the association's Show Your Card & Save program are entitled to the Gateway discounts.


Many of the Gateway business and consumer computer systems are available for a 10 percent discount. A higher 25 percent is offered for the Gateway Learning instructor-led, online courses and CD-ROM classes. Digital accessories, cameras and plasma televisions also sell at variable discounts.


Purchases are possible through Gateway's 196 retail stores, by telephone or the site at www.aaa.com/gateway. So far, three-fourths of the sales are from stores, 15 percent from phone and the rest online.


AAA is promoting this benefit to 77 local clubs nationwide and via e-mails to opted-in members. Also supporting are marketing collateral, on-hold messages, radio scripting and ads in AAA's Car & Travel Monthly magazine.


"Certainly, anytime you enter into a relationship with an organization the size of AAA, the biggest challenge is visibility with the membership," Bauer said.


Gateway's customer profile is families with children, as well as adults ages 45-64. The AAA membership base is generally middle-aged with a decent income.


"It really falls well into the buying habits of the typical Gateway customer," Bauer said.


Gateway needs such customers in the face of stiff competition from Dell Inc., Hewlett-Packard Co. and IBM Corp. Gateway's fourth-quarter revenue of $880 million was well shy of the previous forecast of $925 million to $950 million. It was hit by supply problems and competition-induced lower prices for desktop and notebook PCs.


The company, which still gets the bulk of sales via online and catalog, is now placing its bets on consumer electronics like digital TVs and cameras. Its focus since 2002 on this market is paying off. It is the No. 1 seller of plasma TVs, for instance.


"Certainly it is Gateway's focus to stay committed to selling PCs, laptops and servers, but we also continue to develop the consumer electronics market," Bauer said. "What we've done in the past 12 to 18 months is validated by all of our competitors diversifying into the consumer electronics market."


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