LG voted most consistent brand
The dipping share of assembled PCs has dented the ODD demand a bit with growth rates falling from 35 percent to 20 percent. However, the huge demand for upgrading from old CD-ROM drives to DVD writers has kept the going good for the products. Channels across the country suggest that upgrades constitute more than 50 percent of demand.
DVD writers have become the de facto entry-level technology today, followed by combo-drives. CD-ROM drives, channels say, are on their way out. More than half of the total demand generated is for DVD drives, while combo drives account for 40 percent. The price differential between DVD-R/W and combo drives has dropped to Rs 500 over the last one year as compared to over Rs 1,000 previously. That has propelled the demand for DVD writers. Entry-level DVD-R/Ws are priced in the range of Rs 1,800-Rs 2,000, while combo-drives cost around Rs 1,200-Rs 1,400.
The new optical disk storage standards—Blu-Ray and HD-DVD—are generating some inquiries especially in metros. However, channels say that there’s still a long way to go for either of the standards to make a dent in demand as the price tags are too high.
Service & support
Channels have voted warranty support as the most important criterion. DOA (dead on arrival) issues, in-warranty failure rates, repair and replacement turnaround, local service points, and warranty escalation mechanisms are the sub-criteria they polled their responses for.
LG polled as the steadiest brand with the strongest warranty support among its peers; this eventually tilted the final ranking in its favor. The majority of the respondents polled said that the warranty turnaround for LG is below 10 days, while in the case of Sony and Samsung it is almost 20 days—this though Samsung has more service locations compared to its peers.
Interestingly, Sony ranked second ahead of Samsung on support parameters, and respondents credited its distributor Rashi for comparatively better post-sales support.
LG also reported the least DOA and in-warranty failure rates. Alarmingly for Samsung, several resellers polled in tier-2 and tier-3 cities said they have been discouraging customers to buy Samsung over the last six months as there has been a noteworthy increase in in-warranty failures. Sony has a lesser number of DOA and warranty issues as compared to Samsung.
Product availability
Availability of products stood out as the second most important criterion. The fact that two-thirds of the respondents polled for this category belonged to tier-2 and tier-3 cities indicates that regular availability of products is critical to their business. The Samsung distribution model seems to be the most efficient with product availability being no issue. On the other hand, respondents selling LG, mostly in smaller cities, said that several times the local dealer ran out of products.
Sony products suffer two-way problems. In several markets, parallel imports of Sony are on the rise, and this is hurting authorized sub-distributors, creating over-distribution and price-undercutting issues. The issue of parallel imports is compounded by the irregular supply of Sony ODDs in several tier-3 cities.
Profitability is usually dependent on the push-and-pull nature of the product. In this case, Sony is considered a push product by channels and hence provides more margins.
Marketing & branding
This is the third most important criterion, where respondents said that brand awareness and pull, local marketing, and promotions & schemes are important to conduct business.
Samsung has the strongest brand awareness and pull among end-users, followed by LG and Sony. The fact that Samsung has a larger IT portfolio than its peers also helps in reinforcing the brand strongly among customers and channels alike.
Samsung is also more aggressive when it comes to local marketing and floating promotional schemes for channels. The company regularly does marketing fliers and provides local POPs to channels. Samsung also comes out with channel-friendly product bundling schemes for its dealers. While LG also does channel schemes, respondents said it wasn’t enough, while Sony doesn’t do any.
Channel friendliness
Channel friendliness is rated the fourth most important criterion; a local sales rep helps in building channel confidence and keeping channels motivated by regularly providing them regular information, and escalating and resolving issues.
Samsung ranked higher for its channel communication strategy. The company is more dynamic when it comes to spreading regular product and pricing information. Interestingly, although Samsung channel managers interact more with channels, they are often found wanting when it comes to escalating and resolving warranty issues. While LG has fewer local representatives as compared to Samsung, they are good at escalating warranty issues, due to which channels ranked LG higher than Samsung on this parameter.
Price-performance
Price-performance was rated as the parameters of lowest importance primarily because the price difference between different brands is not significant on entry-level models, and secondly because there is no major technology differentiation between various ODD brands.
Resellers ranked Sony as number one in technology and performance, followed by LG. The common perception among channels is that Sony ODDs support more file types than its competitors.
On the price front, the MOP (market operating price) of Sony is higher by about 5-10 percent than its peers, while Samsung has the lowest MOP.
Conclusion
In all, LG won on the basis of its consistent performance across all criteria. While Samsung’s poor showing on warranty support worked against it. If Samsung can improve its warranty, it can become the most preferred brand.
Intro
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