HP remains prints charming
By Sandhya Malhotra
For the first time, inkjet MFD sales overtook standalone inkjet sales in terms of value. Over the last 3-4 years, standalone inkjets have witnessed a negative growth against a growth of 55 percent CAGR recorded by MFDs. While the prices of entry-level single function printers have stayed put at Rs 2,500 over the last year, inkjet MFDs have witnessed a drop of almost 20 percent with the entry-level prices now hovering in the Rs 4,500 range for a three-function device.
The inkjet MFD market is expected to grow at an increasing rate for at least the next two years. The ability of one device to perform 3-4 functions has attracted buyers from these segments to this all-in-one print/copy/fax device. In the mid-to-high-end segment, inkjet technology continues to dominate enterprise color printing needs as color technology still lacks the necessary price-performance. Vendors gave been trying their best to sustain the single function printer by either bundling it with their PC offering or positioning it in special niches.
Channel relationship
This was rated as the most important criterion for polling inkjet vendors. When it comes to relationships, HP ranks ahead of Epson and Canon. Consistency of policies and relationships is the reason why HP has huge mindshare and marketshare. Several respondents said that they have been dealing in HP printers for over a decade, and the company has contributed immensely to their business growth over the years.
Many of the respondents rate HP’s IPG team as the most fair and transparent. HP regularly sits with its partners to understand their needs and systematically helps them plan their growth. In the case of Epson and Canon, there have been several changes in the company’s distribution strategy over the last few years creating a certain amount of discontinuity in the channel relationship.
However, respondents said that the channel engagement level of Epson and Canon has improved, and there is more focus on partner profitability. Canon, with its Gurukul roadshows, is touching the right chord among channels, and their training in soft-skills is helping partners to better understand issues. Epson on the other hand has become aggressive and more consistent in its engagement with channels.
Service and support
Service and support was rated as the second most important criterion. Contrary to popular perception, it was Epson which took the pole position, ahead of HP and Canon. The reason? Epson offers onsite warranty support to customers on all its inkjets printers, as against HP and Canon which provide it only on select models. In fact, in major cities, Epson’s turnaround time for onsite repair or replacement is 24 hours or next-business-day even for entry-level printers. In smaller cities this goes up to an average 5-7 days based on local availability of spares and replacement.
For models where onsite warranty is available, HP and Canon have a turnaround equal to Epson. For carry-in warranty, HP is faster than Canon across cities. HP’s toll-free technical support is rated as the finest. The company provides toll-free support in local languages, which is very relevant in many smaller cities. Troubleshooting over the phone is also faster than Epson and Canon. Many southern respondents complained about HP’s slow warranty support.
Marketing and branding
It’s HP all the way when it comes to marketshare, with almost two-thirds in its pocket. One reason for this is the phenomenal brand equity it enjoys among customers. Many respondents said that even though they inform customers about Epson’s onsite warranty, they still choose HP. HP is also the most aggressive in end-user marketing. It has a local marketing strategy for every region, and advertises in the vernacular media. Also, the fact that it’s a market leader in the PC segment helps create a strong customer tie-in. As for Epson respondents complained that the vendor has left all its marketing and promotion to its regional distributors and they aren't doing a good job of it. Canon's recent brand endorsement deal with Sachin Tendulkar has helped create strong brand association, but only in tier-1 cities. Many small city resellers aren't even aware of Canon-Tendulkar association.
Price-performance
Performance-wise, HP is considered the better of the lot, followed by Canon and Epson. Survey respondents suggest that Canon is perceived to be technologically better than Epson because it has other consumer products as well (like digital cameras) where it enjoys leadership position. Based on its strong brand pull, HP continues to command a premium of nearly 8-10 percent over its peers. The partial cost of onsite warranty provided by Epson is factored in its price, which makes it slightly more expensive than Canon.
Product availability
HP has the widest availability of products, followed by Epson and Canon. But HP also suffers from over-distribution in some parts. Epson and Canon, by employing a unique city-based and regional distribution model, have increased their availability and reduced over-distribution. Also, by removing a layer from the distribution, these two brands offer better margins to resellers. HP makes up for its lower margins through volume incentives and frequent schemes.
Conclusion
No guesses for who is the winner in this category—HP is far ahead of its peers. But Epson and Canon are both showing signs of consistency of policies and channel management, and if this continues they have the chance of gaining more channel mindshare.
Intro
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