Channel Chief
“Our focus is partner profitability”
 Canon has seen impressive gains in market share in the printer market in 2008.
VP Sajeevan, Assistant Director, Consumer Systems Product, Canon India shares the secret behind the company’s growth and discusses future channel plans with Varun Aggarwal
Canon has managed to grow significantly in 2008. What is the secret?
Overall Canon grew by 21 percent in calender year 2008, while the Consumer Systems Product (CSP) division registered a commendable 58 percent growth. As per IDC, our market share in the laser printer market grew 10 percent growing from 31 percent in 2007 to 41 percent. Our market share in scanners is now 51 percent. Our new channel initiatives have played a pivotal role in this growth.
We started a very unique initiative called Channel Dialogue, an organized forum where partners come to us with suggestions, complaints and ideas. In the past nine months, we have conducted 63 Channel Dialogues with over 14,000 channel partners across the country. The idea is to bring out all issues plaguing channels and work together toward a solution to better service to our customers. Our target is to conduct 75 channel meets by the end of March 2010.
The second initiative is to understand what we call the consumer BIBLE (Before I Buy Live Experience). In the current market, Indian consumers are either deferring purchases or being very choosy. About 90 percent of consumers want a live experience before buying. Keeping that in mind, we have set up three Canon lounges in Gurgaon, Mumbai and Bengaluru.
To encourage usage of original cartridges, we have set up 400 Original Ink Centres (OICs).
What is your outlook for the market?
Our outlook remains extremely positive. For us, India has been the only market that has shown sustained growth despite the global recession.
Over the last nine months, we have seen robust demand from government, education and consumer segments. The corporate and the SMBs certainly reeled under the slowdown, but that demand is also reviving now.
We have been extremely aggressive with our product strategy over the past nine months. We have added 27 new products with new features like Wi-Fi, higher print yields and auto-duplex printing aimed at bringing convenience and cost-effectiveness to customers.
One of the laser printers we launched at the entry-level recently, the LB 2900, for home users, comes with a full-capacity toner giving 2,000 prints and costs only
Rs 5,900. It’s become an instant success. Similarly, we launched Rainbow range of laser printers for SMB market keeping in mind their printing needs and the affordability aspect.
We have probably been the only company to launch a range of A4 and A3 scanners. India is the only market that is seeing growth in the scanner market for Canon. With digitization of paper documents on the rise, scanners have a great potential.
In the last CRN Channel Champions 2009 survey, Canon did not perform well in terms of services and support.
A lot has changed since last year. This year, I am sure things would be a lot different when you do the survey.
Today we have 33 Canon Care centers, as compared to the 25 we had last year. Also, we now have 256 authorized service centers from the previous 180.
Actually, the problem we
had in 2007 was with the print head. We completely moved to the cartridge technology in 2008. Today our service is among the best in the industry.
How are you supporting the channel in the current economic situation?
One of the things we have been extremely focused on is ensuring partner profitability. We have a
program called Partner Excellence Program Secondary (PEPSY) to generate an everyday report on secondary billing. We also define MOP in channels. If a partner is found selling below MOP, we take immediate action.
We either ask the partner to stop doing it or take back the material. So far we have terminated three distributors for price discrepancies. This has been an important contributor to our success.
The last 12 to 18 months have seen major consolidation in the channel community. For instance, two years ago, we had about 34,000 registered resellers across the country, plus an additional 15,000 unregistered partners. A majority of these unregistered partners don’t exist in the market today—many shifted to real estate or ventured into telecom for short-term gains; while others vanished as they couldn’t survive the slowdown due to lack of proper business practices like maintaining a healthy MOP, managing inventory, etc.
Further, to support the partners financially, we have tied up with Standard Chartered Bank to offer channel financing.
What are your channel plans for the next six months?
Our biggest challenge is to ensure product availability in the market as the demand is growing rapidly. Currently, we’re not able to meet the market requirements. In India, the demand for our consumer laser printers is 30,000 units, but we are only getting 20,000 units. We have already advised our factories to increase the capacity allocated for India.
Following the launch of our new products, we are embarking on our popular Gyan Yatra program to educated channels about the new features and new consumer trends. By March 2010, we intend to conduct Gyan Yatra in 42 cities.
Our focus over the last several months has been to ensure that our partners are given demo products. For small stores with space constraints, we are providing small kiosks at our own costs. Recently during Diwali, we launched a massive POP (Point of Presence) activity across the country where we chose 700 partners to set up arch gates at their stores to pull more people into their showrooms. We offered several freebies to customers and this helped garner a lot of business for partners. This POP program will run for three more months and, we believe, will give us immense brand visibility in smaller towns and bring in more footfalls for partners. |