CHANNEL SATISFACTION SURVEY 2002: Partners Want Foreign Junkets!

One of them being the high expectations of partners from vendors on foreign trips! Advertising support and training emerged as other areas. Partners, on the other hand, are satisfied with the demand/pull creation by vendors. Read on to find more.

The channel community has revealed that the most important driver for

satisfaction among them is ‘Demand/pull creation’ by vendors in the third

DQCI Channel Satisfaction Survey. And why not? In these tough market conditions,

partners can pin their hopes only on the vendors to help buoy their businesses

by creating enough demand in the market. Interestingly, ready product

availability gets greater importance than net margins earned on a product. This

could well be a result of the realization among partners that volumes sustain

the market in present-day situations. After-sales service and pricing-quality

parity come in after that.

However, if we analyze the data for just distributors, a strikingly different

picture emerges. Distributors place the greatest emphasis on pricing-quality

parity followed by commercial terms. In hindsight the choice seems logical

because of their business model being totally dependent on volumes and

turn-around time.

The choice for the most important satisfaction driver remained consumer

demand/pull for all other partner segments, that is retailers, systems and

network integrators, systems assemblers and service partners.

The systems assemblers, however, place greater importance on warranty

policies and after-sales service. Net margins were ranked even lower than ready

availability and pricing-quality parity.

Network integrators placed an equal importance on margins and after-sales

service next to consumer demand.

INDEPENDENT COUNTRYWIDE SURVEY



This is the third consecutive independent annual survey that DQCI

commissioned IMRB to undertake and gauge the satisfaction levels of channel

partners on 18 different parameters. The survey was done across the top 10

cities in the country including four metros and Bangalore, Pune, Hyderabad,

Ahmedabad, Nagpur and Chandigarh.

TOP FIVE SATISFACTION AREAS

CONSUMER DEMAND/PULL CREATED BY VENDORS READY AVAILABILITY OF GOODS WARRANTY POLICIES INNOVATIVE PRODUCT LAUNCHES AFTER-SALES SERVICE

Determination of overall satisfaction of channel partners in conducting

business with their respective vendors was the key objective. The other

objectives included the identification of satisfaction among the different

quarters within the partner community and to understand the relative importance

of different satisfaction parameters for different type of channel partners

(distributors, retailers, assemblers, integrators). This year around the survey

also tried to determine the most preferred vendors across major product

categories, 25 in all.

TOP FIVE DISSATISFACTION AREAS

FOREIGN TRIPS CHANNEL-INTENSIVE TRAINING RECOGNITION IN ADVERTISEMENTS NET MARGINS EARNED PROACTIVE RESPONSE TO CHANNEL ISSUES

And to do all this, the idea was to select a sample that simulated the real

market from the standpoint of a geographic and functional spread. But a large

number of partners performed more than one function. For instance there was a

high degree of overlap between partners doing systems assembling and component

reselling. The reason was obvious, survival in a highly competitive environment.

So when no watertight compartmentalization emerged, the partner was placed in

the category on the basis of the function he was largely involved in.

Following is a list of the 18 parameters on which partners were asked to

express their satisfaction levels:

1. Proative response to channel issues
2. Availability of decision makers
3. IT and Internet intensive processes
4. Channel friendliness of vendors
5. Foreign trips for channel partners
6. Recognition through advertisements
7. Arrangement of promotional events
8. Channel partner intensive training
9. Quality of advertising support
10. Fairness in price dealings
11. Innovative Product launches
12. Commercial terms
13. Warranty program and policy
14. Pricing-quality parity
15. After-sales service
16. Net margin provided
17. Ready availability
18. Demand/pull creation

AREAS OF DissatisfACTION



While we have looked at what drives satisfaction, we also analyzed areas

wherein partners were least satisfied with their respective vendors. The three

areas where the channel partners are rating the vendors poor or average are ‘Foreign

trips’, ‘Channel-intensive training programs’ and ‘Recognition through

advertisements’.

Relative importance of channel intensive parameters

Foreign trips was where the vendors had created great expectations among the

partners and in turn the partners looked forward to foreign sojourns more often.

However, because of a large gap between expectations and deliverables, vendors

were ranked least satisfactory on this parameter.

Partners also felt that vendors were lacking in proactively responding to

address channel issues. This largely stemmed from their low level of

satisfaction about easy access to officials. So in a nutshell vendors should

work towards making their officials easily available to partners and take

proactive initiatives to solve the channel related issues.

DEGREE OF SATISFACTION



On individual product front, the survey adopted a different methodology this

time. Instead of using a system of straightforward voting (specify the name of

the best vendor for a particular product), the survey sought for individual

degree of satisfaction with key vendors on the pre-decided parameters (where a

broader rating scale can be used, implying degrees of preference and strength of

feelings, rather than a clear-cut choice), and thereby linked it to their

preference of vendors for different product categories.

Here below you would find the product-wise analysis of the survey mentioning

the preference of vendors among partners.

Desktop PCs



Not too surprising was the emergence of the ‘assembled PC’ as the most

preferred brand. Though referring assembled PCs as a brand may be a misnomer but

what is more important here is to notice that majority of the partners (60.5

percent) prefer selling assembled PCs over branded ones. This preference may

well be an outcome of the assurance of better margins in selling assembled

systems.

Among the top brands, IBM and HP (including Compaq’s share) were

neck-to-neck with 18.6 and 18.3 percent partners respectively, showing their

preference. While resellers and systems assemblers preferred assembled PCs the

most, network integrators had IBM as their first choice while service partners

preferred HP over anyone else.

Laptops



Needless to say, IBM took the top spot here too, followed by Toshiba and HP.

The last quarter has also seen IBM venture into the retail environment. This

probably would have been one of the many reasons why IBM emerges as the favorite

among all channel categories.

Inkjet Printers

A unique feature which emerges in this product segment, which today is

considered to be the most fiercely competed, is the total domination of HP. According to the survey, across all partner categories, HP emerged as the most

preferred inkjet vendor. More than three-fourths of the partner community voted

in favor of the company. Epson came a distant second followed by Canon.

Relative importance of channel intensive parameters

Laser Printers



Like the inkjet category, HP’s domination of this category too is

complete. Here again, three-fourths of the partner community preferred HP over

any other vendor. Samsung’s second spot in this category came as no surprise,

because of the company’s enhanced focus on this product category during the

last year that was also accompanied by a series of product launches. Taking the

third spot was Epson.

Servers



Our study for server vendors was bifurcated into assessing vendors for

PC-based servers and high-end servers. In both these sub categories IBM took the

top spot with HP coming second. In the PC-based servers, assembled Intel-based

servers took the third spot and the same got repeated for the high-end servers

too. Across all partner types, IBM PCs were preferred for the purpose of

PC-based server installations. While, in the high-end category, IBM found favor

among resellers and systems assemblers, while HP was the preferred vendor for

systems and network integrators.

Monitors



Samsung emerged as the most preferred monitor vendor. And this preference

for Samsung monitors was seen across all partner types. LG emerged as the second

most preferred vendor. While Samsung’s domination of this category may not be

as complete as that of HP in the inkjet and the laser space, it still enjoys a

considerable lead over LG.

Microtek came is as the third most preferred vendor, even though the distance

between the second and third spot was huge

Hard DISK Drives



Increasing dissatisfaction among the partners with Seagate only helped

Samsung to clinch the top spot in this product category. Though Seagate was not

too far behind on the second spot, partners do feel that an increased effort

towards better product quality, after-sales and warranty support can help

Seagate retain its long-held numero uno position.

Optical Disk Drives



Three out of five partners preferred Samsung ODDs over any other and this

domination by the Korean giant was complete across all partner categories. LG

came in second. Sony came in third. Creative, one-time biggie in this market

failed to feature in the top three and came in a distant fifth, with just less

than two percent of partners preferring it.

Motherboards



And there were no prizes for guessing this one. Intel was indeed the most

preferred vendor in this category and this preference was reflected across all

partner categories. Mercury comes in second after Intel. Vintron came in

far-behind-the-leaders at the third spot.

CPUS



Undoubtedly, Intel takes the lead over AMD and Via in processor category.

Keyboards



Once again, the story repeats. Samsung gets the top honors of being the most

preferred vendor. Samsung is followed by TVSE. The mention of Indian vendors in

most categories comes as an exception rather than a rule. Also because the

representation of the Indian manufacturing segment in the IT industry per se is

very minimal. On TVSE’s heels is the mice major, Logitech.

MICE



This category throws up results that may not be quite obvious. Logitech

emerges as the top vendor in this category. But what is surprising is the

emergence of Samsung at the #2 spot. Apparently good number of partners

questioned, showed an increasing preference for Samsung over Microsoft and iBall

mice. Perhaps, this is an ideal example of what a strong brand creation does in

increasing marketshare irrespective of the product category.

Scanners



In this category, HP emerges as the clear leader, getting favor from more

than half of the partner base. And HP maintains this leadership across all

partner segments. HP is followed by Umax on the second spot and then by Canon at

the third spot.

SPEAKERS



The market which was once dominated was Creative has adopted Mercury as the

King. Nearly half the respondents showed preference for Mercury speakers with

Creative getting the second preference.

Sound Cards



In this category, Creative emerges as the most preferred vendor across all

partner types followed by Yamaha. Between these two players they find favor with

over half the market. Intex comes in third with a miniscule presence.

Graphic Cards



Asus and Creative take the top spots in this category. Riva, even though

comes up as the fourth most preferred graphic card, yet it enjoys a high degree

of preference from the systems assembler and the reseller community. Sis gets

the third spot.

Modems



D-Link emerges as the most preferred modem vendor, with over half the

partner community voting in favor of D-Link. This preference for D-Link modems

is seen across the partner types. Followed by D-Link are Dax and Motorola.

UPS/CVT



Again, due to the highly fragmented nature of the UPS industry, assembled

and regional brands attract a high degree of recall from the partners and emerge

at the top. APC however is the most preferred vendor in this segment followed by

Microtek.    

NICS/HUBS



D-Link emerges as the most preferred vendor for NIC and hubs across all

channel partners followed by Dax.

ROUTERS/SWITCHES



In this high-end networking category, Cisco captures the mind and

marketshare according to partners. D-Link comes in at the second spot but is

still half-way where Cisco stands.

Cable and Cabling Accessories



Here again D-Link emerged as the most preferred vendor for cable and cabling

accessories. AT&T and Avaya also found presence at the second and third

rungs respectively.

Office Suites



You don’t have to be a rocket scientist to guess who emerges at the top

here. Microsoft with its immensely successful Office is on top. Interestingly no

other vendor’s name was thrown up by the channel partners - so complete is

Microsoft’s domination in this category.

Operating Systems



This is another category where there isn’t much competition. Across all

partner types, Microsoft emerges as the most preferred vendor. Although Linux

figures in the list, partners have failed to name any Linux OS company that they

prefer.

Anti-Virus Packages



Norton emerges as the most preferred anti-virus software, with nearly

one-third of the partner community favoring the same. McAfee, though second, is

quite a distance from the leader.

Database Software



Oracle emerges as the most popular database application, followed very

closely by Microsoft SQL. As compared to Microsoft SQL, Oracle enjoys a fairly

greater preference among the systems assembler and the network integrator

community.

WHAT’S SO DIFFERENT ABOUT THIS SURVEY?



Well to begin with, this year’s survey was many a times comprehensive as

compared to what we have done in the past. It was comprehensive not only in

terms of the partner base covered but also in terms of approach, the questioning

methodology as well as the product categories included.

This survey did not start with an aim to find out just the overall perception

of vendors among partners but instead identify the satisfaction levels on a

number of well-researched individual parameters.

The survey results also threw up surprises in the form of partners seeking

far more foreign trips from vendors and appropriate recognition from vendors on

the advertising front.

For more on vendor-specific results of the survey, look out for the

forthcoming DQCI Channels Choice Awards issue!

MOHIT CHHABRA in New Delhi, with inputs from GOLDIE in Mumbai

SURVEY METHODOLOGY

In this third annual DQCI Channel Satisfaction Survey conducted by IMRB, a

total of 602 partners comprising distributors, resellers, systems assemblers,

network integrators and service partners were interviewed. The survey was

carried out over 10 cities: Mumbai, Delhi, Bangalore, Chennai, Kolkata, Pune,

Hyderabad, Ahmedabad, Nagpur and Chandigarh.

The partner sample consisted of six distributors, 364 resellers/retailers,

170 systems assemblers, 24 network integrators and 36 service partners. Of

which, nearly 150 partners each were interviewed in Mumbai and Delhi, 75 each in

Kolkata and Chennai and 25 each in the remaining cities.

All together, 25 product categories were considered while asking partners to

respond to the survey questions.

The interviewing started with questions on product categories dealt in, type

of channel partnership and vendors serviced etc and moved on to the relative

rating of different satisfaction parameters by the respondents.

In this survey, the method of plain voting was not adopted as it allowed one

to express his/her individual opinions, in relation to a number of issues,

criteria that have been identified by the same individual. Individual degree of

satisfaction with key vendors on the pre-decided parameters (where a broader

rating scale can be used, implying degrees of preference and strength of

feelings, rather than a clear-cut choice) was sought, and thereby linked it to

their preference of vendors in different product categories.

This rating choice allowed the respondent to select a single numeric answer

ranging from one to the interval defined for that question. Relative impression

allowed the respondent to select any position between the extremes. The interval

was kept to a five point verbal scale (that is, poor to excellent). By defining

a smaller interval, the analysis yielded better results and produced a smaller

grid of possible combinations. The score thus collected was analyzed and then

linked to a simple voting with reasons asked.

Since there was a high degree of multi-functionality among partners, they

were considered on the basis of the function that they were largely involved in.