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Now that Patriot Memory is entering the Indian market, it is scouting for
the right kind of channel partners who can position its products in the right
customer verticals. Paul Jones is very optimistic about the prospects of DRAM
modules, USB drives and MP3 players in the Indian market. Here he outlines how
he would like to drive this business
How important is Indian market for Patriot?
India is a very important market for us. In fact, this year we have zeroed
on India as our main focus. We have been in this business for the past 22 years
and focused on the US and European markets.
Three years ago, we opened our Asian office in Taiwan. Since then, we have
seen encouraging business growth from this continent. We see great scope in
India as we have witnessed good traction and interest for our products.
What is your distribution network in India?
As of now, we are still formulating the right distribution strategy for
India. India is a vast region. It will not be possible for us to reach out to
the myriad cities. We also believe that one single distributor will not be able
to reach out to all channel partners, especially those in the smaller cities.
This is why we will have regional distributors who will not focus on
geographies. Instead, they will focus on customer verticals.
So we will have regional distributors who will work with the retail channels,
the systems integration channels, the reseller channels etc.
This is the only way we can reach out to a wider set of customers. Also,
since each of the distributor will be targeted on certain verticals, there will
not be too much channel conflict, which is precisely what we want.
Most vendors, when they appoint regional distributors, give them geography
to work rather than customer verticals. How confident are you that your strategy
will work?
We have adopted similar strategy in other countries and it has paid us rich
dividends.
Memory is a commodity, and therefore the key to success is to move large
volumes. This is why we need to reach out to as many channel as possible so that
they in turn can take our products to the end customers.
Also, price fluctuations in the memory market are very rampant. We can decide
what the profit margins for a particular customer vertical should be, and then
in case of price changes, the channel has the leeway to work on the margin
bandwidth to ensure that they don't suffer any loss.
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Paul Jones
CEO, Patriot Memory Inc |
When do you plan to have your own direct presence in the country?
Before we establish our direct presence, we would like to establish our
brand presence in India. Hence, we are first going to the channel to entrench
our brand awareness. As we gather marketshare we will ask for more technical
support with several engineers so that post-sales warranty issues are ironed
out. Once we have achieved this, we will have our own office in India.
Is the brand awareness creation a challenge, since you are a late entrant
in the Indian market?
I don't think we have entered the Indian market late. But yes, we have to do
a lot of activities to increase our brand awareness.
To do this, we will have a select marketing strategy. We will adopt a
top-down approach. This means that we will spend our on certain focused events,
where will reach out to our core customers-especially the systems integrators.
Initially, we will have schemes and advertising targeted at the systems
integrators. We will come with co-branding options with other vendors as well,
where our products have been used in their systems.
For our retailers, we will work out means to increase footfalls into their
shops. We are mulling coming out with a channel scheme where they
can bundle our products with higher configuration upgrade machines. This way we
will help our partners sell more PCs.
Over time we will add loyalty programs for partners who do recurrent business
with us. This is to make sure that they do not use any other brand other than
ours.
Who are your closest competitors in India?
We have several competitors but there are none so major. The Flash market is
a very big one and there is enough room for a lot of players to operate here.
We will continue to push our DRAM memories and also we will increase our
focus on the Flash memories and USB drives.
The sales of these two products have been incrementally going up at a steady
pace over the past several years globally. But more so in India where the
telecom and mobility market is moving at a steady pace. Our USB drives are
Microsoft Vista ready and as more users start moving to Vista, they will prefer
our drives.
But the Flash memory and the USB drives business in India are dominated by
the gray and fake products menace. How will you tackle this issue?
Yes, I have noticed that the gray and the fake business is rampant in India.
But while we accept this is a serious issue, we are not overtly worried about
it. Fake manufacturers can make products identical to the ones we design. But
they will not find it viable to include all the technology we integrate in the
products.
Also, we have made all our products plug-and-play. In addition to this we
have bar coding on our products, so we can provide good warranty support to our
products. All these features make our products very user friendly, something
that the fake products will not be able to match.
Having said this, I must add that there exists a parallel import channel. The
reason it is still in existence is because of the price differential in the
original and the gray products. We are finding out means and ways which will act
as deterrents to fake product makers.
We are working on coming out with an India-specific pricing, which will make
it lucrative to buy our products from our authorized channel. We are in talks
about coming out with a subsidized pricing strategy for India and this should be
introduced shortly.
In 2006, Patriot experienced a 155 percent sales growth from the previous
year. What growth are you expecting this fiscal?
In the H1 of this fiscal there was a tremendous price drop in the prices of
Flash products – almost in the region of 60 percent. This propelled sales, which
is why we have a very good half-year. I will not be able to share exact revenue
figures right now, but I can tell you that we are expecting a healthy triple
digit growth.
VINITA BHATIA
vinitavs@cybermedia.co.in Page(s) 1
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