HP, Samsung Voted Channel Favorites

The results of the DQCI Channels’ Choice Awards Survey — 2001, showcase

the complete domination of HP over the channel community across the country. The

vendor has proved itself as the Channel Champion, second year in a row, bagging

all the six gold awards. Samsung, on the other hand, has created a sensation by

displacing Intel from the second place in the last year’s award list and has

won the Channel Champion Silver Award. Intel had to contend with only one silver

compared to three golds and two silvers of last year. DQCI talks to the winners

to find out how they managed to carve out a niche for themselves in the psyche

of channel partners.

HP has done it again. Channel partners across the country have crowned it as

the Channel Champion second year in a row. By bagging the DQCI Channels’

Choice Gold Awards in all the six categories, the vendor has proved itself as

the most popular vendor among channels.

The partners have overwhelmingly voted it as the No 1 vendor for its

products, market support, post-sales support, commercial terms, online support

and the close relationship it maintains with the channel. Says Ravi Aggarwal,

VP, HP India, "It is our philosophy to look at the channel as an extended

arm of the organization, and it is our constant endeavor to maintain close

proximity with them."

Samsung, on the other hand, has sprung a surprise. It has made a heroic entry

to the second place by winning silver awards in all but one category. Partners

have voted Samsung at the second place for its products, market support,

post-sales support, commercial terms and its close relationship with the

channel.

Points out James S Jong, Director, Samsung, "Channel partners are our

feet on the ground. They provide us the reach to the nook and corner of the

country. We put in our best efforts to keep them satisfied in every

respect."

For Intel, it is time for introspection since it has been able to win only

one Silver Award for online support. This is in contrast to its performance last

year when it had bagged the Channel Champion Silver Award by winning three golds

and two silvers in various award categories. This time round it has been pushed

to third place for best products and marketing support.

Microsoft, which had won a Silver Award for training support last year, is

not among winners this time with a third place in online support. Compaq and

Wipro are at third place for best commercial terms and best relationships

respectively.

BEST PRODUCTS



Both the award winners in this category term their positioning and product

basket as ‘unique’. HP’s portfolio extends from high end Unix servers and

storage solutions that are bought by enterprise customer to home products like

multimedia PCs and deskJet printers.

Samsung’s product portfolio offers the channels and users a broad spectrum

of products ranging from PC monitors, hard disks, CD-ROMs, DVD ROMs, CDRWs,

combo drives, the components that help Samsung dominate the assembled market and

therefore the Indian PC market.

Says Raj Kumar Rishi, Country CCO Manager, HP India, "We always try to

ensure that our products fit the requirements of customers in various

segments." On the other hand, Vivek Prakash, GM, SEIIT, puts a different

perspective for their success. Says he, "All our products are amazingly

well featured and surprisingly affordable as compared to competition."

Also technology leadership for HP has helped it maintain a top of the mind

recall within the channel. Feels Rishi, "HP has always been ahead of

competition in terms of bringing new technologies to market."

Pricing, both feel is not the key decision variable, when it comes to the

channel partners doing business with them. Says Prakash, "The products have

to be great, not just good. And policies should be friendly and contribute to

channel health."

Rishi is of the opinion that the contributing factors to the success of the

channel and the company together lie in the distribution model where in one,

smooth product availability through national distributors is ensured.

Secondly, in ease of doing business with the company in terms of a consistent

and transparent channel policy and in established processes for channel account

management, channel training, channel marketing support and claims processing.

"Price positioning", he adds, "is just one of the components in

HP’s product and channel strategy."

Summing up HP’s channel philosophy, he adds, "It is our philosophy of

looking at the channel as an extended arm of the organization, and a constant

endeavor to maintain close proximity to them."

BEST MARKETING SUPPORT



Marketing has over the years evolved to become a fine art. While the most

visible component of marketing support is the advertising, our channel champions

go beyond advertising to ensure the partners’ cash registers keep ringing.

Samsung has taken their touch and feel with the customer way beyond the channel.

With the launch of buildurpc.com last year, they tried to increase their

customer contact through a now universally accepted interface.

Says Prakash, "We have taken IT marketing to a different plane

altogether. It is more focused on customer needs than tom-tomming features

alone." HP used a variety of media to reach its customers. The use of the

medium depended upon its effectiveness to reach the target customer audience,

for HP’s product and service portfolio is diverse. A striking aspect of HP’s

ad spend is that a big part of it goes through the channel partners. Says Rishi,

"The objective here is to build channel partner branding along with HP

brand building."

Both HP and Samsung, in the last year, struck a balance in providing healthy

margins to the channel partner and delivering promotion targeted at the

end-customer. Says Prakash, "Dealers should enjoy selling - and that is a

function of both their margins as well as customer pull. Similarly, customers

have to be confident that they are buying the best - a function of both better

recall and widespread availability of products and service."

To ensure the maximum mileage out of each marketing rupee spent, Samsung’s

advertising was kept consistent and attractive consumer promotions were run.

Adds Prakash of the web initiative, "Our web site, buildurpc.com, is an

initiative which identifies us with the PC buying process - we get an average of

over 1.5 million hits every month and more than half a million page views."

While HP did all the things that a typical marketing text would ask a

marketing professional to, it went a step further. It brought into the loop the

sales force of its channel partners with the launch of the now popular E-Points

program. Rishi refers to it as a substantial investment from HP in this year of

market slowdown.

He further adds, "This program has ensured that the partner sales force

is highly motivated to meet HP and our partner’s business objectives. At the

same time, our channel management processes ensure that channel partners have

reasonable margins while doing business." The program implementation

incidentally won laurels for the HP India team at the Asia Pacific level, as

being recognized as a best practice.

On the customer front, HP undertook end-user seminars showcasing latest

products and services. HP worked towards showcasing its inventive capabilities

across three key dimensions of the emerging technology landscape: enabling

intelligent, connected devices and environments; enabling an always-on Internet

infrastructure; and enabling a new generation of applications delivered as

e-services. Adds Rishi, "By understanding the relationship among these

three, we can help transform the experience people have with technology and the

role it plays in business and life."

BEST ONLINE SUPPORT



The only category where Intel broke the complete domination of Samsung over

the Silver awards is online support. It could however not displace HP from being

the sure shot leader. Online contact has become an important channel of

communication, for not only it offers a one-to-many flexibility, it is extremely

fast.

Says Amar Babu, GM - Channels, Intel India, "A majority of Intel

communication with the channel customers is online via Internet and is

24x7." For this all Intel channel partners have a registered account for a

secured communication. Intel uses net for disseminating information regarding

products features, technology updates etc to the channel customers online.

Regular training courses are offered to the channel that can be completed

online. Adds Amar Babu, "The overall effort is to use the Internet as an

effective and preferred mode and the channel appreciates the benefits."

Intel is looking at expanding their support coverage online. The plans are to

provide post sales support and technical support services to the channel

partners online 24 hours a day, seven days a week. Adds Amar Babu, "We also

plan to offer more online training to the channel this year."

HP is not an exception when it comes to providing excellent support to its

customers and partners. It has a comprehensive post-sales support program for

its customers and channel partners. To serve its customers efficiently, HP has a

complete web-based customer complaint management system, which allows automatic

forwarding and tracking of complaints and also a prompt closure. Also to support

the needs of its channel partners, HP has a Web-based call logging and tracking

system linked to their inventory system to log calls instantly, order for parts

and know the status of their requests.

HP is also taking training online. In its recent effort to virtually connect

with its channel partners, HP conducted its first satellite-enabled training for

their resellers. "We have used the most advanced education service that

allows two-way data interaction," says Ashwini Aggarwal, Country Partner

Manager, HP India. While it will help HP to cut costs, it will also make it

convenient for the partners to have their queries addressed easily and faster.

BEST POST-SALES SUPPORT



With a well-drafted organizational structure, getting after-sales support

queries addressed at Samsung are a smooth ride. Says Prakash, "We have

recorded our highest sales in a period when market sentiment is at its

weakest," and conveying the fact that the overall organizational structure

and a swift channel team is what it takes to win in the cutthroat market. He

further adds, "Now, with situation improving, it can only get better."

HP being a channel-driven company, maintains a strong relationship with

partners and thus works in close association with the objective of fulfilling

their customer needs best. This remains a rule whether the sale has been made or

not. The HP warehouses are placed at strategic locations across the country to

ensure availability of parts to channel partners in the shortest possible time.

Adds Rishi, "In case of any technical/escalation support, the channel

partner can seek online help from highly trained product specialists across the

country."

BEST COMMERCIAL TERMS



Says Vivek Prakash candidly on their Silver award for the best commercial

terms offered, "The policies were well thought out on paper as well as on

the ground." In the process highlighting an important lesson that

implementation is a keyword for any successful policy.

HP looks at it from the distribution perspective. Says Rishi, "We have

relationship with the best distributors in the country who ensure excellent

supply chain in addition to providing relevant commercial terms to our final

tier business partners." And HP bulwarks them by structuring their

incentive programs in a manner that they help the partners in their

profitability objectives. And in the process help HP achieving its numbers as

well.

BEST RELATIONSHIP MAINTAINED



The mantra in the year of the slowdown was close contact with the channel

partners. For in these tough time the adage, ‘Absence makes the heart grow

fonder’ fails. The Samsung Country Product Managers are all in constant touch

with their channel partners. Says Vivek Prakash, "The basic tenet is open,

constant and transparent communication." So much so, even the promotions

planned are "brainstormed" with channels before they are implemented.

HP has assigned account managers to all its business partners who interact

with these partners on daily basis. These account managers do joint business

planning with partners to identify opportunity areas, critical issues that need

to be resolved and marketing support needed by the partners. They also make

joint customer calls along with the partners on a case to case basis.

Says Rishi, "We have maintained a high degree of openness, consistency

and transparency in managing our channel relationships. At the same time, we

have established robust processes to manage our channel engagement." To

ensure that the channel is in constant touch with the top management, HP

organizes quarterly channel meets for their business partners as well as their

sales teams. These meets are a forum for partners to interact with HP Country

Management team including Product and Segment Managers. Adds Rishi, "HP’s

top management and our partners keep in close touch with each other through

formal and informal interactions across the year."

CHANNEL CHAMPION



With a well-defined channel policy and well-planned promotions in place, HP

looks as the obvious choice of the channels as the Channel Champion. Says Rishi,

"HP has well-established processes, policies and programs for its channel

partners." Their philosophy of treating their channel partners as an

extended sales arm is well communicated to one and all.

Continues Rishi, "Moving ahead, we intend to build up on these

strengths, increase the content of our deliverables to our channel partners and

increase the channel satisfaction while doing business with HP."

Samsung feels the only direction to go after this is up. Says Prakash,

"Better, Better, Better - that is our Mantra." And it is more than

just Samsung’s welfare that he has on his mind. The last year was also a time

when Samsung earned itself the distinction of launching some very exciting

promotional campaigns, the ‘Mobike se Mercedes tak’ deserves a mention here.

And the vibrant channel team wants to keep that tradition intact. Says Prakash,

"More exciting programs aimed at exciting the channels are on the anvil and

also they will be aimed at improving channel health."

THE ROAD AHEAD



With the markets expected to take an upswing by the middle of this year,

companies are gearing up for another tough two-quarters ahead. But the channel

was kept constantly excited throughout the last year, barring a few hiccups here

and there.

Both the channel and the vendors have a lot to look forward to in 2002 and

beyond. The Indian market is an opportunity waiting to be explored. The

upcountry markets are responding to the IT revolution and an IT minister with an

agenda. With companies aiming for better numbers and higher revenue figures, the

woods look lovely indeed and all have miles to go before they sleep.

Mohit Chhabra in New Delhi