HP-CMDA Octroi Logjam

The stalemate between HP and CMDA, Pune, on the demand of the latter that HP
deliver octroi-paid goods within Pune has become more of an ego clash than a
business issue. It is in the interest of both, that they come half the way and
solve the problem right away.

The issue has now degenerated into a clash of egos because HP cannot hide
behind the smoke-screen saying that it does not have a billing center in Pune.
If it is serious about doing business with partners in Pune, then it needs to
establish one.

Of course, doing this will open Pandora’s box for HP because other cities
in Maharashtra too will demand the same facility. Perhaps this is what restrains
HP from setting up a billing center in Pune.

HP should look at establishing more billing centers as an investment for the
future because business is expected to grow manifold from B and C-class cities
in the coming months and years.

What has emboldened members of the CMDA to fight for octroi-paid goods in
Pune is the fact that other major vendors, including Samsung, LG, Epson, Samtel,
Microtek have been supplying octroi-paid goods in the city.

Also, if partners in Mumbai can get octroi-paid goods, why not in Pune? Why
not in other cities of Maharashtra? This is the reason resellers across several
cities in Maharashtra have joined hands with CMDA, Pune.

HP needs to accept these developments positively and show the necessary
flexibility to set up a billing center in Pune. Otherwise it stands to hurt its
own interests in the short as well as long term.

In the short term, HP is hurting itself because other competing vendors are
gaining marketshare in the Pune market because CMDA members have boycotted
selling its products. The CMDA has gone to the extent of suspending two of its
members for selling HP products, which means the reseller organization is
serious about exerting pressure on HP to treat them just the way other major
vendors do.

CMDA has, in fact, shown its willingness to come the half way by suggesting
to HP that it reimburse its distributors the octroi that they pay in the form of
marketing costs if it is not yet ready to establish a billing center for Pune.
HP needs to look at this option seriously to safeguard its interests in the
growing Pune market.

Members of CMDA are confident that they can do business without HP because
other vendors are gladly filling in the gaps. Of course, in the bargain,
customers may not be getting what they want. For this, CMDA members squarely
blame HP which is trying to reach its targets in the city by putting pressure on
retailers of Compaq PCs to sells its printers.

The fact is, the entire episode is hurting, both partners and HP. The
solution lies with both the parties who should forget their egos and put
business interests upfront. The initiative lies with HP.

sylvesterl@cmil.com