MULTI FUNCTION DEVICES: Have You Tried Selling Them?

Do you think the devices that promise printing, scanning, copying and faxing and come in the price range of Rs 18,000 to Rs 65,000 will attract customers? If yes, then multi-function devices, as these are called, may be the products you should watch out for.

The age of convergence for products is upon us. More and more

devices that are hitting your store shelves have a capability to perform more

than just one function. While your telephone doubles as an answering machine,

your television comes with a VCD player. Can IT products be left far behind?

The latest to jump on this bandwagon are printing devices with

scanning, copying and faxing capabilities. Both vendors and channel partners are

gung-ho about the future of these products.

While no third party data about the movement and volumes of

these devices are available, guesstimates put the growth rate in the 40 percent

bracket. Agrees S Magesh, Marketing Manager, Volume Products-OIP, "We are

looking at a 40 to 50 percent growth rate for the next two years on a very small

installed base."

Is it the next big thing?

Canon clocked close to 200 units of printing devices with

multiple functions, a month last year. Today it is looking at a substantial jump

to 1000 units a month by the end of next year. HP on the other hand is looking

at growing its market from the present 110 units a month to about 175 units a

month in the same time frame.

Sharp, another player in the segment, is selling 100 units a

month and looks at doubling this number soon. Samsung claims to sell 75 units

monthly.

All these numbers highlight only one thing — this is a segment

that is growing and has immense potential for further growth. Says Pankaj

Sharma, Head, IT Sales, Sharp Business Systems, "We are growing at nearly

100 percent."

Cost and space benefits

A multitude of factors seem to be fueling growth in the segment.

The first being space saving, which is a boon for the SOHO, a segment where the

product has seen most growth. And the second is cost-saving that comes with the

purchase of one product which has functions of various devices.

Says Sanjay Varmani of Groovy Computers, "While space

saving is a definite pull that the device offers, it also comes with a distinct

cost advantage." Agrees Magesh, "It brings about the comfort of having

a single peripheral with your PC."

Charu Jain of SMC International points out another plus of

buying such a product. Says she, "It also saves on the number of ports used

and decreases the wiring confusion behind the PCs."

The reasons notwithstanding, there are certain sections of the

market which has found use for these products. "The device holds a lot of

utility in verticals industry segments like export and jewelry business, where a

great deal of color copying is required", says Pankaj of Sharp.

Distributed need

Though sales in the large-corporate segment have been rather

low, an interesting trend has emerged. These printers occupy a place of pride on

the senior managers’ desks to give them the extra comfort of privacy of being

able to photocopy confidential documents within the confines of their offices.

A trend that Tarunjeet Sarao, Country Category Manager, Imaging

and Printing Systems, BCSO, HP India, eloquently terms as ‘distributed need’.

Agrees Charu of SMC International, "Even in the SME segment, the device

goes to the senior management."

The product movement however is largely targeted at the SOHO and

SME segment. Says Anil Sachdeva of Kadam Marketing, "The SOHO and the SME

are the big buyers for the product." But not much has been done in terms of

promotional activities to enthuse sales in this segment.

Says Varmani, "We have not seen anything happening but hear

that HP is planning something." Admits Sarao of HP, "We did not have

adequate market information about the segment, so there was a lack of

focus."

The market heats up

Now, after gathering adequate information, HP has recognized

this business as a growth area and is putting together a market plan. It has

frozen other marketing details regarding the segment too and has already kicked

off the Web and direct mailing activities. "The next couple of months will

see a lot happening", Sarao adds.

The focus on the product was missing from Sharp's end too. With

product volumes showing promise, the company is planning an aggressive promotion

in the November-December timeframe. Says Pankaj, "We have been softly

promoting and showcasing the product at our roadshows and seminars, but a

focussed campaign will come soon."

Avers Magesh of OIP, "We have refrained from promotions

because we wish to occupy an aggressive price-point position in the

market." Samsung, however, swears by demos. Says Moninder Jain, Country

Product Manager, Samsung, "Any customer who sees a demo is hooked to the

concept."

The companies see a greater number of first-time buyers for this

category of products rather than replacement buyers, more so because buyers are

assigning a greater proportion of their disposable income for acquiring IT

assets.

The productive life of the asset is seen as three years, another

reason why the concept of trade in discounts has not caught on in the segment.

The retrievable scrap value from a one-year old asset is hardly as aspect the

vendors would like to touch upon while selling the product.

"Organizations buy only after they see a certain value for

money coming out of it as the differential in the price of a printer and scanner

and copier as against an multi functional device is still quite large,"

says Pankaj.

Addressing channel needs

Training the channel to address service needs of the product is

hardly a cause for concern among vendors. This is largely because the

multi-function device sits on top of the printer engine, a technology that the

partners understand very well.

Magesh statement says it all, "We have less than one

after-sales call per customer per annum." Agrees Sarao, "Technical

training is not an issue." On the contrary he adds that partners are in

need of skill-building training sessions.

These sessions should equip partners to talk like a vendor and

enable him to configure solutions too. Sarao feels this will enhance the overall

productivity and profitability of the partner. This is an area that Sharp is

addressing with its sales training.

Once the channel is equipped to go to market with these products

and once product awareness increases, the multi function devices market space

will be a place to watch out for.

Mohit Chhabra in New Delhi