‘The key reason for our success is the distribution network’



An MBA from the Faculty of
Management Studies, University of Delhi, Sonal’s experience as country manager
at Micros Fidelio India Limited, a property management systems company, geared
him for the upheavals of the IT industry. Presently handling the display
division for Samsung India, Sonal has played a key role in upgrading the color
monitor market from 15″ to 17″ size. Sonal is now gearing himself up
to create a market for high-end monitors by empowering Samsung’s distribution
network.

How big is your distribution
network today?

We operate through four
distributors in India — Tech Pacific India Limited, Redington India, Ingram
Micro and Savex Computers.  Between these four distributors we cover the
entire breadth of the country with more than 84 sales offices in over 25 cities.
We have more than 4000 channel partners who feature in our database and whom our
distributors bill to.

Each of our distributors has key
competencies in certain product lines or geographical belts which on the whole
gives us enormous channel strength.  Tech Pacific and Redington give us the
much needed channel width. Ingram Micro in addition to the above does very well
in developing new products such as our CDRW range and our new multimedia
monitor.  Savex is a niche distributor and specializes in sales of high end
products, such as TFT LCD monitors. One of the key reasons of our success has
been our distribution network in India. 

What are your expectations
from the channel?

The channel partner is our
actual product champion. He is our link with the end customer. Our expectations
hence also revolve around him adding value to the sale to the customer and
guiding him to the right purchase decision at a fair price.

What are the terms and
conditions to become your channel partner?

We have a two-tier distribution
structure whereby our national distributors bill to the dealer channel. The
criteria that our distributors follow include credit worthiness. Channel width
is a concept that is very dear to us and is followed very well by our
distributors.  There are little volume commitments that are needed. Our
brand is very powerful — the moment a partner starts Samsung business — the
volumes grow steadily.

What kinds of schemes and
promotional programs do you keep running for the channel?

All our schemes are very
carefully devised to help the channel partners earn more through both — higher
sales and incentive programs. Our “Mobike Se Mercedes Tak” scheme just got
over and was a grand success. The beauty of the scheme was that it promoted
sales of 17” size and high-end monitors, where the channel margins are very
healthy.  This enables the channel partner also to upgrade their business
model. The most important aspect is that we are the  only company with
schemes to actually increase the sell-out of  channel partners.

A case in point is our very
unique  “M2M  Reseller Coupon Scheme” which was on till April 30,
2001.  Under the scheme a user gets a coupon for the entire Samsung product
range that the dealer sells to system integrators or to his tier-three channel.
Each coupon carries a unique number, which needs to be registered on our web
site. then we have a lucky draw, which carries different prizes every week —
from wristwatches to foreign vacations! This directly leads to higher sell-out
for our channel partners.

To increase demand at the end
customer level we run our annual “Value++” program. Under this program our
end customers get free-bundled products.  Last year with every monitor and
hard disk drive, we gave away a value booklet. This included free Internet for
lifetime, discounts of Samsung Home Electronics products, subscriptions to IT
magazines, discount coupons for NIIT and a free Sony music CD. The total value
of the bundled software and freebies was over Rs 8000.

This is the kind of value that
Samsung offers to the end customers. We also make PC purchasing a more enjoyable
experience by bundling free essentials like computer training, multimedia
titles, games and Internet hours.

How will you describe your
relationship with your channel?

Our channel strength emanates
from the focus and the relation we enjoy with them. We have very strong personal
relations with key channel partners. All our schemes revolve around increasing
their sell-out and rewarding their performance. Our support does not end at
selling to the partner. It continues till he has sold to the end user.

For corporate deals we actually
go out with the channel partner and promote sales for him. We provide sales
training to the staff, extend support on corporate mailings, classified
advertising and make demo samples available to our partners. We also undertake
initiatives like www.buildurpc.com to
increase our market size and sales. The site, which helps end users in their
purchase decision, has a dealer locator, with names and addresses of our
dealers. The sales are hence channelized to the dealer.

What new products are you planning to sell through the channels in the days to come?

The most interesting product,
which we have just launched and will soon ship into the country, is the
world’s first and only 24 inch TFT LCD Monitor, the SyncMaster 240T. It is a
multifunction digital device and can be used with a DVD, VCR, Camcorder and of
course with a PC and even has a Picture-in-Picture (PIP) functionality. This is
a high-end product, which will retail for approximately Rs 5,00,000 a unit and
will ensure very high margins for the channel partner.

Other products to be launched in
the country include a 19” Flat monitor — 955DF, a 17” Flat multimedia
monitor — 750DF. We are now targeting the home edutainment segment. We have
launched our multifunction product range of TV monitors in 15” and 17” size. 
This can be used with a cable TV connection, Air TV, DVD player, Camcorder and
of course with a PC. It also has a PIP feature and comes with a remote control.
It is an ideal choice for the second TV at home, in the bedroom and can be used
with the PC as well.

Channels are nowadays
complaining of inadequate margins in business. Are you providing satisfactory
margins to the channel?

All our promotions and programs
are aimed at increasing channel margins. The innovative coupon scheme was one
such initiative, which increases the sell-out of the partner and reduces his
inventory cost thus increasing his margins. By constantly upgrading the market
and launching technology products we ensure a healthy margins for the channel.

We at Samsung have been making a
constant effort to upgrade the market from 14”/15” monitors to 17”. Also
we have launched a host of very unique high-end products such as our TFT LCD
range, TV monitors, a 17” multimedia monitor. All these ensure healthier
margins for the channel. 

What are the replacement and
warranty issues that confront you in dealing with the channels?

We have the widest service
network today in the country with over 75 service centers in over 52 cities
handled by our consumer electronics company. On our Syncmaster range of monitors
we offer an unparalleled three-year on-site warranty including picture tube.
This defines the kind of confidence we have in our product and how much we value
customer satisfaction. Even our channels share this confidence in our products.

The introduction of a new
product or a model calls for orientation of the service staff. What kind of
training support do you provide to the your channel?

Whenever we launch a new
product, we provide training to the sales staff of our dealer. In our dealer
meets we highlight the key product features to increase their awareness.

What kind of support do you
plan to provide your channel partners for niche products like the high-end
monitors?

We are committed to upgrade the
market to new technologies and better products. To facilitate healthy sales of
high-end monitors we would be launching a very unique program under the Samsung
Star umbrella -— Samsung Authorized Corporate Reseller Program or SACR. The
selected members of the SACR program will get special support form us to promote
sales of high-end monitors.

This will include samples for
product demonstrations, specialized sales kits with product presentations and
literature, sales training to the sales staff, corporate seeding and joint sales
calls for large deals, support for classified advertising, support for
conducting road shows and events and direct mailers for corporates and other
users. The partners will be carefully selected based on their abilities and
customer focus to ensure that the end-user gets good value in dealing with our
partners.

Mohit Chabbra in New Delhi

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