'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