'We expect partners to position Canon as the lead product.'

Currently looking after both the Canon channel and sales through the direct route, Ravi Bhatia, has over two decades of experience. He started his career at Glaxo, where he worked for almost four years. 

His next stint was with HCL and it was while working here that Bhatia learnt the importance and the power of a strong channel. This knowledge has equipped him to handle his present responsibilities at Canon where he is driving the entire channel initiative in a bid to position Canon as a channel-friendly company. He tells DQCI that Canon's immediate priority is to improve its communication with the channel. 

How big is your distribution network today?

Our distribution network is essentially three-tiered. The first tier comprises of the two national distributors, Redington and Tech Pacific as far as hardware is concerned, which is printers and scanners. We also have Wipro as our national distributor for consumables only.

From the distributor, we come to the local partner, whom we call the Canon Premium Partner, who provides the functionality of bringing stocks closer to the markets. They serve a very key role and we would like to increase our business with them. Currently we have 25 such partners and we would be looking at 300 such partners as we enter B and C class cities. 

At the third tier, which is end-user focused and the most important, we have 800 partners and this number includes retail shops as well. Although we are not big in retail, we would to certainly grow there. We would like this number to reach 3000 from the current 800. 

How have you been able to develop the network that exists today?

The first thing that we decided to do was to correct our communication. And to correct that, we decided to have central resources to focus on this subject. We now have a program manager who looks at this aspect. He looks at frequent communication to the channel, which is announcing programs and making sure that the programs are monitored, tracked and rewarded in time. Thus, we are trying to correct the situation although it is far from satisfactory today. 

What are your expectations from the channel?

We expect partners to position Canon as the lead product and service customers with our products. However, our overall goal is to win the confidence of the channel. To that effect, we are establishing a help desk in four metros, where the channel can call in and seek support. Apart from this, we have a team of merchandisers, who are Canon employees, who will be moving in the markets. 

What are Cannon's terms and conditions for its channel partners? 

We are not really dominating the channel in that sense. We are trying to penetrate the channel. So our approach is one that any marketer would follow to achieve penetration and to align oneself to the market needs rather than what you could dictate. So, right now, we don't dictate terms. Basically we would want channel partners to meet certain quantity levels and keep stock that meet these requirements. 

What kind of schemes and promotional programs do you keep running for channels?

We are running programs for each and every level. For example, at the national distributor level there are shipment targets that we want to drive, with shipment incentives. At the Canon Premium Partner (CPP) level, we want more stocks to be available in the city of focus. 

And in conjunction with these, we run schemes too. For the November and December 2000 period we ran a scheme called 'Hot Wheels', where some partners won a car each. 

We also have back-end reward programs for the CPPs. The third tier, which is the port of call for the customer, there are two focus areas. One is the end-user focus, a partner who ends up with a certain number of end-user sales during January to April will win himself a trip to Phuket. In addition, for every twelve printers that he sells he gets a cartridge worth Rs 750. 

What problems do you face while doing business with channels?

The first problem that we have got a good handle on is manpower. Now for every aspect of business there is a person to whom the channel can speak to and get a response. Problems mostly arise when communication is not right. 

So we have put the communication infrastructure in place and in addition to this, we will have a help desk. We are adding more and more things to improve our communications. We are organizing channel meets and one will take place on 16th April. 

What is Canon's strength today?

One is the product quality, second, the price point attractiveness and, third, the customer satisfaction that Canon products bring to channel partners. The other thing is the after-sales revenue that we can bring to the channel through cartridges.

What are the products being sold by the channels currently?

Currently we have scanners, printers, multi-function devices which is the IT channel or the SPD channel as we call it. The non-IT channel or the OIP channel sells copiers and fax machines. 

The channel is complaining of inadequate margins. How do you tackle this problem?

The margins are definitely a key aspect of our relationship with the channel. We constantly keep a watch on the prices in the market. First, we ensure that the product is broadly available in the market. We also ensure adequate backends and support to make the channel profitable. We also understand the channel's desire to conduct business without any hassles and enjoy peace of mind. To ensure this we have put in place service infrastructure. 

How do you tackle replacement and warranty issues? 

We offer a one-year warranty on our printers and scanners and have 23 service facilities across the country. Of these, eight are company-operated and the rest are manned by Redington India. But from here on, we would like to move to more channel-oriented service centers rather than company-operated facilities. 

Ideally in the future we would not like to have our own service centers. We want to have a high density channel presence in this sector. 

With every new product launch there is training that is required, so what initiatives will you be taking on this front?

Starting this January, we have appointed people to look at the sales and service aspects of product training. We also have outsourced a partner, who looks after training logistics, like venue booking, availability of study material at the venue and so on. We will be unveiling the training calendar on 16th April. 

Since we are expanding our service partners, we think 20 training sessions will be required very quickly to cover 100 service partners. The sales training will have to be conducted every 45 days at every location because the number of partners is very large. 

What has the channel to look forward to in the coming quarter then?

The channel can look forward to first, all the jarring noises becoming diminished and going away. That is one promise we want to make to the channel. They have been very open with us and we have taken their feedback very seriously. Second is that we are committed to building the relationship with the channel and are aware that Rome was not built in a day, but are moving towards it. And there will a number of new products rolling out. 

Mohit Chhabra in New Delhi