'We strive to be loyal to our resellers and expect their loyalties to us in return'

Armed with an MMS from BITS, Pilani, Deepak Sharma joined Eicher Tractors in 1981. He then moved to Modi Xerox and stayed with them for 11 good years. Joining Invensys in 1998, he is now spearheading the channel development of Powerware International Limited, the power division of Invensys. DQCI caught up with this bibliophile to discuss the channel strategies. Excerpts from this conversation. 

What role do you visualize for channels in the overall Invensys business plan?

Our company presently is in a phase of transition, moving from a direct model to one where we expect nearly 70 percent of our business to come from the channels in the near future. We have structured our strategy for three areas. One is the single phase products with less than 6 KVA rating, the second is the single phase and three phase products ranging from 6 KVA to 60 KVA , and the third area would comprise of products higher than 60 KVA . For the first area, we will follow the distributor-reseller model. For the second area, we will appoint business associates and for the above 60 KVA range, we will be selling directly. 

What would be the key parameters on which you will base your decision to select a business associate?

We are looking for partners who already possess a comfort level in the power business to qualify as our business associates. These could be manufacturers of UPS who have their own products in the 5 to 10 KVA range and have a reach in the market with an established customer base. They also should have strong regional presence. In the 30 to 60 KVA range, our experience tells that there is a lot of work to be done to get the power requirements right and we have to make sure that an optimum solution is provided. So somebody who understands the power needs will be involved. Also, not to limit our alternatives for choice, we may even look at people who are into structured cabling and system integration. 

As of now, what is the number of partners that you are looking at?

To address the lower end of the market, we will have distributors and resellers. We will start off with two distributors and see if there is a need to add on a third. For the next level, that is the resellers, we think that on all accounts we need to have a minimum of 750. On the business associates front, we recognize the fact that these people will have regional coverage and so we will look at having 30 such associates to give us an adequate market coverage.

The channel complains of inadequate margins. How do you plan to address this issue?

Inadequate margins primarily are a result of over distribution. This is the main reason that we are appointing just two distributors. The intention being that there should not be too much of a competition between distributors. We strive to be loyal to our resellers and expect their loyalties to us in return. In order to ensure this, we have introduced a system of inquiry generation, where in we will forward the enquiries from end-users to our resellers. They will then take it up from there.

How do you plan to address the training needs of your partners, especially the business associates?

We have designed two types of training programs for our partners. One of them is the "learn yourself" type of a program. This is in the form of a book that covers each segment we are present in. It covers various aspects including how to approach a customer, how to identify his needs and specify the right product. It also contains some information on how to position ourselves with regard to the competition. It is ready and is available for our channel partners. We will also put our partners onto our sales web, which carries a lot of informative material. And lastly we would be running classroom-training programs for all our business partners as soon as they sign up with us. 

How do you plan to attend to the service requirements?

On the service front, we have made two categorizations. One is for the high volume products that include the 6 KVA and below models and the other is for the above 6 KVA models. For the 6 KVA and below category, we will further split it into the 500 VA and the non-500 VA type. For the 500 VA type. 

If the location is upcountry, we will appoint a courier agency to drop the new product and pick up the old one. And in one of the 50 odd locations that we plan to cover, it will be routed to our local service provider, who will fix it within an hour or replace it. For high volume products, our warranty policy will be "replacement without questions".

What will you base your decision on, in appointing the service providers?

Of the 50 locations planned, we already have two in place. Rather than trying to be city-specific, we will look at the partners' capability to provide support across the country. In the Business Associate model, we will work with people who have the capability to provide the first level of service. 

Other UPS manufacturers have been here for quite some time now. So how will you counter their first mover advantage?

If you look at the market, Tata-Liebert has two very respectable names in that JV and also immense brand equity by virtue of their being around for so long. 

What we bring to the table is modern technology vis-à-vis them. And the products that we sell in India are the same as sold anywhere else in the world. 

Perhaps we have the last mover disadvantage in terms of our reach and brand recall, but we have the latest technology that we offer to our customers. Our products employ the latest Digital Signal Processing (DSP) technology. 

The market of entry level UPS is highly fragmented, so how do you plan to counter competition from the low-cost products?

Till a couple of years ago, there was not a single player in the industry representing the organized sector. With APC launching their 500 VA models, they demonstrated that economies of scale can overcome the advantages that some other player might have from lower overheads. 

Certainly that is the model that we want to push. When our numbers are higher and the import duties come down, as they must, the inefficiencies that are built in manufacturing small numbers will be countered and we will become very competitive.

MOHIT CHHABRA in New Delhi