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HP raises cartridge prices; resellers fume

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DQW Bureau
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While the reseller community is yet to breath a sigh of relief from the

counterfeit cartridge menace, HP has gone ahead and increased prices of its

inkjet and LaserJet cartridges with effect from 1st of May, 2002.

In a letter sent to all its Registered Supplies Resellers (RSRs), HP has

informed about a price increase of 4.4 percent on all but two models of inkjet

and LaserJet cartridges. On the other two models, the price hike is to the tune

of 9.4 percent.

However, with the introduction of resale tax and taking into consideration

the wholesale tax, overall changes in the cartridge prices turn out to be around

six percent.

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Resellers obviously are not very happy with this development. “When

counterfeit and refilled cartridges are still widely in use, this increase in

price is badly-timed,” said Rajkumar Sheth of New Era Equipments. According to

him, this price hike may in fact provoke end-users to go for cheaper

alternatives.

Voicing a stronger opinion, Saifee Merchant of Best International, said,

“This is surely not a customer-friendly approach that HP has adopted and it

may well lose out on its market share in the next six month's time.”

The price hike has also created problems for those resellers who have annual

consumable supply contracts with corporate.

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Highlighting this, Devang Shah of Crystal Impex, said, “RSRs or even

lower-tier resellers who have an annual contract for supplying cartridges to

clients would suffer as the latter won't revise their rates.” He feels that in

an absence of any kind of price-based support from HP, these resellers would be

forced to pay from their own pockets.

Resellers have also expressed their dissatisfaction over the reason offered

by HP for the price hike. HP attributes this hike to the devaluation of Indian

rupee against the US dollar.

Resellers, however, do not buy this because other brands have hardly

increased their prices. 

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Goldie S

New HP faces glut of retailers

With the merger of HP and Compaq, the new HP is facing a glut of retailers.

With the result, there is fear among some of these retailers that they might

have to down shutters by the end of this calendar year.

Explains one former exclusive Compaq retailer who has now become a

multi-brand seller, “There are over 450 exclusive Compaq retail outlets and

another 400 HP showrooms in India, concentrated largely in metros. This is too

large a number for the market. Therefore, the new HP will have to downsize this

number to a manageable 500 outlets. Which means it will have to disown quite a

few of them.”

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HP, however, said it will continue to invest in its retail channels for the

promotion of various products. V Krishnan, GM (Marketing, Imaging and Printing

Group), HP India, said that Compaq retail outlets will continue to retain their

current mode of operation. However, there will be lot of changes within the

store, which will now have a significant presence of HP peripherals.

“These stores will also offer supplies and consumables,” he added.

According to Krishnan, HP is currently in the process of consolidating the

retail operations of both companies. Retailers see this as a reason to worry.

Said Vengarai Srinivasan, Proprietor, Cyber Boutique, “Since I am an exclusive

Compaq retailer, the new HP will protect my loyalty. But other HP outlets which

are multi-brand in nature might be threatened by this process.”

Krishnan said that the new HP is working on branding guidelines for retail

outlets. “Once an uniform branding is implemented, every store will become a

part of the new HP retail chain,” he added. But, will the market absorb the

glut of new HP stores?

Vinita Bhatia


(CNS)

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