Market confused as distributor promotes its own warranty program

Can a distributor promote own warranty program for a vendor product, which
already carries some warranty is the million-dollar question among the
resellers. The answer is yet to be found, as both the concerned parties (vendor
and distributor) are not giving a clear answer on this issue.

The resellers in Cochin market are quite confused and upset over the
different warranty programs announced by distributors for the same MSI products.
Micro-Star International (MSI), a Taiwan-based global player, is being
represented in India by its three distributors–Mumbai-based Priya Limited,
Bangalore-based Cyberstar Infocom Limited and Kolkata-based Tirupati
Enterprises.

While MSI has announced only three-years warranty for its motherboards and
graphic cards, Priya Limited is offering one year and two-years warranty option
on the same products for a discounted price.

Meanwhile, the company (MSI) has clarified, through e-mail, that it offers
only three-years warranty and any other schemes are part of the distributor
offerings and it does not have any binding on it. However, the company did not
divulge any information about whether it has legally allowed a distributor to
make such offers. Priya Limited is also refusing to comment on this issue.

According to Cyberstar Infocom and Tirupati Enterprises, they are offering
only the company’s warranty of three-years and they feel distributors do not
have any rights to modify company warranty as it against the vendor policies.
Meanwhile, resellers are saying Priya is taking shortcuts to sell more products
and eventually, depriving the customers of their due warranty support. According
to market reports, Priya is offering this warranty option not only in Cochin but
in other select markets too.

"The different warranty policy for the same product is taking its toll
on the resellers who do not buy from Priya. We are MSI authorized dealer partner
for Cyberstar Infocom and as our distributor is not offering this choice, we are
losing out on competition. However, the customers are not aware that our
products carry three-years warranty and they are more concerned about that Rs
50-150 discount offered by Priya channel partners," said PK Harikrishnan,
Director, Alltime Power Technologies Pvt Ltd.

"When a company offers three-years warranty on its products, it shows
the quality and reliability of the product. However, if a distributor is cutting
it down to two-years and one-year, it is a plan to degrade the brand. Priya also
has their own `Krypton’ brand and any call to the company, the representatives
will first try to pitch Krypton saying it is very competitive in all fronts and
available for a lower price. We feel Priya is trying to kill MSI and promote its
own Krypton brand," said another leading reseller from Cochin.

"Priya started this warranty option only few months back and it has
created a lot of confusion in the market. Normally, buyers (end-users) will not
be aware of this different warranty policy among the distributors and a reseller
can easily push a one-year warranty product instead of three-year to make more
money. This has made many resellers to switch to Priya to buy products,"
pointed out a leading reseller from the same market.

"Even, vendors like HP and Mercury announce their special warranty packs
which is available for a few hundred rupee extra. But, this is part of vendor
program and nothing to do with distributor."

"Priya is offering this warranty option only with the consent of MSI and
we are offering this in all our branches across the country. Actually, Priya is
taking risk by announcing such schemes because Priya takes the responsibility of
replacing the product in one-year and two-years schemes. However, for products,
which come under three-year warranty the buyer should approach only the company
(MSI) authorized service partner-Accel ICIM Systems & Services Limited, for
any replacement and service. Nevertheless, the warranty support of MSI is very
poor and it takes six to eight weeks for replacement," said a source close
to Priya Limited. However, when we contacted Aditya Bhuwania, Director, Priya
Limited, he refused to comment on whether a distributor could promote own
warranty program for a vendor product.

Meanwhile, Accel ICIM has clarified that its turnaround time on MSI products
is within a week. Accel ICIM has tied-up with MSI as their authorized warranty
support partner about eight months ago. "We provide warranty support for
only MSI authorized products and not for distributor own schemes. Presently, the
warranty support is routed only through distributors and end-users cannot
approach us directly," according to a spokesperson at Accel ICIM.

"When a company has appointed a full-fledged warranty support partner,
then distributor has no role to play in it. It (warranty) is a principal’s
commitment to its customers which will be honored by them and any distributor
cannot modify the warranty policy as it is against the vendor policies,"
said Rajeev Chaudhari, Director, (Sales and Marketing), Cyberstar Infocom Ltd.

"MSI products are up to the mark and it’s a preferred brand across the
world. Its failure rate is less than one percent and the warranty support
delivered through Accel ICIM is also good. We get replacements within a
week," confirmed Abhishek Kejriwal, Director, Tirupati Enterprises, which
has been recently appointed as distributor for MSI. "We have informed about
Priya to MSI and waiting for their response."

Frank Sherap, Account Manager (Sales Department-1), Micro-Star International
(MSI) Company Limited, responding to an

e-mail on the issue, commented that MSI is offering only three-years warranty
and any other offer is not part of the company and it is only distributor
scheme. However, he has not clarified whether a distributor can pro-mote own
warranty program for a vendor product or not.

S Gopikrishna

Chennai