Croma's Norton pricing upsets partners

Many of the volume partners of Norton India, a security software brand of Symantec, have been complaining about eroding market operating price (MOP) in the trade channel. The ongoing pricing disturbance in tier-2 channel is forcing Norton partners to either drop Norton brand or start looking out for other competitor security brand.

Commenting on the pricing disturbance Paramjit Singh Juneja, CEO, Secant Technologies, one of the volume partners in Ludhiana pointed out, "We have been associated with Norton as star partner for last 4 years, but for last many months we have been facing MOP issue with the brand. We are not able to match the lower pricing which the company is offering to LFRs and to its star partners. Therefore, slowly we have started focusing on other brands like K7, Kaspersky, e-Scan and Trend Micro. But the way Norton is pushing other channels and virtually killing trade channel, it is becoming difficult to continue selling Norton."

Agreeing to Juneja, Rajesh Bajaj of Bajaj Infomatics from Pathankot, said, "Norton's market in Pathankot is also going slow as it is difficult for smaller partners like us to match the online pricing and price undercutting in other states."

Although the partners have been facing this MOP disturbance for last 2-3 months, previously, it has been reported that Norton Anti Virus (NAV), which has a dealer pricing of Rs 315 plus taxes, was available in Delhi at Rs 200. As its star partners were creating price undercutting. But partners broke their silence when they found that Norton Internet Security (NIS) 5 users pack is selling loose at Rs 499 at Croma retail store in Jalandhar and its online portal (www.cromaretail.com).

Puneet Dhir, president, Jalandhar Computer Trades Association, also one of the volume partners in Jalandhar lamented, "It is very disappointing to know the recent unethical policies of Norton in which channels all across India suffered huge loss due to wrong policy decision and favor is being done to a few people and for driving their profits, whereas capital of dedicated channel partners across India is being eroded. Channel partners had hardly overcome the loss suffered in NAV as its prices dropped to Rs 200, whereas everyone was holding stocks at billing price of Rs 330. Now with NIS, this packing cannot be sold loose and is part of NIS - 5 user pack; whereas Croma has been given material with individual packing and MRP stickers and import stickers."

Dhir questioned, "How can we sell a product which is being billed to us at Rs 785 and Rs 1399 when its being exclusively made available at Croma at Rs 499?"

Nevertheless, partner have escalated all the MOP matter and Croma incident to Norton's country sales manager, India and Saarc, Ritesh Chopra.

Responding to channel concerns, Chopra wrote an email to partners (a copy of which is with The DQ Week), which stated, "Norton has sent a formal complaint to Croma around compliance issues as Croma has breached a contract with Norton. The agreement Norton had with Croma was that to bundle the Norton Internet Security together with only brand new laptops to experience Norton Internet Security. But Croma store in Jalandar has de-bundled and put them up at their retail shelves. Norton so far has given a total of 1,000 units to Croma. Taking an immediate step it has stopped all further shipments with a written advice to them that they are terminating the program with them."

When The DQ Week contacted Chopra on this Croma issue, he admitted, "We have learnt that Croma is offering Norton products at reduced pricing and have proactively addressed this issue with Croma with the aim to resolve the conflict. Norton believes in maintaining fair business practices. We have built a very strong partner ecosystem in India and are committed to supporting our partners to achieve steady business growth."

Some of Norton partners are not happy with Norton pricing and distribution policies. They feel, in the run to compete with competition, the company is using its trade channel for profitability, and for volume business it is utilizing LFRS and e-commerce channel.