TVSE re-orients its channel strategy

Will work only through national distis, increase reach to 500

towns





The Rs 228 crore Che-nnai-based periheral manufacturing major, TVS Electronics

Ltd (TVSE) is getting aggressive on the channel front to increase its business

and reach a revenue target of Rs 500 crore by 2006. The company has worked out a

five-pronged strategy of increasing the channel part-ners, reaching more

cities/towns, strengthening the service infrastructure, expand-ing the product

portfolio, and creating more brand awareness and visibility in the market, to

achieve the projected numbers.

According to S Magesh, Head (Channel Marketing &

Distribution), TVSE, "The year 2004 will be a turning point for us, as we

will be moving on to the next stage of development and growth in the company.

TVSE will grow as a more stron-ger company with national reach and acceptance,

by build-ing relationships with channel partners and customers." Over the

last one year, the company has increased its channel contribution to total

revenue from 50 to 75 percent, through aggressive programs.

The company is realigning its channel structure to provide equal

opportunity for the rese-llers and create a level playing field for the channel

partners. TVSE which was mainly operat-ing through its regional distri-butors is

now focusing on national distributors, for better reach and availability across

the country. In October, it appoin-ted Redington as its third national

distributor, which is in addition to Ingram Micro–appointed in 2000–and Tech

Pacific–appointed in 2002. "Now, we want to move all our regional

distributors under them. We have already done in eight markets and soon, all

regional distributors will be re-named as re-distribution part-ners (RDPs) who

will buy prod-ucts only from national distri-butors," pointed out Magesh.

At present, the company has around 130 RDPs across the country and plans to

scale up this number to 250 within the next one year. Similarly, TVSE will

increase its reach from 360 cities/towns to 500 cities/towns in the same period,

mainly in B and C class markets.

And to address the small towns, it is adding many more people

who will be placed in these small towns. The idea is to have one person covering

10 to 12 cities, which will be grou-ped as a territory. This expan-ded reach is

all the more impor-tant for its DMPs. Remarked Magesh, "Dot matrix printers

are projected in a big way in upcountry markets and our reach there would help

us to increase our marketshare to 50 percent by 2004." Currently, TVSE

enjoys 44 percent market-share in this segment, as per the IDC report for AMJ

2003.

While realigning the channel partners, TVSE wants to form

special groups for specific product segments to avoid clash of interest and

unethical competition among the rese-llers. "We will have dedicated RDPs

for specific product lines with clear focus on the prod-ucts. Even with

distributors, we are planning to practice the same which will give clear focus

and more revenue for the company. However, there will be some RDPs–around 25

percent of the total–who will be allowed to sell all products," pointed

out Magesh.

TVSE plans to market UPS systems only through Ingram Micro,

while Redington and Tech Pacific will work on geog-raphical basis for

consumables. Redington will primarily address south and east, while Tech Pacific

will take care of north and western regions.

Out of the major metros, TVSE has traditionally been weak in

Mumbai, a fact admitted by Magesh. But now it has embarked on a major initiative

to address the situation by launching Mission Mumbai. This entails adding three

more people, increasing the number of RDPs from six to 15 within the next three

months and dividing the city into three regions. "With Mission Mumbai, we

have increased our business in the city–we are doubling business every month–and

soon, Mumbai will be the number one revenue generating center for us," he

quipped.

Similarly, the company is strengthening its network in Delhi and

nearby markets. Overall regionwise, TVSE got 45 percent of its business last

year from the southern region.

The company is also streng-thening its product lines by

launching new models of UPS, shortly. TVSE is also betting big on its new

consumables for the DMP segment. "Consumables will be the third largest

revenue generating business for the company and we have laun-ched our Web

initiative here," he added. TVSE is also adding more excitement to the

chan-nel community by announcing various schemes and point programs, apart from

end-user promotions.

Asim Raina & S Gopikrishna


Chennai