Lexmark, the $ 4.6 billion printer major, has
been a rather late entrant in India. Despite that, it did not believe in
investing millions in promotions like other MNCs have done, but has believed in
its product, which has yielded good dividends for the company. The success of
Lexmark in the country has been possible due to a great extent because of the
patience and hard work put in by its team. But the team is successful only if it
has an inspiring leader. That’s where PG Kamath, GM of Lexmark India, scores
very high marks. With 15 years of work experience at Ingram Micro, he
understands both vendor and distributor perspectives, and this has helped him to
build the Lexmark brand in a short time. Nancy Sudheer of The DQ Week met up
with Kamath to learn more on his strategies for the Indian market.
How important is it for Lexmark to be in the numbers game in India?
Lexmark is not interested in participating in the numbers game where all the
vendors are just killing each other. Presently we want to concentrate our
energies on building the Lex-mark brand. We have a good technology product,
infras-tructure, the team is in place now and the correct invest-ments are being
made in pro-moting the brand and prod-ucts. A year back in July 2002, my job was
to do the clean up and we then moved headquar-ters to Mumbai, appointed
managers, and set the channel in place.
Initially, Lexmark was facing a lot of problems in terms of offtake by the
channels, which in turn did affect the brand. What are the initiatives being
taken to correct this?
In the beginning it was important to create a pull in the channels, as most
of them have a tendency of picking up products, which move fast in the market.
It was important to make them understand that at the end of the day their margin
was also essential which was completely lost out. There is a four percent
upfront margin offered to a channel partner from Lexmark.
Last six months this exercise is on to make partners realize the potential of
Lexmark and to move on from the regular products. Evangeli-zation is important
today; chan-nel partners must understand this and IT associations must inter-vene
in such issues. Today in the western and southern region there are upto 15 and
10 Lexm-ark diamond partners (LDPs) with 70 to 100 and 30 to 40 premium partners
respectively.
MNCs in the country have huge marketing budgets. Lexmark on the other hand
has not been really strong with promotions. What is the reason and what are the
steps you are taking in this regard?
It’s true that initially Lexmark had not been advertising on a large scale
as word of mouth has really worked for the brand. But now this has changed as we
have begun advertising for the channels with attractive gifts and schemes. There
are also retail promotions like the ‘Shop in Shop’ concept which has worked
well for us. Through this endorsement, Lexmark products are displayed in large
retail consumer stores, theaters and also in IT retail outlets. Then there is
the ‘Super Lex Express’ presently in the western region, which will soon
expand to other cities.
You haven’t appointed the biggies in the distribution
business for Lexmark, which was surprising especially since you have been from
Ingram Micro. What was the reason behind this decision?
On the inkjet side Lexmark appointed distributors like SES Technologies for
West and South, and Savex for North and East. For a brand like Lexmark it was
essential to push it and create a pull, which is not possible with the biggies
as they have a wide range of products in their portfolio. SES and Savex both
have their uniqueness as the former has specialized in components and the latter
is a box mover. Therefore Lexmark is able to reach out to both segments, which
are the assembler market and the box movers. In fact, dealers also have a flexi-bility
of changing distributors every quarter. And Ingram was involved in the laser
business for corporates and from 2004 will be involved in inkjets also. The
other two distributors are also open to take up the laser business. The biggies
have an advantage of their reach, there-fore from the beginning the policy we
adopted was to app-oint Ingram Micro for the supplies business. Fulfillment was
the criteria here, which was taken care of by Ingram.
Lexmark has also been bagging a lot of corporate orders.
Does this indicate moving away from mainstream business in the future?
Ingram Micro has been con-centrating on corporate clients right from the
beginning, which include LIC, Chattisgarh Gover-nment to name a few from the
total 20 corporates. Lexmark is popular and is known abroad and therefore is
known among the corporates. Therefore these corporates prefer a Lexmark but this
does not mean we are away from the mainstream business as Lexmark has been
showing a constant growth.