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P R I N T E R S Epson Makes A Mark
Two years after Epson India, a 100 per cent subsidiary of the $12-billion Seiko Epson of Japan, broke up its marketing arrangement with Wipro, it is proving that it can fight the battle alone-and win. In the past year, it has doubled its inkjet marketshare to 27 per cent, and is now getting into the laserjet segment, where Hewlett-Packard has a near-monopoly. Boasts Paramjit Singh Puri, Senior Country Manager, Epson India: ''I have put in place a strong anti-hp alliance.'' Ever since its divorce from Wipro, Epson has been aggressively marketing itself in the Rs 1,000-crore printer market, which comprises Dot Matrix Printers (DMPs), Inkjets, Laserjets, and consumables like cartridges. The Rs 250-crore inkjets market is where the action is, with annual growth rates in excess of 50 per cent, as per IDC estimates. This is mainly because most of the PCs are sold to the SOHO segment, where inkjets are bundled with the system. The noisy, unattractive DMPs, and the expensive Laserjets are not favoured by the home pc buyer. Inkjets, which start of as low as Rs 3,500, have, therefore, become the hot- growth segment. Claims Puri: ''By the end of this fiscal, we will have a 35 per cent share (in this segment).'' What is Epson doing right? Apparently, its success is due to a combination of pricing, product innovation, and tie-ups with pc-makers and assemblers for bundling its printers with their PCs. Besides slashing prices, Epson realised that it could not compete in the entry-level segments like single-colour printers and fight on the price front against rivals like Lexmark. Therefore, it decided to position itself as a value-for-money player. In November, Epson plans to launch 2,880-dots per inch (dpi) printers. Currently, only 2,440-dpi printers are available in the Rs 373-crore DMP market, which is dominated by TVS Electronics with a 35 per cent share. Yet another segment where Epson has fired a salvo is Laserjets. At present, hp straddles the segment with a 86 per cent market share. Epson launched its Laserjet printer only in March, but Puri is already talking of a 10 per cent share by the end of this fiscal. Although the segment is only worth Rs 200 crore, it is the 40 per cent growth rate which makes it important. And, you bet, Epson wants a piece of it. -Venkatesha Babu A
U T O M O T I V E The latest JD Power report, in which Maruti Udyog Ltd (MUL) and Honda Siel share the top rank in customer satisfaction, has created history. As JD Power Asia Pacific Director, Chris Bonsi, said in a statement: ''Maruti is the first marketshare leader to rank highest in a JD Power customer satisfaction study worldwide.'' Understandably, MUL CEO Jagdish Khattar, who has been talking about customer satisfaction from the first day of his tenure, is ecstatic. ''It proves that Maruti not merely has a wide network, but also meets customer expectations,'' he says. Khattar should be forgiven for his inability to hide the glee. The sunshine has come at a time when there is a pall of gloom enveloping the car-maker. It started with the workers demanding higher wages, mainly productivity-linked incentives, and pensions. Initially, the management refused outright. At Rs 23,000 a month, Maruti's pay-out was much higher than what the other players doled out, and it wasn't about to give any more. Raising it to Rs 38,000 a month-that's what the unions wanted-would put an additional burden of Rs 90 crore a year. This at a time when a slew of new models, necessitated by the stiffening competition, is already eating into Maruti's profitability. As over 4,000 of the total workforce of 5,300 went on strike (official figures put it only around 50 per cent), production slumped to 300 units a day against the peak output of 1,450, and queues at dealerships lengthened. A bit of gore was added to the drama when one of the workers was found dead. The MUL board relented and announced a new incentive scheme that would raise the average monthly cost of an employee to Rs 33,767 in two years. It helped to an extent when Heavy Industries Minister Manohar Joshi-the government owns almost half of MUL-sent word that he would like the management to deal with the agitating employees as it deemed fit. But the fact remains that MUL may just have lost out on the traditional buying frenzy in the festive season. Unfortunately for MUL, the agitation has come at a time when it seemed to be getting its act together, having just launched two models of Alto, while the rivals have been merely looking at variants to shore up their shares of the market. The good news? If the JD Power Survey is any indication, its customers aren't about to complain. -Sveen K. Sinha P
C M A R K E T I N G This could be round two of the pc fight in India. In September, Dell ushered in its famed on-line sales model, throwing its competitors in India into a catch-up mode. There are some obvious reasons why the fight will be fierce. Last year, the pc market finally touched the magical one-million mark translating into Rs 5,000 crore of sales. And 43 per cent of this market was that of branded PCs. Besides, marketers like Paul Blinkhorn of Compaq believe that India is the fastest growing market in the whole of Asia-Pacific (next only to China in the entire region). The direct selling model comes with many advantages like disintermediation of several layers of channel partners, greater level of customisation, reduction in cycle time, and lower inventory costs. But on the flip-side, eliminating channel partners could impact growth, as India is a push market where resellers play a crucial role in educating the market, particularly the fast-growing SOHO segment. That, coupled with a poor internet penetration, will make the direct selling model a big gamble. That's not stopping companies, though. As if in response, Compaq recently launched its Cooldukaan, an on-line store that will enable customers to place orders directly with the company. However, Neelam Dhawan, Director (Sales), Compaq India, denies that this is in response to Dell's presence in India: ''We were just waiting for the right time to launch this and the new channel will be a value-add for our customers,'' says she. IBM also has a limited on-line store offering, but caters to a few specified configurations and models. Dell, Compaq, and IBM apart, there is not much of on-line push. Hewlett-Packard India, the fastest-growing pc marketer in India, still does not take orders on-line. The underlying fear, of course, is that direct sales will cannibalise channel sales and also alienate the channel partners or resellers. Says Dhawan: ''Our direct model allows even our channel partners to take advantage of the medium.'' Dell, however, feels that the direct-selling model is superior. ''Customisation, price-for-performance, excellent service and support, and integration of the entire business with the internet is only possible through the direct-selling model,'' says Ron Goh, Vice-President (Asia), Dell. Cautions Blinkhorn of Compaq: ''Only a hybrid brick-and-mortar strategy will succeed.'' One positive outcome of the fight is that companies are rushing to set up their own call centres to assist customers. Compaq already has one, and Dell plans to set up a similar one in Bangalore. This may be round two of the pc fight. But the winner is already decided. And that is the customer. -Venkatesha Babu O
F F - B E A T Months after a bitter dispute between Andersen Consulting and Arthur Andersen forced the former to give up its name, the spunky consulting major has got itself a new name: Accenture. What's the big deal about the new name? Log on to the one-page www.accenture.com site and you will be told that the new name reflects "what (AC) has become as an organisation as well as what it hopes to be". Which is to "transcend the traditional definitions of consulting and bring innovations that improve the way the world works and lives". But the webpage-in true consulting speak-is quick to warn that it's not a mere renaming that's taking place. Rather, AC is repositioning itself to better reflect its strategy to become the dominant consultant in the new economy. Apparently, the name has been chosen from among the 2,700 suggested by Andersen consultants worldwide. Even as the company set about finding itself a new name, it was working hard to trash the name it would give up end of this year. The teaser ads it had been running showed the Andersen Logo torn in half, with the words ''Renamed. Redefined. Reborn. 01.01.01'' written on the missing portion of the logo. There's a reason why AC was keen to-literally-rip its existing name. It all started with AA-traditionally an accounting company that got into consulting to emulate AC's success-asking its sister concern to pay up $14.5 billion for use of the name. AC, not surprisingly, said nothing doing. The fight went into arbitration, and when it came out, AA's claim was trashed, but so was AC's claim to its name. One part of the Andersen family had been suggesting that the AC tag be used by AA itself to separate its consulting business from the accounting practice. Makes sense, given the fact that a Securities and Exchange Commission ruling barring audit firms from operating in many areas of consulting is underway. But that, of course, could trigger a new Andersen war all over again. -Seema Shukla H
U M A N R E S O U R C E S Time was when everyone wanted to be an engineer. Then an MBA. And then the coveted career was in software. Now, the pot of gold at the end of career rainbow seems to be e-commerce, with people migrating from conventional functional streams like marketing to make careers in it. Consider this: Ranjan Roy Chowdhury, the erstwhile marketing manager for SmithKline Beecham Consumer Healthcare (SBCH), now heads e-commerce for its international consumer business. At Hughes Software and Motorola India, most techie-managers want to shift to e-commerce and create portals, and they expect the company to accommodate their aspirations. Key managers across functions man Hindustan Lever's e-commerce cell. Across Pepsico's global operations, large-scale migration is taking place from functions like marketing, sales, and supply chain into e-commerce operations. Says P. Dwarakanath, Director (HR), SBCH: ''Increasingly, such migration will take place from functions like sales, marketing, and purchase where there is room for building large scale e-initiatives.'' Who are the likely candidates? Marketing and sales professionals along with those in purchase and supply chain. Or finance managers who would want to create payment gateways. Infotech professionals with sufficient domain knowledge are, of course, the largest chunk of the e-breed. Says Smita Anand, Head (Organisational Change Practice), PriceWaterhouseCoopers: ''E-commerce is a sunrise area where people from various functional areas want to enter and build on their skills. Companies will have to accommodate such aspirations if they don't want to lose people.'' And what if they don't? Well, two managers from Coca-Cola-Vinod Giri, Senior Brand Manager and Rohit Mall, Consumer Activation Manager-left earlier this year to pursue careers in e-commerce, one as a professional manager with Tata ISP and the other with apnaloan.com. Says Daljit Singh, Executive Director (hr), ICI India : ''It is entirely a people-led initiative to build on skills, which would also extend the businesses' reach.'' Now you know what you have to do to retain your hotshot managers. Make them e-entrepreneurs. -Paroma Roy Chowdhury S O F
T W A R E That's ''are you making money?'' in Japanese, and a question the unexcitable Japanese often like to ask around before making an investment decision. But in software at least they may have waited too long. Compared to Korean chaebols like LG and Samsung, which set up their software operations in India almost five years ago, Japanese zaibatsus such as Sanyo, Sony, and Hitachi are just about getting their act together. Praveen Kannipakam, President, Sharp Software Development (India), admits that it's only recently that Japanese companies have started looking at infotech in India seriously. Says he: ''Language and cultural barriers are the main reasons why greater amount of co-operation is yet to happen.'' Like other Japanese initiatives, Sharp's development centre will mainly cater to Sharp international's digital software requirements for its imaging and document systems groups. Also, the Japanese investments in the infotech sector in India is minuscule. SSDI, for instance, has put in just half-a-million dollars. In contrast, the internet gear maker Cisco is pumping in $150 million into its new R&D centre in Bangalore. However, Kannipakam feels that once the ability of the Indian subsidiaries to deliver is recognised, there will be more money flowing into the centre. ''We expect to play a greater role in the future in meeting the software requirements of different Sharp's divisions worldwide,'' he says. When the Japanese Prime Minister, Yashiro Mori, visited India recently, an important stopover was at the software giant Infosys' campus in Bangalore. Kannipakam says that all this has led to greater awareness among Japanese companies about the prowess and technical skillsets of Indian companies in the infotech sector. A delegation of Japanese infotech companies is also expected to participate in the third annual ''Bangalore it.Com'' jambore, according to sources in the state government. A Japanese pavilion showcasing the requirements of companies from that country is also being planned for the event. The Japs may have woken up late to infotech in India, but nobody expects them to be laggards for long. -Venkatesha Babu
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