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Becoming Market 'Priya'

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DQI Bureau
New Update

The recent ad splashes by LG to promote its monitors has definitely helped the company to sell more

and take on the formidable Samsung. But more than the ad splurge, it is because of Priya International's distribution prowess which is responsible for it.

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In eight months of its association with LG, Priya claims to have sold 20,000 monitors. And the company expects to take the number to 70,000 by the end of the current fiscal. After its break-up with Intel in August 1997, the company had passed into an oblivion. Agrees Ashok Bhuvaniya, CEO, Priya International, "We have been keeping a low profile for some time now, and we know this has forced many in the industry to believe that we are not doing well. Many even thought that the company was in doldrums while a few thought the company has its shut shop."

A turnaround?





But lately, with the LG doing all it can to take-on Samsung in the monitor market, Priya has been a gainer. It has been receiving large promotion funds from LG which the company is effectively utilizing to gain mileage for the company. This is in sharp contrast to the company's policy of not advertising in the last one-and-a-half years. "We have been hard selling our products till now," says Bhuvaniya, "but now we feel that we also need to sell the company's name." A realization that has perhaps taken long to dawn upon the company.

And what more? The company is signing the distributorship for Cyrix CPUs. It also plans to launch notebooks and scanners followed by ISDN equipment. "We have been selling IBM manufactured Cyrix motherboards for three months. Now we are getting into a formal agreement with Cyrix to sell their CPUs," informs Bhuvaniya. The company claims to have sold over 20,000 Cyrix CPUs in its short stint of three months. However, the principals for its other soon-to-be-launched products are still to be decided. "In the next year, networking will be our thrust area," says Bhuvaniya.

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The company is surely regaining its old confidence, but this may not be enough. It has made a few tactical errors in the past and needs to improve upon them. For instance, beginning last year, the company decided to diversify geographically, defocusing from the West market when it was actually time for consolidation. What this also meant was that the company had to commit more than its normal resources to these markets, some for setting up operations and much more for developing the market. Bhuvaniya accepts that it was a mistake to shift focus from the western market and now the company is doing all it can to gain back the leadership it once enjoyed in this market. It has recently opened offices in Ahmedabad, Baroda and Pune, and plans to do the same in other parts of Maharashtra and Gujarat.

Also, Priya's steadfastness to stick to low-priced and low-visibility products need a rethinking. For instance, while GPTL took up Samsung and Spectra became a distributor for Quantum Hard Disk Drives, Priya opted for a rather low-profile brand, JTS. Similarly, its other product range, except GVC modems and motherboards, are anything but market leaders. The company now needs an ace product-a fast moving product from a well-known brand to boost its turnover. But Bhuvaniya contends, "These products yield very low margins. But they also promise large volumes and turnover, and thus economies of scale. Size does matter in distribution."

This may be the prime reason why the company has not been able to reach the heights that GPTL and Redington have reached in the last two years. While these companies have registered turnover in hundreds of crore, Priya's last year's turnover from IT distribution was Rs68 crore. But, Priya is optimistic about a turnaround. It is projecting a turnover of Rs120 crore by the end of the current fiscal. Its geographical diversification could come handy now. The new products, might give the company the much coveted marketshare as well as the mindshare in the Indian marketplace. However, a lot depends on how Priya utilizes this opportunity.

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DHAVAL VALIA,





in Mumbai.

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