Quality Matters

DQI Bureau
New Update

Partners, who comprise the vital link between vendors and customers, have

once again revealed their preferences in deciding the fate of IT hardware and

software vendors in the country. The third country-wide Channel Satisfaction

Survey, 2001 was conducted by the eTechnology Group@IMRB on behalf of Dataquest

Channels India (DQCI), a sister publication of Dataquest.


The good news is that channels partners seem to be happy with their key

vendors, having rated them at 3.59 on a scale of 1 to 5, where 1 is ‘poor’

and 5 is ‘excellent’. This feedback should warm the hearts of vendors

because partners have not blamed them at a time when the market is reeling under

the effect of a recession.


for vendors
  • Work on the openness of top managers

    in dealing with channel partners
  • Additional efforts are required in

    the areas of channel training and customer education programs,

    post-sales service, promotional schemes and innovative channel meets
  • Vendors need to strive towards

    perfection in product quality, since the level of satisfaction is yet

    to reach ‘very good’

Before understanding the satisfaction levels of channel partners with regard

to various parameters like product quality, price, warranty, schemes, support,

etc, it becomes necessary to find the key vendors that channel partners have

chosen to do business with. Key vendors are the ones that topped most channel

partners’ lists when asked to select their most preferred vendor.



According to the survey, HP is the vendor preferred by channel partners in

the systems category. The second vendor in this category is Compaq followed by

IBM and HCL in the third and fourth positions respectively. Surprisingly, unlike

last year, where assembled systems formed a major chunk (with almost 35% in its

fold), this year, partners have preferred to do business with brands. Of the 539

respondents, almost 40% deal in HP systems, 31% in Compaq, 11% in IBM, 7% in HCL

and 11% in the rest.


In the peripherals category, HP and Samsung turned out to be the most

represented brands with 39% and 30% respectively. HP with its printers and

Samsung with its monitors managed to keep up this lead.

Epson and Wipro, with only 12 and 9% representation, appear to be losing

their recall value among partners. Besides, the entry of a large number of other

players, has made it all the more difficult for big vendors to keep up their

earlier shares.


Samsung’s entry into the printer market has threatened HP’s hold. Another

player who intends to be aggressive in this segment is Canon, but is yet to make

a dent in the pie. Possibly by next year, we should see a major change in

channel partner preferences.


Category 1st Vendor Percentage 2nd Vendor Percentage
Systems HP 40 Compaq 31
Peripherals HP 39 Samsung 30
Consumables HP 53 Epson 19
Power supply APC 38 TVSE 14
Networking products D-Link 44 Dax 19
Operating systems Microsoft 69 Linux 10
Other software Microsoft 64 Oracle 5


In networking products, D-Link has maintained its popularity among the

partners for the second consecutive year. However, what is surprising is the

entry of the Dax brand in the second position, dethroning Intel from the

partners’ shelves. D-Link has maintained its lead with 44% representation and

Dax has 19%. Given the fragmented networking products market, there is a host of

vendors represented by tiny fractions of channel partners, which clubbed

together, form a major chunk of 37 %.



Here again, HP takes up the highest representation of 53% because of its

large printer market share. Epson is represented by 19%. In this category, the

ink re-filling business also plays a major role. While HP and Epson have the

largest share in the consumables market, the others form 28%.

Power supply

APC topped the power supply category with 38%, followed by TVSE at 14%. The rest
comprises other vendors from the organized as well as the unorganized sectors.


Importance Vs Satisfaction Levels
Relative Importance Rank Satisfaction Scale (1-5)
Product quality 1 Product quality 3.94
Price for consumers 2 Technology updation in the product 3.64

3 Consumer

Technology updation in the product 4 Price for consumers 3.56
Warranty programs 5 Warranty programs 3.46
Post sales service 6 Advertising support 3.37
Advertising support 7 Post sales service 3.37
Commercial terms 8 Commercial terms 3.30
Promotion 9 Online support 3.19
Online support 10 Promotion 3.17
Channel training

11 Sales team from the

Customer education programs 12 Openness of top management from vendor 3.04
Sales team from the

13 Innovative channel

Openness of top management from vendor 14 Customer education programs 2.96
Innovative channel

15 Channel training


Operating systems

In the case of operating systems and other software, the leader is none

other than Microsoft. The second most preferred vendor in the OS category is

Linux and in other software category - Oracle.

Last year, Microsoft had lost its position to Tally as the most preferred

vendor in packaged software. This is possibly because of the high instance of

piracy in Microsoft products. The 2001 survey results corroborate Microsoft’s

statements that it has managed to curb piracy to a large extent.

In the OS category, Microsoft has a representation of 69% and Linux 10%. The

entry of Linux vendors like Red Hat, Caldera and Suse has improved Linux’s

share because of its free availability and also the partners’ willingness to

support it.

When DQ

Channels India successfully conducted the first ever Channel Satisfaction

Survey two years ago, the vendor community received it as the most

authentic barometer for their business. This year again, the main

objective of the survey was to assess the satisfaction levels of partners

vis-a-vis the IT vendors, their products and business practices.

A pencil and paper face-to-face

interviewing method was used for this survey. A total of 539 channel

partners were interviewed in eight major cities of India. The break-up is

as follows: Mumbai (127), New Delhi (121), Chennai (101), Kolkata (25),

Bangalore (100), Ahmedabad (14), Chandigarh (25) and Nagpur (26). This

sample covered a database of partners from all tiers of the channel chain.

Satisfaction scores were collected on 15 pre-determined parameters, on a

five-point verbal scale, where five was ‘excellent’ and one was ‘poor’.

To maintain a healthy relationship with channels, it is important for vendors

to understand the satisfaction levels of their partners. Resellers can choose to

support one vendor over the other, depending upon how satisfied and enthusiastic

they are about a company’s product, programs, margins, sales growth and

potential, service quality and involvement in helping them grow their business.

At the same time, it is crucial to find out the level of importance that

partners give to various parameters while measuring satisfaction levels. Giving

least importance and being highly satisfied with a particular parameter would

not mean much to vendors. But vendors could use this information and divert

their efforts from such low importance activities to where it is required.


Similarly, given below is a chart listing the level of importance and

satisfaction in descending order. Here, various product categories were clubbed


According to the survey, product quality is the most important parameter for

the channel in the selection of vendors and products. And the good news for

vendors is that channel partners are the most satisfied with product quality

giving it a score of 3.94. At the same time, vendors need to strive towards

perfection as the level of satisfaction is just about to touch ‘very good’,

and is nowhere near the ‘excellent’ level.

While product quality preference remains very much similar to last year’s

survey, a small change appears in this year’s results. Unlike last year, where

channels had given lower importance to the pricing factor, this year, this

particular parameter has come up to the second position. However, the

satisfaction level is at the fourth place at 3.56.

Partners have ranked customer preference/demand/pull as the third most

important parameter. Though this parameter is not directly dependant on vendors,

partners feel it is the vendors who should create the brand value and goodwill

in order to spur the demand/pull.


The criticality of customer preference is built on factors such as the

product quality and support. Most vendors have now realized that a good quality

product and a good support network will build the brand on its own.


of Respondents

All Distributors Systems/Network

Resellers Assemblers Service

Base 539 107 98 461 135 161
Systems 57 56 85 61 87 71
Peripherals 83 81 86 88 98 83
Consumables 61 53 57 67 76 59
UPS 66 68 70 70 87 68

65 58 84 69 76 69

25 29 45 23 28 40

41 34 71 40 46 59

While partners prefer doing business with products that have enough customer

demand, the survey has revealed that partners are satisfied with the existing

customer preference/demand/pull with a score of 3.64 points.

Mean satisfaction score

aggregated from 15 different parameters

Product Category Score
Systems 3.8
Pheripherals 3.6
Consumables 3.5
Power supply 3.5
Networking 3.5
Operating systems 3.5
Other software 3.5
Overall 3.6

By giving the fourth position to updating technology in products, partners

have indicated that they consider this parameter as one of high importance. And,

from the satisfaction point of view too, partners have put this parameter on par

with 3.64 points.

Partners have given lower importance to some of the parameters. But their

satisfaction levels for these are marginally higher. Though this appears to be

on the positive side, the satisfaction levels on their own are on the lower

side. This is true especially with factors like the openness of top managers

from the vendor side and innovative channel meets where the score stands at 3.04

points each and needs to be worked on by vendors.

Partners have given greater importance to warranty programs putting this

parameter at the fifth rank in terms of importance, compared to commercial terms

at the eighth rank.


Channel training support as a critical element in choosing the product, is at

the 11th position. This means that a good number of channel partners felt

training is not at all critical. If vendors intend to use this as a reason to

cut down on training overheads, then beware! The satisfaction chart has a sad

story to tell.

What the channel has indicated is that vendors have failed to impart the

required training. The channel has expressed its dissatisfaction over the

training parameter giving it a score of only 2.94, the lowest in the entire


The survey also indicates that vendors need to put in more efforts in

customer education programs, innovative channel meets, post-sales service and

promotional schemes. The survey shows that there is a lot of scope for vendors

to increase the satisfaction levels of partners in these parameters. Last year’s

survey too, had indicated dissatisfaction in the areas of service and technical


A challenge for vendors

The Channel Satisfaction Survey - 2001 provides critical insights to vendors

that will contribute to the development of a vibrant channel leading to the

growth of IT business in the country. So, it is up to the vendors to take up the

gauntlet and strive to satisfy their partners based on this valuable feedback.

Nelson Johny in Mumbai/DQCI