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TVSE Reorients Channel Strategy

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DQI Bureau
New Update

The Rs 228 crore Chennai-based peripheral manufac-turing 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 partners, reaching

out to more cities and towns, strengthening the service infrastructure,

expanding the product portfolio, and creating more brand awareness and

visibility in the market to achieve the projected numbers.

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According to TVSE head for channel marketing and distribution, S Magesh,

"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

stronger company with national reach and acceptance by building relationships

with channel partners and customers." Over the last one year, the company

has increased its channel contribution to total revenues from 50% to 75%,

through aggressive programs.

The company is realigning its channel structure to provide equal opportunity

to the resellers and create a level-playing field for channel partners. TVSE,

which was mainly operating through its regional distributors, is now focusing on

national distributors for better reach and availability across the country. In

October, it appointed 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 that in eight markets and soon all regional distributors will

be renamed as re-distribution partners (RDPs), who will buy products only from

national distributors," 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.

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This expanded reach is all the more important for its DMPs. Remarked Magesh,

"Dot matrix printers are projected in a big way in upcountry markets and

our reach there will help us to increase our market share to 50% by 2004."

Currently, TVSE enjoys 44% market share in this segment, as per the IDC report

for AMJ 2003.

Fact

Sheet
Company:

TVS Electronics


Products:
UPS, printers and consumables


Target 2006:
Rs 500 crore up from the current Rs 228 crore


Strategy:
Increase number of channel partners to 250, reach about 500

cities/towns, strengthen service infrastructure, expand product portfolio,

and create more brand awareness

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 resellers. "We will have dedicated RDPs for specific product

lines with clear focus on the products. Even with distributors, we are planning

to practice the same, which will give clear focus and more revenues to the

company. However, there will be some RDPs–around 25% of the total–who will

be allowed to sell all products," pointed out Magesh.

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TVSE plans to market UPS systems only through Ingram Micro, while Redington

and Tech Pacific will work on geographical basis for consumables. Redington will

primarily address south and east, while Tech Pacific will take care of the

northern 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. "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, region wise, TVSE got 45% of its business last year from the

southern region.

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 launched our Web initiative here," he added. TVSE is

also adding more excitement to the channel community by announcing various

schemes and point programs, apart from end-user promotions.

Asim Raina and S Gopikrishna in Chennai

CyberMedia News Service

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