'We’ll build the brand first'

Lexmark, the $4.6 billion printer major, has been a rather late entrant in

India. Initially, it did not believe in investing millions in promotions, but

depended on the word-of-mouth approach, which yielded good dividends for the

company. The success of the company in India is a direct result of the patience

and hard work put in by its team that is headed by an inspiring leader–PG

Kamath, GM of Lexmark in India. Backed by 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. CyberMedia News Service

met Kamath to learn more about the company and its 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

vendors are just killing each other. At present, we want to concentrate our

energies on building the Lexmark brand. We have a good technology, product, and

infrastructure; the team is in place now, and the correct investments are being

made in promoting the brand and the products. A year ago, in July 2002, my job

was to do the clean-up. Then, we moved headquarters to Mumbai, appointed

managers, and set up the channel.

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 that 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 4% upfront margin

offered to a channel partner from Lexmark. For the last six months, the exercise

is on to make partners realize the potential of Lexmark and to move on from the

regular products.

Evangelization is important today; channel partners must

understand this, and IT associations must intervene in such issues.

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 is

working well for us. Through this endorsement, Lexmark products are displayed at

large retail consumer stores, and theaters, and also at IT retail outlets. Then

there is ‘Super Lex Express’ for the western region, which will soon expand

to other cities.

Why didn’t you appoint the big distributors for Lexmark?



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 too, 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 specializes in components while the

latter is a box mover. Therefore, Lexmark is able to reach out to both the

segments, namely the assemblers and the boxes market. In fact, dealers also have

a flexibility of changing distributors every quarter.

Ingram was involved in the laser business for corporates and

from 2004 will be involved in the inkjets business too. The other two

distributors are also open to take up the laser business. The biggies have an

advantage of their reach; therefore from the beginning, as a policy, we appoint

Ingram Micro for the supplies business. Fulfillment was the criterion 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 concentrating on corporate clients right since the

beginning, which include LIC, and Chattisgarh Government, to name a few. Lexmark

is popular and is known abroad and therefore is known among the corporates.

However, this does not imply that we are away from the mainstream business as

Lexmark has been showing a constant growth.

NANCY SUDHEER in Mumbai