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
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
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