Whats new with IT industry in India..

Many IT vendors in India are giving their overall sales strategy in the country a regional touch considering the various geographical factors that influence sales. Others are still following the A, B, C-class city approach for product positioning, pricing, promotion and distribution. Going forward, in such a diverse nation as India, does a uniform national distribution policy work? Are regional forces, trends, players or even culture playing an important role in the way IT products and services are sold and consumed? Archana Venkatraman and K R Nambiar find out.

The one-country, one-sales strategy is passé. India is a mix of distinct geographical dynamics, and a vendor needs to encompass every local detail to crack untapped regions. This nascent trend unfolds as some vendors explain it without inhibition while others choose to follow it but in a hush-hush manner. Affirming the growing importance of regional factors to generate markets, Rajesh Gupta, director, sales, sales and marketing group, Intel South Asia, says that as vendors are looking at expanding reach, they have to look at the regional factors and break them down for vendor-channel-consumer benefits.

When Lenovo took over IBM’s PC business in India two years back, the challenges they faced were huge, and ranged from creating a new brand to reworking a distribution policy that has evolved ever since.

Being a relatively new entrant, Lenovo could afford to look at business models that were relatively new without ruffling too many feathers among their channel partners. One of the strategies they adopted was to be flexible in their sales, distribution and marketing across the country.

“In the past two years or so of our existence in India, we have looked at several models and we see unique buying patterns that are region- and even state-specific. We have already taken steps to address such requirements and have reaped benefits from them,” says Shantanu Varma, general manager, transaction business, Lenovo India.

• Case Study : Lenovo's regional strategy

This is not quite surprising since India is a country of great diversity. While such trends have been reported in consumer durables, automobiles and even consumer electronics, the fact that IT products and services have become consumerist to the extent that buying patterns are state-specific is news indeed. Several vendors like Samsung, which initiated an aggressive region-territory-specific program, are replicating the model in the IT space too.

• Samsung India

Samsung India is eyeing 20 percent growth this year, and R Zutshi, deputy MD, Samsung India says, “A regional initiative is a key strategy to drive our numbers.” Samsung realigned its distribution strategy and adopted a twin ND approach for deeper regional penetration. “We have increased our regional sales offices to 30, and have deployed several area sales managers as part of our region-specific initiative,” Zutshi adds.

A quarter ago, monitor vendor Viewsonic realigned its distribution model and roped in Compuage that has better B- and C-city reach. “Horizontal marketing is a very, very basic and entry-level strategy. At the consolidation or the second phase of growth, every vendor aims to transcend the pan-India approach,” says Gautam Ghosh, country manager, Viewsonic. The vendor is currently planning to roll out state-based festival schemes addressing various pockets of India. “Vendors have realized that what sells in Pondicherry does not sell in Patiala.”

While Samsung intends to introduce no ship-down versions for the C and D cities, it will push different models available to suit the market needs. The motherboard vendor follows a standard component pricing across the world because its products are the building blocks of a PC system. Integrators and OEMs make use of the building blocks to offer diverse products and solutions to meet local requirements and preferences. “We don’t offer product and price differentiations across the country, but we do customize our marketing and promotion activities by using the vernacular medium of communication,” informs Gupta.

• Intel:

Intel’s endeavor is to have localization of the messaging as well as promotional activities, and it has begun to execute advertising in regional languages via regional media (print and radio), and also develop collateral in regional languages. Notes Gupta: “The use of local themes and vehicles/symbols—such as camel carts, elephants and other local elements—helps not only our channel partners but also our customers in the region.”

Varma feels that vendors will soon realize that if the overall marketshare needs to be grown then smaller pies within the whole pie also need to grow. “As the market size of a specific state or territory grows, you need to address the regional trends and try to grow the market within that state or territory. If there is a requirement of a specific model then you try to position a model for that specific state or territory,” he explains, “and as the market size grows your share will also grow. Hence, apart from strategies targeted at A-, B- and C-class cities, one needs to focus on the regional trends. In India we that see over a period of time sales strategies acquire a regional touch.”

While there are reports that both HP and Acer have a regional focus and are evolving strategies that adapt to a regional bias, both vendors were non-committal in revealing plans