Canon to take direct route for enterprise customers

Canon India has decided it will go directly to the enterprise customers. But
before you cry foul about this, the company is quick to point out that this is
only for the mid- and high-end products and this business will be limited to a
select corporate clients.

“We will be going direct only in the initial phase. Also, our direct
marketing team will only work with very select mid and high-end enterprise
customers. This is to ensure that there is no overlap with channel partners and
poaching their customers. Over time, as we get some successful customer hits, we
will transition these business to the channel,” assured Alok Bharadwaj, VP,
Canon India.

This is why Canon is now investing in putting in place a good direct sales
team who can offer pre and post-sales support. To understand Canon's stance, one
has to realize that while other printer companies are looking at consumables as
a sure shot route for continuous business, it seems to have caught onto the idea
of cashing on software licenses for its products. In 2005 it sold around 4,000
software licenses in India. And it was expecting a growth of 100 per cent in
2006.

Talking about opting for this alternate strategy, Konishi explained that the
copier, fax or printer machines are ultimately hardware devices and this
business is a cutthroat one with minimal margins.

This is why Canon decided that to distinguish itself from its peers, it needs
to offer a value that the other companies are not. “Our best bet was to offer
applications riding the hardware, which will set it apart from our competition.
We want to offer solutions that will improve a customer's efficiency and value,”
stated Konishi.

However, the company has been facing difficult getting the channel to accept
this strategy as partners are still focused on box pushing and margins.

In other business lines, he is working on seeding the color copier market,
which is negligible in India. It is trying to showcase the value of color copies
over the black and white ones, though this is a tough thing to do in a
price-sensitive market.

Canon also expects better traction in the inkjet AIOs market, where it is
lagging behind HP. Bharadwaj brushes this off saying that inkjet AIOs were
introduced three years ago by HP and since then HP more or less lords over this
segment. “We started putting our strength behind this product line only from
last year. And now we are getting our act in place for it,” he added.

This is why Canon has come up with a four-pronged strategy starting with
enhancing its product range.