'The Indian market is opening up and we want to be present in every state'

Ramneek Chopra knows that government
and commercial are the two buyer segments that need to be tapped for a larger
presence in the two-way radio business. Motorola today holds 75% marketshare,
but for Ramneek, that’s not enough. In an interview with DQCI, he reveals
Motorola’s plans for further growth in the radio business.

What product segments does the Commercial, Government and Industrial
Solutions Sector (CGIS) division handle?

Motorola´s CGIS handles the sales and marketing of two-way radios in India.
Two-way radio technology has seen major acceptance worldwide, as it is a very
cost-effective way of communication. We have seen that this market has grown
twice its size in the last two years specifically in the government sector.

Customers are now accepting the importance of two-way radios to increase
productivity and profitability. These products are seen as a major utility
product in industries like security agencies, hospitality, travel, hotels, event
managements, construction industries, big corporates and major government
organizations

Both, the private and government sectors put together, are a huge market for
this product. We expect this market to grow phenomenally in coming years.

To what extent are these products sold through the channel?

The channel forms a major body when it comes to selling these radios in the
commercial market. So in the commercial sector, 100% of the business is done
through channel partners.

In the government sector, the business is direct, as there is a specified
government body that directly gets in touch with companies on an annual basis
and we keep on taking orders on that basis.

What percentage of the business is through the channel and
how much is direct?

Actually, it will be very difficult to allocate percentages to the overall
sales, either direct and indirect. I would say that both these sectors share
more or less the same percentage.

Worldwide 100% of our sales are done via the channel. But in
India there is a particular body in the government which chalks out orders for
the government sector each fiscal. We deal with them directly.

We see that the commercial market in India is also opening up
and we would like be present in every state to grab this opportunity. We will
increase our reseller base to improve our presence.

What is the channel structure followed by Motorola?

Presently, we have a reseller network of more than 50 partners across the
country and this would definitely be enhanced in a couple of years. We have 10
tier-one partners marketing these products.

These partners are further divided into national and
state-specific. The national partner usually concentrates on bulk orders and
state partners focus on certain sectors where two-way radios can be sold. Then,
we have resellers who are our tier-two partners who purchase from tier-one
partners.

How do you ensure brand loyalty from your channel and
customers?

We keep launching various promotional schemes for the channel as well as
customers, from time to time. To boost sales, we have selected a few growth
sectors and have asked our partners to push sales specifically in these sectors.
If they achieve a set target, they are rewarded with incentives for their hard
work.

On the customer front, we usually give them freebies on
purchase of two-way radios. For example, we give a hands-free kit free with
every two-way radio. These offers keep changing. All such programs have helped
us remain ahead of the competition. We want both our channels and customers to
be happy when they deal with Motorola products.

What is the growth of radio business in India?

The Indian commercial market is still quite stagnant as people are yet to
realize the usability and the long-term profitability of two-way radios. But
this is definitely going to change as two-way radios are now being offered in
various different designs and models.

India is a major growth region for Motorola’s CGIS
division. We have grown by more than 25% in 2002-03, compared to last fiscal.

What is Motorola’s marketshare?

Today, we are four times ahead of our nearest competitor in this business.
Since there is no market study done to ascertain exact vendor marketshares, we
believe we have nearly 75% marketshare. And we owe a lot of this success to our
partners.

Who are your competitors in this business?

There are three other companies in this business: Simoco, Kenwood and Icon.
I don´t know if there are any others also but these three companies are only
that I can mention. They might be selling their products cheaper then us, but
they can´t compete with our technology.

ATANU KUMAR DAS