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Canon to Focus More on Channel Relationship
By
Arun Pegu
New Delhi, May 10, 2008
In an exclusive interview with Channel Times, Alok Bharadwaj, senior vice president of Canon (India), speaks to Arun Pegu, about the company's channel strategy for India, and its latest products. Excerpts
What kind of channel scheme and promotion the company is adopting to push the product in the domestic market?
Canon keeps on introducing various schemes for its channel partners from time to time. Our focus in 2008 would be on more initiatives towards channel relationship building, focused and localized advertising and promotion, participation in all major exhibitions, conducting road shows and trainings which would deliver us higher market shares and better partner relationships. We want to demonstrate that our people can reach the highest level of quality and customer satisfaction. As a step towards rewarding high performance, Canon would be taking its top performing camera partners to Photokina in August 2008. Canon would also be participating in all major exhibitions across the country apart from hosting more than 300 roadshows through the year.
Canon has also initiated the education program, 'Canon Gyan Yatra', which essentially is a knowledge yatra for the channels aimed at promoting our products as well as technology. At Canon, we believe that proper guidance and education to our channel partners are important for growth. Canon India is putting more emphasis on channel education, so that we can communicate better technology to the consumers to boost the sales. We are trying to develop our channels by educating them to enable them to deliver our message of technology advantage successfully to the consumers.
How will the new STPI scheme help the IT industry? What are the benefits available under STP/EHTP Scheme?
The STP scheme is made for setting up of software development and IT Enabled Services (ITES) firm in India for 100% export. The scheme provides single point contact services for member units, which enables them to conduct exports operations at a pace commensurate with global standards. As there is no Indian manufacturer of camera products, the benefits available under STP/EHTP will impact the excise duty - which will lead to the reduction of customs duty. This will reduce import cost and eventually digital camera prices will come down. However, duties on printers have gone up despite reduction in the CVD (which is same as excise duty). This increase happened due to change in methodology of levying customs duty, which will now be on MRP.
How many current channel partners do you have? Are you planning to expand your channel partners?
Canon will enhance its channel structure for the digital and camcorder category, which now includes 65 IT channel partners, 358 photo channel partners, 214 consumer electronic partners, 637 city retailers and 5 distributors. The DSLR channel structure includes 20 distributors, 168 retailers and 4 accounts of SLR exclusive distributors. As a part of the company's strong focus on distribution and channel network, we have appointed 66 Canon Premium Partners for our CSP equipments division. In addition, we have 320 IT Imaging Zones and more than 2700 resellers across 300 towns in India. We also have tied up with 12 System Integrators, such as HCL, Wipro etc across the country. The BIS Channel strength includes 130 Canon Premium Partners (CCP) and 350 Canon Empowered Partners (CEP).
Canon has recently created a fifth division called CII - Corporate sales which mainly focuses on selling all camera and printer products into the top 100 corporate accounts. Why this need for creating the division was felt?
The need for the division was felt as CII is a huge opportunity and needed specialists with focus on the same. As a part of this task, this division is focusing on bundling deals with high involvement categories and companies, like Toyota, Honda, LG, Samsung, Cox & Kings, Thomas Cook, Kingfisher, Jet Airways etc., and for these categories, Canon lifestyle products are a perfect fit as reward. This new division will be responsible for connecting to the top 100 corporate accounts across the country.
What kind of Channel strategy are you adopting to enhance for the digital and camcorder category?
Our channel strategy includes educational initiatives, channel schemes, incentive trips, reward and recognition to ensure that our channel partners continue to support us in the business objectives.
Canon recently announced its strategy to retain its No.1 position in Digital camera market through 2008. What is your market share in the digital camera segment, digital camcorder segment and D-SLR segment? Are you expecting any growth in all segments?
Canon currently is no. 1 in the digital camera category with 27% market share. We are no. 2 in Digital Camcorder category with 10% market share. We are no.1 in D-SLR segment with 53% market share. We are expecting to grow our camera division by 50% in 2008. This division contributes 30% to Canon India's revenues, and Canon expects to generate the same contribution in 2008 also.
There is tremendous potential for digital cameras, as the Indian consumer is becoming more aware of the rich features of digital cameras. The Indian Digital camera market growth was the highest in Asia, and would continue to be so for the next few years. According to IDC, the digital camera market will peak in 2010. Keeping this in mind, Canon is continuously introducing new products in the market to provide customers with the latest in cutting-edge technology. The increase in awareness on the options that digital photography offers to the consumers has been a key factor driving growth for digital cameras. Digital camcorders have also been seeing increasing sales with people wanting to capture special moments with their families. The ease in transferring recordings to a PC for editing and sharing has been a key factor driving camcorder sales.
Is there any service support you are providing to the customers?
Service support plays a very important role for any brand to establish itself in the market. Canon has set up 32 Canon Care Centres providing single point access to the customers for all their service needs for any Canon product. The Canon Care Centre has been devised to ensure faster response, enhance personalized services and provide access to build in knowledge base. The centres are equipped with trained service engineer to handle repairs and queries.
These exclusive centres provide single face/single point of contact for Canon consumer products (Printers, Scanners etc.) and front-end for the Canon camera products. The Canon Care Centres enable quick response, on time and on site service along with value added service to the customers, and provides an added impetus to our drive towards B and C class cities.
What are your future plans to expand the growth of your products in the market?
Overall Canon's presence is expected to increase to 6000 outlets by December 2008.
Canon India has launched the inauguration of its 'Level IV Master Service Centers' in Mumbai and Gurgaon. These 'Master Service Centers', spread over 2,000 square feet each, are the first Canon-owned camera repair and service centers designed on international standards. Besides, we will also be renovating 2 authorized service franchises at Hyderabad and Chennai. Canon is dedicated to the advancement in technology and innovation and commits 10% of its total revenue each year to R&D.
We are committed to enhance the service quality, and considering the fact that professional photographers face a problem in servicing of lenses, these service centers will come as a delightful experience for them. Meanwhile, the company is planning to open 2 more service centers in the second half of this year at Bangalore and Kolkata.
Is there any future collaboration you are planning for the growth in the market? According to you, which products is selling more in the market and why?
The expanding IT market specially increasing PC penetration is creating the desired foundation for digital products in the country. We expect to see a large growth of the consumer durable segment to be driven by digital imaging products. There is tremendous potential for digital cameras as the Indian consumer is becoming more aware of the rich features of digital cameras. The Indian Digital camera market growth was the highest in Asia and would continue to be so for the next few years.
According to IDC, the digital camera market will peak in 2010. Technology trends in the image capture segment can be seen in the features and aesthetics of the digital cameras. Consumers are moving towards reliability. They are looking for the latest in technology and are constantly upgrading. IT products have become lifestyle products, and hence aesthetics of the product also play a major role. Customers want a complete digital experience, and hence are preferring purchases at retail outlets rather than standalone shops as they want to touch-and-feel all products before making a decision.
Keeping this in mind Canon is continuously introducing new products in the market to provide customers with the latest in cutting-edge technology. Canon India had clocked revenues of Rs 510 crore in 2007, and we are looking at doubling our revenues in India over the next 2 years to reach a target of Rs 800 crore in 2008.
What kind of problem are you facing in the market and what are your strategies to overcome it?
There are basically 3 challenges that we experience in managing sales:
Speed of delivery to our channel partners is a challenge, as most of the channel partners do not invest in stocking all models and hence fast deliveries become crucial.
Second challenge is with respect to service facilities. India is a vast country, and customer expectations are similar everywhere. We need to set up more service centers to ensure faster response, enhance personalized services and provide access to build in knowledge base.
Scarcity of quality showrooms is also a challenge, as shopping experience is vital to product categories like digicam.
To overcome these challenges, we have been introducing various schemes and initiatives for our channel partners, to strengthen our channel strategy for digital and camcorder category. Our initiative- 'Aamchi Mumbai' had established a fruitful and long-term partnership with our channel partners. We will be introducing such initiatives from time to time in order to overcome the challenges.
Related Link
Canon Reorients Marketing Plan, Inducts New Talent
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Canon Gyan Yatra' ,channel schemes, incentive trips, reward and recognition are very good and boosting their market share .
Mr.Alok and Mr.Sanjeevan are tremendously implementing this ?Gyan Yatra ? .
Keep it up
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- Sabu,
challanger comp, New Delhi
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How to take dealership of Canon product in navi mumbai ? |
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- Rajesh Gupta,
RGS Innovative, Navi Mumbai
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Sir , thanks for ur support towards canon. Pls. give me ur details so that we can approach u .
Pls feel free to contact me on the below contact no.
Thanks,
Pratibha Salunkhe
Canon Ind Pvt Ltd
0923503554 |
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- Pratibha Salunk,
CANON, Mumbai
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EVERYTHING IS VERY SLOW MOVEMENT IN
CANON. IT TAKES LOT OF TIME TO TAKE DICISION IN COMPARE WITH OTHER MNC. |
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- AKHIL SARKAR,
MICRONICS ENTER, KOLKATA
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i dont think so CANON WILL BE SUCCESS FULL because i am selling canon for the past two years but i did not find my firm name in canon web site |
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- NAVDEEP,
NETPOINT, BILASPUR
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