Pricing Is The Key As Players Clamour For Bigger Share Of Printer Market

New Delhi: | Updated: Dec 24 2002, 05:30am hrs
Computer printing technologies have come a long way in providing quality, convenience and cost advantage to users. Corporate as well as individual users now have a range of printing devices to choose from for any kind of printing job in any price range.

In the Indian printer market, pricing has played an important role in taking new technologies like deskjet and laser printers to the masses in the last few years. Indian users never had so many options available to them before at such low prices.

As most printer manufacturers offer more or less the same technology, pricing plays an important role in wooing the customer. The entry of new players like Samsung and Lexmark has also triggered a price war in the Indian market.

Attempts to grab a larger share of the Indian printer market has forced companies offering laser and inkjet printers to slash prices by 15 to 20 per cent over the last 12 months, according to IDC. While this will popularise the deskjet, it may also encourage some deskjet users to migrate to laser printers.

Hewlett Packard, which holds over 50 per cent of the printer market in India (both inkjet and laser), has dropped prices in both categories in the range of 15 to 20 per cent.

Samsung and Wipro cut laser printer prices in the beginning of 2002, which in turn led HP to slash its prices by over 15 per cent, according to industry analysts.

Our strategy for printers is based around lower price and performance as we are now looking at entering smaller towns and cities, which are more price-conscious, Hewlett Packard country commercial category manager (within the imaging group) Nitin Hiranandani said.

Prices are dynamic in this segment and is expected to come down with the increase in market penetration, according to Xerox Modicorp Ltd marketing director German Gennady.

Samsung India Electronics Information and Telecommunication Ltd country product manager Anish Srikrishna says: Price is not the only important factor for us to grab more customers. Instead, it is our complete focus on laser printers that, unlike other big companies, is fetching us more customers.

According to Manufacturers Association of Information Technology executive director Vinnie Mehta, The entire hardware industry, including the companies offering printers, are experimenting with lower price points.

Canon estimates the printer market size in India to be as big as Rs 550 crore for this calender year. So it is no surprise as to why printer companies are going ahead with hefty spendings on marketing initiatives with big budgets.

Last year, Samsung invested $2 million in marketing and promotion of laser printers. This year (2003) too, we are planning to increase our investments on promotions and marketing by over 80 per cent from last year, Mr Srikrishna said.

Canon is looking at investing $3 million to fuel its printer business in the country. We are planning to invest $3 million in the printer business for brand building and marketing initiatives, Canon Consumer Imaging and Information division director and GM Alok Bhardwaj said.

Among other verticals, the telecommunications sector seems to be where most players in India are betting big for the next two to three years. Moreover, major printer makers are aggressively chasing the small and medium enterprises (SMEs).

Kinds And Types Of Printers
Printers can be classified on the following basis:

Impact printers and non-printers:
Impact printers: These printers use the approach of hammering a typeface against paper and inked ribbon to produce printed output. Impact printers can produce multiple copies using carbon in a single print cycle, which is not possible with a non-impact printer.

Non-impact printers: These do not hit or impact a ribbon while printing print. They use thermal, electrostatic, chemical or inkjet technology to produce printed output.

Quality of printing:
According to this, printers can be classified as near-letter-quality (NLQ), letter quality (LQ), near-typeset-quality (NLQ) and typeset-quality (TQ).

Classification on the use of technology:
According to this classification, the common types of printers are dot-matrix printers, ink-jet printers, drum printers, chain/band printers and laser printers.

Printers can also be classified as producing output in single colour such as black, red, yellow, in two to three colours (such as documented printed in black and white with key words printed in red) or in multiple colours.

Till about three years ago, the manufacturing sector was the most active buyer of printers. The demand for printers is directly proportional to the demand for the personal computers (PCs). The manufacturing sector which accounted for the largest share of printers about three to four years ago has not been doing well recently, Mr Hiranandani said.

Although offtake from large corporates has slowed down, we see a tremendous growth opportunity for printers in the SME segment, he added.

As a result of its focus on SMEs, HP is now looking at entering the SEC D towns and cities. It already has a large presence in the SEC A, B and C cities. We already have a presence in the SEC A, B and to some extent in SEC C cities. Now we are bullish on strengthening our presence in C and D towns and cities, he said.

Like HP, Canon too is focused only on the laser and the inkjet printers. Although relatively a smaller player than HP, Canon intends to grab 5 per cent share in the laser printer market in the country by 2003.

According to Mr Bhardwaj, Canon is expecting laser printers alone to grow by over 20 per cent in the next calendar year while, according to the industry, the printer market as a whole is expected to grow by 15 per cent. Canon started selling inkjet printers in the country less than a year ago.We are targeting 100 distributor-partners by January end, of which we have already appointed 40, Mr Bhardwaj said. Two other active players in the printer market are Xerox and Samsung, who are totally focused on laser printers. Xerox offers a range of laser printers - both black and white and colour with speeds from 10 pages per minute (ppm) to 45 ppm, and a range of multi-functional devices (MFD) like network capable printers and copiers.

At the higher end, Xerox MFDs can provide printing, scanning, faxing and routine copying right up to sophisticated finishing, according to Mr Gennady.

Xerox sees a tremendous opportunity in the laser printer segment and expects this market in India to grow by over 10 per cent in 2003.

Also with the increased adoption of colour printing in our daily business needs, networked colour laser printing is another segment where we foresee growing at a much faster rate than the overall printer industry. The growth rate could also become more significant as acquisition costs go down, Mr Gennady said.

Apart from telecom, Xerox sees potential for printers in verticals like insurance, telecom, software and even business process outsourcing.

Xerox invented laser printers and also introduced the first colour laser printer. Both Samsung and Xerox have a nationwide presence in terms of contact point shops with the customers.

The last financial year ending March 2002 has had a negative impact on the printer business, according to industry players. The number of PCs sold and Internet access is linked to the printer market, Mr Bhardwaj said. However, he says: The laser printer market has grown by over 15 per cent even in times (about four months ago) when the PC industry was actually shrinking.