The Hindu Business Line : Real vs reflection

TVS Electronics put into action a `genuine for sure' campaign to help customers buy company products and shun fakes. And the effort has paid off, it says.

WHO would buy your product more willingly? Someone who has never considered buying your product? Or someone who thinks he has been buying your product but has only been sold fakes so far?

The latter, of course! This looks like a no-brainer. But we have seen too few IT players talk about fakes eating into revenues. With the exception of Microsoft, of course.

TVS Electronics initiated a campaign against fake products that carried its name. A year later, it claims it has increased its market share in printer-related supplies from 14 per cent to 32 per cent.

S. Narendran, general manager, marketing and R. Jaishankar, head, supplies business unit, spent some time with eWorld to explain what they have done in the last 12 months to bring about this change.

Narendran says, "The IT mindset is to cut price! That's what we and every one else had been doing for long."

If a buyer takes home a TVS-E printer, chances are that 60 per cent of all supplies - printer heads and ribbons - he buys in the future would be non-original products. That is, products not from TVS-E, says Narendran.

"Of these, a third would be those who have no idea they are buying fakes. That is the segment that easily converts once awareness dawns. Educating the consumer has been our focus for the past year," says Narendran.

And it is easy to educate a consumer who buys a non-genuine product that has no guarantee beyond six months, while the original would last 12 months.

TVS-E has done a couple of things that could, in theory, have an impact on profits: increased share of profits with channel partners and brought down prices.

Jaishankar says that TVS-E has reduced prices of print-heads by about 60 per cent in the last year.

Still, maintains Narendran, "our profits have not seen any impact. Thanks to the increased volumes, net margins have actually doubled."

What exactly has the increase in sales been like? Says Jaishankar, "Sales have more than doubled. If you look only at sale of print heads, they have gone up by 152 per cent in the last 12 months while ribbon volumes have doubled."

The increase in sales has also been due partly to the increase in the number of channel partners.

They have increased by about 35 per cent in 12 months. Interestingly, this is on the higher side, in a year spent in educating the consumer.

Typically, annual increases in the number of channel partners hovers at around 10 per cent.

Leap of faith

Without knowing how exactly the market would react to the awareness campaign, how did Narendran's team convince the management that they would need to increase the share of revenues given to channel partners and cut down product prices, both at the same time?

Says Narendran, "It was a leap of faith that we had to take. We did not see it as one-off campaign for just print-heads but viewed it as an after-market opportunity for a whole range of products."

Towards this, the company adopted a hologram-driven campaign that helped consumers differentiate between original TVS-E products and fakes. Labelled Genuine-for-sure, the campaign has had other benefits that were not originally visualised. Says Narendran, "After we began the GFS campaign, we noticed that sales of other products, unrelated to TVS-E, also went up in those outlets. It was a sign that consumers took the GFS brochures on the outlets' doors seriously and were comfortable shopping there."

The packaging has undergone a change, from being just bland, brown cartons to something that Narendran refers to as `blister packaging'.

hat is the difference? He says, "Earlier, it was easy for anyone to do up a brown carton and print our name on it. Now, the blister packaging with our unique hologram is not easily replicable. To begin with, machines to make those holograms cost about Rs 10 lakh and no one else can promise a hologram-maker the kind of volumes that a branded company does."

TVS-E is pushing the hologram concept hard. It has not only assured its top 20 customers of uniform prices across the country for printer supplies, but it has also worked with them and other big companies to word their tenders for print supplies so as to include the word `blister packaging'.

Says Narendran, "This is one way to ensure, at the tender-issuing stage itself, that only genuine supplies reach our clients."

Tip from parent

Jaishankar has also come up with the idea of a `free health check-up' for printers. He got it from TVS-E's parent company, the TVS group, which is into the automotive business.

He says, "Every time a trusted mechanic checks your car and suggests replacing spare parts, you don't hesitate. You know it's good for the vehicle, even though it might set you back a few hundreds."

So why not do the same for printer owners who have even fewer people around them, to trust their PCs and printers with.

This is an investment for the future, given the goodwill this has generated among the about 500 customers coming in, says Narendran.

bharatk@thehindu.co.in

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