What Acer did in India
Date: Saturday , April 30, 2005
Since last summer, Acer India has been upbeat. This can be attributed to the ‘think globally, act locally’ strategy that the company implemented in retailing its product. For the first time in India, Acer rock bottomed its product prices so much that laptops, until then a corporate personnel’s arsenal, was available at throwaway price even to students in undergraduate studies.
Competitors were nudged by a one-time, sudden reduction of Rs.20,000 on Acer laptops that was until a week back upwards of Rs.50,000. It was not a joke, but Acer had cracked it. The man behind this pricey joke, but yet inexpensive, was Sudarsanam Rajendran, General Manager of sales and marketing of the consumer product group (CPG).
Acer had not ventured into consumer segment of market until three years after establishing in 2000. The company throughout knew that 60 percent of their market was lying there and they were losing it. “We had to build a brand image in the country and along with that increase our infrastructure. So we consciously stayed out of the consumer market concentrating more on the enterprise sector,” says Rajendran.
For him, infrastructure development meant building distribution partners, channel partners, an operation support network and all prerequisites that would enable infrastructure indirectly. Soon, Acer had built its base of partners and the company jumped into the consumer bandwagon.
Acer’s Consumer group is today a three-legged entity focused on the mass market, representing Small Office Home Office (SOHO), Small and Medium Enterprise (SME) and user segments. Although the enterprise segment was the only revenue producer for Acer until 2003, its newly launched consumer group soon emerged grabbing the market with 30 percent of Acer’s revenue in its exchequer.
As the consumer group widened, so did some challenges like garnering the Indian mind share. Then, the company focused on training programs for the salespeople and regular incentive programs for the buyers. To educate its resellers, channel partners and salesmen, Acer introduced its certified courses as unique training program.
The company also set up 120 outlets to capture mind share of the masses by introducing a bundle of unique combo packs as incentives. One such incentive to capture the SME and SOHO market was bundling the Acer notebook and projectors into one combo pack. This reduced prices and added value for the customers. “Customers in India are very demanding and extremely value conscious without wanting to accept anything of n-2 (n minus two) or n-3 platform,” says Rajendran.
So are incentives a selling point for all Indians? Rajendran says no.
The Indian consumer, he believes, most often is convinced more by the bandwidth proposition that is offered than bundling. “You can’t bundle anything and sell; people are smart,” he says. Acer’s market to strategy is deeply ingrained with a philosophy: identify a technology that is needed for the world in future, scale it up to volumes, commercialize it and bring it up to today’s expectations.
“This is possible only by the virtue of our strengths in research and development, and establishing kiosks to demonstrate,” says Rajendran.
Kiosks for Rajendran are nothing but the two outlets of Acer products: malls and points. Acer malls are outlets that deal exclusively with the Acer product line and some complimentary incentives while points are outlets with other competing brands also available in the same outlets.
“This mall initiative is perhaps the most effective way of retailing Acer has done,” says Rajendran. Not only has it created posts exclusively for maintenance and driving retailing of Acer products nationally, but also given a first hand experience to its customers while experiencing Acer salesman’s peddling.