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November - 2006 - issue > Tech Marketing
Canon Calling the shots
Sohini Bagchi
Tuesday, October 31, 2006
In an age when signing up film stars and sports personas as brand ambassadors is the norm for companies to promote themselves, Canon India thinks otherwise. The company is roping in different personalities from every market segment it caters to. And it does so with style and precision. Recently, Canon India signed up ace fashion photographer Atul Kasbekar to promote its range of products in the camera segment.

The company feels that customers are most convinced when they get a person from the same fraternity to endorse the product. Innovation being at the heart of Canon’s new business thrust, roping in Kasbekar, is just one among the many creative marketing strategies of the digital imaging company.

With over 127 products in its basket, that includes photocopiers, fax-machines, printers, scanners, digital cameras, camcorders and multi media projectors—Canon India has created a “buzz”. Morphing from a camera and copier company, with a minuscule market share, Canon has moved aggressively and captured the number two-position in the inkjet printer and the scanner markets. With a turnover of Rs. 310 crore, and a market share of 30 percent, the company is now moving towards market leadership across product categories and plans to increase its marketing spend to Rs. 30 crore this year from Rs. 20 crore last fiscal.

“In a market driven by competition and changing landscapes, one needs to constantly think differently to survive and sustain and keep creating a ‘buzz’ every now and then,” says Som Gangopadhyay, Marketing Manager-Office Systems & Solutions, Canon India.

The initial survival game plan
Roll back to 1997, when Canon India was established only as a distributor of its products in India. With offices in seven cities across the country, it focused on selling mid-range and high-end copiers. The company targeted limited market segments—government and corporate and in the next two years, came up with products such as cameras, fax machines, scanners and printers.

It was a testing time for Canon and challenges came from different quarters. The company faced tough competition not only from the huge gray market, but also from vendors like Xerox and Ricoh in the office automation products segment, Hewlett Packard in IT peripherals and Fuji and Kodak in the camera segment. With other players already having a stronghold here, getting distributors was not easy.

Initially the company was selling directly and later through local distributors. A lack of focused approach resulted in a lackluster performance during the turn of the millennium.
“In such a hard-hitting situation, the company took to a different route to sustain its profitability. Hence, innovation became Canon’s survival kit,” says Gangopadhyay.

Racing ahead with time
Canon went through a restructuring exercise, wherein it completely overhauled its product, marketing and promotion, sales and distribution strategies. The first step was to establish a proper channel network and rework its distribution model. The company began selling its products through national distributors, enhanced its partner strength tremendously, made its machines simpler in technology and gave increased support to the customers. It started organizing road shows and also focused aggressively on the non-metros, something many of its competitors failed to do at that point.

The result was that Canon’s inkjet printer market share jumped from three percent in 2001 to 15 percent in 2003. This made Canon, the second leading player in the inkjet, scanner and multifunctional devices market.
At its “second phase of growth path” in India, Canon made a paradigm shift in its go-to-market strategy, by delayering the distribution channel and emphasizing on retail expansion. By doing so, Canon removed a layer of partners and consolidated its partner strength.

The expanded channel base was resulting in too many strata between the customers and Canon. Trimming down its partner strength to 281 from over 350 has helped maintain a cord with its customers and resulted in faster response and information flow.

The company has come up with another “unique approach”: A “channel specialization” strategy, with separate channels for IT, office automation, photo and consumer electronics, followed by Gyan yatras across the country to educate partners on new products and technologies. Further it created a portal interface called ‘Partner Excellence Program’ (PEP), through which Canon partners could get in touch with the company directly. It also includes online support and ordering system. The channels now have access to product training, business development programs and constant updates on products online.

Recently the company took a group of 20 channel partners to Photokina in Germany where next generation products were showcased.
A focused approach Canon is currently making a “value-shift”. Diverting its focus from unit-based to value-based selling, the company is providing “technically superior next generation” products, adding more features and values in sync with the customers’ need. The new initiative has not only helped its partners create additional business opportunities from medium and high-end businesses, but also helped the company prop up its market share.

With over 100 retail centers and more than 2700 IT resellers at 300 distribution points, Canon plans to enter new geographies and venture into uncharted waters like security and surveillance cameras, large format printers, pro DV cameras and digital publishing. The focus is also on small and medium sized businesses, where it has customized its existing strategies in terms of cost and positioning to reach this market. It is offering two-tier solutions for the SMEs—enterprise version and departmental version, and is building a departmental portfolio for the SMEs.

Presently Canon is eyeing Rs. 700 crore revenue by the end of 2007. It expects growth in its three core areas: digital cameras and projectors, laser multi functional peripherals for the corporates, and consumables that include inkjet printer cartridges or toner cartridges.

The company has evolved through many phases; each one of them has helped it forge a stronger identity. Whether it is the company’s realignment plans, value shift or the recent involvement of Kasbekar, the newly implemented strategies at Canon have set the stage for creating the “buzz”. For one thing, the company concurs: in order to capture the growth opportunities lying dormant in the consumer and business world, one needs to utilize the combined power of unique technology and strong marketing—at the end, it all has to come together to work for its customers.
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