ever since Lexmark adopted the offshore model in India, they claim to have made significant gains. Not to mention, Lexmark has made a strategic decision to move out of the low-end printing segment knowing fully well that more than 75-80 percent of business in India comes from this space . excerpts from the interview

Lexmark works on an offshore business model in India. Why has the company decided to stick with this model?
Lexmark is present in 150 countries across the globe. It has a strong presence in the printing space. The printer division of IBM spun off in 1991 to become a separate entity called Lexmark. In smaller markets, Lexmark is operating on offshore model. Lexmark went offshore in India in 2007. The whole strategy was to compete strongly in the market. However, with significant gains in the last two years, Lexmark is building up the onshore capabilities.

How has it benefited the company?
Offshore model works fine when the volumes are lower. This is a great option for reducing your costs and working strongly with valued partners and resellers. However, to provide more value-added solutions to customers it is required to be present and work along with the customer.

What initiatives have you taken to streamline your sales and distribution model?
Lexmark has been continuously improving its product portfolio every quarter. In May 2009, we launched more than 67 products creating huge excitement in the customers and the IT community. On the distribution front, we have appointed CMS Info Systems as our new national sales and service partner. With a strong team of more than 12,000 plus employees we expect this relation will be a win-win for both parties. This will bring in Lexmark value-added solutions to the enterprise customer more effectively. The SMB segment will be driven by the Lexmark Value Print (LVP) Partner program. We are looking at adding these partners at major cities across India.

How are you ensuring that you stay ahead of your competitors?
Lexmark has the maximum number of award winning products in the market today. Our managed print services division is creating great value for customers. We work with our customer in reducing paper. In the entire lifecycle of a typical multifunctional device it is the paper which accounts for more than 79 percent of the carbon footprint. Thus, it is imperative that printer companies take steps to reduce paper. We are pioneers in this field, and coupled with our motto 'Print Less, Save More' we are giving huge benefits to customer in reducing their cost by more than 30 percent.

Will you be looking at appointing more national distributors?
Cyberstar is our distributor in the low-end, SMB segment. Lexmark has followed a worldwide strategy to move out of the low-end printing segment. This is necessary as the low-end boxes are very uneconomical on running cost and are also far removed from our green-initiative program. This is a big strategic shift knowing very well India has more than 75-80 percent business in the non-network and non-duplex printing space. But it is worthwhile as it is in line with green initiative. Lexmark believes all printers or MFDs have to be network-ready (to reduce the number of devices by sharing) and must offer duplex printing (to reduce paper by printing both sides).

Are you looking at expanding your channel network? What is the goal you have on this front?
Channel expansion is a continuous process. As expressed we are looking at adding larger number of LVP partners to drive the print volume business. In the slow economic market, this model will help customers to buy printers on an opex model.

What are the channel engagement programs you have?
For our enterprise business, which is primarily driven by CMS, we have a program for the sales team including a trip to Singapore for this quarter. On the channel space we are driving the program through Cyberstar. We have also launched Lexmark Cartridge Return Program (LCRP) to pick up toners, cartridges from customer to drive the green initiative across the country. This will provide an incentive to partners and also ensure cartridges are collected and disposed off in the most environmentally friendly way.

What are your future plans for the India market?
India market is very dynamic and growing strong. The growth rates of printers are still in double digits. Infact we expect the buying behavior of customers to shift more towards medium to high ranges of printing solutions as in the West. Also managed print services (MPS) will be the driving factor in the country where MPS solutions will be vertical specific. Lexmark again has taken the lead in having ready-made vertical solutions such as retail, BFSI, IT, government, education, healthcare etc. For example, in the retail front, Lexmark has strong solutions in place for RFID printing, bar code printing, color on demand printing etc. Similarly, for banking and finance, Lexmark has complete document management solutions, right from document generation to storing, archiving and management.

RUTH SAMSON
ruths@cybermedia.co.in

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