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Computer Reseller News

15/03/2012

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home networking

Digisol leaps to the top

D

espite being a nascent brand in home networking, Digisol won the channel preference on the back of its aggressive prices, channel marketing and training, post-sales support and overall channel policy and management. The company differentiated itself with its 5-year warranty support. D-Link remained the most recognized brand in home networking but slipped to second spot primarily because of issues in post-sales support and product availability during August-September 2011. The company became aggressive on pricing in the second half of the year and offered attractive schemes for partners and customers. Belkin came a close third and maintained its position by virtue of its thrust on customer-focused schemes and its warranty support. It was aggressive on channel schemes but lacked focus on channel engagement and management. The company needs to work on expanding its portfolio of home

networking products as well as lowering its prices. Netgear drifted to the fourth position by a small margin due to the high turnaround time in post-sales services and low level of partner engagement. Partners want Netgear to lower its prices as well as broaden its portfolio.

Digisol

Digisol jumped to the leading position from the fourth position in 2010 primarily because of its channel engagement and price aggressiveness. Partners appreciated the company’s efforts to engage frequently with them. It organized roadshows in various tier-1 to tier-4 cities in 2011. Digisol also introduced attractive channel schemes which were appreciated by partners, specially those in Class-B and -C cities. Respondents agreed that Digisol offered them the highest margins (8-12 percent) across the brands, and that was the reason why they put in

Score Card Criteria

Digisol D-Link Belkin Netgear

Product availability

95.6

Price-performance

92.5 91.1 87.5 86.9

Channel profitability

88.6

84.5

82.0

83.3

Brand-pull and customer marketing

86.9

88.2

88.0

85.4

Channel marketing and training

91.1

87.3

86.8

86.6

Post-sales support

88.7

86.1

84.7

83.3

Channel policy and management

91.9

89.1

86.7

86.3

Final Score

92.1

95.5

94.3

635.3 618.4 611.2 606.0 *Scores out of 700

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Computer Reseller News

15/03/2012 www.crn.in

extra effort to promote its products. The company differentiated itself from the competition by offering a warranty of five years. Digisol also leveraged on the strong service support of Digicare. Respondents said that the product availability of Digisol was good throughout the year. The company remained aggressive on prices, which acted as a facilitator in this pricesensitive market. Digisol offers several options in entry-level products. However, partners wanted it to expand its portfolio of high-end products including 3G wireless routers. Most of the partners said that while Digisol’s brand-pull has increased, it still lags in brand recall compared to the competition. They agreed that the company needs to do a lot in its customer marketing efforts to create brand-pull among customers.

D-Link

The company enjoys the highest brand-pull among customers. Being a widely distributed brand, D-Link offers the least profit margin to the channel. Delays in replacement and servicing during the transition of service support to kaizen in AprilMay 2011 as well as the latter part of the year acted as a real dampener. Many of the partners complained of a shortage of products in AugustSeptember 2011. According to the respondents, these shortcomings forced them to also promote other brands unless the customer specifically asked for D-Link. Taking note of the resentment among partners, in 2012 the company assured partners that it would designate various business distributors as ASPs in their regions. In H22011 D-Link reduced its prices by about 10-12 percent;

this resulted in D-Link matching the prices of almost all the home networking products of Digisol. D-Link’s entry-level wireless router, which was priced at about `1,350, came down to about `1,200 after the price reduction. This reduction in prices, coupled with its wide home networking portfolio, worked well for D-Link. The company offered foreign trips to partners achieving the quarterly target in Q42011, but partners in upcountry locations complained of the target slabs not being achievable by small partners. Many respondents agreed that D-Link was not as aggressive in channel marketing and training in 2011 as it was in 2010.

Belkin

Belkin retained its third position riding on its aggressive customer marketing supported by customerfocused and channel-focused schemes. The company increased its brand-pull through ads on the radio and in the online and print media. Belkin also offered attractive customer schemes during October with gifts such as mice, mobile phones and laptop cooling pads. The company remained popular among the channel due to its various quarterly schemes for tier-3 partners in which it offered Sodexo vouchers, water purifiers, refrigerators and washing machines. Belkin also offered trips to Uzbekistan and 5 percent cash-back rebates to its tier-2 partners. However, being the costliest home networking brand, partners admitted that only discerning customers with a specific brand preference opted for its products. Belkin’s entry-level wireless router was 8-10 percent more expensive than those of D-Link and Digisol. Also, the company increased its prices by 6-8 percent in Q42011 while there was no hike by the competition. The company lacks wired modems and 3G routers at the entrylevel; this restricts the low-priced

Survey Demographics Unique votes polled for Home Networking category: 311 North 22%

South 32%

East 9% West 37%

Region

Class A 24% Class B 28%

Type of City

options for customers. Apart from wanting Belkin to become aggressive on pricing, respondents want it to expand its home networking portfolio. According to the respondents, a reduction in channel engagement acted as a real drawback in Belkin’s channel strategy. They said that the company reduced the number of channel managers in 2011 and this reduced the level of its regular engagement with the channel. The company also curtailed its 5-year warranty to three years in 2011. However, partners faced no delays in replacement or servicing.

Digisol offered the highest margins (8-12 percent) across the brands, and that was the reason why partners put in extra effort to promote its products

Class C 48%

Partner 27% Non-Partner 73%

type of reseller

Netgear

Although Netgear worked well on the channel and customer marketing fronts, delays in service support and lack of channel engagement resulted in its slipping to the fourth position from second in 2010. Partners complained of delays of more than 15 days in replacement and servicing due to non-availability of spares. They wanted the company to increase its service support network. Respondents also complained about the scarcity of local channel managers which resulted in a lack of direct engagement by the company. It also led to slow resolution of any issue raised by a partner. Partners were supported only by executives from national distributors. Partners wanted the company to become aggressive on pricing since it is about 5-10 percent costlier than Digisol. Netgear also has limited options in entry-level products as well as in wireless modems/routers. Partners however agreed that customer-specific schemes helped in creating demand. The company also remained aggressive with channel schemes. Besides the back-end cash rebates, the company offered rewards such as digital cameras, DVD players, home theaters and LCD TVs. The company conducted two roadshows in 2011. n

Computer Reseller News

15/03/2012

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methodology

Understanding channel preference

I

n this edition we present the Channel Champions 2011 rankings for components and consumer products. The last issue of CRN— March 1, 2012—featured the results for commercial products. Now in its 10th year, the annual CRN Channel Champions Survey aims to provide a definitive index of plotting channel satisfaction in the country. The US edition of CRN has been conducting the survey for over 20 years now. The main objective of the exercise is to lend a voice to channel perception and experience in dealing with the vendors. The survey also aims to provide vendors a neutral view of channel expectations and how well they are managing channels and helping them to grow.

Survey methodology

In the components and consumer products categories we polled 584 unique respondents (compared to 519 unique respondents in the 2010 survey) across 237 cities through an online poll which ran from November 25, 2011 to January 10, 2012. With each unique reseller voting for an average of five product categories, we received a total of 3,822 vendor evaluations across 11 categories compared to 2,442 evaluations in 2010. For each product category the unique respondents voted their vendor preference and satisfaction on seven key criteria and 21 sub-criteria as listed below. Product availability: Included parameters such as the availability of products, and whether a product was over- or under-distributed. Price-performance: Included subcriteria such as product features, quality and reliability, and price. Channel profitability: The overall profitability that partners could achieve while dealing with a particular vendor. This included the front-end margins offered and the

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Computer Reseller News

15/03/2012 www.crn.in

Survey Demographics Total unique votes polled: 584 North 23%

South 29%

East 12% West 36%

Total vendor evaluations: 3,822

Class A 22% Class B 25%

Region

Type of City

back-end incentives that resellers could earn on tactical schemes and strategic partner programs. Brand-pull and customer marketing: This criterion includes the brand-pull enjoyed by vendors among endcustomers, local customer marketing, and promotions conducted to drive consumer demand. Channel marketing and training: Includes elements such as channel schemes to encourage partners to do more business; market development funds provided to partners; regular communication about new products and price changes; and channel meets for product training and providing other information about the company’s GTM. Post-sales support: Includes aspects such as warranty policy, RMA turnaround and escalation mechanism, toll-free phone support, and Web and email support. Channel policy and management: Respondents voted on parameters such as fairness, transparency and swiftness of various channel processes, and the accessibility and responsiveness of local channel teams and national channel managers.

Scoring

For each product category respondents were asked to vote for

Class C 53%

Partner 46%

Non-Partner 54%

type of reseller

one of their top three vendors in terms of business dealings and rate it on the seven key criteria and 21 sub-criteria. It must be mentioned here that the Channel Champions survey is openended, and resellers are allowed to rate any vendor of their choice; we don’t compel respondents to choose vendors from a list of names. Vendors that received less than 10 percent of the total votes polled in a particular category were not considered eligible and were not considered in the final ranking. Within the finalists, we arrived at the average scores for each vendor for each criterion. Under each main criterion the scores of the sub-criteria were added and averaged to arrive at the overall criterion ranking. Individual criterion scores were added to arrive at the final score, and the final rankings were based on this overall score. The CRN editorial team then conducted a series of qualitative interviews with the survey respondents. For every product category we conducted 25-35 qualitative interviews to understand the voting patterns and get details about the strategies and policies of the vendors that worked positively or negatively for the channels. In all the editorial team conducted close to 350 qualitative interviews. n

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CRN Home Networking

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