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IN THE HOT SEAT: Running the hard yards in MFP

IN THE HOT SEAT: Running the hard yards in MFP

He's a dyed-in-the-wool St.George supporter and gets withdrawal symptoms after the league season finishes, but Oki Australia and IPL Group managing director, Stead Denton, is going to have plenty to do in the off season this year.

He's just kicked off the local launch of a new product category, which he claims could give him a six-month head start on the competition, and he is now thinking about publicly floating IPL to fund a suite of reseller initiatives.

IPL represents Oki in Australia. How does that affect the way the channel is structured?
Stead Denton (SD):
We have a direct business with business development managers who work with the channel on larger sales, tenders or bids. Under that we have Ingram Micro, Alloys International, IT Wholesale and XIT Distribution. Ingram is everywhere and Alloys is a specialised value-add distributor of imaging, while IT Wholesale and XIT Distribution are state-based and do consumables.

How has that channel changed in light of Oki's MFP launch?
SD:
We don't have any plans to review distributors but we have launched a new MFP partner program. Out of our existing partner base we made 42 players Platinum partners. This means they are accredited to sell our high-end 9800 and 9800GA MFP models. As these are very sophisticated machines, the sales implementation and support requires a fair degree of skill. To reward their commitment, we let partners buy directly from us. Below that there are about 200 Gold partners who can sell the 5000 and 3000 series and beneath that there's another 500 dealers who buy from distributors. In our voice business we have 127 accredited resellers.

Why has Oki decided to go into the MFP market?
SD:
Oki decided a while ago that it couldn't compete in the mono laser market and be the dominant player so it invested in LED technology, which can go faster than laser and at higher quality. Now with the introduction of that technology in an MFP we have a 6-9 month window to establish ourselves in the front room as the general office colour printer. Oki's plan is to get 20 per cent of that market worldwide. We're roughly running at 12 per cent now. Two years ago we were at zero.

What challenges is Oki facing with this launch?
SD:
The big players in MFP and high-end printing have a branding advantage over us and that is an issue. The biggest challenge for us though is having a channel capable of selling an MFP. A lot of education and training is needed. While we have a competitive technology argument, getting the coverage is also a challenge. We are addressing branding through our sponsorship of St George's [NRL] home ground. The deal has run for three seasons and will last two more. Hopefully, we'll renew that for another five years. We're also getting our name on the back of players' jerseys.

We are also trying to use our pedigree in the back-office with mission critical faxes and impact printers to move to the front room. On the training side, we have launched classrooms in our Sydney, Melbourne and Brisbane offices because resellers are hungry for knowledge.

You've also launched a channel finance program?
SD:
In the past, when you sold a laser or inkjet printer it was pretty much a cash or credit card sale, but these machines have a list price of $22,000 at the top end. Even the mid-size model is about $3000. Companies really don't buy those products - they either lease or rent them so dealers need to provide finance.

We are also looking at a floor plan for demonstration units. A $20,000 unit just for demonstration is going to hurt a reseller's cash flow, so we need to help partners to get through that.

The plan is to offer the machine interest free to the reseller for four months. The reseller demonstrates it for three months, sells it in the fourth and gets another.

I understand you are looking at an IPO to fund these initiatives?
SD:
Oki Japan doesn't give us much in the way of funding so these initiatives have to be paid for locally. We need to bring dealers up the food chain and help them sell and support the products. That takes investment. We're successful in our market, and strong financially, so we could do an IPO very successfully.

What do you feel you have achieved in the past year?
SD:
We've grown the business by just under 20 per cent and voice grew substantially too. We also opened new buildings in Sydney and Melbourne as well as relocating our Brisbane office to hi-tech premises. We've also recruited some seriously good young people in sales and engineering. We've made money and grown.

And you're a St. George supporter?
SD:
Always. I was a local junior and grew up in the Bexley/Mortdale area. It's my passion. I hate when the season finishes because I go into withdrawal.


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