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HP makes significant changes to its channel

HP makes significant changes to its channel

Hewlett-Packard (HP) has restructured its computer products area to bring the company into line with what chief executive John Bieske describes as "the changing dynamics of the reseller channel".

Bieske said HP has "embarked on a strategy of direct relationships - in a contractual or direct marketing sense - with business partners and resellers", rationalising the existing tier-based distribution channel system.

"We've stopped differentiating between direct and indirect relationships between wholesalers and resellers," he said. Bieske stressed, however, that HP has no plans to change its existing strategy of feeding orders through the reseller channel. The direct marketing agreements are in the process of being pulled together. Bieske said he was unsure how many agreements would be signed.

Until recently, HP had complemented its direct relationships with around 20 key resellers with the distribution of products through wholesalers to what the company classified as "second-tier" resellers. "We've also focused on sales into retail with the creation of a new business unit - formed earlier this year but only formalised on 1 October - called Consumer Retail," Bieske said.

He said the basis of the restructure was the imposition of a cost-driven model on the delivery service to retailers.

The organisation has now created nine groups to manage the range of products and services available:

Desktop PCs/workstations;

Netserver computers;

LAN networking products;

Home and small PCs (Pavilion products);

Printers (networking and high-end);

Consumer-based low-end printers;

Storage products;

Emerging products;

Independent Software Vendor products.

Bieske also said HP had moved away from a system based on national sales managers with responsibility for second-tier or direct relationships to one based on regional managers covering northern and southern Australia.

"Northern region" is classified as NSW and Queensland, while "southern region" encom-passes Western Australia, South Australia, Tasmania and Victoria.

The company has also appointed a national corporate sales manager to focus on sales to key corporates - particularly those in the "top 100 companies" list.


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