ARN: The printer market is very competitive, particularly with consumer sales being so slow. Has this affected you?Minolta-QMS managing director Stuart Drysdale: No. I look at our product range and it isn't just consumer. We don't have a large presence in retail today. But we are talking through our distribution channel about increasing our presence. When I look at where our key product sets fit, one of those sits in the retail environment. To date, we have had our greatest success in the small-to-medium enterprise space. What we now have to do is move ourselves into that retail/consumer environment and also the larger corporate banking, finance and insurance groups.
Have you found any confusion in the channel following the Minolta-QMS merger and if so how have you overcome that?I actually see the acquisition by Minolta Corporation as being very healthy for us. It is a very strong move. It brings the Minolta recognised brand name quality to our printing company. QMS has always been recognised for its controller technology and Minolta is the second largest print engine manufacturer in the world. So it hasn't been very confusing when people look for laser printer vendors. It might be confusing when somebody rings Minolta-QMS and asks for Minolta, meaning the camera company and the photocopier company. But Minolta Corporation is a distributor of ours in Australia, so we get the follow through.
Within Australia, Minolta-QMS doesn't sell direct, so it is straight through the distribution channel. One of those distributors is Minolta but it has a set of dedicated dealer resellers so we find there is no conflict.
Are you able to take advantage of the technology now that QMS is under the Minolta Corporation banner?Minolta is the second largest engine manufacturer in the world. They have OEM'ed their product to Lexmark and Epson and also QMS so, from our viewpoint, our print engine technology is very, very strong. That means our controller technology and the relationship with our print engine manufacturer can be closer which in turn brings out more benefits and features. One of the new concepts that we are bringing out is our print/copy concept - so a laser printer can be an ad hoc copier.
As a company, we have taken a marketing strategy to Minolta Osaka, which they are now pushing down to the other groups, so we can leverage off the Minolta brand name. It is a very well recognised name throughout everyone's industry so we are looking at, say, bundling our product with digital cameras. To me, vertical markets are important for us to be able to market through, take those sales leads that we generate and give them to our authorised dealer network.
How have you changed your distribution relationships lately and why?One of the key things I wanted to look at was how we meet and deal with our reseller channel. We needed to have products available on time and one of the key things we had to change were the operating skills of our distributors. We had to look at how we address the Australian market and make sure our dealer resellers can get access to our products very easily. To be honest, resellers should not be stressed out by dealing with any company. That means we have got to have good, strong distribution partners who are better set up to do that. That is also why we appointed a consumables-only distributor as a second source. So if somebody is short on consumables, their preference isn't to go to one of the mainstream IT distributors but to go and source those consumables locally. In the past, that has been an issue and it was disappointing through August of last year. We reacted as quickly as we could to make sure it doesn't happen again and now it is working very well. The response from dealer resellers was that this was a necessity.
What are the challenges inherent in looking after both the Asian and Australian markets at the same time?I don't think the challenges are any different. When I look at the channel and channel strategy throughout different countries, it is exactly the same - we deal with our distribution partners and then facilitate and help with sell-through for our dealer resellers. Offering rebates, marketing development funds and doing advertising to push the incentives and programs does that. The programs we have in Australia are typically the same as we have in Singapore, Malaysia, Hong Kong, China, Taiwan or Thailand. Obviously we have a slightly different approach to product sets by country, but in regards to our approach to distribution, it is identical.
What are the main factors that will drive the printing market in the next 12 months?The first is the margin the dealer and reseller will receive from the vendor. The second is technology. In building more features on digital laser printers and allowing people to take on our copy/print concept, the reseller can offer unique selling points in departmental printing. The value-added reseller will become more critical, I think, for our channel in being able to address customers needs.
How do you make your channel aware of what they can do with the product?Comparisons are really important. One of the key things I don't think we've done particularly well in the past is product positioning. It is one of the things we have got to be able to do so somebody who looks at one of our competitor's machines will also think of the advantages of our product. Marketing for Minolta-QMS Australia has only three directives over the next 12 months: product recognition, product positioning and sales lead generation. That lead generation then goes down to our authorised reseller dealer network.
Is that product positioning the key to moving into the retail space?I actually think the retail space has more to do with product recognition than anything else. In retail, everyone walks past the products every day. So with a retail presence, people will start to think of Minolta-QMS when they look at their small office or corporate needs. So it will be a critical element to get that recognition in the market, more than product positioning.
The retail market in Australia is made up of a number of categories. We are looking at the upper group of IT retailers - to partner with them through our distributors and offer them the rebates to move forward. We have to make sure the product is there, the technology is there and the pricing is there, specifically for the retail market.