Professional Documents
Culture Documents
HP Inc. India
Understanding B2B Structure & Strategies
Group -4
Aditya Chauhan 29NMP05
Divyanshu Bisht 29NMP26
Gaurav Satija 29NMP29
Kanika Dua 29NMP36
Srinivas 29NMP83
Submitted to Prof. Vibhava Srivastava as a minor project report for completion of course in
B2B marketing area.
Contents
Acknowledgement...................................................................................................................... 2
Executive Summary................................................................................................................... 2
About Hewlett-Packard Company............................................................................................ 3
HP Enterprise.......................................................................................................................... 3
HPE Key People....................................................................................................................... 3
About HP Inc............................................................................................................................ 4
HP Inc. Key People (Global)..................................................................................................... 4
How does HP Inc. Sales happen in India?................................................................................ 6
What are the Key challenges faced by HP Inc.s Sales & Marketing Channel in India?..........10
What are the Key strategies to measure the effectiveness of the distribution channels in
India?.................................................................................................................................... 11
What are the metrics used to calculate the CLV?..................................................................11
How does HP Inc. India sales team manage customer lifetime engagement?......................12
Conclusion............................................................................................................................. 13
Acknowledgement
We would like to thank Prof. Vibhava Srivastava for his guidance and knowledge throughout
the term.
Also, we would like to thank the Account managers of the Channel partner (Savex
Technologies Pvt Ltd) for insights on the B2B sales & distribution mechanism of the HP Inc.
India.
Executive Summary
This report aims at understanding the strategic B2B sales and distribution framework of HP
Inc. (an American Information Technology company) for Indian subcontinent. This report
points out problems in sales and distribution of HP Inc. products in B2B scenario. We have
tried to understand the strategies and operations of HP Inc. Indias sales and distribution by
engaging in dialogue with the key persons who started and accelerated the HP Sales in India.
Also, we have tried to take insights from the channel partners of HP Inc. India to understand
and evaluate the margins, policies and incentives set for their distributors.
The report further elaborates the critical success factors and key performance indicators of
the distributors to show how a competition among them drives revenues for HP Inc. India.
Also, we have covered the pros and cons of the various distribution channels and the issues
faced by the HP Inc. in India.
About Hewlett-Packard Company
Hewlett-Packard Company was American multinational Information and Technology Business
Company formed in 1939 HQ at Palo Alto by Bill Hewlett and Dave Packard. The company
provided wide range of hardware components as well as software and related services to
consumers, small- and medium-sized businesses and large enterprises, including customers in
the government, health and education sectors.
On October 6, 2014, Hewlett-Packard announced plans to split the PC and printers business
from its enterprise products and service business. The split closed on November 1, 2015, and
resulted in two publicly traded companies: HP Inc. and Hewlett Packard Enterprise.
HP Enterprise
HPE or the Hewlett Packard Enterprise was found as the result of the split of HP Company. HPE
is a business-focused organization with four divisions: Enterprise Group, which works in
servers, storage, networking, consulting and support; Services; Software; and Financial
Services.
Martin Fink - Executive Vice President, Chief Technology Officer and Director of Hewlett
Packard Labs;
Mike Nefkens - Executive Vice President and General Manager, Enterprise Services
Antonio Neri - Executive Vice President and General Manager, Enterprise Group
Robert Youngjohns - Executive Vice President and General Manager, HPE Software
Henry Gomez - Executive Vice President, Chief Marketing and Communications Officer
John Schultz - Executive Vice President, General Counsel and Corporate Secretary
Vision of the Company To create technology that makes life better for everyone,
everywhere every person, every organization, and every community around the globe. This
motivates us inspires us to do what we do. To make what we make. To invent and to
reinvent. To engineer experiences that amaze. We wont stop pushing ahead,
because you wont stop pushing ahead. Youre reinventing how you work. How you play. How
you live. With our technology, youll reinvent your world.
The offering of the HP Inc. India and worldwide can be categorised as follows
As per our findings, the laptops, tablets and desktops business of the HP Inc. India are facing
the tough competition not just in Indian B2B environment rather worldwide. HP Inc. India isnt
able to generate much revenue in the specified product categories due to saturation in the
space and evolvement of many low cost providers. HP Inc. India enjoys position of market
share leader in the Imaging and printers category and the business of supplies provide
maximum revenues to HP Inc. India. The supplies category has maximum margin on the
products.
HP Inc. Product Portfolio
National Distribution
Sales channel
Manager Managers
Tier-2 Tier-1
Key Account
Channel Channel
Managers
Managers partners
Tier-2
Channel
partners
Tier-2 Channel Managers The responsibility of Tier-2 managers is to enable Tier-2 channel
partners in order to provide efficient, quick and hassle free purchase experience to its B2B
customers. They basically look for the smooth operations of the products and transactions.
Tier-2Channel Partners Are the third party vendors who wish to work with and work for HP
Inc. to earn profits. All Tier-2 channel partners buy the products from Tier-1 partners for sales.
Tier-2 channel partners can be categorised as follows -
HP World: The Brand Exclusive Stores
HP Online Store
Local Stores
HP resellers/sales experts
Enterprise Solution partners
HP Original Cartridge Stores
For Tier-2 Channel partners The tier-2 channel partners are generally the business owners
(wholesaler or the retailers). They need to apply for accreditation which they get through
application of certification from HP Inc. India to qualify to sell and do business for HP Products.
Types of tier-2 channel partner certifications/categories
Certificate partner(entry level partner)
Silver partner
Gold partner
Platinum partner
Central
Governm
ent &
PSUs
State
B2B
Clients
Corporate
Enterpris s
e Education
Business
Institution
s
How does it work?
B2B Client
Tier-1 Channel
Partner
HP Inc. India
Info Flow
Product Flow
Whenever a B2B client raises a request for a particular product category (the request/need
may either be generated by a KAM or the requirement may come up from the client either
through tenders or KAM or Tier-2 Channel partner), the information is added to the CRM tool
by the concerned personnel which could be a KAM or the Tier-2 channel partner. Individual
Price is quoted (depending upon who is dealing with the account) to the client from the
channel partner and KAM depending upon their profit margins and targets.
The role of channel manager herein would be to ensure that the interest of the KAM and the
Tier-2 partner doesnt conflict in case they both bid/reach to the same client. In case any such
situation arises, the issues are settled through discussion keeping in mind the fact that neither
of the parties incurs loss and in best interest of the organization. When the information about
the requirement is updated in the CRM tool, the HP Inc. India checks for availability of the
stock with its Tier-1 distributor. Each Tier-1 distributor stocks specific product range to their
regional warehouse depending upon the pattern of products demand in the geographic
location. The relationship and the capacity of the Tier-2 partner also affect the information
sharing process. When a Tier-1 partner confirms about the availability of the product in the
stock, KAM asks the Tier-2 partner to raise request for order from the Tier-1 partner. The tier-2
partner may either purchase the whole consignment from single tier-1 channel partner or the
multiple tier-1 channel partners depending upon the credit policies and the relationship of the
tier-2 channel partners with tier-1 channel partners. The tier-2 channel partner purchases the
consignment on the credit note and sells it further to the client depending upon its margin.
The client in any case would generate invoice in favour of the respective Tier-2 client no
matter even if the lead is generated by the companys own KAM.
Sample Scenario Key Account Manager, Oil & Energy Industries gets the requirement of 5 HP
Page wide business Printers. The Key account Manager would float the information of the
requirement to its Tier-2 channel partner depending upon the availability, readiness, margins,
credit availability and other aspects of the channel partner. The interested T-2 channel partner
would take the lead and quote its price to the client. The client would make deal with the
vendor who offers the lowest price.
Note: Each distributor or the channel partner is given liberty to employ their own sales force
and technical team who is adept enough to understand HP Inc. products & services and sell
them further to corporate and retailers in the markets.
HP Inc India ensures to maintain healthy competition among its channel partners for
competitive sales volume and services. It also helps HP Inc. to induce the competition and
hunger for more sales volume among its channel partners such that they do not become
threat to sales operations and expansion in India.
What are the Key challenges faced by HP Inc.s Sales & Marketing
Channel in India?
The major challenge faced by HP Inc. is the conflict of interest between its KAMs and the Tier-
2 channel partners involved in the bidding process. As in, lets assume that the KAM and the
Tier-2 partner both reach ABC Company to pick order for 100 HP Laptops with certain
specification. They both quote different price to the customer. In case, the KAM wins the order
and forwards it to some other Tier-2 partner then the one involved initially on discovering the
reason behind his loss generally gets into tiff with the KAM. Albeit, the condition leads to both
competition and tussle among the Tier-2 channel partners but also leads to conflicts with
KAMs.
In such scenarios, the channel manager plays a crucial role in satiating the egos of both the
KAM and the tier-2 client by offering certain offers.
For Tier-1 Partners: More they purchase and bill the products, more effective they are
considered to be. Please note that the Tier-1 partners are authorised to generate invoice for
the certified Tier-2 partners only. The Tier-1 partner must have a warehouse, sound financial
details and risk taking capability.
The Tier-2 partners may sell to the B2B clients, retailers or they might have their own sub-
distribution channel called the Tier3 partners. They might not be present or available within
the reach of every local areas and highly available in shady areas or restricted geographies.
Key Account managers: The KAMs effectiveness is measured on the basis of the business
retained by them as well as the new accounts fetched by them.
Revenue Metrics
Campaign Metrics Sales Enablement
(CLV, Revenue per
(clicks, conversions, Metrics (downloads,
customer, overall
shares, traffic & lead flows, lead
revenuew
web analytics) scoring)
increases)
Finance Metrics
Service Metrics
(maximized margins
(customer
& profitability,
satisfaction,
reduced overhead &
feedback, reviews)
selling costs)
Revenue metrics is the most preferred metrics to measure the growth, sales volume and
customer base for the HP Inc. in India and worldwide. The organization believes in calculating
the revenues generated per customer in the sales cycle and it further helps in forecasting the
demand and sales for the consecutive period. All data is analyzed on weekly, monthly and
quarterly basis as well. The data is captured and retained from its distributors for further
processing.
Customer Lifetime Value is the prediction of all value the business will derive from the
relationship with its customers. It helps in estimating the customers monetary worth to the
business after factoring in the value of the relationship with customer over the period of time.
Additionally, it helps in determining how much money a company wants to spend on acquiring
new customers and how much repeat business a company can expect from certain customers.
It estimates the amount spend or to be spent on acquisition of the customer and the amount
incurred by company in providing services to them and reduces it from the total
revenue/business made from that customer over the time to understand actual worth of the
customer to the company. If there is large amount spent by the company on the acquisition
and retention of the customer despite poor business and profits, then the company shall not
invest in serving the particular account .
The most important factors to the marketing performance considered by HP Inc. are
Brand Lead Customer
Website
Awarenes Generatio Acquisitio
Traffic
s n n
Customer
Customer Repeat
Engagem Sales
Retention Clients
ent
How does HP Inc. India sales team manage customer lifetime
engagement?
HP Inc. believes that more there would be customer engagement more the repeat purchase
and the business it would get. Henceforth, they have a wide network of support and service
channel in India and for the smooth functioning of the support and service network, the Tier-2
channel partners are also encouraged stocking the supplies like ink toners, display units,
accessories and other components for the ease of availability when and where required. HP
believes in providing its customers an experience by which it believes to fetch more business.
The Tier-1 channel partners are encouraged to participate in the corporate fairs, trade shows
etc. to increase the visibility, brand awareness and make its customers aware of HPs
innovation in different product categories.
Furthermore, HP believes that happy partners lead to happy customers; therefore it organizes
several events to upgrade, educate, inform and motivate its channel partners. In every
quarter it defines the targets to its channel partners, provide them technical trainings of
products as well as managerial, sales and personality enhancement trainings to the
employees of the channel partners under its Train the Partner program. HP also has its
partnership renewal model in which channel partner may apply for next level certification by
fulfilling certain criteria. The partnerships are also renewed and upgraded as a reward for
exceptional business performance. To motivate and inspire its channel partners, in every
quarter the award ceremonies are organised by HP Inc. India to reward and appreciate its
channel partners for their performance and for healthy and informal exchange of ideas as
well. Apart from incentivizing and rewarding its sales force, the employees of the channel
partners are also rewarded and groomed for excellence.
Conclusion
From our discussion with tier-1 and tier-2 channel partners in India, we understand that HP
Inc. India has smooth and functional sales and distribution channel in India. People are happy
with the policies, motivation and rewards provided by the organization. There are no strict and
hard rules but the partners business practices need to be fair and ethical. HP Inc. India
believes in investing in human capital to grow and penetrate in difficult geographies of India.
References
https://en.wikipedia.org/wiki/HP_Inc.
https://en.wikipedia.org/wiki/Hewlett-Packard
http://www.savex.org/