Professional Documents
Culture Documents
HP B2B Business
HP B2B Business
HP Inc. India
Understanding B2B Structure & Strategies
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.
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. India’s 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.
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 won’t
stop pushing ahead, because you won’t stop pushing ahead. You’re reinventing how you work. How you play.
How you live. With our technology, you’ll 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 isn’t 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
Distribution
National Sales
channel
Manager
Managers
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
Distribution Channel Manager – is responsible for maintaining the relationship and business with the Tier-1
partners, who act as the distributors for the HP Inc. India. The role of DCM is also to develop new distributors
and help existing ones to grow.
Tier-1 Channel Partners – are the main or the tier-1 distributors of HP Inc. India. They are the ones who are
responsible for actual billing and distribution of HP Inc. products in India. HP Inc. India has 4 major distributors
or the Tier-1 channel partners and many minor distributors who help in penetrating each and every segment of
the market. The major Tier-1 channel partners of HP Inc. in India are –
Ingram Micro India Pvt. Ltd.
Redington (India) Ltd.
Savex Technologies Pvt. Ltd.
Compuage Infocom Ltd.
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
Government
& PSUs
State
B2B Clients
Corporates
Enterprise
Business Education
Institutions
How does it work?
B2B Client
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 it’s 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, let’s 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.
What are the Key strategies to measure the effectiveness of the distribution channels in
India?
There are different parameters to measure the effectiveness at each level –
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.
Finance Metrics
Service Metrics
(maximized margins &
(customer satisfaction,
profitability, reduced
feedback, reviews)
overhead & 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 –
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 HP’s 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.