WHEN IBM spend a billion dollars a year on global advertising each year, and arch-rival HP spends $860 million, just how do the small local producers get their names out there?
Well, some insist they don’t need to and by targeting their marketing efforts in the right direction, they can still reach the people they really need.
Thus, while some local producers are hardly household names, they use their reseller channels to effectively reach their market and offer their customers something they claim the big boys cannot — customisation and better service.
While IDC credits the multinationals for driving market growth through rampant price-cutting, the local producers are still receiving almost a quarter of local sales — equivalent to some 30,000 units.
Cyclone Computers does not sell to the home user, but rather small businesses and tertiary education institutes.
“Our customers don’t buy on price, they buy on support. We are able to get closer to the consumer and are more responsive to their needs,” says general manager Richard Morgan.
“Our competitive advantage is flexibility, delivering more unique build requirements to the consumer and we service them better than multinationals. We have more spares available, say in Auckland rather than Sydney, and a good stock of technicians,” he says.
The Tier One IBM partner claims its customised PCs can be shipped out within three to five days, claiming that when HP had some problems with service and delivery, the Auckland-based company was able to pick up some disaffected customers.
Eschewing general advertising, Cyclone instead prefers to sponsor certain conferences, claiming a select market, supplied mainly through direct sales staff.
“Joe Public has no idea who we are, yet we are the largest local assembler. Most of our business is word of mouth. We keep good customers happy and use them as solid reference sites. That works well for us,” Morgan adds.
Mark Forbes of Ultra Computers says his business stresses its point of difference in flexibility and response time, claiming it can deliver new technology quicker than the multinationals.
Ultra also claims to work closely with its channel of 1300 resellers, adding that its active core of 50 dealers tend to be strongest in the regions, with particular success in Tauranga, Napier and Kerikeri.
“Local resellers will know the people who sign the cheques. The multinational people will not. Our Tauranga dealers have been there for 20 years. They probably play golf with the local law firms and act as their IT arm,” Forbes says.
Smaller companies cannot afford their own IT departments, he continues, so they will rely more on their reseller for IT guidance and support.
Ultra, he says, cannot compete with the multinationals on marketing spend, so they localise it more, working with the channel through local roadshows, relationship exercises and socialising.
Jan Paterson, general manager of Christchurch-based Insite Technology, also attributes survival to avoiding the main retail sector and instead forging close links with her 150 resellers, many of whom are regional or serve specific niches like education.
“We build to order, so are extremely flexible with configuration. We cannot compete with the multinationals on marketing, so we stress technical turnaround and our good spare parts stocks,” Paterson says.
Garry Marriott, managing director of JDI, also credits close channel links and a quicker turnaround of new Kiwi-made technology products.
“We can change quickly if there’s a new product. We can supply. We can customise. The multinationals typically supply from Singapore or Australia. We local producers have shorter lead times,” Marriott says.
Nonetheless, the multinationals are picking up some tips from the locals with Acer claiming its own BuildYourOwn strategy has boosted sales by 250% over the same period last year.
Acer NZ Country manager Rod Bassi says the company offers similar flexibility coupled with the “peace of mind of a major brand name”.
Acer has three distributors — Tech Pacific, Ingram Micro and Dove Electronics — plus direct resellers including Fujitsu, Able Business Machines and Connect NZ.
Bassi says the imminent launch of a Retail Kiosk Strategy will “provide access to BuildYourOwn facilities on the retailers’ shop floor, giving customers access to the freshest technology, faster”.