Survival Of The Fittest

Although new sales in the bar code printer market seem bountiful, the abundance of printer manufacturers competing for a share of the market is creating unique business challenges. Vendors must help even the playing field for their VARs and integrators. Often, this is no easy task.

The Survival Game Has Started
Tetsuo Kasahara, president of Citizen America Corp. (El Segundo, CA), told me, "Distributors sell many brands of printers. This puts pressure on manufacturers to offer lower prices and more options. The survival game has started."

Kasahara said Citizen is focusing on connectivity and productivity in its new product development. "We believe we can compete in the pricing game," Kasahara stated. "But, winning market share requires more than competitive pricing. Our expertise in connectivity is a real plus for Citizen. Vendors must have a specialty to offer resellers."

Citizen markets its products mainly through VARs and integrators, although it does have some direct sales. Kasahara said Citizen uses trade journal advertisements, trade shows, and co-op advertising (with resellers) to promote its product line. "We are aggressively going after this market," said Kasahara. "Citizen will offer resellers new technology, as well as monetary help with marketing expenses."

Pulling Sales Back Into The Channel
Datamax (Orlando, FL) Senior Vice President of Marketing and Sales Bill Nix offered me yet another way of beating competitors. "VARs do not have the capital to reach all end users," said Nix. "Vendors must help their resellers in every way possible. We use the Internet to reach end users. When end users come to our Web site, we encourage them to give us information about their needs by providing special incentives. Sometimes an incentive can be as simple as a free tee shirt.

"Datamax uses its Web site to gather end user demographic information about the bar code printer market. In the past two years, we have entered 11,000 end users' entries in our database. Many of these ‘hits' on our site turn into leads, which we pass along to VARs in our distribution channel. So, we pull sales back into the channel from our Web site. This is quite different from traditional systems that place all the burden on sales channels to develop new leads and grow the market."

Nix believes there is very little end user awareness about offerings in the bar code printer market. He also believes it is a moving target. "There is little brand-name awareness," Nix stated. "There is also little end user loyalty to a product. The only loyalty is to the channel. Resellers create customer loyalty through service. We know that, and that is why we never compete with our VARs. Datamax markets its products exclusively through a reseller channel."

What Does This Mean?
No one vendor has all the answers for competing in today's tough business climate. Citizen's Kasahara is correct when he says winning market share requires more than competitive pricing. And Datamax's Nix really hits the mark when he says resellers create customer loyalty through service. I believe VARs hold the key to market penetration. VARs must choose which manufacturer offers the best marketing help, the products with the most up-to-date technology, and the lowest pricing levels. This selection is important, but the real burden on VARs is to provide unsurpassed customer service. End users will only give their business to VARs that offer it all — good products, good pricing, and great service.