labels: hewlett-packard, marketing - general
HP goes direct news
16 June 1999

The worldwide computer hardware giant, Hewlett-Packard Co. is planning to go direct. H-P plans to sell its PCs to corporate clients directly. This has given the jitters to some of its competitors, adding to the confusion in this market.

H-P already sells its PCs, printers, scanners and consumables directly- through its website. Now it is planning to do likewise with its corporate customers. Such a move would seem logical when the web is emerging as a strong primary and support selling media. This helps it get closer to the customer and reach out to them faster. Cost competitiveness comes from cutting the margins- so out go the channel levels and thereby comes the edge in price. H-P plans to sell about a third of its PCs this way.

But where will the dealers go? H-P, which has maintained a clear demarcation when it comes to treading on retailers'' turf, plans to bring them into their fold of online dealers with whom the customers can conduct their business, with a list of recommended local dealers on their website. H-P will go direct for large corporate customers but move into the background when it comes to system integrators and other dealers. The infotech industry is full of diverse marketing strategies for similar products.

Dell, another manufacturer has sworn by direct sales but then Compaq, which has its network of dealers and retailers, got into trouble when they tried the same strategy.

H-P itself has confessed that they want to be there for the online customer going PC shopping, to rake in their share. Dell is doing so too, with its Dell Gigabuys.

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HP goes direct