Compaq channel plans not set in stone

Compaq New Zealand will not necessarily follow in the footsteps of Compaq in the US, especially when it comes to changes in the distribution channel. Compaq CEO Eckhard Pfeiffer has been meeting dealers and resellers in the US to set out what he calls a set of engagement rules for selling both direct and indirect to customers. However, Compaq NZ may or may not follow these rules, says Compaq's local marketing manager, Tony Lambert.

Compaq New Zealand will not necessarily follow in the footsteps of Compaq in the US, especially when it comes to changes in the distribution channel.

Compaq CEO Eckhard Pfeiffer has been meeting dealers and resellers in the US to set out what he calls a set of engagement rules for selling both direct and indirect to customers. The new sales model will encompass both local and global selling — essentially offering to meet customers' needs whichever way they want.

However, Compaq NZ may or may not follow these rules, says Compaq's local marketing manager, Tony Lambert. "There have been many cases when Compaq has done something in the US or Europe, or even Asia-Pacific, and we have not done them here — especially with channel strategy."

Although Compaq is already selling direct in the US, Compaq New Zealand has remained fully committed to the channel, he says. Meanwhile, Digital New Zealand has a strategy of selling both directly and indirectly.

Lambert says Compaq New Zealand will start finalising its distribution channel over the next couple of weeks. "Much will depend on who the new managing director is. However, we have been making the channel partners aware of the process we're going through. They're aware of the time frames we're working with."

In the US Compaq is already selling direct but this market has totalled only a small percentage of sales, according to Pfeiffer. "Only 10% is mail-order direct or phone direct," he says. "In the first part of the year 70% of all PC sales were indirect."

Pfeiffer's comments come in the wake of Compaq's recent problems with inventory glut in the US as it went through the process of reconfiguring its distribution system to a build-to-order model. "Competition has changed and the market has changed, and this is a better way to handle customers' business," he says.

"Dealers will no longer be able to have the inventory they used to have because the cost of holding it is too high.

"We are now tailoring to customers' changing needs. Where we bid for a large contract we are obviously bidding down to a level where we want to go, giving customers the best price we are willing to give. Today we cannot refuse to do business the way a customer wants."

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