Tuesday, August 07, 2007

Assembled or branded

I scanned through my posts and found, amazingly, that I had never written about computers. Of course, I had written about Xenitis a long long time ago, but somehow I never wrote about the dynamics of this market.

I happened to read a post on how Taiwan is slowly discovering India - which is a good thing. About time we courted Japan too, but thats for later. One thing led to another and I was thinking about why branded PC sales are still lower (slightly dated) than assembled PCs. The great debate continues...and I saw a report today from Business-standard on how the assembled industry survives in the face of competition from the branded industry.

So, heres why the assembled computers still sell well in India. If I were a branded computer maker, I would try and attack these.

People dont like to hear tiered costs. The branded chap puts out an ad in the papers. PC's cost Rs. 25000 and you find out there that, really, all he is offering is a CRT. If you want to make it usable, you have to add something to it and the price naturally, goes up. By contrast, the assembled chap asks you over phone, what you want and gives you a complete price, more or less. So, those in the branded market, heres a tip. In your ad, quote the highest price for the fully loaded version first and reduce as the customer makes his choices. Try this!

Service. You got a problem, you call him up. He will come usually on the same day and fix it for you. (The flipside is also that the assembled chaps are notoriously difficult to get when it comes to servicing - many people do not realize this. Also, the branded chap is also not easy when it comes to servicing - he will give you a date 3 days later and not turn up too. So, servicing is an issue all over.) There is no better way here than, obvious, better customer service.

The assembled guy can reduce the cost still further by using used components or altered components. Some of them will tell you that, others wont. But, they are able to give assembled boxes at lower price points using these. So, for the organized chaps, create a seconds market here. With the upgrades of the affluent, you can sell more boxes downstream.

You want to upgrade? Feel free to exchange your old HDD for a new one and get a discount on the new one too. You got something you want to add- either do it yourself (the geek way) or call him. Make it easy folks. Let people upgrade whatever they want and help them do it, for a fee if you wish.

Now thats what appeals to families. If I were a geek, I want a free hand to do whatever I want with my machine. The assembled chap will not crib if you grow branches on your machine. Our first computer was operated upon almost daily and upgraded every few weeks till we were satisfied. So, that market is pretty much closed.

The other side of this, not written about, is piracy. Though today, the bigger assembled players do not offer you software as they used to earlier, they can, with a nudge and a wink give you any software you want, for free. Or he will point you to a place in a shady bazaar where you can buy all the software you want for the price of one DVD.

This is one market, where there is a really deep bottom of the pyramid to tap and nobody has tried it yet. Yes, it is messy, but who said it was easy.

3 comments:

Raj said...

"So, heres why the assembled computers still sell well in India. If I were a branded computer maker, I would try and attack these".

While you have been objective enough to present both perspectives, I really think this is a good story to inspire non-branded players to take on brands, with the caveat ,of course, that it should be done within the bounds of legality. Brands must be kept on their toes. Unless they are clearly preceived as delivering additional value, they should not be allowed to survive, let alone charge the premium.

Kavi said...

My first PC was an assmbled piece. The second one was a branded one. The brands must better use the comfort of security that their names bring along..

And, oh yes..in a way it is healthy too to have competion from all quarters..

Anonymous said...

if the 'assembled' ones are coming with hundreds of dollars worth of pirated software, how can the 'legal brand' company possibly compete?