Writankar Mukherjee, Kolkata, October 20, 2008
The Economic Times (Bangalore edition)
Anticipating a rub off of the present financial crisis on Indian consumer sentiments, Lenovo India has started taking several cost cutting initiatives to drive efficiency in the organisation. The PC major intends to pass on such greater cost benefits to its consumers — both retail and enterprise segment — to drive sales beyond the market growth rate.
Lenovo India has started cutting down on the administrative expenses, and expenses related to travel and conference. “We are evaluating other areas to drive efficiency. Such cost savings will be passed on to our customers by reducing the product price. However, we are yet to decide the final details,” Lenovo India country manager (marketing) S Prasanna Rai said.
Incidentally, the Indian PC market has already seen some impact from the slowdown. Even research firm IDC has forecast that PC sales growth this year will slow down to 10% compared to 20% in 2007. Industry circles claimed that while desktop sales have been growing at a modest 4-5%, the sale of laptops has recently slowed down from 80% to 50%. “We have set a goal to grow at a higher pace than the market growth rate. Though we are yet to see an impact on our sales, consumers are likely to postpone their purchase decision. Even enterprise segment clients may reduce their IT spending. We will have to offer a greater value to the consumers,” said Rai.
As a result, Lenovo is now offering three years extended warranty on all its products as well as bundling free IT peripherals. The company has just launched a new line of notebooks where it has lowered its entry-level laptop price from Rs 29,000 to Rs 21,000. “The new range of entry-level laptops are based on the new Intel Atom processors,” said Rai.
Lenovo is also going to fine-tune its marketing strategy. It spends around 65% of its budget on advertising related efforts and the balance 35% on below-the-line promotional activities.
0 comments:
Post a Comment