With more than 30 years of experience in the distribution of semiconductors and electronic components, Ramakrishna Electro Components (RK Group) has emerged as one of the reputed firms in the industry. Rathindra Kumaar, country manager, Ramakrishna Electro Components, who has recently joined the company, talks about the current trends in channel distribution, the firm’s marketing strategies, the challenges it faces and its growth, in a tête-à-tête with Richa Chakravarty of Electronics Bazaar.
Tuesday, December 11, 2012: EB: What are the current trends in channel distribution in India? And what are the trends you foresee in the near future?
Looking closely at the channel distribution chain, the latest trend prevailing in the market is to encourage and provide value added services, thereby bringing buyers and suppliers close together as possible. Also, besides big distributors and channel partners, suppliers are also looking for value added resellers (VAR) and independent design houses (IDH) to serve the buyer closely. Lastly, there is a major focus and thrust on serving small and medium enterprises (SME) as this segment accounts for a significant share of the manufacturing industry. I foresee that these trends will continue for some years.
EB: Today, everyone wants to grab the SME pie. How are opportunities shaping up in the SME sector?
Indian SMEs have a significant share of the industry and hence it is no surprise that the trend is to focus on them. The reason is simple—the SMEs are doing well and have an outstanding output, especially in the field of consumer and power related equipment (such as home inverters, UPS systems, lighting products, audio products, etc). There is an opportunity in every field, and distributors are making the most of this by converting new concepts into affordable reality with the help of their principals. Talking of new concepts and initiatives, we have recently set up a fully equipped lab with qualified and experienced application engineers to offer nearly productionable reference boards to support the industry.
EB: How do you enable your channel partners to make use of these opportunities?
We believe channel partners are an extension of our own firm, and we enable them by linking them to our servers and manpower resources to have real time information on stocks and prices. We also offer training by our technical experts on new products.
EB: What other marketing strategies do you apply to keep yourself ahead of the competition? What value addition do you do to push the products off the shelf?
Our marketing strategies are very simple, yet unique. Our aim is to be always close to our customer base and provide a perfect solution whenever a customer looks for an answer. We follow a three point marketing and sales strategy. With respect to marketing, our strategy is to first expand our business within the active customer base. Second, we have a dedicated accounts manager for customers who need technical resources for significant mid to long term returns. Finally, we drive business through segment focus and follow signal chain theory to cover maximum bill on material (BOM) coverage. Also, we are making reference boards to address entire segments with more than one customer. Our sales strategy is to offer services both in the Indian currency and the US dollar. We offer flexible commercial terms in business, and our retail outlets help in catering to a larger market to leverage maximum benefit.
EB: What kind of growth do you expect this year and what are the segments that have emerged as the primary drivers for it?
In spite of the global slowdown, we expect to grow 20 per cent year on year. Segments like power electronics, digital consumer electronics, automotive and renewable energy are driving the growth of our business.
EB: What type of incentives do you have for your channel partners, particularly the small and medium traders?
We ensure that our channel partners grow with us. We provide numerous benefits to them. We offer turnover discounts and also special benefits for value added contributions.
EB: In terms of business expansion, are you looking for more channel partners? How can a channel partner find you?
We are open to any kind of resources that help to expand business. Apart from Delhi, we have our own regional offices in Pune, Mumbai and Bengaluru, along with resident offices in Baroda, Chennai and Hyderabad. We are also planning to open offices in Kolkata, Cochin and Ahmedabad. So, channel partners who want to do business with us can easily locate us through these offices and also through our website. We also advertise in magazines.
EB: How do you choose your channel partners? What is the procedure?
In a nutshell, when we are in the process of selecting a channel partner, we look at his background, relevant experience in the distribution field and his keenness to grow with us. It is essential that a channel partner adds value to the business and services offered, and eventually catalyses the business to grow. If both sides do not think similarly, the partners cannot travel together too long. Hence, there has to be a relationship based on trust and transparency.
EB: What type of challenges do you face with respect to your channel partners? How do you resolve them?
In a cost sensitive market like ours, our bigger challenge is to educate buyers and channel partners. Suppose a buyer approaches us for a component and we are able to provide him with the complete circuit, it is necessary for us to educate the buyer about the price advantage he can enjoy, along with required specifications. The bigger issue is to understand a customer’s intentions and educate a buyer about what we can offer. Hence, the challenge is to educate a buyer about the right product, right planning, competent buying and the right price in order to make a project competitive. Apart from this, buyers need to follow a certain discipline when judging a component and not do so just on the basis of price. They should consider quality and specifications as well.
EB: What are the key strengths and weaknesses of any national and regional distributor?
As far as national players are concerned, they are financially strong and have vast experience in handling big customers in terms of finance, delivering large volumes and in holding stocks, while regional players service specific regional requirements, with their small quantities and local deliveries. Regional players have an advantage as they can cater to individual customers, but national players have to go through their channel partners and cannot directly connect with local customers. However, national players have better resources and expertise, which regional players may or may not have.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine
