HP talks chop in bid to restore value to channel

Distribution Partners face axe as vendor develops channel marketingprogrammes

Hewlett Packard is wielding the axe over its European distributors and resellers in a desperate attempt to relieve criticism that its products are over-supplied.

Speaking to PC Dealer last week, Jos Brenkel, European marketing manager of the HP personal systems group, said it was not enough for distributors to reduce costs through improved logistics, because this further reduced margins. He warned that an unspecified number of distributors which operate in this manner will be reduced over time.

HP has previously stated that its channel must focus and bring value to specific areas of the supply chain or face the chop.

Through three channel marketing programmes, HP wants its distributors and large corporate resellers to bring value by excelling in one or more elements from finance and administration, logistics, configuration, sales and marketing and services. 'We will kill our industry if we only focus on cost. We have to focus on strategic value too,' added Brenkel.

HP has established a channel assembly programme (CAP), a support-based sales initiative called Vendor Express for partners unable to configure, and an Economy Models programme, which requires volume commitment and is directed at its two-tier partnerships. The latter two will be introduced by the end of next year.

The assembly programme has already taken off in the UK. It has been implemented by Northamber for the last nine months and Computacenter will be signed up in February 1998.

'Dell has made us revisit the supply chain,' Brenkel conceded. 'In the past, our inventory management has been our failing. We have suffered because we have either had the wrong product in the channel or because we couldn't meet the demand.'

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