Canon and Compaq Make Strong Comeback in Printer Bundling Market.LA JOLLA La Jolla (lə hoi`yə), on the Pacific Ocean, S Calif., an uninc. district within the confines of San Diego; founded 1869. The beautiful ocean beaches, in particular La Jolla shores and Black's Beach, and sea-washed caves attract visitors and , Calif.--(BUSINESS WIRE)--July 6, 1999-- Canon and Compaq (Compaq Computer Corporation, Houston, TX, www.compaq.com) Compaq was the leading PC manufacturer when it was acquired by HP in 2002. Founded in 1982 by Rod Canion, Jim Harris and Bill Murto, one year later the company shipped 53,000 PC-compatible COMPAQ Portables, resulting in $111 have stormed back to take the lead in a market that is proving to be the most effective selling tool in the printer industry -- PC/printer bundling. A bundle is a promotional tool used by retailers to attach a printer with a PC and monitor system and sell the "bundle" as a complete package. "During the first quarter of 1999, Hewlett-Packard See HP. Hewlett-Packard - (HP) Hewlett-Packard designs, manufactures and services electronic products and systems for measurement, computation and communications. The company's products and services are used in industry, business, engineering, science, medicine and and Lexmark (Lexmark International, Inc., Lexington, KY, www.lexmark.com) A manufacturer of desktop and network printers that was spun off from IBM in 1991. For five years, IBM and Lexmark agreed not to compete with each other, and IBM continued to market printers to its own mainframe and owned nearly 90% of the printers being offered through bundles," stated Huyen Pham, Printer Analyst for ARS ARS In currencies, this is the abbreviation for the Argentine Peso. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. Inc. "Now, however, Canon and Compaq have reclaimed re·claim tr.v. re·claimed, re·claim·ing, re·claims 1. To bring into or return to a suitable condition for use, as cultivation or habitation: reclaim marshlands; reclaim strip-mined land. over half of that market." Canon and Compaq's success in printer bundles can be credited to a number of different tactics including promotional mail-in rebates, owning the complete PC bundle package, and direct retailer incentive rebates. "Rebates have become vital in the printer market," claimed ARS Printer Analyst Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Peterson. "Retailers primarily determine which products are grouped together in a PC/printer bundle. Through rebates, retailers are able to advertise these bundles at a very low price to draw in customers and then achieve large register totals by charging pre-rebate prices. Naturally, retailers would rather sell a $99 printer with a $50 rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. than a $79 model with a $30 rebate." Canon has recently launched a wide array of PC bundle related rebates in an effort to gain retailers favor. Compaq, however, is using a similar strategy that HP has used in the past -- own the entire PC bundle. Compaq offers its own branded PCs, monitors, and inkjet printers A printer that propels droplets of ink directly onto the medium. Today, almost all inkjet printers produce color. Low-end inkjets use three ink colors (cyan, magenta and yellow), but produce a composite black that is often muddy. to retailers as a complete bundle package. By offering a "vertical PC bundle," Compaq has more leverage in terms of pricing, cooperative advertising costs, and placement. Finally, the most recent and effective means manufacturers are using to push their products into printer bundles are direct incentive rebates. These rebates, ranging from $8 to $10, are given directly to retailers for each printer unit sold through a bundle. "Retailers have indicated that Canon has been very aggressive with direct rebates," Peterson indicated. "PC/printer bundles have become critical to the printer industry and evidence of this is shown through these types of aggressive tactics manufacturers are using to push their products to the end-user." ARS has been providing a weekly report to PC, monitor, and printer manufacturers summarizing the PC/printer bundle market for over five years. This report includes information about which products resellers are offering through bundles and provides a monthly graphical breakdown of PC and printer vendor bundle share. ARS Inc., founded in 1987, is the PC Industry's most comprehensive source of competitive market intelligence on products, price and margin trends, marketing activity, promotional campaigns, and sales channel dynamics. Competitive tracking information from ARS is utilized by over 150 leading industry manufacturers and resellers worldwide to make strategic and tactical sales and marketing decisions in the areas of personal computers, printers and supplies, networking, imaging, and display/monitors. Headquartered in La Jolla, Calif., ARS also has regional offices in Dallas, Silicon Valley, and Japan. More information about ARS and its services can be found at http://www.ars1.com. |
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