HP’s STRATEGY TO COMBAT AFTERMARKET INK

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HP’s STRATEGY TO COMBAT AFTERMARKET INK

 user 2006-07-12 at 12:30:00 pm Views: 66
  • #16160

    HP’s Strategy to Combat Aftermarket Vendors in Emerging Markets
    To
    combat the erosion of its supplies revenue in emerging economies, HP
    has launched a new line of low-priced cartridges that it calls “Simple
    Black.” The firm’s strategy is to offer cartridges at two different
    price levels in emerging markets. HP tested the concept in the Chinese
    market last year, and it officially launched Simple Black cartridges
    for emerging markets such as China, India, and Sri Lanka on May
    31.Until now, aftermarket brands were the only option for consumers who
    wanted an inexpensive cartridge for basic black-and-white printing.
    HP’s Simple Black cartridge closes the gap between OEM and aftermarket
    ink pricing. For instance, in China, a remanufactured HP 816 cartridge
    typically has a street price between 60 and 80 yuan ($7.50 and $10).
    Comparatively, the HP 816 Simple Black cartridge is priced between 95
    and 110 yuan ($12 and $14), which is about 50 percent more expensive
    than the HP 816. Both the remanufactured cartridge and HP’s Simple
    Black cartridge use a dye-based ink. In contrast, the pigment-based P+
    HP 816 cartridge (135 yuan, $17) is more than twice the cost of a
    remanufactured cartridge and three times the cost of a refill kit
    .