HP FIGHTING INK RIVALS BY THE BARREL

[Anonymous]

HP Fighting Rivals Who Provide Third-Party Ink By The Barrel
Hewlett-Packard’s
most serious competition these days may not come from Dell or Xerox. It
might just be coming from third party ink cartridge suppliers who are
cutting into HP’s highly profitable supplies revenue.
Vince
Ferraro, vice president of worldwide marketing for the HP LaserJet
Business Unit, writes ……Have you noticed all of these printer
cartridge refiller businesses popping up in strip malls across the
country? You know, those places where someone uses a syringe to re-fill
an ink cartridge (almost sounds like an addiction) or where used toner
cartridges are opened and colored plastic is poured in. Many people
think they are saving a lot of money by buying remanufactured printer
cartridges. However, there are costs that these users probably haven’t
considered.Primarily, those costs are in quality, he writes: “Put in
another light, the cost of using remanufactured cartridges can be more
than just the price of the cartridge. Our printed output represents the
quality of our work and ideas. To have this output disparaged due
having the colors look wrong is hardly worth the perceived cost
savings.”But it’s those very cost savings — perceived or real — that
rivals are going right after. For example, a press release from a
company called OfficeSupplyOutfitters crossed the transom today.
OfficeSupplyOutfitters provides, among other things, unbranded or other
third-party toner and ink. Included in the press release (really more
of a marketing pitch than a press release) was this passage:”Compatible
brand toner cartridges and inkjet cartridges are a great savings for
any consumer and are now becoming a mainstream purchase,” says Mike
Gardner, the company’s president . “A decade ago it was a ‘build it in
your garage’ business and the quality of your generic toner cartridge
would be questionable at best. Now, publicly held companies are
manufacturing these cartridges by the millions and with the same
quality controls employed by the first party toner andinkjet printer
manufacturers.”Visit a Walgreens, Staples or Office Depot and you will
find their generic brands right next to the first party brands. Next to
an HP brand toner cartridge you may see an Office Depot brand
cartridge. Having the office supply superstores endorsing compatible
toner and ink products provides a tremendous amount of validity to the
compatible lines, says OSO.Ferraro didn’t mention it in his item, but
solution providers have said that they’ve found luck and
differentiation through HP’s Scalable Printing Technology, which it
rolled out almost a year and a half ago and which, HP contends,
introduced Moore’s Law to print head technology. The technology and
consulting tools have helped them make an ROI argument to customers,
convincing them in many cases to stay away from third-party ink.

[Author]

November 16, 2006 at 12:29 PM