HP’s STRATEGY TO COMBAT AFTERMARKET INK

[Anonymous]

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 .

[Author]

July 12, 2006 at 12:30 PM