*NEWS*HP’s STRATEGY TO COMBAT AFTERMARKET

[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 12:29 PM