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 user 2009-03-17 at 11:18:00 am Views: 66
  • #21862

    Lexmark to pursue superstore customers
    International will announce Tuesday that it is dramatically expanding
    its lineup of printers at office superstores Staples, Office Depot and
    OfficeMax.The Lexington-based company will nearly triple the number of
    printers for sale compared to six months ago at the three
    chains.Lexmark says all three cater to exactly the type of customer it
    wants: small businesses that print a lot.The announcement comes at a
    critical time for the only Fortune 500 company, which has its
    headquarters in Lexington, because it was recently dealt a blow by the
    shutdown of Circuit City.It’s also a critical year for Lexmark in the
    eyes of analysts, who have expressed skepticism about the long-term
    viability of its inkjet printer division.Tom Carpenter, who follows the
    company for Hilliard Lyons in Louisville, said that this year, “the
    writing could be on the wall” for the company’s inkjet division without
    a large increase in shelf space at major retailers, particularly office
    superstores where small and medium-size businesses shop.

    into those stores is another step in a turnaround plan begun after
    Lexmark’s inkjet division began to struggle in the latter half of 2005.
    The company found it was selling printers to consumers who didn’t print
    enough. Since inkjet printers are often sold at a loss, printer makers
    rely on sales of ink to make their profits.Since 2006, Lexmark has
    walked away from 20 percent, and then 30 percent more, of its inkjet
    printer sales, in an attempt to focus its new strategy on consumers,
    such as small businesses, that use lots of ink.”As someone’s going
    through their normal workday … they are having to print to
    communicate, to generate reports, to share information and more,” said
    Todd Hamblin, vice president of worldwide sales and marketing for the
    inkjet division.

    Carpenter has said that he would like to see
    Lexmark offer at least three to five models in each office superstore
    to give those consumers a good selection, a benchmark that Lexmark has
    now achieved.On the added shelf space, Lexmark will be offering
    higher-end products that offer features such as dual-sided printing and
    wireless functionality, Hamblin said.For instance, at Staples the
    printers will range in price from $150 to $400. Lexmark’s offerings at
    that store used to cost anywhere from $79 to $250, he said.The company
    will also sell more laser printers at those stores, where it previously
    sold mainly inkjets.Lexmark is also expanding its presence at some
    other stores nationally, including regional consumer electronics chains
    Fry’s and Micro Center. Neither has locations in Kentucky.

    most small-business customers shop at office superstores — about twice
    as many, on average, than at other types of stores, Hamblin said — the
    electronics stores help build awareness of Lexmark and grab individual
    consumers.The company has not yet been able to get back into Best Buy
    after the chain took its printers off the shelves last year and decided
    to sell them only on BestBuy.com. Hamblin said the company is
    constantly working to expand its relationship with all retailers.He
    noted that Best Buy has reduced the space it allots in stores for
    printers after the economy contributed to a decline in sales for the
    category.Lexmark has focused on smaller consumer-electronics chains
    such as Fry’s, to expand distribution. This strategy has been in place
    since last year, when it became apparent that Circuit City would close
    some stores and might close completely.

    Lexmark has
    traditionally sold most of its inkjets at mass-marketers such as
    Wal-Mart and Target, and those stores will continue to play a strong
    role. Hamblin wouldn’t say the amount of sales that come from that type
    of business, but he said it is higher than the industry average of 30
    percent to 40 percent.

    Those retailers will be shipped more
    higher-end printers, too, Hamblin said, in hopes that Lexmark can sell
    those to small business customers who might be in smaller towns where
    there are fewer retail options.”Our goal is to attract that
    small-business and home-office customer wherever they’re shopping,”
    Hamblin said.Another key initiative, he added, is that Lexmark has
    hired more regional sales teams to go to stores and educate employees
    on the benefits of Lexmark printers.Analysts like Carpenter have long
    said that Lexmark salespeople don’t visit stores enough.”The perception
    among many salespeople is Lexmark is cheaper, but it costs way more to
    print than an HP,” Carpenter said.Hamblin said Lexmark is finding
    stores receptive to meeting with the salespeople.

    Lexmark expansion
    will announce Tuesday that it is dramatically increasing the number of
    printer it sells at these retailers. (Comparison numbers are from six
    months ago.)

    Staples: Seven (four inkjets and three lasers), up from two.
    OfficeMax: Nine (five inkjets and four lasers), up from six.
    Office Depot: Six (four inkjets and two lasers), up from zero.
    InkStop: Eight (seven inkjets and one laser), up from about five.
    Micro Center: Five inkjets, up from zero.
    Fry’s: Nine (five inkjets and four lasers), up from zero.