CERTIFICATE<br />444576227024<br />This is to certify that the Summer Project entitled “Research Study of Channel Partners at Quickheal Technologies- Evaluation of Channel Strategy and Channel Conflict.” carried out at Quickheal Technologies Ltd., Pune has been submitted by Dr Matin Raje, a 1st year MBA++ (Marketing) student of The Department of Management Sciences (PUMBA), University of Pune, towards the partial fulfillment of the requirement for the award of the Masters in Business Administration (MBA++) and the same has been satisfactorily carried out under the guidance of Mr Hemant Katole during the academic years 2008 – 2010.<br /> Mr. Hemant Katole External Examiner Dr. Capt C M .Chitale Project Guide Head Of Department (Lecturer PUMBA ) D M S ( PUMBA )<br />PUNE UNIVERSITY<br />BONAFIDE CERTIFICATE<br />Certified that this project report “Research Study of Channel Partners at Quickheal Technologies- Evaluation of Channel Strategy and Channel Conflict” is the bonafide work of “DR MATIN RAJE” who carried out the project work under my supervision. <br /> Mr. Hemant Katole External Examiner Dr. Capt C M .Chitale Project Guide Head Of Department (Lecturer PUMBA ) D M S ( PUMBA )<br />Research Study of Channel Partners at Quickheal Technologies Evaluation of Channel Strategy and Channel Conflict.<br />A PROJECT REPORT<br />Submitted by<br />Dr Matin Raje<br />Roll NO. 8308<br />NAME OF THE GUIDE<br />Rajesh Pahurkar<br />In partial fulfillment for the award of the degree<br />Of<br />MASTER OF BUSINESS ADMINISTRATION<br />In<br />MARKETING<br />DEPARTMENT OF MANAGEMENT SCIENCES<br />PUNE UNIVERSITY<br />MAY 2008-10<br />ACKNOWLEDGEMENT<br />I express sincere gratitude to Mr. Jagannath Patnaik (Vice President, Sales and Marketing) for giving me the opportunity to work with Quickheal Technologies and for his extensive guidance.<br />I would like to put forth my earnest thanks to Mr. Rajesh Pahurkar for providing me with vital inputs to co-relate the present project work with the theoretical concepts and hence provide a sound base to the report structure.<br />I would also like to thank Ms Sailee Phirke (Marketing Co-ordinator, Quickheal) for her valuable support.<br />I am extending my thanks to all those who have helped me, directly or indirectly, in completing the project work.<br />I hope that I have been successful in my endeavor. Discrepancies and mistakes, if any, are solely mine.<br />Dr Matin Raje<br />Department of Management Sciences (PUMBA), <br />University of Pune.<br />CONTENTS<br />SR NO.TITLEPAGE NO.Certificate from the OrganizationCertificate from the InstituteAcknowledgement1Executive Summary12Objectives of the Study33Company Profile84Overview of Antivirus Industry and Competitors185Channel management and channel conflict286Research Methodology347Research Analysis368Findings and Conclusion519Recommendations5310References5511Annexure- Questionnaire56<br />223198212393<br /> <br /> <br />Quick Heal Technologies is the leading provider of Anti-Virus and Internet Security tools and is leader in Anti-Virus Technology in India. A privately held company, Quick Heal Technologies Pvt. Ltd. (formerly known as Cat Computer Services (P) Ltd.) was founded in 1993 and has been actively involved in Research and Development of anti-virus software since then.<br />Serving more than million users worldwide, Quick Heal Technologies employs more than 200 people in sixteen branches and its headquarters is in Pune, India. <br />Quick Heal an award-winning anti-virus product is installed in corporate, small business and consumers' homes, protecting their PCs from viruses and other malicious threats.<br />Quick Heal Technologies was formed for catering the demand of highly reliable anti-virus software, which would successfully tackle the growing number of virus problems. <br />Objective :<br /> The primary objective of the project was a research survey of channel partners of Quickheal Technologies regarding overall marketing channel strategy. perception of channel partners regarding the antivirus products offered. Along with that understanding the key drivers for motivating channel partners, evaluating various marketing and sales programs of Quickheal Technologies and determining if Channel conflict is present were the secondary objectives.<br />Research methodology : <br />A market research of 50 channel partners was conducted mainly in Pune region. <br />A questionnaire was prepared so as to systematically extract information regarding the objectives of the study. Sampling Technique was used for determining the targets and Interview method was used to fill the questionnaire. This is in fact, known as Schedule technique.<br />Relevant conclusions and findings were drawn from the facts collected.<br />Major Findings : <br />
Quickheal antivirus is perceived as a good product regarding quality and service offered.
Marketing channel strategy is satisfactory but there is room as well as need for improvement.
Satisfaction level of channel partners although good needs to be maintained well, as competitors are gaining ground.
Minimal level of channel conflict is present and if addressed positively can strenghthen the channel further.
<br /> <br />Suggestions and Recommendations :<br /> <br />
The Quality aspect should be maintained as it is the mainstay of Quickheal’s popularity.
The pricing of Quickheal products needs to be reviewed as local players as well as some international brands have revised prices and are providing stiff competition. In the Indian scenario price is the most important factor regarding purchase decisions.
The Marketing and Promotions done by Quickheal are good but can be more fine tuned according to channel partner’s expectations.
Small and exclusive dealers should be supported regarding the price disadvantage they face against major partners.
I am glad to mention that Quickheal products have huge scope in Indian as well as international markets as the products have unprecedented Quality features which will make them succeed in the future.<br />7620066675<br />Primary objective<br />The primary objective of the project was a research survey of channel partners of Quickheal Technologies regarding overall marketing channel strategy.<br />Secondary Objectives<br />1. Studying the perception of channel partners regarding the antivirus products offered.<br />2. Evaluating the marketing effectiveness focusing on various aspects like price, promotions and profitability.<br />3. Understanding the key drivers for motivating channel partners.<br />4. Determining the inclination of channel partners towards future support to Quickheal.<br />5. Analyzing prominent competitors and taking into consideration the views and suggestions from channel partners regarding major market forces.<br />6. Evaluating various marketing and sales programs of Quickheal Technologies and compare effectiveness.<br />7. Determining if Channel conflict is present and the reasons behind it along with possible solutions.<br />Reasons and benefits of the study- A Detailed view<br />The reason behind selecting the research subject and specific purpose will be clear on going through the excerpts from CRN magazine of 2007 and 2009. You will find them on the next page. What is important to note is that the magazine rates the Antivirus players on various aspects like Price-Performance, Marketing and Branding, etc and the most important being Channel Relationship.<br />Quickheal has dismantled Symantec from the numero uno position and channel strategy plays a very important role here. All Antivirus companies rely on channels as the link to customers and hence the marketing channel strategy makes or breaks the future of the company.<br />Here we see that Symantec is well ahead in the race and also that Quickheal is catching up.<br />I would like to draw your attention to the comment regarding channel relationship- <br />The next two years changed the scenario for Quickheal due to the above strategy.<br />Here although Quickheal seems to be the winner regarding Channel relationship the need of the hour was to keep the good work going and finding out any issues remaining and the overall perception. Fortifying the marketing channel strategy and perfecting it when the going was good seemed to be a good idea. Hence the research was undertaken.<br />The external and internal business environment is dynamic and ever changing especially competitor strategy. It was necessary to gather this data from channel partners as they were the most important and practical source.<br />066675<br />Overview<br />Quick Heal Technologies is leading provider of AntiVirus and Internet Security tools and is leader in Anti-Virus Technology in India. A privately held company, Quick Heal Technologies Pvt. Ltd. (formerly known as Cat Computer Services (P) Ltd.) was founded in 1993 and has been actively involved in Research and Development of anti-virus software since then.<br />Serving more than million users worldwide, Quick Heal Technologies employs more than 200 people in sixteen branches and its headquarters is in Pune, India. <br />Quick Heal an award-winning anti-virus product is installed in corporate, small business and consumers' homes, protecting their PCs from viruses and other malicious threats.<br />Quick Heal Technologies was formed for catering the demand of highly reliable anti-virus software, which would successfully tackle the growing number of virus problems. <br />Quick Heal Technologies (P) Ltd. was founded by Mr. Kailash Katkar and Mr. Sanjay Katkar in the year 1993.<br />Global Perspective<br />In more ways than one, Quick Heal Technologies today has gained a position of strength and credibility on the Antivirus map of the world. It is, for the company, the dawn of a new perspective, no longer confined to domestic industry leadership but signifying the emergence of a global institution with the caliber and competence that global presence demands.<br />What this means is a disciplined and dedicated effort to surpass levels of excellence the company has achieved in the past; it means bench-marking the merits of some of the most successful companies in the world; it means having to position one’s product in line with some of the best available in the international market place. It is this task that the people at Quick Heal Technologies, have worked hard to achieve, shaping the skills at their disposal to attain world standards – right from the software engineering and quality assurance processes to products that excel in performance; from effective communication and promotion to widespread networking and successful marketing strategies; from inspired employee culture and innovation to good corporate governance.<br />In more ways than one, they have taken to the world order and it is for them now to seek and cross frontiers that have never been attempted before!<br />lefttop<br />PRODUCT RANGE<br />0-238125<br />What resides in your PC? Virus? Or Quick Heal?' So runs a commercial from Quickheal on FM radio. The radio may be an unusual but effective medium for an anti-virus company to create brand awareness. <br />As India emerges as one of the fastest growing markets, the battle among anti-virus companies, dominated by the multinationals, to grab a slice of the market is becoming intense, reminiscent of the cola wars of the mid 90's. <br />Anti-virus (AV) software has so far been dominated by a clutch of multinational companies, Symantec, Kaspersky and Trend Micro. But some domestic vendors have also entered the fray, such as Quickheal Technologies Pvt. Ltd from Pune and K7 Computing Pvt. Ltd from Chennai. <br />Increasing IT adoption <br />A key driver of anti-virus ware is the massive computerization and increasing telecom density in the country. By global standards, India's computer penetration is still low. So is telecom density. PC penetration in India is barely about 2 per cent of the population. Mexico's PC penetration, for instance, is about 47 per 100 and for Russia, it is about 15. <br />As for telecom density, despite the phenomenal increase in the telecom network, density is about 9 per 100 people. The comparable figure for China is 52 and the Asian average is 14. <br />Says Diptarup Chakraborti, principal research analyst at Gartner, "
Increased IT adoption in enterprises — government and corporate sectors — and rising PC penetration have created awareness about the need for anti-virus ware."
<br />Moreover, as Internet usage grows, and with more people accessing the Net for online transactions, the need to protect data is being felt more keenly. <br />CERT figures <br />That the virtual environment is clearly not fully secure is apparent from data from the Computer Emergency Response Team (CERT), the electronic security arm of the Government. In March this year alone, 47 security incidents were reported to CERT-In from various National/International agencies. <br />About 73 per cent phishing(the act of tricking someone into giving confidential information or tricking gullible users into doing something that they would not or should not do. For example: sending an e-mail to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft) incidents were reported. At least 4 per cent of the incidents related to virus/worm under the malicious code category and 23 per cent of unauthorized scanning incidents were reported. <br />As compared to the previous month, the number of virus/worm incidents has decreased while scanning and phishing incidents have increased. "
This, is turn, is driving the anti-virus ware market,"
Chakraborti says. <br />Riding piggyback <br />Also, anti-virus software is riding piggyback on personal computer (PC) sales. High-end PCs costing upwards of Rs 35,000 come with anti-virus software in their pricing. Further, laptops are being bundled with pre-installed anti-virus ware. As sales of PCs and notebooks picks up, anti-virus ware also sees a proportionate increase in sales, says Chakraborti. <br />Split Along 2 levels <br />Broadly the anti-virus market could be split along two levels. The Enterprise Market (government, corporate users — financial institutions, petroleum and manufacturing entities) and retail PC users. <br />The secure content market in India is estimated to be around Rs 200 crore. IDC India estimates that the market could grow to Rs 480 crore by 2008, or by about 140 per cent in a year's time. <br />But Cyber Security Expert Subimal Bhattacharya says, "
This figure does not factor in the grey market."
The grey market or pirated software market is estimated at about four times this figure. <br />Secure content management covers anti-virus protection, messaging security/e-mail filtering and Web content management/Web content filtering components. Antivirus alone is estimated to contribute 75 per cent of this segment. Inclusive of enterprise networks, anti virus ware markets could grow to over Rs 1,000 crore, says Bhattacharya. This could happen by 2009 as financial institutions, and corporate ventures across the length and breadth of the country increasingly begin resorting to IT-driven applications. <br />Besides, another major drivers are the e-Governance projects of governments and local bodies in the country. "
Financial inclusion alone will be a key catalyst for the explosion in the anti-virus ware market,"
says Bhattacharya. <br />This year itself, markets are expected to grow by at least another Rs 75 crore for the organised sector or enterprise networks. It is for this market that both global and domestic companies are in the slugfest. <br />From the consumer market perspective, users appear to prefer original anti-virus ware. A good portion of the sales are accrued from Net downloads. <br />As in the US, users in India too prefer to download anti-virus ware, especially for the updates. Downloads, says Chakraborti, have been on the rise in the past four to five quarters. <br />Symantec and Trend Micro of the US are dominant players in the Indian market, at least for now. These two, along with McAfee, are focused on the enterprise markets completely, and enjoy a head start. <br />But smaller players have raised the pitch and competition is likely to become more intense in the coming months as they wrestle with global companies for space in the high-value enterprise markets, particularly e-Governance and financial institutions. <br />Upgrading offices <br />The competitive environment has prompted the global companies to upgrade liaison offices into full-fledged subsidiaries or operate through tie-up arrangements. Trend Micro's liaison offices in India have been upgraded into full-fledged subsidiaries. Symantec also has a fully-owned domestic operation. <br />Trend Micro's country manager, Niraj Kaushik, says, "
By the end of 2007, we plan to more than double our current headcount of 20 professionals. We have had 100 per cent growth year-on-year in India since inception and we expect the growth to continue at the same pace over the next couple of years."
Symantec has opened response centres in Pune and Chennai. <br />Kaspersky, a Russian anti-virus company, has tied up with the Hyderabad-based Zoom Technologies for researching and monitoring virus traffic. <br />Despite the presence of domestic players in the anti-virus ware market, Bhattacharya says, "
The enterprise network markets will continue to be dominated by big multinational companies such as Symantec."
<br />Says Symantec's India managing director, Vishal Dhupar, the "
Indian security market has traditionally been driven by the enterprise segment. India has been and continues to be a very important market for Symantec. We have packaged Symantec's offerings for the Indian market in a manner that enables customers to opt for one module at a time. This makes it easy for them to adopt new technology and upgrade it at regular intervals within their IT budgets."
<br />Further, Symantec believes that many opportunities in India have still not been optimised. <br />SMBs, small cities beckon <br />Hence, not surprisingly, it is the small and medium business (SMB) units or micro enterprise networks that companies such as the Pune-based Quickheal are focusing on, clearly aware that they may not be in a position to compete with transnational companies. <br />As in the cola wars, domestic vendors are targeting tier-two and three cities. <br />Says J Prasanna, Joint Secretary, Cyber Society of India, "
Smaller companies need better product features such as hijack restore, generic root kitdetector, and native boot cleaner, to clean infected machines and privacy tools when compared to larger companies. They also need to concentrate on smaller towns where the actual PC explosion is taking place."
<br />Quickheal has already got its products certified by West Coast Labs for Checkmark Level II certification and won the Virus Bulleting 100 per cent award 17 consecutive times for its anti-virus ware. <br />K7 has obtained checkmark Level I and Windows Vista certified from Microsoft, the only Indian anti-virus ware company to do so. <br />The certifications indicate that Indian companies are not content with being just vendors to domestic SMBs for sustaining growth. Instead they are preparing for global forays. <br />Quickheal has already aggressively pitched for the SMB segment in tier-two cities that are beginning to ride the computerization boom. Quickheal’s director, Sanjay Katkar, says, "
We derive close to 90 per cent of our sales revenues from these cities."
<br />Price sensitivity factor <br />The SMB and non-metro focus of domestic players is also largely driven by price sensitivity. Quick Heal, for instance, has been priced as low as Rs 500, though the fully loaded package that includes firewalls, anti-spam and anti-spyware is priced upwards of Rs 2,500. None of the MNC products however, is priced anywhere close to the domestic vendors. In fact they are priced at a substantial premium. <br />Yet MNCs are also not prepared to lose out on the SMB markets. The SMB sector is the fastest growing market, presently. Estimates are that 44 per cent of the total IT spend or a mind-boggling Rs 26,100 crore (about $7 billion) comes from the SMB segment.<br />Says Kaushik, "
We are now moving towards further expanding our market. This is happening with more focus towards SMB space products, which are both cost-effective and maintainable, issues most relevant to them."
<br />Price engineering, therefore, is the game played by MNCs to gain a foothold in the SMB markets. MNCs offer package deals in the form of perpetual contracts. These contracts allow for high-priced initial purchases with free downloads at periodic intervals. Alternatively, the pricing is worked by low prices initially, though there are no free downloads. <br />For positioning themselves in the market, MNCs have entered into direct arrangements with hardware makers, converting their anti virus wares as part of the original equipment. Accordingly this status allows the PC or the SMB server buyers to also purchase the anti-virus ware prices to be loaded into the hardware prices. <br />However, the MNC arrangements work well only with branded PC makers. The price-sensitive tier-two and tier-three markets are more dominated by assembled hardware. Aiming for these markets requires a different channel. <br />Quickheal uses retail chains for accessing these price-sensitive customers and focusing largely on these smaller cities/towns. <br />Clearly there is market segmentation taking place, though this could very well be a prelude to consolidation — as in the case of the cola wars!! <br />Major Players<br /> <br />Net Protector<br />Analysis of Antivirus Industry – A Marketing Perspective<br />The Antivirus industry belongs to the high tech products pertaining to IT industry.<br />These products have some peculiarities which have to be considered when marketing of these products is contemplated.<br />Moreover instead of just providing data on the antivirus industry it would be imperative to analyze those peculiarities as they would be helpful in determining the strategy for efficient marketing.<br />Following are the major peculiarities of Antivirus products<br />1. Shorter product life cycle<br />Antivirus products are characterized by a short product life cycle curve. Such products typically go through the life-cycle stages in shorter periods of time compared to an ordinary product. Thus the sales volume of a particular product category will peak within a short interval of time before descending in an equally short period of time. This is in fact a reflection of the constant technological changes that characterize Antivirus products. Though incremental in nature, such continuous technological changes “shrink” the product life cycles considerably for specific models. <br />2. Greater risk of discontinuous change in product technology.<br />While incremental changes occur almost regularly among Antivirus products, they are also more prone to radical and discontinuous technological changes than ordinary products. A discontinuous change is explained as one that will create a total change in the consumption patterns, customer profile etc. Such changes are considered as competence destroying, as the existing knowledge becomes inadequate to develop and market the new product categories. Antivirus products may become technologically obsolete within short periods of time due to a greater possibility of discontinuous change occurring in the product technology domain. Several authors have associated the attribute “unpredictability” with high-tech contexts. This can also be considered as a direct consequence of the high occurrence of discontinuous innovation to happen in high-tech contexts.<br />3. Indispensability of associated infrastructure <br />Antivirus products are incapable of existing in isolation. It is widely acknowledged that the ability to develop supporting infrastructure that could keep pace with the rapid and dynamic changes happening in Antivirus product categories is a key factor determining the success of an Antivirus product launch.<br />4. Lack of well established industry standards <br />A basic characteristic of high technologies is their evolutionary nature. As a result of their constant state of evolution, products that are meant to satisfy the same needs operate with different standards. The emergence of a universally accepted standard that can benchmark the other offers takes a lot of time. This idea is represented by the “dominant design” concept in technology management literature. According to Utterback (1994):<br />. . . a dominant design is the one that wins the allegiance of the market place, the one that competitors and innovators should adhere to if they hope to command significant market share.<br />In Antivirus markets, the establishment of a dominant design is generally an arduous and highly unpredictable process. In a particular product category, when it will appear as if a dominant design is emerging, a new design is introduced which could confound the entire market.<br />5. Uncertainty about product functionality<br />From the consumers’ point of view, high levels of uncertainty are associated with the functional variables attached to high-technology products. Moriatry and Kosnik (1989), for instance, consider all such functionality-related uncertainties under the heading “market related uncertainty”. To start with, consumers tend to face difficulty in matching their needs to the benefits the Antivirus products might offer. Added to this is the high amount of risk associated with high-tech products. The risk is more since high-tech products generally have high switching costs associated with them. Difficulty in anticipating the changes that could take place in the market place adds another dimension to this uncertainty.<br />The above major attributes that characterize Antivirus products impact on the marketing task in a significant manner. <br />Add to this- Managing the distribution channels<br />The existence of a well-established service network is a vital component in the marketing mix of Antivirus products. The supporting infrastructure will typically include complementary products vitally needed for the functioning of the product, essential supplies and updates, well trained service executives who can install and repair the products etc. Being technologically advanced, Antivirus products will require complementary products that are compatible with the technology employed. Unless such technologically compatible products are widely available, users will find it difficult to adopt such high-tech products. <br />High-technology attributesMajor effectBehavioural response soughtShorter product life cycleReduced cycle time leading toconstant and rapid changes inthe customer/market profileTimely absorption andadjustment to thetechnological/market trendsby providing continuity inchangeGreater probability ofdiscontinuous change inproduct technologyGreater risk of obsolescence ofthe technological andmarketing skills acquired bythe distributorQuick adoption of drasticmeasures like reduction inprices or phasing out ofproduct whenever requiredNon-existence of industrystandardsComparison of alternativesbased on well-defined criteriabecomes impossible for theconsumer and informationasymmetry becomes a crucialfactor in the consumers’decision making processGreater thrust on educatingthe customer after acquiringknowledge about a widerbreadth of topicsIndispensability of supportinginfrastructureGreater importance for awell-established servicenetwork. Greater need forclosely observing the marketadoption processProviding regular training tothe service force andencouraging them to improvetheir skill setUncertainty about productfunctionalityDifficulty in gaining theconfidence of the customerFocus to shift from selling theproduct to creatingrelationships<br />95250-38100<br />Marketing Channels<br />1905058420<br />A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.<br />It is a 'path' or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). A marketing channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent) intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer.<br />Conventional and Vertical Marketing Systems<br />The marketing task environment associated with high-technology products being highly dynamic and unpredictable, the attendant channel management functions become extremely challenging.<br />Importance of Marketing Channels in IT products<br />Indeed, the current worldwide crisis calls for efficient planning, production, spending, selling, cost cutting, efficiency in everything and the software industry is not an exception. We are not attempting to address all of these issues here, but focus specifically on channel management .<br />Why? Because, the distribution channel is a significant revenue source and, if managed right, can get products to the market in a more profitable way than through a direct approach.<br />Why are channels so important, especially in these times of trouble? <br />Distributors and resellers help you grow your market share by providing access to larger customer pools, marketing resources, technical expertise and customer service. This is valid for any kind of product/sale, and especially so for complex ones. A key factor is that distributors are your external sales force. Big emphasis here on external. That means considerably less overheads for you, essential when there is pressure to reduce headcount or freeze hiring.<br />Channel Satisfaction and effectiveness<br />When the process is handled correctly, the potential benefits of leveraging channel partners far outweigh the challenges of managing them. Channel partner strategies can introduce new products to new markets, relieve existing sales resources of maturing products, or scale into new verticals and market segments that require specific skills or relationships. Vendor companies can quickly ramp into new verticals by partnering with experts in the area.<br />Integrating the Customer Perspective<br />Thus far, this discussion has focused on the perspective of the organization and the management issues within a sales channel environment. An important perspective is that of the customer. Ultimately, the customer makes little to no distinction between the original manufacturer or supplier and the partner presenting that product or service for sale. Customers calling the channel representative with whom they are engaging should receive information about the product, delivery, or service that is consistent with what they would receive from the original manufacturer of the item.<br />The process, delivery, information, and so forth between the supplier and its channel should be transparent to the customer. The complexity of the relationship should be nonexistent in the mind of the end customer. Creating this seamless interaction from the customer’s perspective requires very close integration of business processes and clear rules of engagement between the ecosystem leader and its partners. The customer will hold the final word on whether channel management is working successfully.<br />The channel will be most effective when:<br />each member is assigned tasks it can do best.<br />And all members cooperate to attain overall channel goals and satisfy the target market.<br />When this doesn’t happen, conflict occurs:<br />Channel Conflict<br />INHERENT DIFFERENCES IN VIEWPOINTS OF SUPPLIERS AND RESELLERS<br />Financial Goals<br />Supplier ViewpointReseller ViewpointExpression of ClashMaximize own profit by- Higher prices to reseller- Higher sales by resellerMaximize own profit by-Higher own-level margins(lower prices from our supplier and higher prices to customer)Supplier: You don’t put enough effort behind my brand. Your prices are too high.Reseller: You don’t support me enough. With your wholesale prices, we can’t make money.- Higher reseller expenses- Lower expenses (less support)- Higher reseller inventory- Faster inventory turnover(lower reseller stocks)- Lower allowances to reseller- Higher allowances from manufacturers<br />Desired Target Accounts<br />Supplier ViewpointReseller ViewpointExpression of ClashFocus on:Focus on:Supplier: We need more coverage and more effort. Our reseller doesn’t do enough for us.Reseller: You don’t respect our marketing strategy. We need to make money too.- Multiple segments- Segment correspondingto resellers’ positioning (e.g. discounter)- Multiple markets- Our markets only- Many accounts (raise volume and share)- Selected accounts (those that are profitable to serve)<br />Desired Product and Accounts Policy<br />Supplier ViewpointReseller ViewpointExpression of Clash- Concentrate on our product category and our brand- Achieve economies of scope over product categoriesSupplier: You carry too many lines. You don’t give us enough attention. You’re disloyal.Reseller: Our customers come first. If we satisfy our customers, you will benefit. Shouldn’t you consider pruning your product line?- Carry our full line (a variation for every conceivable need, plus our efforts to expand our line outside our traditional strenghts)- Serve customers by offering brand assortment- Do not carry inferior or slow-moving items (every supplier has some of these)<br />Reasons of Channel Conflict can be summed up as<br />Role Incongruities<br />Resource Scarcities<br />Perceptual Differences<br />Differences in expectations<br />Decision Domain Disagreements<br />Goal Incompatibilities<br />Communication Difficulties<br />152400-711200<br />Questionnaire<br />The questionnaire was prepared so as to systematically guide the respondent through the desired path. Questionnaire was such that respondent found it interesting to answer.<br />The questionnaire prepared had the following things:<br />1. The questions would be understood by the recipients<br />2. The layout was simple to follow and easy to use.<br />3. The questionnaire length was not too excessive.<br />4. The questionnaire was mostly multiple choice questions so that recipient<br />will not have any problem while filing it.<br />Sampling Technique<br />The basic idea of sampling is that by selecting some of the elements in a population we may draw conclusions about the entire population. A population element is the subject on which the measurement is being taken. A population is the total of elements about which we wish to make inferences. The ultimate test of a sample design is how well it represents the characteristics of the population it supports to represent. In measurement terms the sample must be valid. Validity of the sample depends upon two considerations viz. Accuracy and Precision.<br />Interview method was used to fill the questionnaire. This is in fact, known as Schedule technique.<br />Schedule is the name usually applied to set of questions, which are asked and filled in by the investigator in face-to-face situation with other person. The replies given were filled in the questionnaire. Since all the data was available in written form, tabulation of data and analysis became easy.<br />The other advantage of schedule is that, it specified the object of inquiry clearly because questions were asked directly and the subject information was collected about that alone.<br />1. Sample size: 50<br />2. Target group: Channel partners of Quickheal.<br />3. Location: Different regions in Pune.<br />Data Collection<br />There are mainly two types of data source, they are:<br />Primary Data<br />Secondary Data<br />Primary Data<br />Primary data is to be collected through original source, it not available in readymade form, It is originated by primary source like personal interaction or feedback forms or questionnaires, which act as a tool for collecting data.<br />Secondary Data<br />This data is made available from external sources. During the project, data under the respective B.A. manager was made available from the company’s database, data of advisors who had left the company etc.<br />Methods of Data Collection<br />Interview method:<br />The interview method of collecting data involves presentation of oral verbal stimuli and reply in terms of oral verbal responses. This method can be used thought personal interviews and if possible through telephone interview.<br /> Limitations of the study<br />Due to the following unavoidable and uncontrollable factors the factors, the result might not be accurate. Some of the problems faced while conducting the survey are as follows:-<br />Time and cost constraints were present.<br />Chances of some biasness could not be eliminated.<br />A Samples size of fifty has been use due to time limitations.<br />A majority of respondents show lack of cooperation and are biased towards their given opinions.<br />15240047625<br />The analysis of data and the findings are as listed below.<br />The total data collected was 50.<br />1. Which of the following QuickHeal Technologies product lines do you fully support at this time?<br />QuickHeal AV+QuickHeal Total SecurityQuickHeal Admin ConsoleQuickHeal Protection for Mail Servers50502015<br />Analysis<br />All dealers were dealing in AV+ and Total security. Admin Console and Protection for Mail Servers was sold by 20 % and 15% respectively. Some dealers were not aware of the last two products.<br />2. What do you feel about Quality of QuickHeal Technologies products?<br />Very GoodGoodSatisfactoryPoor832100<br />Analysis<br />No dealer pointed out that the quality aspect of Quickheal was poor. Majority i.e. 64 % termed it as good and 20 % were satisfied. But only 16 % said it was very good, which shows there is room for improvement.<br />3. Please rate QuickHeal sales activity on the following parameters<br /> Very GoodGoodSatisfactoryPoorCredit period given025250Promotion Activities124250Price of products0151916<br />Analysis<br />The credit period given as well as the promotional activities performed by Quickheal are perceived as medium. Nearly 100 % of dealers expressed opinions from good to satisfactory.Price of the products was a matter of concern where though 68 % of respondents termed them as good to satisfactory, 32 % complained that the price parameter is poor.<br />4. How do you rate the services offered by Quickheal?<br /> Very GoodGoodSatisfactoryPoorDelivery of products129200Presales service127220Post-sales service123260Executives Interaction123251<br />Analysis<br />In all the above parameters which determine the service quality of Quickheal the respondents predominantly opined as good or satisfactory. Only 2 % of dealers termed the service quality as very good, hence raising the bar is what is needed.<br />5. How much of your business volume is accounted for by QuickHeal Technologies products?<br />24% or less25% - 49%50% - 74%75% or more41513<br />Analysis<br />82 % of dealers have less than 25 % business volume from Quickheal, 10% have it below 50 % and 8 % get business of over 50% from Quickheal. There is a need of increasing the share which is being taken by some domestic and cheaper products.<br />6. How much of your profit is derived from QuickHeal Technologies products?<br />24% or less25% - 49%50% - 74%75% or more44411<br />Analysis<br />Here 88 % dealers derive 25 % or less of their profit from Quickheal and only 12 % gain more than 25 % from Quickheal products alone. <br />7. How confident are you that QuickHeal will gain additional market share in the coming year?<br />ConfidentNot sureDoubtful9338<br />Analysis<br />Most of the respondents (66 %) were not sure about future position in which Quickheal will be, which can be due to various factors like slack in business, competition, pricing and new players to name a few.18 % said they were confident and 16 % were doubtful.<br />8. To what extent do you plan to give QuickHeal Technologies greater emphasis in your business over the next few years?<br />Great extentModerate extentSlight extentNot at all43790<br />Analysis<br />74 % of channel partners have vouched to give moderate support to Quickheal in the next few years while 18 % say they will emphasize to a slight extent. 8 % are more optimistic and pledge support to a great extent.<br />9. Are you dealing with other companies?<br />YesNo473<br />Analysis<br />Most of the dealers are dealing with multiple antivirus products and only 6 % sell Quickheal exclusively.On further probing it was learnt that Symantec, Mcafee, Netprotector and Kaspersky were the major products sold alongside Quickheal.<br />10. Compared to Other Security Products in market, how does QuickHeal offer advantages regarding<br /> Strong advantageAbout the sameStrong disadvantageSelling5423Profitability0455Delivery3470Tech Support5450<br />Analysis<br />Regarding selling advantage 10 % opined as strong advantage while 84 % said there was no such advantage. 6 % complained of strong disadvantage due to price factor.90 % said no advantage on profitability aspect while 10 % said it had strong disadvantage. No dealer termed Quickheal as having advantage in profitability.6 % said it had strong advantage regarding delivery of products while 94 % said no such advantage.10 % had the view that Quickheal had strong advantage when it comes to Tech Support while 90 % felt it was at par with other products.<br />11. Which product do you see as offering a stronger competition to QuickHeal Technologies dealers?<br />SymantecMcAfeeKasperskyEscanNetProtector5312030<br />Analysis<br />It is surprising to know that a domestic product like Net protector is seen by channel partners as the main competitor for Quickheal at 60 %. Kaspersky 24 %, Symantec 10% and McAfee 6% are the other major competitors. The importance of pricing has to be underlined here.<br />12. Overall, how have the actions taken by QuickHeal sales and marketing management affected your business in the previous year?<br />Very PositivePositiveNot sureNegativeVery Negative2102990<br />Analysis<br />Although 58 % were not sure whether sales and marketing management of Quickheal had in any way affected their business, 20 % said it was positive and 4 % said it was a very positive effect. However, 18 % said it had a negative effect.<br />13. Which administrative area presents the greatest opportunity to Quickheal for improvement?<br />Order processingShippingInventory trackingBilling and credits56237<br />Analysis<br />When asked to choose between the given 4 options, 74 % chose Billing and credits while 12 % chose shipping or delivery of goods.10 % saw an opportunity to improve in Order processing and 4% in Inventory Tracking<br />14. Please rate the following QuickHeal marketing and sales programs (On a <br />Scale of 1-Poor to 5-Excellent):<br /> 12345Program Name134240Channel Meets244040Channel Trainings0126212Radio Advertising0120281Newspaper Advertising0236120Channel Magazine Advertising1236101Road Shows053951Television Sponsorships134240<br />Analysis<br />The promotional programs of Quickheal when rated for their effectiveness led to the following conclusions- Newspaper Advertising was the most effective followed by Radio Advertising. Channel Magazine advertising and Road shows came in third while channel meets and Television sponsorships were ranked fourth. Channel training as a promotional tool was ranked lower than the others.<br />15. We would like to know if you have any specific complaints, difficulties or doubts regarding Quickheal products and their sales (esp. channel conflict). We also need your valuable advice and suggestions.<br />The channel partners were probed on following parameters<br />Honesty: Is Quickheal perceived as a company that keeps its word?<br />Competence: Do they believe it is capable of delivering?<br />Benevolence: Do they believe you have their interests at heart?<br />Bilateral communications: Do the partners have a real opportunity for input?<br />Correct-ability: Is there an appeals process, and does it work?<br />Consistency: Do you follow the same policies and programs?<br />Explanation: Do you take the time to explain the rationale for any changes?<br />Interactive justice: Do you show respect?<br />Local knowledge: Do you take the time to understand the partner’s problems & how they see the world?<br />Analysis<br />This question provided an informal session to discuss about all issues related with the marketing channel strategy of Quickheal. Most of the questions elicited a favorable response.The dealers gave the following suggestions in addition-The Price factor needs serious consideration as products like Kaspersky and Net Protector are priced very competitively.Banners, brochures and other promotional material should be updated and aggressively provided by Quickheal.On the important issue of channel conflict the small size dealers who were also exclusively dealing with Quickheal had problems in selling because major dealers had a price advantage due to bulk purchase.<br />2559319301<br />Findings<br />Quickheal AV+ and Total Security are popular and well accepted by the channel partners but Admin Console and Protection for Mail Servers are less supported and some dealers were not aware of the two products itself.<br />Quickheal scores on the Quality aspect of its product line. There were no complaints from dealers.<br />Credit period given and Promotion Activities are perceived as good by dealers. But the Price factor of Quickheal has been having a negative influence on sales as per dealers.<br />Service aspect from Quickheal which includes Delivery of products, Presales service, Post-sales service and Executives Interaction have been good but there is room for improvement.<br />Most of the dealers accounted 25% or less of their sales volume and profit pie to Quickheal products.<br />There was no concrete response about future position of Quickheal in the Antivirus market by dealers. Also they pledged only moderate future support.<br />Symantec, McAfee, Netprotector and Kaspersky were sold alongside Quickheal by most dealers and provided stiff competition.<br />Although Quickheal scores on the Quality part in comparison with other products it was on the same level regarding some important aspects we surveyed. Those were Advantage in following aspects- Selling, Profitability, Delivery and Technical Support.<br />A domestic product like Net protector was found to be the major competitor in Pune for Quickheal.<br />Most of the dealers were not impressed by sales and marketing efforts by Quickheal. Also on probing regarding which administrative area can be fine tuned more, the dealers voted for Billing and credits. But this does not imply that there is any problem but only scope for improvement.<br />Newspaper and Radio Advertising top the promotional tools used by Quickheal for their effectiveness according to dealers. Channel training, Meets and Television sponsorships ranked below average.<br />Promotional material like banners and brochures are not provided as aggressively as other competitors do.<br />Small size dealers are facing adversities due to the undue advantage which major players have as the latter purchase in bulk from Quickheal. Channel conflict is present at a minimal level which can be managed positively to strengthen the channel further.<br />Conclusion<br />Quickheal as a product of quality and the company with it’s strong dealer network have a bright future in the Indian antivirus market. A careful consideration on the pricing strategy and the promotions can help Quickheal to maintain the support from channel partners and in turn to outgrow it’s competitors.<br />15240026670<br />The recommendations provided below by me are based more on the theoretical aspect of marketing and coupled by the practical aspect of the industry which I gained during the summer internship while interacting with and observing the channel partners. But they need to be tested and approved by the more experienced marketing heads in the organization as they know the practical ramifications in more detail.<br />1. Dealers especially the major ones should be made aware of Quickheal’s high end products- Admin Console and Protection for Mail Servers.<br />2. The Quality aspect should be maintained as it is the mainstay of Quickheal’s popularity.<br />3. All the following aspects are at a satisfactory level but to gain additional market share the bar has to be raised. The areas important are as follows-<br />a. Credit period given<br />b. Promotional activities<br />c. Delivery of products<br />d. Pre and Post sales service<br />e. Executive’s interaction<br />4. Although Quickheal is now an international brand, at the micro-level in India, it is facing stiff competition from local brands. These brands are playing the price card as mostly customers buying PC’s below Rs. 35000 go for antivirus products having lesser price and basic protection. One strategy can be to introduce a basic low priced product for home users. But careful consideration should be given to the fact that it might eat into the pie of the already established products.<br />5. The promotional activities carried out by the Sales and Marketing department of Quickheal have not impressed dealers and they are demanding more aggressive campaigning. Promotion at the dealer level can be increased by providing banners, table weights, props and all types of material which a dealer can use in daily routine and also provide brand recall for customers.<br />6. Channel training, Meets and Television sponsorships ranked below average in the research and the company can reduce the focus on these tools of promotion and increase the frequency of the better performing tools like Newspaper and Radio Advertising. This does not mean to sideline Channel meets as they and Training programs are good for interacting with channel partners while others are customer centric.<br />7. Small size dealers who are exclusively dealing in Quickheal can be supported in price terms if possible as they are loyal and can be leveraged in the turbulent times ahead.<br />8. I would reiterate the need to revise the Pricing strategy of Quickheal products to counter the Local brands like Net Protector and some established brands like Kaspersky. One thing which can be done is that at least the price of Quickheal AV+ can be revised southwards to maintain an advantage for channel partners.<br />9. Building Channel Trust <br />The concept of building channel trust is relevant and useful for future strategy of Quickheal-<br />And the best method for building Channel Trust will be<br />A. Start at the beginning. Ensure your partners and your offering (including financial returns, partner responsibilities and opportunities) are aligned to the market you wish them to address, and you are not trying to force “square pegs”…..<br />B. Listen to your channel and deal with any outstanding issues that may hamper further progress. Conduct reviews quarterly with as many partners as possible and follow up on the agreed actions.<br />C. Implement a clearly defined escalation process, including consequences for breaches, to deal with channel conflict or bureaucratic lack of care.<br />D. Have a channel plan and stick to it. If you have to change policies, resources, programs or margins, think through the channel consequences and provide ample warning and an explanation.<br />E. Not all partners are the same, so don’t treat them as if they are just there to make up the numbers. Take the time to understand their strengths and drivers as businesses and people.<br />301625-1905<br />Websites visited:<br />www.wikipedia.org<br />www.google.com<br />www.justdial.com<br />www.cdmapune.com<br />www.hbs.edu<br />Books referred:<br />- Marketing management by Philip Kotler.<br />- Transforming Your Go-to-Market Strategy: The Three Disciplines of Channel Management (Harvard Business School Press) by V. Kasturi Rangan<br />- Marketing Channel Management: People, Products, Programs, and Markets by Russell W. McCalley<br />- Strategic Marketing Channel Management by Donald Bowersox<br />- Research Methodology- C. R. Kothari.<br />Annexure<br />Quick Heal Technologies, Pune<br />Survey of<br />Channel Partners<br /> Name: Address:<br />1. Which of the following QuickHeal Technologies product lines do you fully support at this time?<br />QuickHeal AV+QuickHeal Total SecurityQuickHeal Admin ConsoleQuickHeal Protection for Mail Servers<br /> <br />2. What do you feel about Quality of QuickHeal Technologies products?<br />Very GoodGoodSatisfactoryPoor<br />3. Please rate QuickHeal sales activity on the following parameters<br />Credit period givenVery GoodGoodSatisfactoryPoorPromotion ActivitiesVery GoodGoodSatisfactoryPoorPrice of productsVery GoodGoodSatisfactoryPoor<br />4. How do you rate the services offered by Quickheal?<br />Delivery of productsVery GoodGoodSatisfactoryPoorPresales serviceVery GoodGoodSatisfactoryPoorPost-sales serviceVery GoodGoodSatisfactoryPoorExecutives InteractionVery GoodGoodSatisfactoryPoor<br />5. How much of your business volume is accounted for by QuickHeal Technologies products?<br />24% or less25% - 49%50% - 74%75% or more<br /> <br />6. How much of your profit is derived from QuickHeal Technologies products?<br />24% or less25% - 49%50% - 74%75% or more<br /> <br />7. How confident are you that QuickHeal will gain additional market share in the coming year?<br />ConfidentNot sureDoubtful<br />8. To what extent do you plan to give QuickHeal Technologies greater emphasis in your business over the next few years?<br />Great extentModerate extentSlight extentNot at all<br />9. Are you dealing with other companies?<br />YesNo<br /> If yes, please specify<br />______________________________________________________________________________________<br />10. Compared to Other Security Products in market, how does QuickHeal offer advantages regarding<br />SellingStrong advantageAbout the sameStrong disadvantageProfitabilityStrong advantageAbout the sameStrong disadvantageDeliveryStrong advantageAbout the sameStrong disadvantageTech SupportStrong advantageAbout the sameStrong disadvantage<br />11. Which product do you see as offering a stronger competition to QuickHeal Technologies dealers?<br />SymantecMcAfeeKasperskyEscanOthers (pl. specify)__________________<br />12. Overall, how have the actions taken by QuickHeal sales and marketing management affected your business in the previous year?<br />Very PositivePositiveNot sureNegativeVery Negative<br />13. Which administrative area presents the greatest opportunity to Quickheal for improvement?<br />Order processingShippingInventory trackingBilling and credits<br />14. Please rate the following QuickHeal marketing and sales programs (On a Scale of 1-Poor to 5-Excellent):<br />Program NameRatingChannel Meets12345Channel Trainings12345Radio Advertising12345Newspaper Advertising12345Channel Magazine Advertising12345Road Shows12345Television Sponsorships12345<br />15. We would like to know if you have any specific complaints, difficulties or doubts regarding Quickheal products and their sales (esp. channel conflict). We also need your valuable advice and suggestions. <br />______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________<br />Many Thanks for sharing your valuable time to complete this survey.<br />