HP is one of the major players in the world of printers and print supplies. High quality printers are sold by the company at low prices. This HP printer support to the customers comes with the expectation that they will use print supplies made by the company. In fact, the bulk of the revenues for HP are generated through the sale of print supplies. Now the company has hinted a shift towards managed print business model that will make sure customers get printers at subsidized rates only if they fulfill their print supplies through the company.
This business plan was disclosed by the executives of HP last week. According to this plan, HP printers at low prices will only be made available only if the customer agrees to purchase print supplies through HP partners. Customers not agreeing to this plan and using supplies form third party vendors will have to pay more for the same printers.
This move by HP is being seen as a response to a decrease in its print supplies business. By signing a contract with the customers where they buy their supplies through locked in brands, HP is ensuring a boost to its supplies business. HP is a company that has a long history of working with its loyal partners. It has also realized that its end users are looking at not just fast and reliable printers but also efficient services when it comes to print supplies and software solutions. These are the customers who also have concerns about their security. For them, paying a little extra for print supplies is not a big issue provided all their concerns regarding software and security are addressed.
In a sense, a contractual print service is a move from HP that is justified when one looks at the prices at which the company makes available its high quality printers to its customers. There is no other company that comes even close in terms of HP printer support to its customers. Of late, HP has been facing a stiff competition from third party suppliers and vendors that are selling print supplies at a fraction of a price charged by HP. This has led to a staggering drop in the print supplies business of the company, forcing it to reevaluate and introduce a new marketing strategy that serves its interests.
In a related move, HP is planning to phase out discounts on its printers that can be used with supplies from third parties. In future, company will focus upon only those printer models that are capable of working with HP print supplies.
While there are many experts who believe this move towards contractual print supplies will give a dent to the sales figures of HP printers, there are also experts who say such a move will help in boosting loyalty among HP customers. This move by HP is not going to be implemented in a week or a month. It is a long drawn out strategy that will take effect over a number of years.
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