Marketing personal computers directly, either by post or by telephone, and indirectly via consumer stores, are the distribution channels having most difficulty getting started in Italy, unlike direct and value-added sales which have been the biggest successes, say analysts at International Data Corp Italia. Direct personal computer sales in Italy, in which IDC includes manufacturer-direct sales, direct marketing and manufacturer-owned stores, comprise only 16% of total unit sales in 1991, 102,000 out of 625,000 units, says IDC. The largest proportion of direct sales in 1991, 96,000, came from manufacturer-direct sales.
Superstores
Only 6,000 were sold through direct marketing channels such as Digital Equipment Corp’s DEC Direct, Hewlett-Packard Co’s HP Direct and Dell Computer Corp’s traditional direct sales operation. For some time, in Italy as elsewhere, says IDC, the direct sales channel has declined in importance, both in terms of units sold and in terms of corresponding user spending. In the next few years, IDC expects the breakdown of direct sales to shift to direct marketing and manufacturer-run stores, which are still uncommon in Italy. This year, for example, IDC Italia says the number of units sold through direct sales should decline to 91,000, while direct marketing will increase its proportion to 14,000 units and vendor-owned stores should sell 6,000. IDC predicts that in 1993, direct marketing will have quadrupled its share of unit sales to 25,000, manufacturer stores will more than double their volume to 15,000, while direct sales will drop to 87,000 units. The bulk of personal computer sales in Italy, namely 84% in 1991, come from indirect sales, which IDC classifies as sales by value-added resellers, dealers, superstores and consumer outlets. The first accounted for the majority of units sold, 263,000 out of 523,000, followed closely by dealers with 253,000. IDC expects the success of value-added sales to continue through 1993, rising to 312,000 units this year and 350,000 the year after. IDC subdivides value-added resellers into those that specialise in specific hardware and network architectures, those that concentrate on multi-user systems and those that major on applications. IDC says that it has noted a distinct preference among resellers specialising in specific hardware and network architectures for Unix systems, particularly IBM Corp’s RS/6000 – made in Italy, Compaq’s SystemPro and Santa Cruz Operation Inc Unix on Intel Corp 80486-based machines.
Americans and Japanese fondly imagine that Europe is a single homogeneous market where marketing methods that work in one country can be effortlessly replicated in at least the 11 other countries of the European Community. But despite the efforts of the Brussels steamroller, you can order the French to reduce the diameter and the tarrage of their beloved Gaulloise or Gitanes, but you can’t stop them smoking the things – or voting against the Maastricht Treaty that the Irish think is so wonderful and the Danes deplore. Personal computer markets are equally diverse, and they do almost everything differently in Italy including marketing micros. Marsha Johnston has picked up an International Data Corp Italia report and has been leafing through it: here are some of the things she discovered in it.
Dealer sales, by contrast, should decline slowly over the next 15-odd months. IDC forecasts that 239,000 units will be sold through dealers this year and 225,000 next year. Superstores, which have yet to arrive in Italy, will not be a major factor in indirect personal computer sales for the next three or four years, IDC reckons. Consumer store personal computer sales, however, should almost double to 13,000 in 1993 from 7,000 units in 1991. It is no wonder that the majority of personal computer sales are through indirect channels when one discovers that every one of Italy’s top seven manufacturers sell either exclusively, or in the majority, through indirect outlets. According to IDC, the top seven vendors are Ing C Olivetti & Co SpA, IBM, Apple Computer In
c, Zenith Data Systems, Olivetti’s Olidata venture, Toshiba Corp and Compaq Computer Corp. Of the seven, Olivetti has the lion’s share of direct sales with 45%.
System partners
Its 55% of indirect sales come through 250 dealer concessionaires that bear the company’s mark and 150 system partners, 50 of which collaborate with Olivetti’s direct sales force on large accounts. IBM, which has a presence throughout Italy, sells only 10% of its personal computers through its direct sales force, relying on 500 concessionaires for the bulk of its sales. Zenith Data Systems, Compagnie des Machines Bull SA’s personal computer subsidiary, sells throughout Italy via direct and indirect channels, 37% and 63% respectively. Its indirect network comprises 130 concessionaires, of which 60 are qualified – capable of providing value-added services – and a further 70 are resellers. Apple, Olidata, Toshiba, and Compaq all sell exclusively through indirect channels. Apple boasts 280 sales outlets, with 180 resellers, and IDC estimates that Olidata has hundreds of tiny resellers throughout the country. Toshiba has 70 concessionaires, 10 of which specialise largely in Toshiba products, and it also has five distributors. Compaq uses 120 concessionaires and 60 value-added resellers to market its personal computers indirectly. IDC says that Compaq is studying the possibility of enlarging its distribution network the better to cover certain regions of Italy, in particular the relatively poor and underdeveloped south.
