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February 23, 1993


By CBR Staff Writer

IBM Corp’s participation in the small business sector of the industry is characterised primarily by the ferquency with which it changes ground rules and prices so that resellers find themselves saddled with unsalable stock, and its willingness to resort to litigation to keep resellers in line, all the while making it clear to them how lucky they were to be selling IBM kit. But on Monday, down in Orlando, Florida, IBM North America chief Bob LaBant was on the podium trying to persuade 3,000 distributors at their annual meeting that the leopard had changed its spots. According to LaBant, IBM’s new priorities include providing better software and services to small US business customers, and he insisted that the greatest growth potential for IBM lies in the small business sector. If IBM US is to grow with the industry, then we must be successful in general business. That’s because the opportunity is huge, valued at some $60,000m, and getting bigger, Reuter quotes LaBant as saying. We are aiming to grow our general business services at a compound rate of 50% for the next four or five years, he said – IBM sales to general business currently generate about 10% of IBM’s US sales of $25,000m. According to the newswire, the group politely applauded LaBant’s speech, but some in the audience said they were skeptical of whether IBM can effectively compete with other computer makers. IBM told them that it has launched a pilot programme that emphasises narrow and targeted marketing for customers in 155 segments. It involves keeping detailed computer profiles of customers, their buying habits and businesses. Fred Fassman, assistant general manager of IBM’s US marketing unit, said the company has identified a 21% revenue growth rate in the top five market segments, saying these could boost IBM’s overall market share – but he declined to identify them for competitive reasons.

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