Wednesday, June 06, 2007

Canon sells to a better class of customer

Every time I think about cutting back on my Canon position, I see an article like this one. Essentially, Canon has created a more efficient customer base than its competitors. It isn't completely clear how they were able to do this, but I have a few theories:

  • Canon does not have a personal computer business like HP does. Some of the printers bundled with PC systems will be heavily used, but consumers who purchase unbundled printers seem more likely to use them. Brother, Lexmark, and Epson printers also tend to get bundled with PCs.
  • Canon does bundle photo printers with digital cameras. Consumers may not be any more likely to be heavy users of these printers, but if they do, they will likely be using more costly color ink and photo paper.
  • Canon has a long history of supplying HP with the print engine for the LaserJet series of printers. This arrangement would artificially increase HP's market share number and decrease Canon's, and therefor alter each measure of efficiency. On the other hand, if Canon sells to HP with a greater profit margin than HP sells to the consumer, which seems likely, the aberration isn't that big a deal.
  • In the past, color printers used one cartridge to hold all three ink shades, so when you ran out of cyan (probably because you printed too many Word documents with random phrases underlined as if they were email addresses or web links), you had to throw out half a tank of yellow and red. Canon was fairly early in switching to separate cartridges for each color tank, which intuitively would make one think they sell less ink. But I suspect the opposite occurred. Rather than feeling ripped off by a printer company, Canon users felt free to print Word documents with lots of cyan because they knew they wouldn't be wasting a bunch of red and yellow ink.
  • I don't have any hard and fast evidence, but I feel like Canon printers are easier to use—especially if you want to print directly from a camera or memory card. It would be easy to assume that usability is most important as an initial selling point, and that customers are locked in, but that ignores how easy it is to get a new printer at a low cost.
  • Brand loyalty thanks to years of producing professional and "prosumer" cameras might encourage consumers to buy genuine Canon consumables rather than generics. I know for my family, we gladly pay more for Canon supplies on the assumption that they will produce better results.

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