HP Draws New Strategy for Ink Sales

Hewlett-Packard is set to announce Tuesday a new strategy for delivering consumables to market, establishing three tiers of cartridge products and creating new pricing segmentation in the process. <P> The Palo Alto, Calif.-based company will establish "Standard," "Value" and "Specialty" cartridges for its inkjet hardware. The tiers segment the pricing for the supplies in a more defined way. <P> HP will set the street price for the Standard cartridges at $14.99 and target modest print environments; the street price for Value cartridges will be set higher and be targeted at higher print volumes to establish a lower cost per page; and Specialty cartridges will be priced differently based on the targeted solution, such as with ink for high-resolution photographs. <P> Pradeep Jotwani, senior vice president of HP's Supplies, Imaging and Printing Group -- a $15 billion annual business -- said the move was aimed at providing the best supply solution for individual customers. <P> The company also said it has redesigned the supplies section of its online store to reflect the new strategy. Jotwani said the strategy is being rolled out so solution providers that maintain a direct relationship with customers with supply sales will continue to maintain that relationship. <P> HP has been working to invigorate its inkjet business -- an industry segment that has traditionally been less profitable but with higher volumes than laser printers. In addition to aggressive competition in consumables from companies including Xerox and Lexmark, HP and its rivals are also battling a growing market for third-party "compatible" supplies and recharged and refilled cartridges.

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