An investigation of the influence of customer perceived-value, company brand equity and loyalty/rewards programs of OEM (original equipment manufacturer) inkject supplies on consumer buying behaviour to promote purchasing of OEM supplies

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Bhate, Kaustubh
Issue Date
MA Marketing
Dublin Business School
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The printer supplies industry has adopted the practice of cell phone and razor blade sellers: Charge low prices for initial equipment, then make money from ongoing fees for additional needed components. Vendors sell consumer printers at cost, or even sometimes at a 20 percent loss but on the flip side, earn a 60 percent gross margin on ink jet and toner cartridges. Independent sellers of replacement ink, sell products of two basic types: Replacement cartridges and Refilling. The leading seller of inkjet printers is Hewlett-Packard but Canon and Epson are also important sellers. Some manufacturers combine the printhead and the reservoir, so that the user replaces the printhead and the ink at the same time. Others sell ink tanks separately from the printhead. Over the past several years environmental concerns have begun to shape consumer purchasing behaviour towards OEM inkjet supplies. The Refill industry has highlighted the fact that refilled or remanufactured inkjet supplies reduce the number of cartridges going to landfill sites thereby appealing to the environmentally conscious consumer. This competition in the Aftermarket is of critical importance to OEMs as it directly affects their profit margins. This study will focus on indentifying whether customer perceived value, company brand equity and loyalty programs of OEM inkjet supplies will positively influence consumer behaviour towards buying original ink supplies rather than refilled supplies or continuous inkjet supply systems.(CISS). OEM supplies cannot compete with aftermarket suppliers on price and hence there is an increased focus by these companies on providing a total customer experience with OEM supplies so that consumers get value for their money. The study finds that keeping customers satisfied and maintaining easy to purchase and easy to install attributes of inkjet supplies OEM by emphasising the convenience factor will add value and influence purchase decisions of consumers. Only 60% of respondents felt that OEM supplies give consistent print quality, this attribute needs to be improved by OEM suppliers so that more customers appreciate it. Just emphasising lifestyle benefits while maintaining high price of OEM supplies does not provide value the customer is looking for and therefore may not succeed in affecting consumer purchase decision. Brand attributes of OEM supplies such as reliability and hassle free operation will influence consumers to buy OEM supplies but that may not be enough to convince consumers to buy OEM supplies over non-OEM supplies. Author keywords: Inkjet, consumer behaviour, loyalty programs, brand equity and perceived value