Team D

BADM 5400

November 5, 2018

d. light Design: Marketing Channel Strategies in India

Q: What channel alignment constraints face d. light as it thinks about how to establish a

channel structure in India? List and describe any legal, environmental, and managerial

constraints.

A: We learned d.light's operation in India from this case, the first question inquires about the

constraints they will face while establishing channel structure in India. From this assessment it

appears that they're going to face four constraints.

The first factor is India's low education level. If a company wants to launch a new

product, it first needs to create demand for the product. From the case, we see that the major

customers of d.light live in rural India, therefore their universal education levels are very low

and far behind the city. In India, a company always needs to introduce its products to

customers before selling them because people don't usually buy products they don't

understand. That constraint leads to a lot of preparatory work for d.light. Moreover, literacy is

low in rural India, especially among women. The low level of education may lead to the client's

insufficient understanding of the instruction manual, thus causing the company corresponding

after-sales trouble.

The second factor is the lack of publicity in the Indian media. It is common knowledge

that when a company enters a new market, product promotion and brand reputation are very

important. If d. light wants to enter the Indian market, it must focus on these two things.
Unfortunately, India’s media efforts are insufficient leading to the creation of a constraint. In

India, only 63 percent of rural households use television, 48 percent use radio, and 39 percent

use newspapers, according to the case. The situation could lead to lagging advertising in rural

India. Therefore, this can directly affect the product visibility and brand reputation of d.light.

The third factor is India's income crisis. In India, there is a large income gap between

people who live in cities and those who live in rural areas. The main source of income for rural

residents is agriculture. Because of the weather and climate, the agriculture will not have a

good harvest at various times throughout the year. This means people living in the countryside

may not have enough money to buy d.light's products. This will create an unpredictable sales

crisis for the company.

The fourth factor is India's poor transport infrastructure. The case states that India's

transport infrastructure is poor. Especially in rural areas, it is difficult to build an efficient

transportation network. Poor infrastructure can make it difficult for d.light to deliver products

efficiently to consumers in the countryside. As a result, it will affect d.light's sales, while

increasing shipping costs.

Q: For rural consumers in India, discuss how these channel alignment constraints lead to

demand-side misalignments if the company sells through the:

a) Rural entrepreneur channel, and link these misalignments to constraints (legal and/or

environmental and/or managerial)

b) Village retailer channel, and link these misalignments to constraints (legal and/or

environmental and/or managerial)

 c) Centralized shops channel, and link these misalignments to constraints (legal and/or

environmental and/or managerial)

d) Conclude from this analysis what d. light’s channel structure should be. Which route(s)

to market should be its highest priority, and why?

A: a) In the example of the company, Boond, the business struggled to grow sales and increase

demand for the products due to management’s inability to incentivize or encourage the

marketing-channel partners to increase sales efforts. Another challenge for the RE channel was

the skills of the REs. These people were capable of performing the job, but they were not

professionally trained sales people. Therefore, this added to their struggle to create sales and

increase demand. The Res were also not well versed in proper monetary handling procedure,

which caused costly financial and potentially legal implications.

b) Village retailers were found to be more skilled when it came to moving money and products

over large distances which resulted in a decrease in the time between payments making

financial processes timelier. These shop owners are knowledgeable about product capabilities

and aspects in order to better present the products and influence buyer decision making.

Unfortunately, this channel only account for 4% of sales in the rural area segment. This could be

due to consumer desire to seek more product variety in larger cities rather than village

retailers.

c) Through the centralized shops channel, d. lights found constraints due to challenges from a

government oil company that viewed the products as incompatible with their energy

conservation branding. In addition to this, dialogue with local retail-store owners revealed that

they were not adequately incentivized to make an investment in this product due to their
monopoly of petroleum products. D. light’s products had a low profit margin that did not entice

shop owners to make an investment of time and money in this new product.

d) Through the assessment above, d. light should make village retailers the highest priority and

focus their efforts on developing new strategies to assist with the growth of sales in this

segment. These individuals are effective sales people with better money handling and customer

service capabilities. D. light should also make efforts to expand product variety in order to

better cater to consumer tastes in this segment.

Q: Can d.light “do well” (i.e. be profitable) as well as “do good” (i.e. improve lighting access for

the rural poor in India) with the cost structure and current personnel and overhead

investments in place in India?

A: Yes, D.light could “do well” as well as “do good”. From the exhibit 10, we see that the total

profit margin of two products is $478.84. This means that the products provide an opportunity

for profit for the company. Additionally, 25 employees earned money and the company also has

the ability to pay the office and overhead cost $150,000. This shows that d. light did “do well”

in terms of profitability. In India, kerosene lamps are still commonly used in rural areas. From

the exhibit 5, we can see that 68% of rural household could access to electricity at an average of

only 9.79 hours per day. Even though 94% of urban household could have access to electricity,

there are only 17.61 hours per day of access. With the assistance of the d. light Nova, the rural

poor in India could access electricity from early morning until late at night, afford to improve

the quality of life, save living costs, and solve health problems. This product could improve the

overall lighting access for the rural poor in India. Thus, D. light would also “do good” with the

cost structure, current personnel, and overhead investments in place in India.