D.light Design: Marketing Channel Strategies in India

Abstract

This case looks at a new start-up company, d.light Design, as it was seeking to go to market in India with its solar-powered LED lamps in 2009. Sam Goldman, founder and chief customer officer of d.light, was in New Delhi, India; his business-school friend and co-founder Ned Tozun was in China, the site of the company's manufacturing plant.One of the key decisions Goldman and Tozun needed to make was whether d.light should focus on just one distribution channel in India, or multiple channels. The startup had limited capital, so it needed to get the distribution question right to generate revenue quickly.The case thus combines an entrepreneurial problem with an emerging-market, or bottom-of-the-pyramid, channel design challenge. This case does not focus on product design or manufacturing challenges but rather on questions of: The constraints d.light faced in creating an aligned distribution channel. These constraints can have legal, environmental, and/or managerial foundations Demand-side misalignments in the channel structure that will occur if d.light chooses one or another of the considered channels in the case, namely, (a) the RE (rural entrepreneur) channel, (b) the village retailer channel, or (c) the centralized shops channel • What mix of channels—or what single channel—d.light should focus on in the Indian market • The financial return possible based on d.light's current cost structure and overhead expenditures in India Assess channel benefit demand intensities for chosen target market segments Assess channel alignment constraints that can limit the channel designer's ability to optimize the channel to meet identified end-user demands for channel benefits Use these ideas to defend a choice of one or more possible channel structures as appropriate parts of a company's overall channel system Analyze financial opportunity in this situation, given cost parameters and possible market penetration estimates