The primary reason for Konark's current situation is the of a clearly defined long-term distribution strategy; this lack of strategy has led to several secondary problems, including dealers selected by Konark distributors. The company is facing the loss of its sales tax exemption in its primary sales region (Orissa) and needs to develop a strategy which will help it not only maintain its current market share, but increase its presence in the market.
A long-term distribution strategy is critical to the success of Konark. Such a strategy begins with whether the company wants to sell directly to consumers, or use a dealer network to do so. While the emphasis at Konark has been to use dealers in the past, this has been inconsistently applied since the company maintains showrooms where customers can examine sets and make purchases (although few purchases are actually made in the showrooms). Thus the company is in direct competition with its own competitors, and is maintaining expensive showrooms that contribute only marginally to revenues, let alone to profits.
In order to reduce its own costs and build customer loyalty, Konark should eliminate its company showrooms and let consumers visit the dealers directly in order to decide what model of television they want to purchase. This will also eliminate the company as a direct competitor to the distributors and encourage loyalty among the dealers which is currently lacking. Konark could take the money it would save from operating the showrooms and invest that in co-operative efforts with dealers in major metropolitan areas in order to create in-store showroom environments where consumers would be able to combine the experience of the Konark showroom with the convenience of a dealer. This would also reduce the decision making timeframe and improve the possibility that consumers who see a Konark set that they like will purchase the set immediately from the dealer at the dealer's pri...