Konark Television India

Konark Television India manufactures high quality televisions and sells them at prices which are competitive, or even favorable to the competition, and is enjoying a decreasing market share in its primary markets. The primary reason for this is lack of a clearly defined long-term distribution strategy; this lack of strategy has led to several secondary problems, including rogue dealers selling to unauthorized outlets. 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 distributors in order to decide what model of television they want to purchase. This

ature and the number of competitors decreases due to consolidation (which is currently happening in the Indian television market), the level of profit margins decreases and companies find that there is a trade-off between market share and profit margin. Konark may therefore want to decrease the cost at which it sells sets to distributors while permitting them additional profit margins. In this way, the company would still have favorable pricing when compared to the competition (although this is apparently only a small selling point to consumers) and would be able to compete effectively when more than one brand is sold in a single outlet. Konark must also deal with the rogue distributors who are purchasing sets from the manufacturer and then selling them to outlets that are not approved by Konark. Rewriting the agreement between dealers and Konark will help eliminate some of this problem, since dealers will have a better overall relationship with the manufacturer, but Konark must also build a two-prong approach to handling this situation. On the one hand, Konark needs to approach these unauthorized dealers directly and select some to be Konark distributors; if these dealers are able to sell Konark sets at a profit, that repres

Category: Business - K