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

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1: Average Annual Household Income (Rs.)

Income Quintile

Rural

Urban

Lowest fifth

5,651.67

15,332.16

Second fifth

15,480.09

33,226.54

Middle fifth

24,408.17

53,948.05

Fourth fifth

40,974.34

85,403.05

Highest fifth

119,469.20

197,267.10

Sample mean

41,194.40

77,612.44

Exhibit 2: Types of Work Done by Employed Individuals

Figure

Exhibit 3: Average Per Capita Consumption (Rs. per month)

Income Quintile

Rural

Urban

Lowest fifth

664.19

846.41

Second fifth

582.29

905.80

Middle fifth

629.63

1,083.02

Fourth fifth

779.05

1,414.64

Highest fifth

1,212.58

2,172.87

Sample mean

773.57

1,282.91

Exhibit 4A: Rural Household Consumption in Various Categories (Rs.)

Income Quintile

Kerosene (monthly)

Fuel and Lights (monthly)

Cooking and Household Appliances (annual)

Education/Schools (annual)

Lowest fifth

36.27

102.37

22.96

399.22

Second fifth

37.58

106.65

13.67

383.17

Middle fifth

38.84

140.93

23.28

563.34

Fourth fifth

41.03

186.93

68.59

814.62

Highest fifth

42.11

322.63

178.11

2,299.90

Sample mean

39.12

171.92

61.33

892.21

Exhibit 4B: Urban Household Consumption in Various Categories (Rs.)

Income Quintile

Kerosene (monthly)

Fuel and Lights (monthly)

Cooking and Household Appliances (annual)

Education/Schools (annual)

Lowest fifth

48.54

229.12

51.88

1,303.26

Second fifth

50.76

299.85

53.93

1,392.26

Middle fifth

43.66

363.86

89.42

2,033.91

Fourth fifth

33.02

449.08

191.05

3,389.76

Highest fifth

22.78

581.16

523.63

6,069.30

Sample mean

39.81

384.10

181.16

2,825.46

Exhibit 5: Rural Household Access to Electricity

Income Quintile

% of Households with Access

Average Hours/Day of Access

Lowest fifth

52

6.94

Second fifth

57

7.82

Middle fifth

65

9.33

Fourth fifth

75

11.32

Highest fifth

90

13.57

Sample mean

68

9.79

Exhibit 6: Urban Household Access to Electricity

Income Quintile

% of Households with Access

Average Hours/Day of Access

Lowest fifth

84

14.76

Second fifth

92

16.71

Middle fifth

96

18.04

Fourth fifth

99

18.81

Highest fifth

99

19.75

Sample mean

94

17.61

Exhibit 7: Household Exposure to Mass Media (% of households in which at least one member is exposed to the media type)

Rural

Urban

Newspaper

39

71

Radio

48

49

TV

63

89

Exhibit 8: Image of a d.light Promotion at a Typical Haat in Rural India

Figure

Exhibit 9: Image of a Hypermart in Rural India

Figure

Exhibit 10: Estimates of d.light Product Economics (Rs.)

Model #

S10

S250

MSRP

549.00

1,699.00

d.light revenue

446.34

1,381.30

d.light COGS

–274.50

–849.50

Distribution costs

–54.90

–169.90

Profit margin

116.94

361.90

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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