From the few years, consumer electronic manufactures have started focusing on the rural markets for their growth and expansion. The major reasons include saturation of urban growth rate and increased contribution and higher growth rate in markets.
Increase in disposable incomes due to good agricultural output, increase in easy financial options by banks and financial institutions, increased media penetration and electrification of rural areas are influencing the growth of marketing in rural areas.
In this light situation, India’s learning consumer electronics manufacturer LG Electronics India Pvt. Ltd. (LGEIL) began concentrating on rural marketing.
To mark its presence and to increase sales, LGEIL designed a different marketing strategy for rural areas. It made changes in its products to suit needs of rural customers. For example, LG removed ‘golden eye’ technology in models sold in rural market. Keeping in mind about the rural customers, LG carried out campaigns in various regional channels like Lashkara, Alpha Punjabi, and Gujarati.
LGEIL adopted a unique distribution strategy for rural markets to increase its presence and sale of its other products. The company designed a pyramidal sales structure by decentralizing its distributing network. The company fragmented the distribution network with branch offices operating from big cities and many Remote Area Officers (RAOs) working under each branch office. These RAOs were further fragmented with Regional Sales Officers (RSOs) working under the supervision of each RAO.
By 2005, company had 51 branch offices and 78 RAOs. Each RAO was given charge of the territory with an independent accounts, sales, servicing and marketing team. To assist RAOs in there endeavour; the offices were computerised and connected with branches officers and the corporate office’s ERP system through Very Small Aperture Terminal (V-SAT) and an Intranet network. This enabled the...