Bangalore market

Bangalore has 441 dealers (approx.)

1 sales person approx. can control 20 dealer.

No. of sales person require are = 441/15
= 30 (approx.)
1 sales person salary = 50000
22 sales person = 50000*30
=1500000
1 regional sales manager = 90000
4 regions = 90000*4
= 360000
Other expenses = 5000000
Total cost = 1500000+360000+5000000
= 6860000

As Bangalore is a metro city, for consumer durable customer mostly prefer buying it from
Modern trade like the MBO’s. So in Bangalore market we will focus more on modern trade
i.e. 60% of sales meeting through modern trade & the rest 40% through distributors. Due to
lot of intermediaries in traditional format & high cuts from distributors & retailers, LG earn
less profit margin. Whereas in MBO’s the profit margin is high for LG.

LG uses three types of channels:

1. Level 0: Directly from brand to customers (Lg brand outlets)

2. Level 1: Brand to Modern trade to customers (Modern Trade)

 Mainly sell the high & medium end products.

3. Level 2: Brand to distributer to retailer to customer (General Trade / Distributer

model)

 Mainly sell the Medium & lower end products.

We can’t totally ignore the distributor model because it will help LG to earn volume share in
market.

LG can also sell their goods through direct channels

 Direct channel

 Online marketing

Some advantages of direct channels are

 No loss of margins through intermediaries.

 Complete control over the distribution system.

Key players of Modern trade of Bangalore are:

 Girias

 Vivek

 Pai

 Croma

Jodhpur Market
Jodhpur has 84 dealer (approx.)

1 sales person approx. can control 15 dealer.

No. of sales person require are = 84/15
= 6 (approx.)
1 sales person salary = 40000
6 sales person = 50000*6
=300000
1 area sales manager = 70000
= 70000
Other expenses = 1000000
Total cost = 300000+70000+1000000
= 1,370,000
As per Jodhpur market for consumer durables, customer may have a mixed feeling of where
to buy. Still now there is a preference for opting traditional trade. Keeping all these thing in
mind we will focus 55% of sales through distributer model & the rest 45% through modern
trade or the MBO’s.

Types of channels:

1. Level 1: Brand to Modern trade to customers (Modern Trade)

 Mainly sell the high end products

2. Level 2: Brand to distributer to retailer to customer (General Trade / Distributer

model)

 Mainly sell the Medium & lower end products.