D light design marketing channel strategies in india

ANNE T. COUGHLAN AND BENJAMIN NEUWIRTH ’12 KEL876 d.light Design: Marketing Channel Strategies in India Our mission is to eradicate the use of kerosene.1 —Ned Tozun, founder and president of d.light In December 2009 Sam Goldman, founder and chief customer officer of d.light Design, was in New Delhi, India, finalizing his startup’s plans to begin distribution of its solar lamps throughout the country. Goldman and his business school friend Ned Tozun had founded their company two years earlier, and in the interim Goldman had moved to India to focus on sales and marketing and Tozun had relocated to 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 whether it should use multiple channels. The startup had limited capital, so they needed to get the distribution question right in order to generate revenue quickly. d.light Design d.light Design2 was founded in 2007 by Stanford Graduate School of Business students Sam Goldman and Ned Tozun as part of the Stanford d.school (Institute of Design at Stanford) course “Design for Extreme Affordability.” In the course, students were challenged to design affordable, market-driven solutions to problems in emerging markets. The course goals were partially inspired by the work of Dr. Paul Polak, who in 1982 started International Development Enterprises (IDE). By bringing modern product design and development techniques into an emerging market context, IDE was able to help improve the lives of millions of impoverished people. For example, the company’s treadle pump, a low-cost irrigation device meant to break farmers’ dependence on monsoon rains, sold more than 1.4 million units in Bangladesh. Central to the philosophy of IDE and the Stanford d.school class was the notion that to realize the full 1 Saikat Basu, “Stanford Graduates Bring an Idea and Rays of Light for Rural India,” Digital Journal, June 17, 2008, http://www.digitaljournal.com/article/256250. 2 Note: The average rupees-to-dollars exchange rate in 2009 was Rs. 48.7 = US$1. This rate can be used throughout the case when currency translations are useful. ©2015 by the Kellogg School of Management at Northwestern University. This case was developed with support from the June 2009 graduates of the Executive MBA Program (EMP-73). This case was prepared by Benjamin Neuwirth ’12 under the supervision of Professor Anne T. Coughlan. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685 (or 617-783-7600 outside the United States or Canada) or e-mail custserv@hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Kellogg Case Publishing. This document is authorized for use only by Karun Kapoor (KKAPOOR18@GMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. D.LIGHT DESIGN KEL876 benefits of a livelihood-enhancing product, the poor must purchase the product at a fair market price, not receive the product as a handout. Before attending business school, Sam Goldman had spent several years in the Peace Corps in Africa. He discovered that in developing nations all over the world, a substantial number of people who did not have reliable access to electricity still used kerosene lamps for light at night. Kerosene lamps provided only weak light, however, and the lamps were dangerous to use and expensive to refuel.3 Goldman became aware of the dangers of kerosene when a neighbor’s child was badly burned in a kerosene fire. As he put it, “I knew this happened thousands of times every year and realized in that moment that ‘there had to be a better way’ and resolved then to make a difference.”