LG plans channel restructuring

The general economic slowdown coupled with a diminishing rupee against the dollar is forcing LG to revise its product and channel strategy for the year. "The overall market has shrunk by 33% and there are no signs of this coming back in the near future," feels Sanjoy Bhattacharya, GM, IT sales and marketing, LG India. The launch of new products like printers and scanners scheduled for now, has been pushed to Q3 as of now. "Instead, we will focus on our existing set of products," informs Bhattacharya.

The only exception seems to have been made for cloud-ready monitors that are likely to be launched in early July. The company has already identified about 25 VAR partners for this product across 4-5 of the major metros. Currently, LG is in the process of identifying a national distributor for these monitors. "Preference will be given to our existing set of NDs like Redington, Rashi, and Supertron, and somebody among them is likely to bag the deal," reveals Bhattacharya.

Even for its existing set of products, LG plans to tweak its positioning as well as the channel strategy. Vis-a-vis laptops, the focus will be on low-end DOS-based models primarily coming in the Rs 20,000-25,000 range. While for monitors, LG's best-selling product range, the plan is to launch a program whereby the end user gets 1-year McAfee anti-virus software license with every LG monitor purchased.

This program is aimed at further consolidating LG's position at #1 in the monitor segment (27% market share in FY12). However, the share dipped to 23.7% in the last quarter, prompting LG to start selling its 15.6 inch range of monitors again. Prior to this, LG had discontinued this entry-level range and led competitors like AOC and Acer gain market share.

However, most importantly, LG is completely undergoing a channel restructuring for its existing products. From 209 regional distributors, the company has exited the relationship with most. It will now have 80 RDs in its kitty, with whom it will improve its business volumes. "The focus has been on partners who can sell fast and not on those who act more like C&F agents," informs Bhattacharya.

The company is also in the process of appointing 1,400 Managed Reseller Accounts and under each of them, 10 Managed System Builders. Therefore, LG will have an ecosystem of 14,000 Managed System Builders besides its Managed Reseller Accounts (who will basically be the sub-distributors, as per Bhattacharya). "We have launched a website www.lgchannels.in which will have all the information about the availability and movement of our products. We will also maintain a direct personal relationship from LG with these partners," added Bhattacharya. The company is also looking at refurbishing its service delivery mechanism and will be even publishing its DoA policy in the next few days.