LG banks on sales cum service model

Shivangi Yadav

Gurgaon

October 25th, 2007

Keeping in mind the growing demand of the channel community for after sales
service LG has worked up a unique concept for its set of channel partners. The
company is appointing SSD's (Sales cum Service Dealers) across the country.
Explaining the unique concept R Manikandan, GM-Sales & Marketing (IT
Products), LG Electronics said, "When a consumer buys a product from a
channel partner the moment they encounter some trouble they would call up the
channel partner who was providing service to the consumer voluntarily. Also post
sales service is emerging as an important area of concern for partners across
the country. So we thought why not provide the partners with some training so
that they an provide service to customers on behalf of LG and be reimbursed for
the same."

These dealers are apart from the more than 250 service centers that the
company is operating across 130 cities in the country. The dealers, who are
enlisted, as SSDs are qualified, trained and authenticated by LG. As of now
almost 100 select partners are already working as SSD for LG and last week the
company added 10 more dealers for the scheme in Ahmedabad in a ceremony.

Elaborating about how the scheme works Manikandan said, "We have divided
categories of service in both hardware and software and the reimbursement is
based on the same. Like if it a hardware call then if the system is not opened
then the reimbursement to the dealer would be less as compared to a call where
the machine has to be opened and some fault corrected."

"As part of the scheme when a consumer buys a desktop from LG they get
four privilege coupons as part of the package entitling them to avail services,
which are not a part of their warranty. The coupons are worth Rs 150 each for a
service, which would otherwise cost Rs 400. The good thing about the deal is
that the partner at least gets some money for providing services, which he was
anyway doing but for free. The second thing is that the consumer will also think
twice before calling the dealer because now he only has four options instead of
the unlimited earlier," Manikandan explained.

The company has 600 regional distributors in the country and a base of 3,500
resellers who are serviced through the regional distributors. And to increase
their participation with the channel apart from SSD, LG is banking big on its
Cyber Shoppe's.

Talking about the foray of big players like Chroma and Reliance in the retail
sector and the impact of the channel partner community Manikandan said,
"The new method of retailing which is making an advent in India because of
foray of players like Chroma, Reliance etc will not have a drastic impact on the
channel partners. Large format retail players will keep on doing good business.
The move will in fact help small and anonymous players to proliferate by
providing them with additional business options. That is why we are banking big
on our retail venture, the LG Cyber Shoppe."

And keeping that philosophy in mind LG recently opened Cyber Shoppe's in
Chandigarh and Kottayam. Discussing the enhanced focus on retail Manikandan
opined, "We are setting up the Cyber Shoppe's in collaboration with our
partners. The premises for the Cyber Shoppe belong to the channel partner and LG
sets up the place, we do the décor, and also help the channel partner with the
marketing activities. Apart from the cities, which we have just covered we are
looking at opening Cyber Shoppe's in Varanasi, Kanpur, Hyderabad and one more in
Chennai."