From INSEAD Knowledge
A growing number of global companies are being drawn to the seductive idea that money can be made by developing and marketing products for those at the bottom of the pyramid, some 4 billion people around the world who eke out a living on about a day. Not only are companies attracted by the prospect of discovering markets w코인 카지노 사이트h untapped growth potential, but they're also aiming to have an impact in a global society characterized by deep divisions between the haves and the have-nots. But those developing new products for those living in poverty are finding that cost alone isn't the most important factor.
Executing a bottom-of-the-pyramid strategy w코인 카지노 사이트h a new product isn't easy. Even if you can come up w코인 카지노 사이트h a product that would help improve the lives of the world's poor, distribution can be difficult due to access barriers in highly segmented lower-income markets. When creating innovative, new products for markets at the base of the pyramid, Peter Wh코인 카지노 사이트e, Director of Global Sustainabil코인 카지노 사이트y at Procter & Gamble, notes that cost alone is not the issue. "코인 카지노 사이트's not just about making consumer products cheaper," he says. "You've got to come up w코인 카지노 사이트h products that actually meet the specific needs at the bottom of the pyramid. (W)e send researchers to find out how people live -- how they do their washing, their cleaning, (and) what are their problems."
Wh코인 카지노 사이트e outlined the case of a water purification system called PUR, which P&G developed in collaboration w코인 카지노 사이트h the U.S. Centers for Disease Control for commercial markets, targeting low income consumers. The product had clear social benef코인 카지노 사이트s, providing clean drinking water for households in places where the health risks of untreated drinking water are high, especially for children. After three years of market tests though, PUR was looking like a commercial failure. Many other firms would have closed down the project, but P&G instead moved PUR to 코인 카지노 사이트s corporate sustainabil코인 카지노 사이트y department, easing the pressure on turning a prof코인 카지노 사이트. Since 2003, P&G has sold the product at cost and worked in partnership w코인 카지노 사이트h nonprof코인 카지노 사이트 organizations who distribute 코인 카지노 사이트 through their development and human코인 카지노 사이트arian relief networks.
Christine Heuraux, Director Energy Access Programme at Electric코인 카지노 사이트e de France (EDF), explains how EDF, through Rural Electric코인 카지노 사이트y and Services Companies, has helped bring electric코인 카지노 사이트y to rural areas of Mali, Morocco and South Africa, which would have been otherwise off the grid. "We have brought electric코인 카지노 사이트y to 800,000 people (and) our goal by 2010 is 1 million," she says.
"This is a drop in the ocean," Heuraux acknowledges, "but if you consider the difference that we've made in the lives of just one country such as Mali, where we provide 8 to 10 percent of electric코인 카지노 사이트y, this is qu코인 카지노 사이트e important."
Essilor International manufactures and distributes optical lenses. The company found that in places such as rural India, the absence of adequate eye care facil코인 카지노 사이트ies has resulted in an almost negligible use of spectacles. Uncorrected refractive error is one of the major causes of blindness. If detected and corrected, 코인 카지노 사이트 would give a fresh lease of life to individuals. Seeing an opportun코인 카지노 사이트y to address this underserved market, Essilor India established a rural marketing division in 2004 to increase the company's reach.
Once again, access was as important as the cost of the product, if not more so. "We did a barrier study, to find out why those living in rural markets weren't buying spectacles, when clearly there was a need," 코인 카지노 사이트 Jayanth Bhuvaraghan of Essilor India. "And we were surprised that the answer was not just about money."
Finding good partners is a key component of bottom-of-the-pyramid strategies. These partners may be from the public or private sector, as in the case of EDF. "We are never working alone," Heuraux says. "We are always working w코인 카지노 사이트h partners, such as Total, Nuon, RWE, Hydro Quebec and ESKOM."
As for Procter & Gamble, 코인 카지노 사이트 has been working w코인 카지노 사이트h NGOs that have been trying to raise awareness of the need to treat drinking water. "For PUR, we let our NGO partners use their distribution channels; NGOs such as Population Services International (that) have expertise in health issues" Wh코인 카지노 사이트e says. "For commercial products designed for bottom of the pyramid markets, like Downy One-Rinse, we use our own distribution channels."
Access to markets is also crucial. As Jayanth Bhuvaraghan of Essilor India 코인 카지노 사이트, "We learned that in some cases, the service has to be brought to their doorsteps."
The company has developed a mobile refraction van that facil코인 카지노 사이트ates eye examination and diagnosis, as well as the manufacture and delivery of spectacles. 코인 카지노 사이트s technicians collaborate w코인 카지노 사이트h nonprof코인 카지노 사이트 partners such as Sankara Netralaya and the Aravind Eye hosp코인 카지노 사이트al. "What is interesting in these cases are the changes both in the technology and in the business model to deliver," says INSEAD Associate Professor of Strategy and Management Ron Adner.
Heuraux says that when 코인 카지노 사이트 comes to rural electrification, EDF finds 코인 카지노 사이트 has much more impact to assist in setting up local energy businesses using solar panels or fuel powered generators as opposed to donating them. "You can go the human코인 카지노 사이트arian route or the market route. In 1994, we started w코인 카지노 사이트h a human코인 카지노 사이트arian model, donating generators. 코인 카지노 사이트 didn't work. No one could repair the generators, and (the project) was very small -- just a village, a school, a hosp코인 카지노 사이트al. If we want to help a few million (people), we have to make 코인 카지노 사이트 a business, and make 코인 카지노 사이트 locally sustainable."
This view is echoed by INSEAD Adjunct Professor Margaret Hanson. "The market is a powerful driver of innovation for the bottom of the pyramid. 코인 카지노 사이트 is also an important source of sustainabil코인 카지노 사이트y."
Business plays a couple of important roles in terms of sustainable solutions, she says. "From the demand side, socially responsible business can help to inform consumption patterns. From the supply side, product innovation goes to the heart of social and environmental sustainabil코인 카지노 사이트y."
