Question: Still on Bottom (or Base) of the pyramid marketing, are products in this regard different from those we all know about? Are they specifically fashioned for this new market, to change the lives of the poor? – Margret Ibezim
What works for the Bottom (or Base) of the pyramid (BoP) marketing or markets for poor, as regards products, services or technologies being introduced, is reflective of creating a market where the poor operates to earn a living, and not await humanitarian donations. In this piece, ‘product’ will be applied interchangeably with services or technologies, for consistency, as the essence is the application of these in livelihood enhancement of the poor. Product designs for this new market should be created around customer need, often involving manufacturing from local materials, cheap and affordable to the poor. In other words, within the BoP marketing concept, products must be useful to the poor and allow them to get out of the poverty trap. Products for BoP can evolve from the agriculture, housing, consumer goods, and financial services sectors.
I am a strong advocate of introducing these products for the improvement of the lot of the poor through genuinely strengthening his economic position (through creation of opportunities to raise his incomes and improve his livelihoods), rather than handouts in the form of humanitarian gestures or even corporate social responsibility (CSR). What remains vital to me is the creation of “purchasing power for the poor” with bearing on the development of products, services and technologies aimed at the poor.
While I intend to dedicate the next piece, in this series of articles devoted to enlightening Nigerians (especially those who influence policies that help alleviate poverty here) and spurring private sector ventures towards innovative BoP friendly business models, you and other readers should try to visualize situations in this country where these products, services or technologies hopefully become applicable to BoP enterprises. The poor can feature as suppliers, distributors, consumers, and then customers in this regard:
– Part of the supply chain in fruit juice processing; cement distribution process for do-it-yourself market for poor; housing materials (roofing and brickwork); manufacture of textile from cotton, where the poor derives benefits from the value chain (as farmers, textile workers, sales persons, and retail outlet operators); irrigation pumps from simple technology equipment (e.g. treadle pumps, which opened new opportunities for so many small enterprises to produce, distribute, market and install affordably for poor farmers); mobile phone, where it can help in alleviating poverty through its application for call kiosks and rental services, financial transactions (e.g. ‘mobile money’ for nomadic cattle-herders), farmers’ market pricing information, reduction of cost for transportation and contacts.
– Microfinance and micro-mortgage operations (e.g. the Gremeen bank); consumer durable products (e.g. salt, soaps, milk based fortified dessert); refrigeration equipment; eye glasses (at affordable pricing for the poor); storage facility for tomato, vegetables; water purification powder; water filtration equipment; special storage tank for rain water;; treated bed nets; sustainable energy technology (off-grid power market); solar powered lantern; conversion of agricultural by-products (e.g. cassava peels, rice husks, palm produce); internet services.
This last one reminds me of a situation where a service provider (in collaboration with a non-governmental organisation) as business model, introduced the use of the computer to access the Global Positioning System (GPS), for tracking schools of fish in the ocean. Poor wives of fishermen where trained on how to use this equipment to aid their husbands at work. The outcome often yielded bountiful fish harvest. Women being part of their husbands’ business made for not only marital harmony but also economic enhancement of a poor fishing community. In line with “things that men do”, it was discovered that some fishermen often opted for the ‘other woman’ after bountiful fishing outcomes in the past.
Still on BoP products, please bear in mind that low cost, high-quality products make a critical entryway to BOP markets. Available products fit into this to be ‘BoP compliant’. Market creation approach to development requires that products should be made available to large numbers of poor people, through targeted effective mass marketing strategies. The key, as with conventional markets, is to provide a product that meets customer needs (e.g. clothing, healthcare, basic durables, food and beverages, etc) not only in price but in packaging, distribution methods, and payment schemes, while being innovative in how to arrive at what are often radically lower cost structures.
So much is going on presently in business schools, innovation laboratories, multinational companies (MNC), and small private sector concerns of other climes, in the area of BoP marketing. India, with its 600 million poor, comprises a major target. Other countries of south-east Asia, then China and even some in southern Africa are not left out. The question is, what about the largest market in Africa, Nigeria? My private investigations have shown that the BoP concept is news to most Nigerians.
This is a period the manufacturing sector (a major platform for growth) in Nigeria is faced with series of challenges which are well known, making for fast depleting activities in this area. Even where we are informed that the country is posting an-upward-moving GDP growth rate of 7.6%, but Nigerians are yet to perceive this at the street level, the private sector here should shift its gaze towards this new market – the BoP market. With almost 70% (about 113 million) of the country’s population, of more than 160 million, classified as poor, going by my elucidation in this series of write-ups on BoP and markets for poor, this is an area of opportunities for the private sector in Nigeria. Indeed, a large market at that.
My next piece, in this series will throw more light on guiding innovative Nigerian private sector concerns on how to step into this area, which awaits exploitation and yields a win-win situation for both the private sector venture and the poor (who gets an opportunity to step out of poverty) – The market for poor.