“Poverty as a Marketing Opportunity, Rather Than Social Problem” (2)

Poverty as a Marketing OpportunityWhat baffles me sometimes is the clear lack of interest here, in even contemplating business models hinged on poverty being approached as a marketing opportunity, and not the much touted social problem. Bottom of the Pyramid (BoP), as a concept, unmistakably embraces ‘a pointer’ to how marketing features prominently in dousing social ills where poverty occupies a centre stage. I wonder how many of related innovative business models (which have become the ‘in-thing’ elsewhere) can be ascribed to Nigeria presently. I am not aware of any.

In a situation where there are genuine and resolute efforts at creating opportunities from poverty, it is not breakthrough technological innovations that are needed to penetrate markets which are based on the activities of the poor. Rather, it is novel marketing approaches that turn-around social problems, allowing companies to make money while improving peoples’ lives and helping them rise out of poverty.

C.K. Prahalad and others have it that the poor comprise the ‘resilient and creative entrepreneurs’, ‘value-conscious consumers’, while ‘a whole world of opportunity’ comes up for both the poor and initiators of the related business ventures. With marketing being synonymous with business and this approach having bearing on markets for poor – comprising business models which benefit likely initiators (e.g. multinational companies, small private sector enterprises) and the poor (who feature in both the production and consumption processes) – it then makes for easy claim that poverty creates marketing opportunities, rather than much orchestrated social problems.

The well known “4 Ps of Marketing” also applies for businesses aimed at alleviating poverty in these ways:
Product – What is being provided for financial exchange, in this business relationship with those at the 4th tier of the pyramid, are products, services or technologies in point-of-use systems for water supply; healthier food products; micro-finance or low-cost remittance system; housing; and energy (off-grid power supply).

Price – What it costs, in monetary and real terms. Sensitivity to prices linked to quality applies here (BoP consumer also deserves the best quality). What works in this market is to pack the goods in very small units (e.g. a village retail shop selling cigarettes by the piece, detergents by the ‘sachet’, and drinks by the glass or cup).

Place – Where the product can be bought in this market makes for involvement of dealers sometimes, with a good supply channel that entails profit margins to sustain itself and effectiveness. Most times, dealers provide additional services to the customer (e.g. after sales service, and even provision of credit to their customers, as those in the villages are often well known).

Promotion – Products for BoP markets require rigorous promotion to make them known, within a delivery channel that can supply them profitably. Sustained and sometimes lengthy promotion is often required due to the conservative nature of the market for poor. Rural customers, most times, need to see what they want to buy, and how it works. This is why demonstration depicts a vital tool for promotion in BoP marketing.

I subscribe to “Business Fight Poverty”, an online community of individuals from business, international donors, NGOs, and academia who share passion for fighting poverty through business. As a Nigerian, it seems I am a ‘loner’ there. I view the lack-luster tendency of the relevant stakeholders in Nigeria clearly swaying its people that an insignificant few of my compatriots tend to look in the direction of this platform which helps to stimulate ideas on how some of the 112 million poor Nigerians can end up saying good-bye to poverty.

Research centres, academic institutions, and business ventures in many other climes are regularly churning out BoP related inventions and business models. It is amazing why Nigeria seems completely insulated from goings-on. Lack of space here provides for only these examples of business models (from about 150 I have access to), and calls for answers why none of such efforts is being replicated in Nigeria:

Global Positioning System (GPS) technology operated by women in fishing communities, to facilitate their spouses’ occupational efforts in the Indian Ocean (Sri Lanka).
-Unilever’s businesses for impoverished rural women, through retailing of health and hygiene products (India).
-Vodafone’s introduction of mobile banking solutions, M-PESA (Kenya, Tanzania).
Natura’s use of “Priprioca” rain forest plant fragrance for its ‘Ekos’ cosmetics line (Brazil).
-Barclays Bank’s infusion into local “Susu” microfinance services through traditional collection (Ghana).
Treadle pump for small farmers’ participation in agricultural value chain for increased incomes (Bangladesh, India and Nepal).

Holcim’s ‘House-for-Life’ model for providing cement to address the housing needs of the very poor (Sri Lanka).

Amanz’abantu’s rural water supply through smart card technology (South Africa).
Dimitar Madzarov milk procurement system for small-scale farmer suppliers (Bulgaria).
Bosch, Siemens and Hausgerate (BSH) cooker, fuelled by coconut oil (Indonesia).
INENSUS’ small wind turbines and decentralized energy systems (Mauritania).
The ceramic water filtration system (Nicaragua).
Herders’ cattle tracking, using cell phones and global positioning system devices (Senegal).
Shoprite’s support of small-scale farmers of fresh fruits and vegetables (Mozambique).
DANONE’s yoghurt production and sales scheme (for child development), using well-organized network of rural women, “Grameen Ladies”(Bangladesh).

The above are all known to have brought millions out of poverty, and have been derived from innovative business models where marketing played vital roles. Any claim of poverty comprising a marketing opportunity, rather than social problem clearly makes sense.

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