Ground rules for innovation at the Bottom of the Pyramid (BOP)

LightCastle Analytics Wing
February 11, 2017
Ground rules for innovation at the Bottom of the Pyramid (BOP)
  1. Price Performance- Functionality and price should go hand in hand solely because the consumers at the bottom of the pyramid are value seekers. They are always on the look-out for Value for Money products and services as their incomes are on the lower end of the curve. In some fronts, balance between price and performance can be really tricky such as FMCGs or financial services. In such cases, the psychology of the rural consumers tends to be caressed with a sense of pessimism. Hence educating them about its benefits and the knock-on benefits is the only to get them on board, i.e. cajole them to be your consumers. In this way, firms can mold expectations and reach a price performance band that is feasible. BOP targeted products typically come in a no-frills package. This is because, consumers only want the basic need to be fulfilled. That said, too much fanciness can kill a product’s reliability regardless of the price. Again there are several BOP markets where consumers are abreast with trends and fads. In such cases, there must be frequent delivery of price performance. Innovation in such relatively more “conscious” markets tend to have faster cycles. The product life cycle too also tend to be shorter.
  2. Balance old and new technology- In emerging economies, even in BOP segments, there is a steady rise in the number of graduates coming out. Also, internet penetration has increased greatly. These phenomena suggest that there is a growing class which becoming smart phone and social media savvy. This segment no longer gets the jitters when it comes to embracing new technology. So, firms which target BOP segments must take these factors into account as they can add more zest and decisiveness to their strategies. For instance, a clothing startup can use video calling to get a better understanding of the customers’ orders. In addition, they can send photos to better illustrate their offerings to the BOP customers. On the other end of the spectrum, simple phone calls or SMS may also to be used to drive home a firm’s message into the minds of less educated and less tech savvy customers. A FMCG firm may utilize a combination of sales personnel and simple video animation to forge awareness and boost usage knowledge centering a new product.
  3. Making products available- In the rural scene, availability is crucial. Choosing the right channels is extremely crucial here. Retailers in the rural markets exert a lot of influence on the consumers. Again, village “elders” also dictate purchase decisions to a certain extent. It is important to target these influences to ensure traction of new product’s exposure. Alternatively, conducting extensive BTL campaigns can also be done. BTL Campaigns where company personnel speaks about important social issues and then relate the product to it can easily convince consumers. Also, there can be weekly meetings where films are screened and side by side, the promotion of products are done. Such strategies also ease scalability.
  4. Making products and services less resource sapping- Resources such as water, electricity are traditionally viewed as valuable entities by the rurali. This, along with the fact that they have relatively less incomes, suggests hat any new offering by a firm must be resource efficient.

     5.Designing products in line with the rural ecosystem- Needless to say, the products must embrace the rural way of life. The product must yield        utility sought by such consumers, accommodate usage patterns, incomes and expectations.

Want to learn more about Management Consulting?

See Our Service

  1. Engaging in process Innovation- This is pivotal because as far as the rural context goes usage ease is crucial to attract them. Technical specifications if applicable must be evaluated continually. Changes must improve the user experience. Also, the processes of distribution must also be tried and tested in order to improve market penetration rates.

     7.Making user experience simpler- Even though BOP segments’ exposure to education and free thinking is on the rise, there is a still a large base of consumers who are not equipped with basic skill sets. Thus firms must consider such status quo before designing the product.

     8.Educating consumers-The just aforementioned point leads us to this point. Educating consumers is vital against the back drop of a setting where skills levels are low compared to the urban sphere. Consumers can be educated in a variety of ways-retailers can be taught to teach consumers about product usage and its advantages, village influencers can also carry out this task. School children can also be provided guidance. There are a myriad of ways. Strategy will depend upon the situation.

  1. Making battle-hardened products- Since much of rural life is rough and tough. Products are expected to be the same. They must be able to function in different adverse settings.

     10 Researching consumer heterogeneity- BOP markets are likely to differ in terms of skill levels, languages and needless to say demographic  factors. Research is crucial here to identify points of differences among segments. The results from this research could be used to develop new products or tailor teaching methods.

  1. Ensuring Adaptable distributions systems are in place- The ecosystem in the rural sphere can be complex and thus the task of distribution will be complex too. It is important to identify a lot of parties here-retailers, NGOs, government welfare departments etc or influential personalities who provide education and raise awareness pertaining to various issues. Identifying events where large crowds from different villages gather can also be a quick way to quicken distribution.
  2. Forging adaptable platforms for faster product modification and adaptation- Villagers are more likely to damage products. Hence, firms must design products in such a way so as to allow room for reparability. Also, rural settings also call for challenging traditional entities. Circumstances can be really dire at times. For instance, power outages may be extremely frequent thus calling for newer and cheaper methods for power.


WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

For further clarifications, contact here: [email protected]

Want to collaborate with us?

Our experts can help you solve your unique challenges

Join Our Newsletter

Stay up-to-date with our Thought Leadership and Insights