Portioning to make products affordable for the BOP
Picture: Kiosk in Cape Coast Ghana [CM]
Affordability of consumer products is not just an issue of “marketeability”, but of understanding that everyone has the right to be considered a “valuable consumer”, and that everyone should have access to them. It was in the frame of a joint venture with Unilever Chile and our Chilean design Studio: Design for Social Innovation, that this topic was raised by one of our students. It has also been a topic commented by some economists such as the deceased CK Prahalad.
Some consumers, such as manual laborers [in the case of South America and Africa] might not have “the cash” to access to large quantities of a certain product. In simple words, what I mean [for what I’ve observed and what I’ve taken from self-performed interviews] is that: some individuals get paid for a week of work [sometimes they do what in Chile we would call “pololos”, that being short-time period of a certain job] and usually that money, is spent weekly. Generally, there is no big salary at the end of the month [which is normally believed to be the standard], or there are not sufficient funds to get the “whole product” [the complete package] once a month. So the consuming behavior is driven by the needs derived of using weekly or daily the money in small quantities for immediate consumption. Picture: Kiosk in Cape Coast Ghana 2010 [CM]
The other issue is, generally, supermarkets are usually not located near to the Bottom of the Pyramid [BOP] populations. So if they would want to get something, they have to spent money in Public Transportation [going and returning]. This could be a critical expense when you are thinking about low-weekly salaries.
For what we’ve seen, in countries like Chile, Perú, Bolivia, Argentina, Mali, Ghana, Brukina Faso, Kenya and others, the “almacenes or kiosks”, which tend to be very small shops [sometimes they are even ran in the back of a house] located in the neighborhoods; are the ones in charge of selling the “weekly-needed-groceries” locally. Despite their “social role”, they are usually selling at more expensive prices. Why? Because of all the steps that the individual has to go through in order to get some profit. The “almaceneros or shop keepers” buy, normally in a retail supermarket, large packages of a certain product. Then, the portioning takes place by using small polypropilene bags. Then, they sell these small-sized packages it at affordable prices to the local consumers in the neighborhood. Nonetheless , the price per ounce, gram, etc, is more expensive than normal.
Some years ago, one of our students identified this type of behavior, and generated a complete new way to shop detergent under these contextual circumstances. Even though the product call the attention of marketing areas, the product was impossible to market because of some legal regulations.
Today, some companies have realized the importance to consider the BOP individuals as important consumers. Labels like Nestlé, with their product Milo, or Unilever with their product OMO have switched to sell one-time-use “sachets”. We know that this is not mere “philanthropy” [they can profit from the large amounts of individuals that buy], yet it is a way that everyone can access the same product. Now, we need to think about making the distribution channels more efficient so that the BOP consumer doesn’t have to pay more for the same products.
HINTS FROM THIS POST
01. Watch out with consumer behavior, leave prejudices on the side. You might think that BOP consumers do not buy high-rated or expensive products, but they do [Omo is one of the most expensive-good performance washing soap in the market].
02. Markets need to be democratic enough to help everyone in the access to them. Ask people what they require, but also observe what are they doing.
03. Companies should see a way to make distribution channels more efficient, so that the BOP consumers don’t have to pay more than the individuals that have access to big retails.